Insurers not interested in selling across state lines

Health insurers aren't interested in selling plans across state lines, even though several states have recently enacted laws allowing out-of-state insurers to join their markets, says a new paper from the Georgetown University Health Policy Institute.

Researchers reviewed laws passed in six states that let insurers sell plans across state lines and not one insurance company has attempted to expand into a new state market, reported The Hill's Healthwatch.

"Although these proposals are often touted as an alternative to the ACA, our analysis in six states found that across state lines laws did not result in a single insurer entering the market or the sale of a single new insurance product," lead author Sabrina Corlette, a Georgetown research professor, wrote in a blog post accompanying the paper.

The problem isn't the different benefit mandates across states; it's that insurers must establish a completely new provider network when entering a new state's market. "The number one barrier is really building that provider network that's attractive enough to get patients to sign up," Corlette told The Washington Post. "To do that, you have to offer providers attractive reimbursement rates, which makes it difficult to get them in network."

Inevitably, crossing state lines to sell health plans becomes a "chicken and egg" game, as insurers want to build a strong provider network to market to potential consumers, but establishing that network means insurers must guarantee their providers will receive a decent volume of patients, Corlette added.

To learn more:
- here's the Georgetown University paper and blog post
- read the Healthwatch article
- see the Washington Post article