10-26-2009, 04:55 AM | #1 (permalink) |
immoral minority
Location: Back in Ohio
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What would being able to buy health ins. across state lines do for me?
The republicans keep saying that doing this will lower my costs and should be the way to go. But, would this really work? Haven't we done this with credit cards, and now all credit cards come from North Dakota and Delaware? While it is more efficient, those two states had the fewest laws and regulations on the industry. And they offered major tax breaks to get them to move there. Why wouldn't the health care industry do the same thing?
The one benefit would be for large nation-wide companies. Instead of having to shop around and offer 50 different plans to each state, they could offer the same plan across their whole company. Are there any other reasons, either positive or negative that this would cause? Do you think if the 'public option' is a nationwide plan, that insurance companies would need to come up with nationwide plans to compete? Would my healthcare costs go up to pay for doctors in New York, Florida, and California because the cost of living is higher? Has anyone heard if the 'public option' will cost you more if you live someplace with high prices? Or do you think this will become a major headache? Little scam companies will be started in far away states, and you won't be able to contact them or find them when you have an expense. Will there will be 500 different plans to choose from with a bunch of different fine print, laws, and regulations on all these plans? |
10-26-2009, 04:58 AM | #2 (permalink) |
Darth Papa
Location: Yonder
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As I understand it (and I confess, I'm sketchy), the idea of segregating the insurance market along state lines was to force companies NOT to average prices across the country. So, expensive markets would have expensive insurance, but consumers in cheaper markets wouldn't have to bear that cost.
Call me cynical, but I think without some sort of pressure valve like the public option is intended to be, corporations will find SOME way to screw consumers no matter what constellation of regulations are placed on them. |
10-26-2009, 05:40 AM | #3 (permalink) | |
Junkie
Location: Ohio
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Insurance companies already to business in multiple states. The problem is that they have to conform to each individual states insurance regulation, set forth by the states dept. of insurance. A national set of regulations would help
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10-26-2009, 05:47 AM | #4 (permalink) |
Asshole
Administrator
Location: Chicago
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I'm going to resist injecting my opinions into this post as much as possible and address some of the factual issues with the hopes that it will foster the conversation.
The state-by-state regulatory system that we have wasn't really designed. It developed over a period of time. The federal government never really sought to provide much oversight until about 20 years ago. That goes for health, life, property/casualty and all the other lines. The large companies already operate across state lines, pretty much with impunity. For instance, even though I live in Illinois, my health insurance carrier is Blue Cross/Blue Shield of [southern state]. The BC/BS company has to follow IL laws here, but so long as they are filed to do business in the state, they are allowed to do so. This is done because my company's corporate headquarters are in the unnamed southern state and is an unusual arrangement. What the Republicans propose that is different than the current system is to allow smaller companies to use brokers to seek the best coverage ("best" being a qualitative term defined by the buyer) available in the entire nation rather than the local companies. The prospective carriers would still need to be filed and authorized to transact business in that state (no mean feat in some states since it can take years in spots), so buyers could potentially access all points of a larger network. Health insurance costs are already localized, but costs from area to area generally do not vary too much, at least in terms of hospital care (which is the big ticket item) because the local health insurors have negotiated those prices downwards already. There is more variance in office visits, especially with specialists.
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"They that can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety." - B. Franklin "There ought to be limits to freedom." - George W. Bush "We have met the enemy and he is us." - Pogo |
10-26-2009, 06:07 AM | #5 (permalink) |
Who You Crappin?
Location: Everywhere and Nowhere
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Isn't the larger problem that the big players in the insurance business more or less collude with one another by sharing information and artificially setting prices? In other words, we have the exact opposite of competition
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10-26-2009, 06:11 AM | #6 (permalink) | |
Junkie
Location: Ohio
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However there are some states where only 1 or 2 companies do business, having a national set of insurance regs would eliminate the need to be appointed by individual states to do business allowing for greater competition.
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10-26-2009, 06:15 AM | #7 (permalink) | |
Asshole
Administrator
Location: Chicago
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I cannot imagine how fucked up my life would get if insurors were no longer required to share information on losses. A couple of carriers tried that about 8 years ago, and it had the opposite effect than I think you intend, Derwood. It killed competition since the competing carriers had no idea what the historical loss history was and could not price things accurately. Granted, this was on the P&C side, so things are necessarily different. But sharing loss history is going to be universal in the industry and I can't imagine a carrier wreckless enough to not even ask about prior loss history in any segment of the industry. Or are you referring to something completely different and I've made assumptions here?
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"They that can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety." - B. Franklin "There ought to be limits to freedom." - George W. Bush "We have met the enemy and he is us." - Pogo |
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11-03-2009, 07:56 AM | #8 (permalink) | |
Junkie
Location: Ventura County
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I know the issue is a bit more complicated than it appears, but I think moving in the direction of being able to buy health insurance across state lines is a good thing regardless of what Congress does with the other issues.
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11-03-2009, 08:18 AM | #9 (permalink) |
immoral minority
Location: Back in Ohio
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But why would United Health - Texas offer a lower premium than United Health - Georgia? Why would a large national insurance comapny compete against themselves? And then what would happen if nobody bought from United Health - New York because salaries are higher there and doctors charge more, meaning higher premiums?
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11-03-2009, 08:40 AM | #10 (permalink) | |
Junkie
Location: Ohio
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Quote:
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11-03-2009, 09:18 AM | #11 (permalink) | |||
Junkie
Location: Ventura County
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Perhaps the premiums would be lower based on underwriting or the pools of people insured by one company compared to another. Perhaps a pool that includes too many people on a "southern diet" is a bad thing. Perhaps a carrier would specialize in certain types of risks and based on that specialization they add special value to covering the people who fit that category. For example power weightlifters won't fit the traditional height and weight charts - but they may be more healthy than the general population. And perhaps in one state there is not enough of them for one insurance to bother with in that state, but pooled nationally you could have several carriers who target that market and underwrite and rate accordingly. Quote:
the irony is that corporations like restrictions to competition, they don't want you to have choice. They know if they get control of the market they can control the market. Anti-big corporation types should favor more competition, not less. Quote:
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"Democracy is two wolves and a sheep voting on lunch." "It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion." "If you live among wolves you have to act like one." "A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers." |
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11-06-2009, 07:36 AM | #12 (permalink) |
Asshole
Administrator
Location: Chicago
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Ace, that makes no sense at all. It's not like BCBS has to have underwriting offices in all 50 states. That would have the opposite effect of what you're thinking - it would be incredibly inefficient. Why should they have an office in Rhode Island when they can have one in Boston, an hour away, with the authority to conduct business in Rhode Island? Why shouldn't the Denver office be able to undewrite for Wyoming, especially since it's going to be very difficult to find talented underwriters in a state with only 1M people? Why would you locate your underwriting office to Nevada if the talent pool isn't there to accomplish your goals?
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"They that can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety." - B. Franklin "There ought to be limits to freedom." - George W. Bush "We have met the enemy and he is us." - Pogo |
11-06-2009, 07:50 AM | #13 (permalink) | |||
Junkie
Location: Ventura County
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I don't think it matters where they have underwriting offices and they should locate an office like that in the place the best suits there needs. I think improved efficiencies can lower costs to the consumer. We often hear about overhead or administrative costs being too high and that is a justification for a public option. A public option is not going to actually help a company reduce costs. It would be nice to see Congress actually look at why admin. costs are high and help reduce those costs rather than assume big business simply wants to take advantage of people.
__________________
"Democracy is two wolves and a sheep voting on lunch." "It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion." "If you live among wolves you have to act like one." "A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers." |
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11-06-2009, 07:56 AM | #14 (permalink) | |
Junkie
Location: Ohio
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I can't speak for all insurance companies, but my company is based in NC. Our underwriting department is also based there. As far as I know there is no law currently that says that you must have an office in the state you are doing business in, so I'm not sure what your post means. We do business in all 50 states with only one underwriting office location.
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11-06-2009, 08:07 AM | #15 (permalink) | |
Asshole
Administrator
Location: Chicago
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In the Property/Casualty world, insurance companies have rules about internal competition. They don't want to give different quotes to the same buyer through different buyers. It makes them look stupid. That's worth pointing out because I think that health insurers will figure out fairly quickly that internal competition is bad for them and find ways to stem the flow.
__________________
"They that can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety." - B. Franklin "There ought to be limits to freedom." - George W. Bush "We have met the enemy and he is us." - Pogo |
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11-06-2009, 08:13 AM | #16 (permalink) | |
Junkie
Location: Ohio
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Quote:
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"Your life is Yours alone...Rise up and live it" |
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11-06-2009, 08:18 AM | #17 (permalink) | |||
Asshole
Administrator
Location: Chicago
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I guess chalk it up to confusion in what you really meant based on the reality of how state insurance regulations actually work. Quote:
What this boils down to, at it's core, and at least for me, is that the Republicans want to trump individual state insurance departments and force them to loosen regulation. If an individual state WANTS to allow other health insurors to conduct business in the state, they already have the ability to do so. Now, why do you suppose that they haven't? ---------- Post added at 10:18 AM ---------- Previous post was at 10:15 AM ---------- Quote:
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"They that can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety." - B. Franklin "There ought to be limits to freedom." - George W. Bush "We have met the enemy and he is us." - Pogo |
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11-06-2009, 08:20 AM | #18 (permalink) |
Who You Crappin?
Location: Everywhere and Nowhere
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maybe this has been asked before (and maybe it's a non-issue), but would insurance companies all up and relocate to whichever state gives them the best tax incentives? If so, what does that do to the cities/towns whose local economies/employment base are tied to those relocating companies?
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11-06-2009, 08:24 AM | #19 (permalink) | |
Junkie
Location: Ohio
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[
[/COLOR] What is being proposed is that different insurance carriers (which are commonly owned by a single insurance company, i.e. the various Blue Cross/Blue Shield companies) be allowed to conduct business across state lines. So that BCBS of IL could compete against BCBS of AL, for example. That is the internal competition, and in the P&C world, it only happens rarely.[/QUOTE] I see. Thanks, I haven't read the bill. In that case internal competition would be pointless. If I were to change something I would do away with state depts' of insurance and have a federal dept. This would make for easier competition across the country. It's rediculous all the different state laws that a company has to conform to. ---------- Post added at 11:24 AM ---------- Previous post was at 11:22 AM ---------- Quote:
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"Your life is Yours alone...Rise up and live it" |
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11-06-2009, 08:33 AM | #20 (permalink) | |
Asshole
Administrator
Location: Chicago
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The problem with relocating to a smaller spot is that there will almost certainly be attrition of talent among the current staff and a lack of experience folks in the new spot. I'm sure that a lot of companies would love to move Wichita to take advantage of the lower wages, lower cost of living, etc., but they don't because they know that there aren't enough experience underwriters, claims adjusters, assistants, etc. to make it work. And it takes time to train someone into that role. An underwriting trainee, at least on the P&C side, typically has 3-4 years of training before they're even allowed to start doing any supervised underwriting.
__________________
"They that can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety." - B. Franklin "There ought to be limits to freedom." - George W. Bush "We have met the enemy and he is us." - Pogo |
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11-06-2009, 08:48 AM | #21 (permalink) | |
Junkie
Location: Ventura County
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In most states there are "admitted" insurance companies and "non-admitted". The location of administrative or processing offices have nothing to do with the status, however the regulations they are subject to can greatly affect costs. An uninformed consumer (by consumer I am not just talking about insuring a Honda civic, in that market I doubt you could even use a non-admitted insurance company) would never want to use a "non-admitted" carrier, but an informed consumer could save a ton of money in the "non-admitted" market. One important question for insurance across state lines would be for minimum federal standards for any health insurance company, where states could further enhance regulations for the state's needs. Here is a definition from the web on "admitted" v. "non-admitted":
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Insurance Question...What is an admitted or non-admitted carrier? - Yahoo! Answers
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"Democracy is two wolves and a sheep voting on lunch." "It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion." "If you live among wolves you have to act like one." "A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers." Last edited by aceventura3; 11-06-2009 at 08:50 AM.. |
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11-06-2009, 09:04 AM | #22 (permalink) |
Asshole
Administrator
Location: Chicago
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Ace, as a guy that does this for a living every single day, let me tell you that it's not accurate AT ALL.
First, it is illegal in all 50 states to have non-admitted primary auto insurance. Period. No exceptions. Your Honda Civic will never, ever be insured by a non-admitted carrier. All insurance carriers conducting business in a state, admitted and non-admitted alike, are beholden to state regulations. Non-admitted carriers answer to state regulators on a very regular basis. I know this because I am part of the process a lot of the time. A non-admitted carrier, for instance, has to follow the same cancellation procedures as an admitted carrier. The difference is that admitted insurance carriers have to have their rates on file with the state and are only allowed to deviate off those using pre-determined (and filed) exceptions and using pre-determined coverage forms. Non-admitted carriers don't have to file rates or forms. I go through these differences dozens, if not hundreds of times a day. It is what I do for a living. Non-admitted insurance companies are the equivalent of auto insurance companies for bad drivers. They deal in the tough, nasty, hairy, claim-ridden accounts. Hotels on the beach in Florida, gun manufacturers, helmet importers, doctors that just got out of rehab, etc. all end up in the non-admitted arena. I can think of hundreds of reasons why allowing non-admitted health insurance is a fantastically bad idea, not the least of which is that the consumer would get screwed more often than not. ---------- Post added at 11:04 AM ---------- Previous post was at 11:02 AM ---------- Also, the average surplus lines tax is around 3%, not all states charge a stamping fee, inspection fees get charged by admitted carriers all the time, inspectors visit accounts all the time and anyone buying coverage from a B++ non-admitted carrier is a fucking idiot that gets what they deserve. I can't even get an exception to transact business with a B++ carrier, not that I would ever want one since that's the sign of a carrier about to fold. I know you didn't write this, Ace, but this is one of those examples why you shouldn't assume that things are accurate on the internet. Whoever wrote this is not very familiar with my industry.
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"They that can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety." - B. Franklin "There ought to be limits to freedom." - George W. Bush "We have met the enemy and he is us." - Pogo |
11-06-2009, 01:07 PM | #23 (permalink) | |||||
Junkie
Location: Ventura County
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Also, if a Honda Civic was covered under certain commercial policies for liability coverage, it could be under a surplus lines policy. Quote:
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For those interested in a better description, I found one: Quote:
How can this help an individual in the health insurance market related to the OP? Again, it goes to a question of choice. If I form a group to self insure or if I have a condition that is difficult to insure, or whatever the reason, should I have a choice of insuring with a non-admitted carrier - I would say give me the choice.
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"Democracy is two wolves and a sheep voting on lunch." "It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion." "If you live among wolves you have to act like one." "A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers." |
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