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Under the coming administration and Congress, the repeal of the Affordable Care Act (Obamacare) looks like a foregone conclusion. What's a nation to do? If the federal government is going to drop the ball, the states will have to pick it up. One possibility is for progressive-leaning states that favor single-payer to band together to create it for themselves.
Here's one way it might work: California, Washington, New York, New Jersey, and Massachusetts form the core. That's roughly 75 million Americans, or close to 1/4 of the population. These states would enter into an interstate compact to join their populations into a single, unified pool and create a single-payer healthcare system to serve their residents. Other states can choose to enter the compact at a later time if they meet the requirements (whatever they may be).
I think you are MUCH more likely to get something like the "Delaware" and "North Dakota" model of credit card companies incorporating in the states with the lowest fiduciary requirements and least regulation. Health insurance companies will find a state with the absolute lowest requirements and base all their rules out of that regulatory environment.
Because the only way interstate sales can work is if State A MUST accept State B's policies as valid, even if State B has the lowest possible standards of insurance.
You don't need interstate sales, PNW. You can still have Compact members approve for sale within a particular state. All you'll have is a shared risk pool. It gets complicated when health care costs vary so much from area to area.
The bigger problem is if congress approves sales across state lines. You'll see legal battles for years if congress does this, since it gets into issues of federal/state primacy, federal pre-emption, regulation of insurance markets and so forth. A very messy thing.
You don't need interstate sales, PNW. You can still have Compact members approve for sale within a particular state. All you'll have is a shared risk pool. It gets complicated when health care costs vary so much from area to area.
The bigger problem is if congress approves sales across state lines. You'll see legal battles for years if congress does this, since it gets into issues of federal/state primacy, federal pre-emption, regulation of insurance markets and so forth. A very messy thing.
I just finished reading Rand Paul's proposal and determined the "unregulated" sales across state lines would be awful, at least for my state. Insurers are tightly regulated in Maryland and proposed rate hikes must be approved, not merely reviewed by the Insurance Commission.
I would like to see a single payer system adopted among Compact Members. Until the ACA came about, there was no Federal interest in health care other than Medicare. IIRC, the Supreme Court changed that a bit. The other issue is that insurance companies would go ballistic and send their lobbyists with cash in hand to both Congress and the President. Shocker, I know.
One interesting point was the "in network" issue. Insurance companies go to a provider network (CityX Hospital Group for example) and say "we will have xx,xxx number of people that will sign up with us", what deal will you give us on in plan rates? Basically a negotiation of some type. This becomes more difficult across state lines, just the magnitude of number of healthcare systems in each state and supporting the people who sign up for insurance in that state as well as showing you will have xx,xxx people sign up. Different regulations are also part of this.
Race to the bottom is also a potential issue (broader discussion).
Resolving issues with claims and other issues is also a potential problem. I had an issue with BCBS agents giving me incorrect information on the plan I chose. It was actually incorrect in their documentation. The state I live in has a consumer insurance agency - I wrote to that agency, I got immediate results with BCBS allowing me to choose any new plan even though the deadline passed.
If cross state lines insurance start up, it is not clear Alaska will fight for someone in Florida who signed with company in Alaska. Multiply that by 50. States grouping together might help a bit, paper talked to these issues. So you almost need a federal agency to do this - not a good add to the federal gov. I am not sure how many issues will come up overall, it will likely increase as you cross states, and you need a way to raise issues to get them resolved.
Also I understand that as of 1/1/2016, the ACA allowed these "Compacts", no one seems to want to use it.
^ I think forming networks will not be a problem for those insurers who have activities in multiple states. Examples would be Anthem and Aetna. Humana, who focuses on Medicare Advantage, could probably use those pre-established networks too.
More interesting to me is how the Feds will pre-empt state insurance laws, if indeed they can. If a state can no longer regulate the insurance in its state, who will? Will the Feds do it? Unlikely. Will we see policyholders left holding the bag? Likely if reserve requirements are too weak.
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