December 6th, 2016: President-elect Donald Trump has called for allowing health insurers to sell coverage across state lines to encourage competition and provide consumers with greater choice of individual plans.
The proposal is part of Trump’s health care alternatives to Obamacare posted on his presidential transition website, and he talked about it frequently throughout the 2016 campaign.
“We have to get rid of the artificial lines around the states, where we stop insurance companies from coming in and competing,” Trump said during the second presidential debate with Democrat Hillary Clinton in St. Louis in October.
The current system under Obamacare, in which every state and the District of Columbia establishes its own government-operated insurance market, “gives the insurance companies essentially monopolies,” Trump explained. “We want competition.”
The 2010 Obamacare law carefully prescribes ground rules for insurers participating in the subsidized health insurance program, including a prohibition against taking into account a person’s pre-existing medical conditions before determining whether to accept an applicant.
The insurers can only consider an applicant’s age and location in setting premium prices, and they are obliged to offer every applicant a basic menu of coverage and benefits.
Trump’s idea – echoed by House Speaker Paul Ryan (R-WI) and House Budget Chair Tom Price (R-GA), who has been nominated to be the next secretary of Health and Human Services — is that by cutting through detailed regulations tied to state insurance regulations, insurance companies will be able to offer national plans with lower premiums and reduced administrative costs.
That presumably would expand consumers’ choices as well as generate lower premiums and out-of-pocket costs.
In effect, insurance companies large and small could market their individual plans to consumers in any state as long as they are licensed in their home states and adhere to their home-state regulations.