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Tom Montgomery
10-12-2016, 09:19 AM
Trump says he will abolish the ACA.

If I understand correctly, Trump sez he will eliminate the "artificial boundaries" that currently prevent full and complete competition between insurance companies. He sez such full and complete competition between insurance companies will lower costs for everyone and -- somehow -- also provide coverage for those with pre-existing conditions that prevented them from qualifying for coverage in the past.

My question: Are not the "artificial boundaries" Donald is talking about abolishing actually state boundaries? The U.S. Constitution allows the individual states to regulate insurance companies as they see fit. Can The Donald's plan withstand constitutional scrutiny?

Too Little Time
10-12-2016, 09:30 AM
Trump says he will abolish the ACA.

If I understand correctly, Trump sez he will eliminate the "artificial boundaries" that currently prevent full and complete competition between insurance companies. He sez such full and complete competition between insurance companies will lower costs for everyone and -- somehow -- also provide coverage for those with pre-existing conditions that prevented them from qualifying for coverage in the past.

My question: Are not the "artificial boundaries" Donald is talking about abolishing actually state boundaries? The U.S. Constitution allows the individual states to regulate insurance companies as they see fit. Can The Donald's plan withstand constitutional scrutiny?
The Constitution does not prohibit insurance companies operating across state lines.

Your comment brings up an important issue in health insurance. Your health insurance network of providers ends at the state line. So don't travel far from home.

On the issue of pre-existing conditions: In the past if you had insurance and a pre-existing condition, moving across state lines would affect your insurance coverage. That was not as big of a problem with group plans.

Norman Bernstein
10-12-2016, 09:31 AM
Trump says he will abolish the ACA.

If I understand correctly, Trump sez he will eliminate the "artificial boundaries" that currently prevent full and complete competition between insurance companies. He sez such full and complete competition between insurance companies will lower costs for everyone and -- somehow -- also provide coverage for those with pre-existing conditions that prevented them from qualifying for coverage in the past.

My question: Are not the "artificial boundaries" Donald is talking about abolishing actually state boundaries? The U.S. Constitution allows the individual states to regulate insurance companies as they see fit. Can The Donald's plan withstand constitutional scrutiny?

It probably CAN withstand Constitutional scrutiny... but the end result won't be meaningful competition.

What is FAR more likely to happen: insurance companies will re-incorporate in whatever state offers the most lax regulations, lowest taxes, and other concessions. States will compete for this privilege... especially if the insurance company agrees to relocate their corporate headquarters in that state, and thereby provide additional jobs. States unwilling to drop their pants will lose out. States which compete for the businesses are likely to agree to weaken consumer protections, and make it far harder to sue the insurer, in exchange for getting the insurer to come there.

For consumers, this will make any sort of legal action against their insurer, should they happen to be mistreated, essentially impossible. A customer in Indiana isn't going to be able to afford to press a lawsuit against a company incorporated in Delaware, so making this change provides 'legal insulation' for the insurance companies.

This will do nothing whatsoever for costs. The fee that a heart surgeon gets in Kentucky might likely be a great deal lower than the fee for a heart surgeon in one of the major hospitals in Boston, and a big part of that is the difference in local costs; it costs a great deal more to live and work in Boston, than in Louisville or other lesser markets. The same is even more true for all the support staff: nurses, orderlies, administrators, etc. In selling health insurance across state lines, insurers are less likely to calibrate benefits and premiums according to local costs.

John Smith
10-12-2016, 10:46 AM
I HAVE HAD a federal plan for years. While it is a federal plan for federal employees and is available throughout the country, it is administered state by state. Medicals costs vary from one state to another, as to the premiums. My premium is based on me living in NJ. If I lived in SC, my premium would be lower.

If an insurance company is based in SC and wanted to sell policies in NJ, I don't think anything stops them, BUT the premiums would be based on NJ costs.

According to the very long and detailed article in TIME back in March of 14 (I think) Medicare also determines what it will approve based on location, costs in that state, patient traffic, and some other factors. They might approve $900 for some service/procedure in NJ, but only $700 for the same thing in another state.

Norman Bernstein
10-12-2016, 10:54 AM
I HAVE HAD a federal plan for years. While it is a federal plan for federal employees and is available throughout the country, it is administered state by state. Medicals costs vary from one state to another, as to the premiums. My premium is based on me living in NJ. If I lived in SC, my premium would be lower.

If an insurance company is based in SC and wanted to sell policies in NJ, I don't think anything stops them, BUT the premiums would be based on NJ costs.

According to the very long and detailed article in TIME back in March of 14 (I think) Medicare also determines what it will approve based on location, costs in that state, patient traffic, and some other factors. They might approve $900 for some service/procedure in NJ, but only $700 for the same thing in another state.

I believe you're right; the states would still retain their insurance regulations, according to their own legislatures... but I don't see how this changes anything, with regard to competition. Already, most insurers are large multi-state operations; Blue Cross Blue Shield, Aetna, United Health Care, etc., all operate in many, if not most, states.

It'a about the corporate aspect; re-incorporating in the most favorable state, for purposes of taxes, and/or for the purposes of extracting whatever concessions that a state can be convinced to yield, to get the insurer re-incorporate there. In other words, it's of no benefit to consumers, but potentially a big benefit to shareholders.

The history of such 'deals' is pretty spotty; states aren't always known to make good deals for their citizens. Rhode Island, for example, extended a $75M loan guarantee to Kurt Schilling (ex-Red Sox pitcher) to establish his videogame company, 38 Studios, in Rhode Island.... he bankrupted it, and the state is out for about half of the money. Schilling, incidentally, got into massive personal financial trouble in the deal... he actually had to auction off his famous 'bloody sock' to pay debts.