President Trump may issue an executive order enabling Americans to buy and sell health insurance across state lines. If so, we’re likely to find that this idea is about as practical and popular as buying and selling haircuts across state lines.
Conservatives have long argued that interstate health insurance markets would drive health care costs downward. “We sell car insurance and life insurance across state lines, so why not health insurance?” they ask. But health insurance has little in common with car or life insurance.
I live in Virginia. For almost 30 years, a Pennsylvania company has sold me life insurance, and over that entire time, they’ve only had three questions: Was I in good health the day I bought the policy? Have I paid my annual premiums? Did I die yet? If I move to Iowa or Chile or Mars, nothing changes. When I die, they write a check to my heirs.
In stark contrast: If a Pennsylvania company wants to sell me health insurance, they have to build a network of doctors and hospitals and laboratories here in Virginia — negotiating deals with all of them. They have to evaluate and process the dozens or hundreds of line-item, health-care expenses I incur each year.
To make this worthwhile, they have to acquire thousands of other enrollees in Virginia, and they have to listen to all my complaints and queries, which, as is the case with health insurance, are many. A few states have opened their borders to out-of-state health insurers, and the response has been a uniform, “Thanks, but no thanks.”
For many conservatives, the original idea was to allow residents of highly regulated states (like New York) to purchase policies written and regulated under the laws of less-regulated states (like Idaho). While the idea sounds appealing, the logistics would be nightmarish, and the Affordable Care Act (ACA) has drastically reduced the differences in state regulations.
The one good thing that may come of such an executive order is that we can finally stop talking about this idea. Then we can start talking about the things that really matter — the delivery of health care rather than the particulars of health insurance.
As long as we focus on health insurance, we’re mostly arguing about how to distribute care and financial obligations. With the passage of the ACA in 2010, the federal government promised more care to millions of people. It also rearranged who paid how much for which care.
But the law did little to change the number of doctors, nurses, hospitals, machines or laboratories — or how we use those resources to produce health.
In the past 25 years, a vast constellation of creative geniuses altered the ways we process, store and communicate information. The same opportunities are poised to change the way we deliver health care, through telemedicine, diagnostic software and hardware, remote telemetry or drones for delivering medical resources.
The challenge is how to unleash these developments in ways that produce better health for more people at lower cost, year after year. Buying your health insurance from some other state won’t do the trick.