Can You Buy Health Insurance Across State Lines?

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by Jeffrey A.
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Are you allowed to purchase health insurance across state lines? Well, no. Under current guidelines, you are only allowed to purchase health insurance in the state you reside in. Even if you moved from one state to another, you’d be obligated to discard your old insurance and purchase the new state’s plan.

All of this is a result of states having the authority to regulate health insurance policies without federal intervention, which partly changed after the passing of the Affordable Care Act. 

Nevertheless, the Trump administration has supported the idea of permitting interstate health insurance purchase in order to create a “competitive market”. Although the idea has been suggested, no action has occurred to make this practice a reality. Given this uncertainty, what is the reason people want accessible interstate insurance purchases?

Why Do People Resort To This? 

The basis for seeking the purchase of health insurance across state lines has been driven by the need for reduction of premium costs, increased affordability, and more insurance options. In an industry that is heavily regulated by the state, the lack of affordable options creates desperation amongst citizens. With health insurance companies that drive up costs because of little-to-no competition, it is no wonder why there has been a growing call from consumers to have access to insurance options across interstate lines. 

Correspondingly, the benefits of allowing interstate purchases are disputed. Some analysts believe that more competition doesn’t necessarily guarantee price reductions in the industry, while other experts clamor that it would lead to reduced premiums and the number of insured across the country. No matter the case, the consensus in the community is that something needs urgent needs to be done, but what?

A Brief History of Health Insurance 

Ever since the 19th century, the regulation of the health insurance industry has fallen upon the hands of the states. This meant that consumers were subject to varying premium costs and healthcare affordability and coverage that differed by state. Nonetheless, following a decision made by the Supreme Court on June 5, 1944, the possibility of interstate insurance commerce became likely. 

Be as it may, any hope for this possibility was shut down when Congress passed the McCarran-Ferguson Act. The bill stipulated that states would solely regulate insurance policies and the federal government would not intervene. In the years after the passage of the bill, state regulations continued to increase with the help of the National Association of Insurance Commissioners. As a result, price regulations were strengthened, and federal oversight was further limited. Nowadays, consumers and policymakers alike have floated the idea of deregulating the industry, but as to how it would occur the question still lingers. 

Current Challenges

What seems to be the situation currently? After the passing of the Affordable Care Act (ACA) under the Obama administration, health insurance became more streamlined across all states. This meant that basic yet essential health standards increased alongside coverage and became prominent throughout the industry despite the pushback from state regulators. So what’s the issue you might ask?

For an advocate of interstate health insurance plans, the lack of a firm commitment plan on Capitol Hill has created confusion. Trump has stated that he would support any plan that expands on the private market and gives more options for the consumer. Even Republican legislators have presented a bill before but to no avail.

In addition, despite efforts from a Republican-dominated Congress in 2017, the American Healthcare Act (AHCA), which would have repealed Obamacare, failed to pass in the Senate, thus halting any effort to tackle health insurance reform for a while. Recently, the Trump administration has been looking to refocus attention on the issue.

With the recent success of Republican lawmakers in expanding association health plans, the deregulation in interstate health insurance purchases became ever more possible. Yet with all of these bills that have come forth, no progress has been on enacting this policy on a national scale. Supporters of a deregulated industry still wonder as to when the President will tackle the issue. 

The Fate of Health Insurance 

What does the future of health insurance entail? Will the purchasing of health insurance across state lines become more frequent? There’s no simple answer to this question. What comes within the next few months or years will be dependent on the political party in power. 

On one side, the Republican party believes in repealing the Affordable Care Act in favor of a system that deregulates the health insurance market. The goal of such a measure being the reduction of costs and increased affordability for the consumer. Laws that deregulate the health insurance industry have been put in place across six states. How well have these policies fared? Not well enough.

Although the idea is to drive down healthcare costs with more insurance companies entering the market, the main obstacle isn’t the regulations of the state, but the difficulty in creating an adequate, low-cost provider network for the patient. Together with the prominence of insurance companies that own a large percentage of shares within the market, it can prove to be near impossible for any new companies to set foot in a potentially deregulated market

Conversely, the Democratic party favors a totally different approach to the healthcare system. With the Democratic primaries underway, two ideas have arisen from the remaining candidates, Joe Biden and Bernie Sanders. One potential policy supported by Sanders called Medicare For All would focus on eliminating private insurance companies and moving towards an all-public health care system. The system would be funded by a revised tax system which would include a wealth tax. The other policy supported by Biden would focus on increasing Medicare coverage for those who want it and is seen as an improvement on Obamacare. This system prioritizes the public option while retaining the presence of private companies. 

The end goal of both policies, the same as Republicans, is to reduce premium costs and tackle healthcare affordability in America. Which proposed change in the healthcare system will be entirely dependent on the winner of this upcoming election cycle. Any last-minute changes can occur months away from November on behalf of the current administration. Ultimately nothing is certain, but it is important that you lend your voice no matter the system you support. In the end, your health is what matters most.


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