Selling health insurance across state lines won’t work

President Trump has a solution to America’s health care problems: Just let insurance companies sell plans across state lines. It will, he argues, increase competition and offer consumers more choice and lower costs.

If only it were that simple. John McCain argued for it during his 2008 run at the presidency. Mitt Romney put it in his 2012 platform. And Trump’s GOP rivals in the 2016 campaign, including Jeb Bush, Ted Cruz, Marco Rubio and Rand Paul all endorsed it.

Here’s what they don’t tell you:

Most health insurance companies aren’t interested. Consumers won’t benefit. And hospitals and doctors don’t see it as a solution, either.

Selling insurance across state lines is already legal. It’s a provision in the Affordable Care Act.

Several states, including Georgia, Maine and Wyoming, have passed laws allowing companies from other states to come in and compete for patients. The Georgia experiment is particularly noteworthy, given that it was highly praised by Republicans when it passed the Legislature in 2011.

Five years later, there have been no takers. Maine and Wyoming have had no better luck attracting insurers.

“As much as people talk about the Affordable Care Act as a national system, all health care is essentially local,” said Rene Santiago, director of the Santa Clara Valley Health and Hospital System. “It all comes down to the doctor-patient relationship and the willingness of doctors and health care providers to enter into agreements with insurance companies.” There’s the rub. An insurance company located in another state — say, Mississippi — offering insurance in California would need to make network deals with doctors and hospitals throughout the state. That’s expensive and immensely complex.

It’s not just that the market is different from Mississippi. The health care market in Northern California is vastly different from the Central Valley and Southern California markets.

To sell insurance in multiple states, companies would need to make major up front investments knowing that they would absorb big losses for several years.

They also know hospitals and other providers won’t be interested in making deals with companies offering minimum coverage to customers, since that shifts the risk of medical care costs to patients or providers — or taxpayers. Insurance premiums might drop over time, but medical costs would skyrocket — or sick people would just die, as many cancer survivors say they’d have done without the Affordable Care Act.

As to consumers — Californians would need to be wary of buying insurance from firms based in states with weak consumer protections. California has some of the toughest protections for patients in the nation, and it can still be difficult to hold insurers to their promises. Good luck trying to convince a company in some far-flung state that it can’t, say, arbitrarily refuse to pay for treatment a patient was led to believe would be covered.

As a candidate and now president, Donald Trump has consistently offered simple solutions to America’s problems. Recently, an exasperated Trump finally said: “Nobody knew health care could be so complicated.”

Not true, Mr. President. And when it comes to selling health insurance across state lines, you don’t know the half of it.

“As much as people talk about the Affordable Care Act as a national system, all health care is essentially local. It all comes down to the doctorpatient relationship and the willingness of doctors and health care providers to enter into agreements with insurance companies.”