Monday, November 2, 2009

Selling health insurance across state lines

The Senate's health reform bill includes a provision to allow the sale of health insurance across state lines. Some argue that it could increase competition and make health insurance more affordable.

The Wall Street Journal weighed in on the subject back in August with an Editorial that said, in part:

Interstate competition made the U.S. one of the world's most efficient, consumer driven markets. But health insurance is a glaring exception. When the competition caucus in Team Obama has to look for Plan B, this is it.

But if you allow for all health plans to be sold across state lines, which state is responsible for enforcing consumer protections? Are states with stronger protections, such as Washington, now forced to accept the standards of states with fewer protections? If a consumer is harmed or wants to file a complaint, do they still call their own insurance commissioner or the state where the plan is based?

Allowing plans from other states to be sold might be a good idea, but standards would need to be set or we could face a race to the bottom. Last year, the Washington state Legislature ordered our office to write a report on another part of this debate -the feasibility of forming an interstate compact to sell health insurance.

Read the full report here.

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