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Dropping Legal Barriers Doesn't Guarantee Interstate Insurance Sales
Originally published on Mon June 25, 2012 6:05 pm
Starting next week, any health insurer licensed in Georgia can sell policies it offers in other states to Georgians. That includes policies that don't meet minimum standards for coverage in Georgia.
They'll be OK for sale under a new state law that aims to increase competition and lower prices for health insurance in the state.
The idea appeals to Brian Mayfield who runs a small company in the Atlanta suburb of Woodstock that repairs and refurbishes cash registers and related equipment. Business at his firm is good, but not good enough for Mayfield to offer employees health insurance.
But it doesn't look like Mayfield, or any other Georgian, will be able to take advantage of the new law. While its cross-state insurance provision is scheduled to go into effect next week, not one insurance company has taken the state up on its offer to sell here.
Some have national ambitions for the idea behind the Georgia experiment. Interstate sales of insurance is a key part of the Republican effort to "repeal and replace" the 2010 health care overhaul. Republicans such as House Speaker John Boehner of Ohio, Joe Barton from Texas, Phil Gingrey from Georgia, and even presidential candidate Mitt Romney, have touted it as a way to reduce consumer costs for health insurance.
In Georgia, state representative Matt Ramsey sponsored the legislation, bringing this national Republican concept to Georgia. Ramsey speculates that no insurer has signed up because they are paralyzed by the Supreme Court's pending ruling on the Affordable Care Act.
"Rightfully, everyone's kind of preserving the status quo until they see what direction our nation's health insurance marketplace is going to go."
It's not like insurers don't want the business, he says.
To find out why no company has signed on, NPR asked Georgia's biggest health insurers: Blue Cross Blue Shield, Aetna, Humana, United Healthcare and Kaiser Permanente. All declined to comment.
Georgetown University professor Mila Kofman says insurers' lack of action is a good thing for consumers. She says cheap plans are cheap for a reason — they don't offer good services. Insurance premiums are expensive because health care is expensive.
"I'm a little surprised, but frankly, it's a big relief," she says, "When you think about health insurance premiums, really the only way that out-of-state companies could sell products that are cheap is if they cut corners — if the product doesn't cover what the Georgia regulated products cover."
That doesn't bother Ramsey, who says, "If an individual wants to buy a more bare-bones policy because that's all they can afford [or] that's all they need, that's a heck of a lot better than not buying insurance."
Ramsey predicts that if the Supreme Court throws out the Affordable Care Act, insurers will jump at the chance to sell more policies here.
In the meantime, the only thing Georgia has to offer is a new law — and no takers.