Health Insurance Sales Across State Lines Are Easier Said Than Done : Shots - Health News President Trump and Republican lawmakers say that letting insurers sell health plans across state lines would save money. But when Rhode Island tried it, the results weren't encouraging.
NPR logo

For Rhode Island, Interstate Health Insurance Sales Didn't Pan Out

  • Download
  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript
For Rhode Island, Interstate Health Insurance Sales Didn't Pan Out

For Rhode Island, Interstate Health Insurance Sales Didn't Pan Out

  • Download
  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript


By midnight today, open enrollment for Obamacare comes to a close. President Trump has already issued an executive order aimed at curbing federal rules of the Affordable Care Act. It's not clear yet what that means. Meanwhile, congressional Republicans know they will repeal it but not what they will replace it with. We want to take a closer look at some of the ideas floating out there as potential pillars of an Obamacare replacement. One is a national insurance market.


PAUL RYAN: We have a lizard selling us car insurance on GEICO. We have Flo selling us home and auto insurance.

CHARLIE ROSE: (Laughter).

RYAN: Why can't we have a vibrant and competitive marketplace like that for health insurance?


That's House Speaker Paul Ryan on public TV's "Charlie Rose" show. Now, some states already do have markets that reach across state lines - Georgia, Maine, Wyoming. And Rhode Island looked into it. But Christopher Koller, the man who led that effort as the state's health insurance commissioner, doesn't think comparing health and car insurance is apt.

CHRISTOPHER KOLLER: No, no, it's not. There's a big difference between a hospital who is providing you healthcare services and an auto body guy who's repairing your car.

CORNISH: Beyond the obvious (laughter), what is it?

KOLLER: Well, one, we have a lot more auto body guys out there in a market than we have hospitals. So in Rhode Island, we have one hospital system that has 80 percent of the births in the state. You absolutely have to have that hospital in your network if you want to be competitive. And I can tell you. The hospital has no reason to give that insurer any kind of discount comparable to what the local health plans who are already established have. So that national insurer cannot offer a competitively priced product.

CORNISH: What about the states themselves because I noticed that state insurance commissioners seem to be against this as well. We've seen some speak out nationally. And what's the reluctance there?

KOLLER: So to have interstate insurance means that a state has to accept the rules of another regulator. That means that, in my case in Rhode Island, if an insurer was licensed in Massachusetts, we would have to say, OK, whatever you do in Massachusetts is good enough for us in Rhode Island. Obviously there are turf issues associated with that, but that also requires just significant work to coordinate the rules and the regulations.

And then ultimately, that would mean that when a consumer calls us with a complaint, we have to say, sorry, we can't help you out. Go call Connecticut. Go call Massachusetts. Go call Georgia. That doesn't feel like we are fulfilling our obligation for consumer protection.

CORNISH: This also gets at a criticism we hear most consistently from Democrats and consumer advocates, which is that the state that has the least amount of rules and regulations for these insurers would just basically draw all of them there (laughter), right? And then the insurers would start offering skimpy plans. When Rhode Island researched this, was that a concern?

KOLLER: Certainly. Let's say, for instance, we in Rhode Island did not allow limited benefit health plans, health plans with annual and lifetime limits. Well, if we were to allow insurers to come in from a state that did allow those limited benefit plans and they were selling those plans in Rhode Island, one, you would create confusion. And two, you would have insurers offering policies that were against the laws. So that race to the bottom is a real fear.

CORNISH: Now, obviously people are still interested in this idea on Capitol Hill. Do you think that they think things will be different if it's national?

KOLLER: No. Look; we don't compel auto body makers to take care of our car if we can't pay for it. But we compel hospitals to treat people if they can't afford to pay for it. We look at health care very differently from auto insurance.

CORNISH: Christopher Koller is the former health insurance commissioner for the state of Rhode Island. Thank you for explaining it to us.

KOLLER: Sure, Audie.

Copyright © 2017 NPR. All rights reserved. Visit our website terms of use and permissions pages at for further information.

NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.