The Republicans' Big Health Care 'Idea' Is Complete Nonsense
by Al Franken
If you watched the Republican debate on Thursday, you probably noticed the candidates agreeing that insurance companies should be allowed to sell policies across state lines.
"We have to get rid of the lines around the states," said Donald Trump, making vigorous circles with his hands for emphasis, "so that there's serious, serious competition." It would, he promised, "be a beautiful thing."
This is often presented as the Republicans' Big Idea on health care -- in fact, as with Trump, it's often the only idea they can come up with. But it isn't a serious plan for improving our nation's health care system. In fact, it's absolute nonsense.
For starters, we don't need to pass a federal law to allow insurance companies to sell policies across state lines. We don't have to repeal Obamacare. We don't have to do anything. Nothing in federal law prohibits states from allowing out-of-state insurance companies to sell policies to their citizens. In fact, six states have already tried it. And guess what? It doesn't work.
Let me back up. Individual states are responsible for administering and regulating their own health insurance markets. They decide which insurers receive licenses to sell policies within their borders, and establish standards for what benefits those policies must provide to their citizens.
States were free to allow insurers from other states to sell to their citizens before Obamacare, and they are still free to do so today. What Obamacare did was establish an "essential benefits package" -- basic minimum standards that all individual policies must meet, no matter where they're sold.
Indeed, many states have explored the idea of allowing insurance companies from other states to sell within their borders; 18 looked into allowing out-of-state insurance sales before Obamacare became law, and 13 have considered it since. But very few have actually decided to do so. And the ones that have report unanimously that it has accomplished nothing.
Why? Because a license to sell insurance in a given state isn't the only thing insurance companies need in order to be able to actually sell insurance. They need to learn the state, analyze the health care needs of its population, recruit participants, build a network of providers, negotiate rates, and more.
If you're a huge insurance company like Blue Cross, you might have the resources to replicate this effort in states across the country, which is why you can get Blue Cross insurance in multiple states. But smaller insurance companies based in a single state have found again and again that, even when offered the opportunity to sell across state lines, it simply isn't worth the hassle.
And that's why allowing cross-border insurance sales has failed miserably in every state where it's been tried.
Wyoming tried it. Their deputy insurance commissioner told POLITICO, "There has not been any interest."
Rhode Island tried it. Their former health insurance commissioner reported that "no one even inquired."
Georgia tried it. Their insurance commissioner said, "Nobody has even asked to be approved to sell across state lines. We're dumbfounded. We are absolutely dumbfounded."
The same proved to be true in Kentucky, and Maine, and Washington: insurance companies simply aren't interested in selling policies across state lines. That's why most of the states that have considered making it possible for insurance companies to do so have decided not to bother. And that's why this "idea" as the Republicans' big solution on health care is absurd.
Which, by the way, is not news to anyone who's actually studied it. "I've tried for 10 years to explain this to Republicans; it is a big problem," sighed Merrill Matthews of the Institute for Policy Innovation (a conservative think tank founded by former Republican Majority Leader Dick Armey and funded by, among others, the pharmaceutical industry and the Koch brothers) in an interview with the New York Times. "Just because a good affordable policy is available in another state doesn't mean that I would be able to get the network of physicians and the good prices that are available in that other state."
It would be bad enough if this were just an inane bit of gobbledygook that Republicans use to disguise the fact that, beyond repealing the law that has extended coverage to tens of millions of Americans, they really have no ideas at all when it comes to health care.
But it's actually worse. Because what Republicans are really interested in isn't simply increasing the number of players in each state's insurance market, but getting rid of the essential benefits package established to protect consumers under Obamacare.
Indeed, when they talk about "increasing competition," Republicans are envisioning a scenario in which states compete to see who can allow insurance companies to offer the most worthless policies to their citizens -- a race to the bottom in which the losers will be patients who discover too late that the garbage insurance they bought doesn't cover the care they need.
For example: In my home state of Minnesota, we have pretty stringent consumer safeguards, even tougher than what Obamacare requires. But under the Republican plan, without Obamacare's minimum standards in place, another state could allow some fly-by-night company to set up shop and start offering my constituents lousy policies that would leave them helpless if they got sick. This would effectively pre-empt Minnesota's laws -- as long as just one state were willing to drop its standards, no state would be able to protect its citizens from these scams.
You don't often hear Republicans calling for the federal government to interfere with the constitutional rights of states to manage their affairs, but I guess they're willing to make an exception when it would help unscrupulous insurance companies rip people off.
Anyway: Obamacare isn't the end of the work we have to do to make our health care system work better. There are plenty of things we can do to build on its successes and improve on its shortcomings. But allowing insurance companies to sell across state lines isn't an answer to the question of how Republicans would replace Obamacare if they ever succeeded in repealing it.
In fact, given that allowing insurance companies to sell across state lines is already permitted under federal law, that dozens of states have already considered trying it, and that it has already been proven not to work in literally every one of the few states that has implemented it, I'd say it doesn't even count as an actual "idea" at all. It's just a political talking point, and a pretty ridiculous one, at that.
So the next time you hear it in a Republican debate, remember that it isn't an example of them taking a rare break from insulting women, immigrants, Muslim-Americans, and each other to focus on substance. It's just further proof that, when it comes to health care, Republicans still have absolutely nothing to offer the American people.