Experts assess Trump’s 7-point healthcare plan
2. Allow health insurance to be sold across state lines.
This proposes allowing consumers to compare plans across the U.S., regardless of state.
“Doing so should increase competition and would presumably help control premium cost inflation,” says Brill.
Although there are issues involving the varying state insurance laws, “insurance companies have gone way too far and are taking advantage of the lack of competition,” says Johnson. “Many states have only a few real choices for insurance. Competition does not really exist so prices are high.
“But the best free-market approach would be focused on reducing costs for employers who provide healthcare for their employees, and then also control the pricing of healthcare services,” he says. “Sixty-percent of employers use some form of self-funding/self-insurance. Helping smaller employers gain the benefits of self-insurance and buying very high deductible stop-loss insurance, which does cross state lines, would be wise.”
Hoagland says that he is not certain how Trump’s proposal differs from current law.
“Health insurance companies can sell their products in any state as long as the product meets state insurance compliance requirements,” he says. “If the proposal is to do away with state insurance licensing and preempt with federal law, the proposal would effectively be having the federal government regulate all health insurance and create a single national market.”
Implicit in the proposal is that premium costs for products offered would be less, according to Mack. “However, historically because of administrative slack, reduction of administrative expenses have rarely been passed on to consumers in the form of reduced premiums,” he says
“What may occur is that insurance companies would design products and premiums to cherry pick individuals who are higher earning, and lower risk,” Mack adds. “Federal government may see decreased regulatory costs of insurance to the detriment of states: It may be merely a shift from one to another.”
Antitrust issues, which are the purview of the federal government, would likely increase as insurance companies grow and acquire increasing market clout, potentially to the detriment of competitive pricing, Mack believes.
“A Trump presidency, especially with a Republican-controlled Congress, would likely not enforce antitrust review or actions,” he says. “Will insurance companies become ‘too big to fail’?”