Trump Wants Health Insurance To Be Sold Across State Lines

Trying to fulfill a campaign promise, the president backs an idea that’s been a nonstarter for many years.

CMS yesterday called for public comment on how to best eliminate barriers to selling insurance across state lines. But as the Wall Street Journal reports this morning, that won’t be easy. “Barriers include the sheer complexity of insurer regulation,” the WSJ reports. “Each state has its own requirements, complicating efforts to make multistate sales work. Any new insurers entering a state also face the formidable task of taking on competitors that already have market share and negotiated contracts with hospitals and doctors.”

Still, the idea needs to be investigated, says the administration. CMS Administrator Seema Verma said in a statement that “Americans are in desperate need of more affordable health insurance options…." Selling insurance across state lines “could help provide access to a more competitive and affordable health insurance market.”

Some health care experts argue that the idea won’t work in the real world. The late Princeton economist Uwe Reinhardt told MANAGED CARE in 2013 that “when an Iowa or a Texas insurer insures a New Yorker, they have to buy the health care in New York at New York prices, which are high ... because they would have to pay Mount Sinai and Columbia-Presbyterian prices.”

On the other hand, as the WSJ reports, “supporters argue it would offer people more choices, especially in areas of the country where there are fewer insurers offering plans.”