The "ban on buying insurance across state lines" thing the 'pugs keep bringing up...

[Ken Burch]

1)Did such a ban actually exist?

2)Did HCR change that?

3)Did the 'Pugs EVER propose removing that ban(assuming it actually exists)during their twelve straight years of control of the House from '94 to '06?

4)If this ban actually does or did exist, why was it there?

[dflprincess]

1. There is a such a prohibition and the insurance bill did not change it (so far)

Though it does not prevent an insurance company from selling in all states (i.e. United Health, Cigna, Aetna).

What the insurance companies and their pets in Congress don't like is that the insurance companies are subject to the regulations in each state they sell in. So, UHG will have different rules to follow in California than it does in Alabama. This is the trade off the insurers made for their anti-trust exemption.

Allowing companies to sell across state lines would effectively end the ability of states to regulate the insurers operating within their boundries. Just as the credit card companies all "moved" to South Dakota because of its lack of usury laws, the insurers would all "move" to the states with the least regulation.

I say "move" because, while your credit card bills may come from South Dakota, you didn't see the CEOs of Citibank or BOA relocating to Sioux Falls when the company "relocated".

Remember - always be wary of anything an industry tells us will "result in more competition and so be good for consumers". I can't think of any time in since the deregulation craze began that that has been true.

[jancantor]

3. Phone deregulation certainly was

(good for consumers). Choice went up, rates went down. Many in the industry argued that would happen, and it did.

[Crunchy Frog]

5. Of course there wasn't a particular class of customers

that the phone companies would refuse to serve. There's a different dynamic in place when it comes to health insurance.

[jancantor]

6. Sure

I was just pointing out a counterexample. The statement certainly is often true. Generally speaking, the more dominant/entrenched a company is, the less they would advocate for such competition.

[boppers]

10. Try getting high speed internet from your phone company in a rural area.

They most certainly *do* refuse certain clients certain services.

[jmowreader]

13. There's a reason they "refuse" that service to rural clients

It's a performance issue--at a certain distance from the phone company's switching equipment, DSL performance drops to the point where the service doesn't work.

[boppers]

16. They'll drop a DS-3 in for enough cash. It's all about money.

It's not a technical limit, it's a profit limit.

Yes, distance from a DSLAM limits DSL technologies, but there are lots of high-speed options that don't use DSL, and even with DSL, you just need a close DSLAM connection to the ATM cloud... provided the cloud is close.

[B Calm]

17. First they run to high fiber optic lines before they can offer high speed

and they are not willing to spend the money for what few customers they'll get. In other words, they want the government to pay for the high fiber optic lines and then they'll reap the rewards.

[jancantor]

19. Yes, shocking

Companies don't like to do stuff that loses them money...

[Crunchy Frog]

20. Yes, but that's based on your location rather than your personal characteristics.

If you want high speed internet bad enough you can move to a more urban area. If you can't get health coverage due to preexisting condition you're SOL no matter what you do.

[Kingofalldems]

18. My rates went up. What are you talking about?

[iamjoy]

2. As I Understood It...

States have the right to regulate the insurance sold in their state. So, the state of Massachusetts may decide that they want insurance sold in their state to cover certain procedures. Maybe they want to make sure their citizens are protected or don't become a public burden because of medical bills or untreated conditions. If another state isn't as protective, and a citizen could buy that less regulated policy, it's undoing the good Massachusetts is trying to do for its citizens.

[DeadEyeDyck]

4. I'm confuzed

[TheKentuckian]

8. About which part? Yes. No. Probably because it is an awful idea being presented as competetion.

The insurance cartel wishes to have the ability to buy a state house and/or just take up residence in a friendly state with little regulation or oversight and administer plans nationally from such havens.

I doubt it would foster any actual competion of consequence as "the families" seem at least tolerant of their "territory".

Remember that when a Republican talks competion what they are talking about is less rules and oversight and more money funneled to the wealthy.

For their talk, one would assume the TeaPubliKlans would be driving the bandwagon for a national exchange but the objective is the ability to seek haven in the least regulated states.

[notesdev]

7. answers

1) Yes
2) No
3) seriously doubt it
4) campaign donations from the people who profit by this arrangement (as usual)

[laughingliberal]

9. Allowing insurance companies to see across state lines will create a rapid race to the bottom...

as they all seek to incorporate in states with lax regulations. A decent comparison would be credit card companies. There's a reason most of them are in one state.

[OHdem10]

11. It is my understanding that the Insurance Companies do not want

the practice of buying Insurance across state lines.

[jmowreader]

14. No, but they want to sell it across state lines

Republican fantasy: All y'all who live in high-cost states like West Virginia shouldn't have to pay those exorbitant rates. You should be able to buy your insurance from a Hawaiian carrier, because it's cheaper there.

Reality: Insurance costs vary from state to state because healthcare costs vary from state to state. Cut out the smoking and the eating of high-fat country cooking that West Virginians do, and healthcare is still more expensive there because the weather sucks and they mine coal. Conversely, healthcare is cheaper in Hawaii because fruit is very abundant there and the weather is excellent.

Insurance companies DO NOT want to sell West Virginians insurance at Hawaiian rates. They would love to sell Hawaiians insurance at West Virginian rates, and if we allow the health insurance companies to sell across state lines, either Pennsylvania or West Virginia is going to become to health insurance what South Dakota is to credit cards.

[ProgressiveEconomist]

12. What the Rs object to is strong State consumer protections in large insurance markets

For many years Rs and corporate Ds like Melissa Bean have tried to allow insurance companies the option to choose a weak set of Federal insurance regulations rather than the stringent consumer protections of ---say--New York State. The main "barrier to selling insurance across state lines" is the power of strong State Insurance Departments to prevent a "race to the bottom". The NY Times had an editorial about this last year:

From http://www.nytimes.com/2009/05/21/opinion/21thu1.html?_r=1&pagewanted=print :

"Editorial: Regulator Shopping
The New York Times, May 21, 2009

The financial crisis had no single cause. But everyone knows that regulatory failure played a role and that one of the biggest mistakes was to allow 'regulatory shopping'--in which banks and other financial firms were permitted to choose their own regulator. What resulted was a race to the bottom. Many firms switched at will among various overseers, in search of the loosest rules and laxest regulators.

And yet, legislation recently introduced in the House would allow insurance companies, currently regulated by the states, to opt for federal regulation instead „ and, in general, if they don¡t like that, to switch back after a spell. If the bill were enacted, the race to the regulatory depths would continue, and the nation would be headed in exactly the wrong regulatory direction.

The rationale for the proposal--known as the optional federal charter--is as meritless as the proposal itself. ... At play here is the power of the insurance industry that has clamored for federal--weaker--regulation for nearly a decade. The industry, and its Congressional supporters, are trying to use the current upheaval to advance a predetermined agenda...."

[MadHound]

15. Some answers,

1. Yes, it did and does exist.
2. HCR did not change that status.
3. Yes, they have tried in a half hearted fashion before.
4. It is in place to more closely regulate insurance companies. If an insurance company could sell across state lines then it could more easily skirt regulations and such.

[truth2power]

21. What they want is to incorporate in a state (Delaware comes to mind)

where there's little, if any, regulation.

Any idea these scumbags have, you can bank on it being a way to knife the consumer in the back.

Lying, worthless bastards. All of them!!!