At the second general election debate, Donald Trump once again touted allowing health insurers to sell plans across state lines as a way to make coverage affordable after killing the Affordable Care Act. But the policy could undermine the individual market and roll back protections that consumers have come to rely on.
Trump hasn't explained how such plans would be regulated. Nor did he answer debate moderator Anderson Cooper's direct question of whether the plan would maintain an insurance mandate for individuals.
“As long as the plan purchased complies with state requirements, any vendor ought to be able to offer insurance in any state,” his campaign says in a 3½-page addendum to health policy bullet points on his website. “By allowing full competition in this market, insurance costs will go down and consumer satisfaction will go up.”
But most health policy experts say the opposite is likely to happen.
Linda Blumberg, a senior fellow at the Urban Institute's health policy center, said she thinks Trump has stuck with the proposal as the centerpiece of his healthcare talking points because it sounds simple and effective to people who aren't tuned in to health policy and because it's popular with 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. “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 bill did not pass.
Although the policy is presented as a way to provide more options and competition, Blumberg said, 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If the ACA were repealed and insurance companies allowed to sell across state lines, health plans would most likely establish themselves in states with the least regulation and then focus on selling low-cost plans with minimal coverage to healthy people.
That would leave an unbalanced risk pool and cause people with health problems to go without coverage or pay exorbitant prices.
And insurers don't appear to be all that interested in selling interstate plans. Under the ACA, they are already allowed to sell across state lines if there is an agreement between the states. The plans must still meet coverage requirements of the federal healthcare law, which also spells out licensing requirements and how disputes would be addressed.
No state has taken advantage of this option and no major insurer has asked for it.
Blumberg said it would be difficult for an insurance company to jump into 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 raise questions about regulatory authority. State regulators don't have the resources to watch other states. The National Association of Insurance Commissioners said in a policy brief that allowing insurance to be sold across state lines would make insurers less accountable and prevent regulators from assisting consumers in their states.
While conservatives generally believe reducing regulation will unleash market forces and drive down prices, state regulation of health plans isn't what's making premiums rise, Antos said. “What really drives the cost of healthcare is the cost of the services and the bargaining power of the insurance companies.”
