Today in the Healthcare Policy and Market Place review, there is a great blog on why selling health insurance across state lines won’t work. http://healthpolicyandmarket.blogspot.com/2009/12/. I agree. The point is, most insurance companies have networks of doctors that are contracted with companies for negotiated rates. If a client goes outside the network, the cost is higher and often a prior approval is required. It takes time to get credentialed by insurance companies. It would make billing more complicated. Insurance companies are not always quick to send out payments. Some insurance companies are notorious for delaying payments by simply being slow or sending back a claim for a verification on nonsense. It would also mean consumers would buy insurance registered in one state, only to discover the coverage was minimal because no one in their state was contracted with the insurance.
Insurance Across State Lines: Buyer Beware
In parts of America, this is already happening. My client lives in Wyoming. She experienced a major medical event. many small rural states do not have trauma hospitals and consequently patients have to be airlifted to major centers in other states. This is what happened to my client. She was airlifted to Salt Lake City via plane at a cost of $38,000. She had an insurance policy from Reserve National out of Oklahoma City. She had been paying for this insurance for nine years. She thought she would be covered. She was minimally covered for all aspects of care. The insurance out sourced negotiated contracts to a company named Beech Street. They did not have a contract with any of the providers. The insurance fine print also stated only one doctor’s visit a day would be reimbursed. If you have ever been in the hospital, you know there are multiple visits by every specialty of doctors. Imagine one doctor a day at a reimbursement of less than $100. This includes doctors during procedures. The fine print had many other items that limited payment. In the end, my client was left with over a $60,000 overall medical bill.
What happened to my client, will become commonplace if insurance is allowed to go across state lines. It would be a reasonable concept if rules and regulations were put in place that insured coverage by doctors in state. It certainly sounds like a banner idea incorporating the Republican idea of allowing insurance cross state lines but I say stop now. It will cause harm to many unsuspecting consumers who just want to feel safe with their healthcare policy. If you believe the consumer will not be at risk, then there is a bridge I’d like to sell you.
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