Why Isn’t Health Insurance Sold Across State Lines?
With all of the focus lately on improving health care coverage for Americans, one topic of interest is the idea of allowing consumers to purchase health insurance across state lines from companies not based in the buyer’s home state. While having this option would seem to be a boon for consumers, it may not be the solution that some politicians tout it to be.
The main reason that insurance cannot be sold across state lines already is that there is no federal mandate for the inclusions and exemptions by which insurance companies must abide. Each state has its own rules, governed by where the insurance company is based. Some states, such as Arizona and South Carolina, impose few regulations on insurance companies, allowing them the cherry pick customers who are young and healthy while denying coverage for others. People who are older, have pre-existing conditions, or who simply make lifestyle choices that the insurance companies deem risky, can be turned down for health insurance with no recourse. Allowing companies to sell across state lines would mean that they could relocate to one of the low-regulation states and impose their exclusionary rules nationwide. This would result in even fewer people being covered, with many more exemptions on the conditions and circumstances for which even those who have coverage could collect.
While some argue that the sale of health insurance across state lines would work smoothly if the federal government would create universal guidelines, the likelihood of states being able to agree on such guidelines is slim. Some states require insurance companies to cover everything from reproductive issues to cosmetic surgery, while others practically exclude such coverage.
There are many ideas on the table about how to improve medical coverage for Americans. The true merits and downfalls of each should be explored fully before implementing any of them.
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- What Is Public Health Insurance?
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- What Does New York Health Insurance Law Cover?
- What Are Employer Obligations When Offering Health Insurance?
Tags: health insurance, healthcare insurance, medical insurance, state health insurance, state health insurance program