Selling Health Insurace Across State Lines - Could It Backfire?

[somarco]

Re: Selling Health Insurace Across State Lines - Could It Backfir

Mandates add 30% plus but variations within a state will still be around even if mandates are lifted.

In Dalton GA Celtic often has better rates and more docs than Blue. Go figure.

 

[ABC]

Re: Selling Health Insurace Across State Lines - Could It Backfir

If that is really all there is to it, then why do carriers have different rates for different parts of a state?

Risk pooling & network discounts would be my answer.

 

[leevena]

Re: Selling Health Insurace Across State Lines - Could It Backfir

Interesting string of comments. I have a few comments;

1. Alton, can you give an example of a regulated market with high levels of competition? And as the reverse, can you show me a deregulated market without competition?

2. Alton, you mention that you have a great carrier in Connecticare. Would it not be advantageous for such a great plan to be sold in other states?

3. Somarco, two plans to pick from will lead to adverse selection and higher costs. It sounds appealing, but is not feasible.

4. Rate differentials in various parts of state. It is correctly pointed out that rate development consists of a variety of issues, with chief among them; underlying provider costs in the area, utilization, inflation/trend, degree of cost control, type of risk in the pool, plan design issues, and state interference. Reason behind why carriers have different rates in different areas of state has to do with the state requiring it. Bear in mind, I am not familiar with all 50, but enough to be comfortable that this statement will be close enough.

 

[Alston]

Re: Selling Health Insurace Across State Lines - Could It Backfir

1. Alston, can you give an example of a regulated market with high levels of competition? And as the reverse, can you show me a deregulated market without competition?

2. Alston, you mention that you have a great carrier in Connecticare. Would it not be advantageous for such a great plan to be sold in other states?

Sometimes additional competition results in less competition in the long run.

Although I don't believe that Wal-Mart's or Home Depot's proliferation had anything to do with deregulation, you can see what happens to smaller companies when the larger companies come in.

There may be some benefits to the economies of scale that companies like Wal-Mart and Home Depot offer us, but their proliferation hasn't resulted in more competition; it has resulted in less.

Banks crossing state lines is a result of deregulation. We have far fewer banks than we did when I was a young man.

Again, there may be some benefit to having larger banks or larger insurance companies, but this isn't the selling point the proponents mention.

They talk about the benefits of increased competition. My belief is that competition will be increased only temporarily as the big companies gobble up the smaller ones.

Health insurance is unique. It is even unique when compared to other insurances.

This uniqueness means that there are no easy answers. Lessons learned in economics 101 don't work as well as one might think.

Some great ideas are elegant in their simplicity. Other are simplistic and unworkable in the real world. Sometimes it is hard to tell the two apart.

Adding more competition reduces costs in most markets but unbridled competition isn't good for the health insurance market.

Without regulation a new insurance company can dramatically undercut an established company's price because the older company will have sicker people on their books.

Since the price of insurance is largely based on the claims each company has to pay, as the healthier people move to the newer company the rates for the established company's policy holders will increase.

The new company can offer a lower rate without lowering the average rate for the state. (At least not until the sickest drop their policies and are no longer part of the equation.)

Connecticare can and does sell across state lines. I believe that they have policy holders in some counties in two or three neighboring states.

However, for the reasons given above, I don't think that deregulation of the sort that is proposed would help them to increase their reach.



(As a side note I find it interesting that Republicans who have always been proponents of states' rights now want to strip the various states' DOIs of power.

Please don't let that last statement lead you to believe that I am blind to the hypocrisy on the other side of the aisle.)

 

[somarco]

Re: Selling Health Insurace Across State Lines - Could It Backfir

Somarco, two plans to pick from will lead to adverse selection and higher costs. It sounds appealing, but is not feasible.

I assume you understood my point. I was not suggesting only two plans, but rather two different kinds of plans.

This is no different from what would be achieved by selling across state lines, such as allowing someone in NY (a GI state) to buy from TX where underwriting is allowed.

If it becomes legal for NY residents to buy an underwritten plan from TX then you can achieve the same purpose by allowing NY residents to buy a medically underwritten plan.

Bear in mind, I am not familiar with all 50,

You mean 57.

There are 57 states, not 50.

 

[VolAgent]

Re: Selling Health Insurace Across State Lines - Could It Backfir

Risk pooling & network discounts would be my answer.

So, you're saying that health insurance is a local affair, that costs might differ in Kansas from Illinois?
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You mean 57.

There are 57 states, not 50.

So when are they going to add the other stars to the flag? Don't 7 states feel left out?

 

[somarco]

Re: Selling Health Insurace Across State Lines - Could It Backfir

So when are they going to add the other stars to the flag?

They are there. Just on the back side so you never see them. Kind of like the dark side of the moon.

 

[bill3173]

Re: Selling Health Insurace Across State Lines - Could It Backfir

Don't know if anyone is old enough to remember what it was like before deregulation of the cable companies, but there were a lot of them and the prices were much lower.

I paid $16/mo. in 1988, as a student, today it's like $67/mo. ~7% annual increase.

Just a guess, but I don't think that a lot of these insurance companies we have now will stick around for GI. We'll all be writing the same carriers in a few years, whether selling across State Lines or not, it'll probably look like like it.

 

[ins.dave]

Re: Selling Health Insurace Across State Lines - Could It Backfir

I still can't believe some of you are talking about GI.
Just like the mandate idea; that won't happen. If it did there is no health insurance industry at that point.
Buying across state lines ties in with the power grab. These 3 things constitute govt. run healthcare or medicare for all.
Rates in FL. alone vary tremendously from Tampa to the Keys let alone from state to state. The cost of living varies on everything else so why wouldn't they?
This whole thing just gets more and more humorous as we get closer to 2012. People are dim. Amazing how long its taking some of them to get it.

 

[HealthGuy]

Re: Selling Health Insurace Across State Lines - Could It Backfir

Ins.Dave: Lets crack out the doobies and watch this all unfold. This crash and burn health bill is fun.