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Why selling insurance across state lines makes no sense.

Grand Mal said:
What's your problem with it? Where is it wrong?
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This Brain-Trust at Georgetown claims to have discovered is that the ESTABLISHMENT doesn't want change. No s**t sherlock, They are probably patting themselves on the back like they found the cure for cancer.

The insurance companies don't want it because with increased competition destroys their Monopoly and forces them lower rates. Govt Politicians & Bureaucrats don't want it because takes from their power.

The people who do want it: every Consumer who understands basic economics.
 
StillBallin75 said:
The biggest reason why selling insurance across state lines is a ****ing idiotic solution is because if that were the case, all the insurance companies would just move to the states with the least restrictions (like, say, provisions for people with pre-existing conditions for example), like how all credit card companies seem to be headquartered in the Dakotas.
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Federal regulation could fix that.
 
Incisor said:
Hard to see how letting insurance companies sell across state lines won't end up in a too-big-to-fail scenario, like what happened with the banks.
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Healthcare industry is not comparable to the financial industry. Apples and Oranges.
 
RBIII said:
Well don't do business in the state you are banned from, if a company is conducting poor business practices then they should be banned. Jesus is this rocket science?
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Were you making my point for me? Cool
 
jimbo said:
No person or corporation understanding economics is ever going to sell a product for a hundred bucks today knowing that it will need to spend millions tomorrow to fulfill its obligations. Few individuals are going to spend a few hundred per month for a potentially useful product if that product will be available for a hundred the day you require millions. That's the problem with preexisting conditions. The only solution to that problem is charity.

The market can and will determine the best policy for an individual customer if the market is allowed to function. Limiting competition by disallowing multi state or individually designed policies limit the market.
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You're right about pre-existing conditions. No insurance company is going to take pre-existing conditions unless other people are on the rolls to take up the slack.

Buy I think your understanding of markets is off. Free markets don't work like you describe. The free market is not a deus ex machina that will magically make everything alright. The free market is morally ambiguous, it doesn't care at all what happens to the people in it.


A free market is simply an interaction between profit maximizing entities. No one in the market can or should take a look at the bigger picture. This is usually disastrous in the long run. Take fishing in a lake. Fishermen will catch as many fish as possible. The more fish caught the more supply the market has and the lower the price of fish. Eventually the number of fish caught will balance at a point where the price set by the supply of fish makes fishing barely profitable. The consumer is happy because they have cheap food, but the fishermen struggle to survive. Eventually the fishermen who don't catch quite as much will have to sell out their boats to the ones who catch more, until all of the profit for fishing ends up in a few hands. Meanwhile no one has taken the population of fish into consideration. Year after year there are fewer fish. Fishermen work longer and longer hours to catch fewer and fewer fish. The price price of fish skyrockets, but the fishermen don't see the profits. They've all gone to a very few.. who've moved because they see where this is headed. Eventually consumers can't afford to buy any fish and we're left with no fish, fishermen, consumers, or profit. All that's left is a burned out community with used up people.
 
ReverendHellh0und said:
Consumers aren't clamouring for them because they don't understand.

Insurers don't want it as it increases supply, thus reducing demand via introduction of competition. The rest of the speculative opinion piece does not get better.
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Gee, that was hard to pick apart, eh? :rolleyes:
 
Incisor said:
From the LA Times:



Or preening political candidates who take donations from insurance companies and executives.
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It's funny that they have a problem with that, but are okay with signing up for "insurance" but wanting your preexisting condition covered. That's not insurance.
 
Mithros said:
You don't make your own choices. You want the government to take responsibility.

When you go into the grocery store to buy food, you assume that everything you buy is safe. You assume that the list of ingredients is accurate. You assume that it comes from where it says it comes from. You assume that the expiration date is accurate. You assume that the meat you're buying has been treated with the proper sanitary procedures. You assume that any problems will result in mandatory recalls.

You assume that the toys you buy your children aren't coated in lead paint. You assume that your car has been manufactured to certain safety standards. You assume that your furnace has the proper safeguards. You assume that the water treatment plant is accurately measuring water quality. You assume that the pills you're taking are all the same, and subjected to the quality control. When there's a huge snowfall, you don't go about shoveling the streets yourself, you expect the government to do it for you.


Has anyone checked more than a few of these things?

You don't take personal responsibility for the vast majority of your life. None of us do. It would be impossible for any of us to go through life "taking responsibility" for all of our own choices. We are not in the middle ages living in our own sewage, we have a modern society. So it would be nice if our political ideologies could likewise progress.
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Sorry, but your analogy is false.

I have no problem with "quality" requirements. I just don't like all my choices taken away...just because the government decides to.

Given your argument, If I walked into a store to buy a pound of meat, the government would tell me I can only have hamburger instead of the prime rib I was looking for. Or...vice versa.

I'm talking about choices instead of mandates about what I spend my money on.
 
radcen said:
Your article is from 2013. My personal example is from 2011. Things may have changed, but I'm skeptical.

I went in for a sleep study test. It was the beginning of the calendar year and I had used zero of my yearly $1000 deductible at that point. The price for the test(s), all inclusive, was $2400(-ish). That's what I was quoted if I paid out-of-pocket.

Long story short, I paid a total of $1100. $1000 to cover my entire deductible for the year, and $100 co-pay for that specific procedure. That leaves $1300(-ish), right?

Ha! Not so. My insurance company paid $34. They had pre-negioated sleep study costs with that particular health care provider from $2400(-ish) to $1134.

I used to have paperwork to show this, and used to show people, but I think I long ago tossed them.
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Yes, but that sleep study... does it really cost 2400 or even 1134? I bet that it actually only really costs a couple 100 bucks.. cost wise. Just saying..
 
RBIII said:
I suppose so if your position is pro crossing state lines. If not, then no.
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I have no problem with people being able to select their insurance. What I am reminding everyone of is that there are reasons that some insurance companies do not do business in some states, because they are not allowed to because of their business practices. So, if we are allowed to shop across stateliness then the consumer should be aware of why that insurer was not doing business in their state to begin with.
 
Greenbeard said:
Which problem is that?
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Indeed they can and do. But they don't get to carry along another state's regulatory climate (and ignore that of the particular state they're selling in) now. That's what across-state-lines proposals seek to change.
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Reconciling cross state regulatory climates. This can and most likely will be done.
 
Greenbeard said:
The fact that prices vary wildly from facility to facility (and even from payer to payer at a given facility) just illustrates the point that prices are determined via contract negotiations between each facility and each insurer.

You seem to be implying that if a new insurer comes into the market, they'll sit down at the negotiating table with the dominant hospital and get more favorable prices than established insurers in the market who generate more business for the hospital. I'm not sure why you think that would be the case.
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No I am saying that the hospital works with one insurance company and that means they set the prices based on this. So if you are sick and need treatment, your insurance company has certain hospitals it only uses. You cant choose.. or has that changed with Obamacare? So even if you wanted to go to the cheaper hospital, your insurance company says no. This means there is a defacto cartel between the insurance company and the hospital. It increases the costs automatically. There should be no links between the insurance companies and the hospitals.. and the consumer should be able to choose whatever hospital they want based on a price list. That is not happening.
 
Casper said:
I have no problem with people being able to select their insurance. What I am reminding everyone of is that there are reasons that some insurance companies do not do business in some states, because they are not allowed to because of their business practices. So, if we are allowed to shop across stateliness then the consumer should be aware of why that insurer was not doing business in their state to begin with.
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You seem to miss it though, some of them would also jump at the chance, but currently can't. The market will solve for bad business practices via competition.
 
Casca XV said:
This Brain-Trust at Georgetown claims to have discovered is that the ESTABLISHMENT doesn't want change. No s**t sherlock, They are probably patting themselves on the back like they found the cure for cancer.

The insurance companies don't want it because with increased competition destroys their Monopoly and forces them lower rates. Govt Politicians & Bureaucrats don't want it because takes from their power.

The people who do want it: every Consumer who understands basic economics.
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I don't know, I can't decide. On the one hand, competition is always good for the consumer and I instinctively resist efforts to limit it but on the other hand opening it up like that takes away each state's ability (read- each state's citizens ability) to decide how these corporations can behave. The example of credit cards has been raised. The credit card companies have all migrated to the states that allow them to charge whatever interest rate they please. Would people in Michigan be willing to let insurance companies in their state operate under Texas laws, for example?
 
There will never be insurance across state lines unless this country implements single-payer. Insurance across state lines is one of the most disgusting things I've ever seen proposed by conservatives. It's right up there with having a reciprocal laws for guns. It's the most hardcore undermining of state's rights imaginable.
 
radcen said:
May be true. Doesn't have to be. I would agree that would be a provision worth opposing, but it by itself shouldn't damn the concept. Most industries have their own laws that corporations must comply to operate in that sate. I see no reason why this would have to be different. My son used to work for Geico, and they had to adhere to all sorts of laws that were state-by-state.
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Exactly. What's acceptable in one state might be unacceptable in another state. I don't know why conservatives are so gung-ho about insurance across state lines idea. It's as if not a single one of them has ever actually talked to a state regulator or even a lowly insurance salesperson about why the idea is so dumb. Why are conservatives of all people demanding this? It makes no sense.
 
Mycroft said:
Sorry, but your analogy is false.

I have no problem with "quality" requirements. I just don't like all my choices taken away...just because the government decides to.

Given your argument, If I walked into a store to buy a pound of meat, the government would tell me I can only have hamburger instead of the prime rib I was looking for. Or...vice versa.

I'm talking about choices instead of mandates about what I spend my money on.
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How exactly is it false?

Insurers are allowed to sell insurance in a state providing that they meet a set of requirements set by the state. A state can't pick and choose which private companies are allowed to sell insurance in their state, but they are allowed to regulate the insurers in their state. If out of state companies are allowed to sell insurance across state lines, then those insurance companies won't be subject to the same requirements.

It would be like allowing a supermarket to pick which state's laws they wanted to abide by for food quality. All it takes is one state to relax regulations for them to be relaxed nationwide.

The problem with our country is that no-nothingism has been allowed to flourish under the guise of political correctness.
 
I can't believe it. It's the liberals having to point out that purchasing insurance across state lines is against conservative values. It's a ridiculous topsy turvy world when conservatives have abandoned all their principles and it's up to liberals to take up the cause.

Seriously wtf is wrong with you people?
 
Insurance companies suck. They are NOT on your side. They are on their side.


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RBIII said:
You seem to miss it though, some of them would also jump at the chance, but currently can't. The market will solve for bad business practices via competition.
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Sure it will.
 
PeteEU said:
Yes, but that sleep study... does it really cost 2400 or even 1134? I bet that it actually only really costs a couple 100 bucks.. cost wise. Just saying..
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A name brand of Zoloft cost $400 but a generic cost $2.50. At least with drugs the rates are available. With hospital charges it's all a big secret.
 
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