NCPA - National Center for Policy Analysis


March 12, 2010

Georgia Gov. Sonny Perdue (R) is showing the way on how states can implement cross-state selling of individual health insurance, says Ronald E. Bachman, a senior fellow at the National Center for Policy Analysis.  States can voluntarily enter into reciprocity agreements with like-minded states.  Together they can create a multi-state market attractive to insurers selling new lower cost comprehensive products. 

Nationally, the cross-state concept has been accepted by Republicans and Democrats as a good starting point for bipartisan reform.  Studies have shown that up to 12 million Americans would become insured with effective national legislation for cross-state selling. 

Gov. Perdue's push for free-market insurance reform is embodied in House Bill 1184 (key contact Rep. Matt Ramsey) and Senate Bill 407 (key contact Sen. Judson Hill).  Both bills are making their way through the legislative process. The slight differences will likely be ironed out when the two bills are merged. 

Both cross-state bills have two major components, says Bachman:

  • First, the legislation promotes a unilateral acceptance of comprehensive individual health policies from other states.
  • As a show of good faith, Georgia would accept individual health policies approved in other selected states without the requirement that they accept policies approved in Georgia.
  • Certain minimum standards and consumer protections are required before accepting such policies.
  • Second, the real power and value of the cross-state selling concept is to establish a coalition of states with a combined large consumer base that will encourage insurers to develop and bring new low cost affordable plans to Georgia.
  • The current 50 state filing processes take insurers years and millions of dollars in state-specific development costs, administrative mandates, filing requirements and fees. 

When new products are developed, Georgia is not usually in the top tier of states for early release. Larger population states get first preference.  However, being a part of an expanded multi-state market with a population of 30-40 million will increase the state's attractiveness as a key market for existing and new insurers.  The proposed cross-state legislation directs the Georgia Insurance Commissioner to be the leader in creating a multi-state coalition with reciprocal health insurance policy approvals, says Bachman. 

Source: Ron Bachman, "Georgia taking lead in interstate insurance laws," Daily Caller, March 12, 2010. 

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