Republican presidential nominee Donald Trump once again touted the idea of allowing health insurance to be sold across state lines at the second general election debate Sunday, despite multiple analyses that show such a policy could substantially damage the individual market and roll back protections that consumers have come to rely on.
Trump has not provided details for how selling insurance across state lines would be regulated. A 3½-page addendum (PDF) to health policy bullet points on his website states: “As long as the plan purchased complies with state requirements, any vendor ought to be able to offer insurance in any state. By allowing full competition in this market, insurance costs will go down and consumer satisfaction will go up.”
But there is no evidence the last sentence is accurate and policy analysts have frequently warned the opposite is more likely true.
As he did in one of the earlier primary debates, Trump focused on selling insurance across state lines as the main response to how he would replace the Affordable Care Act. But multiple experts, including some conservatives, say that without ACA protections, the policy would lead to a “race to the bottom” where insurance companies seek the least regulations and sick people are again priced out of coverage.
Despite moderator Anderson Cooper's direct question of whether Trump would continue the individual mandate for health insurance, the candidate did not respond.
Linda Blumberg, a senior fellow at the Urban Institute's health policy center, said she thinks Trump has stuck with the line because it sounds simple and effective to those not tuned into health policy and won't receive pushback from other Republicans.
“He's not a nuanced guy,” she said. “I have no expectation that he has a lot of understanding of how private health insurance markets work. I'm not sure he cares.”
Joe Antos, a health policy expert at the right-leaning American Enterprise Institute, said it's more likely just one of the ideas Trump remembered on the debate stages than a policy he truly believes in.
“I think it's stuck in his head,” Antos said. “In my opinion, this is an example of Donald Trump not being nearly as prepared as Hillary Clinton is on any topic.”
The idea of selling health insurance across state lines has been mentioned in some conservative circles for many years. It was first introduced at the federal policy level by two Republican members of the House promoting the Health Care Choice Act of 2005, according to the Robert Wood Johnson Foundation. The act was not passed.
Blumberg said it is presented as a way to provide more options and competition, but in reality, it would undermine state insurance regulations and make access difficult for people with health problems.
“This proposal is really more of a throw the sick to the wolves option,” she said. “That's not the way you create a well-functioning healthcare system.”
If the ACA were repealed and insurance companies allowed to sell across state lines, the likely result would be companies establishing themselves in states with little to no regulation and then offering low cost plans with little coverage to predominantly health people.
That would leave an unbalanced risk pool and cause people with health problems to go without coverage or pay exorbitant prices
Recent history shows that with consumer protections, the concept is not very appealing to health insurance companies.
Under the ACA, companies are allowed to sell across state lines if there is an agreement between the two states. The plans must still meet coverage requirements of the act, which also spells out licensing requirements and how disputes would be addressed.
No state has yet taken advantage of this option and no major insurers have asked for it.
Blumberg said it would be difficult for an insurance company to jump in to another area and establish provider networks, make negotiations and set proper prices without existing consumer data.
Insurance regulators also generally oppose the concept because it would lead to questions over regulatory authority. State regulators don't have the resources to watch other states. A briefing from the National Association of Insurance Commissioners states that allowing insurance to be sold across state lines would make insurers less accountable and prevent regulators from assisting consumers in their states.
Antos said that while reducing regulation is a general conservative principle, this idea is not a good example.
“I have a hard time defending this particular point because I think, in the end, what really drives the cost of healthcare is the cost of the services and the bargaining power of the insurance companies,” he said.