Laws on Health Insurance Competition
Employee Benefit Design is a dealer of every available health insurance provider in the state. This means that Employee Benefit Design’s employees are experts on the plans available for your small business or family. Recently, almost half of the states in our union have looked into enacting laws that would allow insurance companies to cross state lines in providing coverage. There are both pros and cons to these proposals, a few of which are listed below.
More competition: More competition among healthcare providers in your state is likely to lower costs for consumers, as the availability of a larger set of choices pushes insurers to make their plans more desirable to consumers.
Better coverage: Inevitably, as a result of increased competition, insurers will strive to create better health insurance plans, covering more health procedures and providers for less.
Reap the benefits of more favorable laws in other states: Because each state regulates health insurance providers differently, other states may allow health insurance companies to operate with less regulation or fees which feed into overhead costs. This could potentially lead to lower cost health insurance in Springfield, MO for consumers.
Unfair competition: Allowing insurers from other states, where health insurance providers are regulated differently, could lead to an unfair advantage for companies in one state as opposed to another. This could lead to insurers leaving one state in favor of another state with more favorable laws and regulations. While this is good for the insurers, it would pull local businesses away from communities, possibly taking jobs away from areas in need of employment options.
Less regional expertise/knowledge: Currently regional healthcare providers are able to assess local health care rather effectively. Creating a network of doctors by having doctors and hospitals agree to contracts with insurance companies allows health insurance companies to provide plentiful healthcare options for the insured. Crossing state lines may make it more difficult for out of state providers to create networks in your regional area, basically negating any competition created by the law in the first place.
Could hinder new local businesses: New insurance company startups could be hindered, as the market may be saturated by out of state insurers. Halting the growth of local health insurance companies may lead to economic problems for certain individuals and communities.
While Missouri has yet to create a bill seeking to allow insurers from other states to insure Missouri residents, the trend is growing across the country. Understanding the implications of such a law and working with local politicians to ensure that the best route is taken to help protect Missouri residents and create the best health insurance environment possible for residents is an important duty of all Missourians.