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Fix health insurance marketplace

Guest Opinion



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Wayne Hoffman

Word on the street: Some Idaho lawmakers want more health insurance regulations after consumer complaints about new, exorbitant out-of-network costs and the failure of some companies to pay claims. A real solution: Legislators in Idaho and elsewhere should remove insurance regulatory hurdles, including coverage mandates and market barriers.

The healthcare system doesn’t work because of years of government interference in the marketplace. This meddling has often been done at the behest of, and for the benefit of, special interest groups including medical, hospital and insurance groups, at great expense to patients. This is the time to undo the damage.

At minimum, the state should pay close attention to at least one promise made by the incoming Trump administration: allow the buying of health insurance across state lines.

Contrary to popular belief, the reason individuals can’t buy a health insurance plan from another state is only partly a function of federal law; the rest of the blame rests with states, including Idaho. In 1944, the U.S. Supreme Court ruled that insurance is a matter of interstate commerce, subject to federal regulation.

In response, the national government passed a law that exempted insurance from federal anti-trust laws and made insurance a matter for state regulators. In 1961, the Idaho Legislature passed a law that says it is illegal for companies not located in Idaho to sell health insurance to Idahoans. That law also made it illegal for Idahoans to buy insurance from companies located in another state. Most other states have restrictions like the one Idaho has, although a handful of states in recent years have lightened their grip on interstate insurance transactions.

In 2012, a bill to allow the buying and selling of insurance across state lines passed the Idaho House on a party-line vote. But, the measure was denied a hearing in the state senate.

Proposals to allow greater consumer choice for buying health insurance existed before Obamacare. More recently, President-elect Trump said in debates and elsewhere that he wants to erase the barriers that stop insurance from being sold across state lines. Whether he follows through on that remains to be seen. However, Idaho lawmakers can take action today.

Some argue that the removal of state-to-state insurance barriers won’t lower costs. But supporters of the proposal make a bigger case: Proponents contend that the lack of competition for insurance within a state stifles innovation and sticks consumers with less-than-ideal insurance options.  It’s probably part of the reason why insurance companies in Idaho and other states are free to require as much $200,000 of out-of-pocket costs just for seeing a practitioner who is not in the insurance network: It’s because they can.

We don’t argue that being able to buy and sell insurance is a healthcare-cost containment panacea. It’s not. But it’s one of several factors that impact the quality and cost of insurance.

This is also a good time to recognize that laws and regulations that stifle competition, or dictate the terms of health coverage, make it harder for consumers to purchase health insurance coverage they want and unwittingly offer safe-haven to insurance companies for their shoddy plans. And laws and regulations that dictate insurance benefits and other plan features do adversely affect the cost of coverage.

Such state edicts should be targeted for removal or overhaul in 2017. And with Obamacare (hopefully) about to become a sad footnote in American history, states, including Idaho, should purposely examine what we can do to drive down costs and reinvigorate the marketplace for insurance. Perhaps the Trump administration will take the right actions to stem the bleeding, but states like ours must do their part, and that work starts now.



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