A number of states including Louisiana, Wisconsin, and my home state of Georgia have expressed no intent in establishing health care insurance exchanges, opting for the federal government to establish and maintain it. Other states, like New Jersey, would like a little more time to explore the costs of establishing the exchanges and will likely take advantage of the deadline extension announced by U.S. Department Health and Human Services Secretary Kathleen Sebelius that allows the states to announce their intent by December 14, 2012.
The health care insurance exchanges are intended to provide consumers and small businesses with a one stop compare and shop location for health insurance. Consumers can also find out if they qualify for tax credits, Medicaid, or other publicly funded health care insurance prior to making a choice in hopes that such allowances will help lower their costs for accessing health care.
In short, the federal government wants to help make a market for health care and driving down the cost of access is part of the strategy for doing so. I wonder if this also prevents another opportunity.
The ideal way of driving down health insurance costs is to expand the number of competitive health insurance providers in a market. Today, consumers must purchase insurance within their states; cross state purchases are not allowed because the provider must be licensed to sell insurance in a particular state. If the federal government is asked to take on the task of establishing an exchange in Georgia, can they ignore the possibility of other carriers providing insurance at a lower cost in neighboring Florida, South Carolina, or Alabama?
As the federal government accumulates data on insurance costs throughout the U.S., how long will they be able to avoid establishing legislative or regulatory initiatives that would allow a Georgia consumer to access an Alabama insurance provider via an exchange set up in Georgia?
The federal government is supposed to promote the nation’s interstate general welfare concerns. It’s bad enough that they may be establishing health insurance markets within states. The most they can do is to persuade state governments to give cross state carriers access to their state’s health insurance markets.