Congress is considering a bill that would allow insurance companies to sell policies across state lines. The bill has been before Congress for some time, but legislators have yet been unable to determine the necessity or viability of such a law. Now, Congress is calling upon witnesses to testify whether or not the law will actually help lower the number of uninsured people in the nation and entice insurers to provide more affordable coverage. These witnesses have begun appearing before the Health Subcommittee of the House Committee on Energy and Commerce.
Steve Parante, Insurance Industry Chair of the Health Finance Department at the University of Minnesota, is one such witness. Early Tuesday, Parante testified that he believes interstate insurance sales will reduce the number of uninsured peoples. He asserts that he has hard evidence of this in the form of research conducted by various third party sources.
However, there is significant opposition to this notion. Several of the witnesses that testified on Tuesday argued that the prevalence of regulatory arbitrage could potentially hurt consumers. The disparity in insurance regulations from state to state is well known, and such disparities drive insurers to sell stripped down policies in an attempt to appease the regulations of multiple states. Parante himself admits that differing regulations contributes to uneven costs and watered down coverage.
Further doubts were raised by Stephen Finan, firector of policy for the American Cancer Society. “Are state insurance departments or state courts going to give full recognition to the problems of out-of-state consumers,” he asks Congress. Finan warns that, without adequate protections, consumers will be at risk.