Don Taylor does not think insurance companies would be willing to sell insurance across state lines. But he admits large interstate employers already offer their workers insurance across state lines when they self-insure against health risks. Taylor suggests that insurance companies, who make their money on calculating risk, cannot figure out how to do for paying customers what companies in myriad other industries already do for their own workers.
He cites the higher Medicare payments in McAllen, Texas, compared to El Paso as an example of how costs can vary based on how individuals receive health care. But again he undermines his own argument by recognizing that McAllen and El Paso are in the same state. If the insurers in Texas can figure out how to make a living selling policies to people in such varied cities within a state, surely at least some of them can figure out how to do that for people in different states. His example utterly undermines his contention that “variation in how care is practiced is the main reason a premium quoted in one state won’t hold in another.”
Insurance regulations, which Taylor dismisses because they do not explain the Medicare cost differential in Texas, raise the cost of insurance, not care. These regulations are indeed a significant reason insurance in North Carolina is less expensive than in the Northeast but fifty percent more expensive than a similar policy purchased in Missouri.
Even if Taylor were correct in stating that variations in the practice of medicine were the key, insurance companies still have another tool at their disposal. They build networks of doctors who are willing to take negotiated payment rates for their services. Every doctor in North Carolina would likely be out-of-network and so leave little additional downside for an insurer.
So why not give it a try? The worst outcome, if Taylor is right, is that it does not help as much as expected. The best outcome is getting insurance for as many as 15 million people who are currently uninsured at no additional cost to the other 285 million Americans. Seems to fit right in with the Hippocratic oath, unlike the bill being voted on tomorrow in Congress.
