The Trump administration is asking for feedback about how it can encourage the sale of health insurance across state lines, a long-held goal of conservatives.
“We are looking for information and ideas from the public on how to create a more dynamic health insurance market with more insurers participating and competing to meet the needs of the American people just like we see in markets for so many other products and services that enhance our daily lives,” Seema Verma, the administrator for the Centers for Medicare and Medicaid Services, said in a statement Wednesday.
Health officials specifically want to know how to take advantage of a little-known part in Obamacare known as a “healthcare choice compact.”
The provision, which is in section 1333 of Obamacare, lets states create healthcare choice compacts permitting insurers to sell coverage in any state participating in the compact, as long as they follow specific rules. The law required the compacts to be up and running by 2016, but the Obama administration never fully implemented the provision.
The latest request, which gives people 60 days to offer feedback, is in line with President Trump’s executive order on Oct. 12, 2017, to encourage the sale of insurance across state lines.
Republicans, including presidential candidates over several cycles, have long looked to allow the sale of insurance across state lines, saying that it would boost competition, lower the cost of coverage, and give people more options.
But the provision is difficult to implement under Obamacare regulations. Obamacare requires health insurers to offer a wide range of benefits, meaning there tend to be few differences among health insurance plans sold in different states or in what they cost. When Republicans propose letting states buy insurance across state lines, they mean a system in which Obamacare’s regulatory structure is no longer in place.
Further, insurers and states have faced several obstacles when they’ve considered the compacts. Insurers would have to calculate premiums for markets in which they haven’t done business, and they have to understand the different hospital and doctor networks in new states.
The pro-Obamacare group Protect Our Care blasted the announcement in a statement Wednesday, casting in as the Trump administration’s attempt to “sabotage” on the healthcare system.
“The Trump Administration wants to let insurance companies pick the state with the least regulation, and allow insurers to bypass much needed consumer protections,” Leslie Dach, campaign chair for the group, said in a statement. “This has nothing to do with choice, competition, or affordability for consumers; it is about increasing profitability for the insurance companies and guaranteeing worse coverage for the rest of us.”
The Trump administration has also tried to facilitate the sale of insurance across state lines through a type of coverage known as “association health plans.” These plans allow businesses and people who are self-employed to band together for the purpose of buying health insurance. They’re allowed set up the arrangement across state lines, but the uptake has been slow.
The farm cooperative Land O’Lakes is available in Nebraska and Minnesota, and the American Veterinary Medical Association is working on selling across state lines in the months ahead. Part of the reason that setting up the arrangements is slow is because insurers have to file separately in different states, which have different laws, and get separate approval.
