Across State Lines: Myth vs. Reality

July 25, 2017

Recently, President Donald Trump said that by allowing insurers to sell health plans across state lines, “your premiums will be down 60 and 70 percent.” The president made the claim during remarks before a luncheon on July 19 with Republican senators to talk about legislative efforts to repeal the Affordable Care Act (ACA).

In a “myth vs. reality” fact sheet, the National Association of Insurance Commissioners (NAIC) said the idea that cross-state sales would bring about lower premiums was a “myth.” It said the reality is: “Interstate sales will start a race to the bottom by allowing companies to choose their regulator,” allowing insurers to target the healthiest consumers. “While those individuals in pristine health may be able to find cheaper policies, everyone else would face steep premium hikes if they can find coverage at all,” the NAIC wrote.

PIA opposes allowing health insurance sales across state lines, because doing so would strip states of their regulatory authority over insurance and undermine the foundation on which state regulation of insurance is based. “All insurance is local,” said PIA National Executive Vice President & CEO Mike Becker. “This is especially true of health insurance … permitting the designation of any one state as regulator for all states would, in essence, impose a one-size-fits-all solution dictated by Washington, D.C.—which, ironically, has been one of the main criticisms of the ACA.”

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