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Author: Jeanwa Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 4332  
Subject: State lines Date: 10/10/2012 11:33 AM
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Insurance can not be bought across state lines. Who made that rule? Who would have to change it. Can the Federal Government?
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Author: pauleckler Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3941 of 4332
Subject: Re: State lines Date: 10/10/2012 3:08 PM
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This is one of the proposals that gets kicked around from time to time.

The resistance comes from politicians who want to mandate coverage for their favorite groups like birth control and mammograms or erectile dysfunction.

Shopping nationwide would allow some states to play the Nevada game on gambling and divorce--to make their states attractive with lower cost bare bones coverage. But politicians and special interest groups might see their influence weakened.

Let's hope it comes to pass, but we know there will be opposition.

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Author: fleg9bo Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3942 of 4332
Subject: Re: State lines Date: 10/10/2012 3:36 PM
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Not an expert but I think that one of the arguments that states make is that they need to protect consumers by regulating insurance companies to make sure that they have enough assets to pay claims. If you, as a WA resident, buy a policy from a company that can only do business in WA, you know it will be able to pay your claims. If you buy a policy from a Florida company, who knows if it will be there when you need it? The state of Florida will not be looking to make sure its companies can cover claims in other states. It would be burdensome for states to have to monitor the financial health of insurance companies based in other states.

I don't know if that's a good argument or just an excuse for states to get a stranglehold on the insurance business and make it do stuff it would never do if freedom prevailed -- like force us - clean-living folks in our mid-60s - to pay for maternity and addiction treatment coverage that we will never have any use for.

--fleg

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Author: erikinthered100 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3944 of 4332
Subject: Re: State lines Date: 10/10/2012 4:16 PM
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Not an expert but I think that one of the arguments that states make is that they need to protect consumers by regulating insurance companies to make sure that they have enough assets to pay claims. If you, as a WA resident, buy a policy from a company that can only do business in WA, you know it will be able to pay your claims. If you buy a policy from a Florida company, who knows if it will be there when you need it? The state of Florida will not be looking to make sure its companies can cover claims in other states. It would be burdensome for states to have to monitor the financial health of insurance companies based in other states.

I don't know if that's a good argument or just an excuse for states to get a stranglehold on the insurance business and make it do stuff it would never do if freedom prevailed -- like force us - clean-living folks in our mid-60s - to pay for maternity and addiction treatment coverage that we will never have any use for.


I agree. I think that "consumer protection" is the given rationale. But it doesn't hold up under scrutiny. Other goods and services are freely bought and sold among the states. And the consumer is beter off when this occurs. The consumer has more choices and is able to shop for the most appropriate and best goods or services. Quality and prices are actually much better due to greater competition. In other words, in the name of "consumer protection," the government is actually screwing the consumer. It does so to serve special interests including health insurers and those offering certain mandated services.

Here's are links to some numbers:

http://healthinsurance.about.com/od/healthinsurancebasics/a/...


In 2009, the average premium for a family nationwide was $6328. In New York, the corresponding price was a whopping $13296 and in Iowa, the corresponding price was $5609.

http://www.dailyfinance.com/2011/08/12/7-best-and-worst-stat...

In 2010, the average monthly premium per person was $215. This varied from a high of $437 in Massachusetts to a low of $136 in Alabama.

It appears that there is a possibility of huge savings from deregulation of the health insurance market to allow purchase across state lines.

Why wasn't this included in the so-called "health care reforms" in Obamacare????

Why??? Massive incompetence or criminal corruption???




dave

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Author: Hawkwin Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3947 of 4332
Subject: Re: State lines Date: 10/11/2012 11:46 AM
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The barrier exists for numerous reasons.

1. States have different laws as it pertains to insurance. In order for a company to operate (sell insurance) in a particular state, they need to meet the rules of that state. Customers and companies are generally prohobited from conducting business interstate in this manner when the company is not approved for those reasons.

2. Jurisdiction is a huge part of it. If someone in NY wants to buy a policy from some fly-by-night company in VT and that company has not been approved by NY, the customer likely has no recourse if the company defrauds the customer. By requiring the company to get approval to do business in NY, they are able to not only vet the company to some extent, they also now have some level of legal authority to shut the company down if they are fraudulent.

Other goods and services are freely bought and sold among the states.

Other goods and services are not substantially different and do not subject individuals to undue risk if the company that sells the product turns out fradulent.

If you want to buy a tv from your local best buy or from some retailer online in another state, if that TV breaks, you are not out a ton of money.

If you buy insurance from an un-approved company and they default on paying your $50,000 medical bill, you are likely up a creek without a paddle.

It does so to serve special interests including health insurers and those offering certain mandated services.

This is a problem with the state insurance commissions, not the insurance companies. Why would any insurance company want artificial barriers to how they do business???

This problem extends far beyond simply health insurance - this is seen in all forms of insurance including LTC, fixed and variable annuities, and life insurance. Some states are so restictive that companies don't even try to do business there. That is one reason why you see NY so much more expensive than other states.

The federal government is generally not involved. That is a problem largely created by individual states.

IIRC, ACA does something to address this but I don't have the time to do the research at the moment.

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Author: erikinthered100 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3956 of 4332
Subject: Re: State lines Date: 10/12/2012 4:01 PM
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1. States have different laws as it pertains to insurance. In order for a company to operate (sell insurance) in a particular state, they need to meet the rules of that state. Customers and companies are generally prohobited from conducting business interstate in this manner when the company is not approved for those reasons.

Different states have different mandated coverage. In one state, you might be able to buy a real insurance policy, catastrophic care only insurance, while another state may have a plethora of mandates which converts all "insurance" into "cadillac" style prepaid health care.


2. Jurisdiction is a huge part of it. If someone in NY wants to buy a policy from some fly-by-night company in VT and that company has not been approved by NY, the customer likely has no recourse if the company defrauds the customer. By requiring the company to get approval to do business in NY, they are able to not only vet the company to some extent, they also now have some level of legal authority to shut the company down if they are fraudulent.

Wouldn't this be a problem for many other goods and services as well? I don't see "jurisdiction" acting as a barrier to free trade among the states in most other areas.


Other goods and services are not substantially different and do not subject individuals to undue risk if the company that sells the product turns out fradulent.

If you want to buy a tv from your local best buy or from some retailer online in another state, if that TV breaks, you are not out a ton of money.

If you buy insurance from an un-approved company and they default on paying your $50,000 medical bill, you are likely up a creek without a paddle.


This is a rationale employed by those who favor restrictions on interstate health insurance. But it doesn't hold up to common sense. If an insurance company and policy meets the standards of one state, why shouldn't another state recognize that company as legitimate? I have yet to hear of a single state which is lax or irresponsible in its regulation of health insurance (the only problem appears to be overregulation).


This is a problem with the state insurance commissions, not the insurance companies. Why would any insurance company want artificial barriers to how they do business???

To limit competition.




dave

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Author: Hawkwin Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3960 of 4332
Subject: Re: State lines Date: 10/12/2012 4:48 PM
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Wouldn't this be a problem for many other goods and services as well? I don't see "jurisdiction" acting as a barrier to free trade among the states in most other areas.

No. A Toshiba model 1320 (made up model) sold in Michigan at Best Buy is the same as the Toshiba model 1320 sold at Walmart in Florida. We don't have state TV commissions that require tvs sold in Michigan have 50,000 pixels per inch while Florida requires that tvs have 52,000 pixels per inch.

That is what we have with state insurance commissions.

That is why Medicare Supplemental plans work so well. The Fed mandates a specific level of coverage per "letter" plan and regardless of which state or from which company you buy a "G" plan, they will all have a specific level of mandated coverage.

This is a rationale employed by those who favor restrictions on interstate health insurance. But it doesn't hold up to common sense. If an insurance company and policy meets the standards of one state, why shouldn't another state recognize that company as legitimate?

Because they don't! Why don't you ask the New York State Insurance Department why this is?

Here is the site that has the requirements to file to sell insurance in NY: http://www.dfs.ny.gov/insurance/ihealth.htm#fileny

Each state has a different process. What in the world makes you think the industry wants these restrictions?

To limit competition.

From themselves? Come on, man. That is like suggesting the auto manufacturers would want each state to create their own conflicting emission standards to make it more expensive for EVERYONE to participate in the market - all to limit competition.

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Author: sykesix Big gold star, 5000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3961 of 4332
Subject: Re: State lines Date: 10/12/2012 7:22 PM
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It appears that there is a possibility of huge savings from deregulation of the health insurance market to allow purchase across state lines.

Why wasn't this included in the so-called "health care reforms" in Obamacare????

Why??? Massive incompetence or criminal corruption???<?i>

It was proposed in the House version but later removed, because the Republicans screamed bloody blue murder.

For the most part, the federal government doesn't regulate insurance, the individual states do this. So there is a patchwork of 51 different insurance regulations. In order to have truely transportable insurance, there would have to be uniform insurance regulation on the federal level.

However, ObamaCare does provide the ability for states to form regional exchanges so there can be some limited insurance sales across state lines if your state decides to join with other states.


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Author: alstroemeria Big gold star, 5000 posts Top Recommended Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3962 of 4332
Subject: Re: State lines Date: 10/13/2012 5:10 PM
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Not to mention that insurance costs more in NY and MA because doctors, hospitals, and other health care providers/services cost more. A lot more.

When I moved to SC from CA, my employer must've given a small whoop for joy as suddenly they were providing me insurance at SC rates. Yeah, they kept my co-pay the same. No, they did not add the savings to my paycheck ;-)

I'm trying to remember 10 years back, but the full price of my employer's group health insurance in CA at the time was ~$1000/mo for a couple, while in SC it was ~$650.

This is why, when you look for insurance on that ehealthinsurance website or for a Medicare supplemental policy, the first thing they ask for is your state or zip code.

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Author: erikinthered100 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3963 of 4332
Subject: Re: State lines Date: 10/16/2012 12:14 PM
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It was proposed in the House version but later removed, because the Republicans screamed bloody blue murder.

Link, please.

As I recall, the sale of insurance across state lines was proposed by Republicans at the "health care reform summit" with Democrats. This idea (as well as other proven cost-cutting ideas proposed by Republicans such as tort reform, tax reform and expansion of HSA's) were completely ignored by Democrats who wrote their own bill without any Republican input and forced it through on a slim majority without a single Republican vote.

Here's a news report that outlines pre-summit 2010 Republican proposals including the sale of insurance across state lines:

http://www.reuters.com/article/2010/02/08/us-usa-healthcare-...


However, ObamaCare does provide the ability for states to form regional exchanges so there can be some limited insurance sales across state lines if your state decides to join with other states.

I wasn't aware of this. Why make only this modest possible improvement rather than creating a national health care insurance market?

dave

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