A proposal increasingly being touted by politicians, including President
"It would be a big change, and I would say that it would probably be a welcome change, especially in the state of
Agrella, licensed in NH,
A Complicated Proposal
It's important first to have a full understanding of this issue, because it's complicated and because selling across state lines can mean different things," says NH Insurance Commissioner
Even given that ability, there still are only eight companies selling major medical health insurance policies to individuals in NH, compared with 120 companies offering private passenger auto insurance in the state, Sevigny says.
"It's funny that with car insurance there are plenty of carriers," says
It's partly because health insurance is more complicated. It's not simply a matter of changing a zip code when moving, which is usually all it takes for an auto insurance update. Health insurance requires a local network and providers that the insurers then have to pay, as well as enough customers to create a risk pool (healthy people buypolicies to pay the costs of the sick). Plus, in NH, carriers have to "split up about 50,000 [consumers] among themselves, which is not a lot of business," Gosselin says.
As Sevigny explains, "Health insurance companies' plans must contract with enough health care providers to meet the state's network adequacy requirements. Health insurance companies have better negotiating leverage with health care providers when they have large numbers of policyholders and a company that can't negotiate good discounts won't be able to price its products competitively."
Many at the national and state level are critical of opening up the insurance industry. Some argue it could mean the state with the most lax regulations and least oversight will become a haven for insurance companies' headquarters. In addition, states would lose direct oversight of the companies selling policies in their own state.
Licensing now gives a state authority over an insurance company, even if it's headquartered elsewhere. Under current laws, insurance companies licensed in NH submit rates and policies to the
Only four states already have approved laws to allow the selling of policies across state lines:
One possibility that has been considered is an interstate compact, in which several states, for example those in northern