One of the more contentious issues of last year’s health care reform debate, whether health insurance companies should be allowed to sell policies across state lines, was subject to a congressional hearing last week.
Witnesses before the
Steve Parente, Insurance Industry Chair of the
Parente added that his research indicated that uneven costs are almost entirely due to differences in regulatory burden and mandates between the states. “In one of the most telling illustrations, we found premium quotes for the same family from the same insurance company for the same insurance benefit to be more than twice as expensive in a New Jersey town, Lambertville, compared to New Hope, Pennsylvania,” he said. “These two towns are separated by a quarter-mile of Delaware River, but their citizens are likely to use many of the same medical providers.”
Yet, others witnesses warned of regulatory arbitrage and a “race to the bottom” that would ensue if consumers could purchase products across state lines. “Selling insurance across state lines has long been proposed as an option to increase competition and choices in health insurance, but there are serious pitfalls with this approach when it is not coupled with adequate consumer protections,” said Steven Larsen, deputy administrator and director,
Stephen Finan, senior director of policy for the
— Bill Kenealy writes for Insurance Networking News, a SourceMedia publication