The idea of allowing consumers to buy health coverage from any insurer in any state has been floated in Congress for several years. It would be an alternative to a consumer’s state or regional exchange. Someone in the Northeast thus could buy coverage from an insurer in the Southwest.
It’s a bad idea that persists. Any proposals should be voted down.
The idea would open the door for rampant fraud and undermine consumer protections. How would the system be regulated?
Let’s say a scammer in State A peddles fake health coverage to consumers in State B. Would the insurance department in State A have the resources or will to remedy those victims — non-residents who may live hundreds of miles away? That state has enough challenges just protecting its own residents.
Luckily the idea remains in the concept stage in Congress. But now it’s surfacing in state legislatures.
The Affordable Care Act lets states create regional exchanges that offer coverage to consumers within the compact. These are partnerships among like-minded states. They’re designed for closely knitted oversight that protects consumers in all states of the region.
But a well-intended New Hampshire lawmaker has introduced a bill allowing residents to buy health insurance from any other state. It would jeopardize the health and wellbeing of New Hampshire residents.
A scammer in another state could sell phony coverage to New Hampshire residents, and skirt New Hampshire’s licensing and oversight.
Who ensures out-of-state health entities are properly licensed and vetted for sale in the state? Or better, who creates and enforces regulations to prevent predators from selling across state lines?
We applaud New Hampshire’s insurance department for opposing the measure at a recent legislative hearing.
Hundreds of new state legislators took office last fall. Many barely grasp state insurance-fraud laws — and especially how they protect consumers.
These cross-border insurance proposals may seem good for the lawmaker’s state residents … at first glance. But they open the door wide for scammers. It’s the school of unintended consequences at work.
The anti-fraud community needs to educate legislators about being vigilant against fraud. That’s an important part of the Coalition’s mission. We’ll steadfastly work to make sure legislative proposals minimize unintended consequences and maximize protection of consumers throughout the nation.
About the author: Howard Goldblatt is director of government affairs for the Coalition Against Insurance Fraud.