Contrary to popular belief, the health insurance industry is relatively state-based. Today, each state has its own rules and regulations that make it difficult for one company to sell to the entire nation. That’s why major carriers like Blue Cross Blue Shield, Humana, and more have separate entities under their company umbrella in each state. For example, Blue Cross Blue Sheild of Tennessee is slightly different from Blue Cross Blue Sheild of Alabama. This is necessary because Tennessee and Alabama have slightly different health care regulations.
In an effort to erase or at least blur state lines and make both buying and selling easier, the ACA allows states to form a “multistate compact” to sell across state lines. Unfortunately, that doesn’t allow carriers to understand their new interstate markets. Hospitals and doctors offices operate differently and have different financial needs in different states. That’s why blurring state lines may streamline processes, but won’t lower consumer costs (at least not yet). Regulations are still too different.
One of the Trump administration’s hopes for the future of health care is to discontinue the ACA requirement that carriers cover “essential” benefits. If that happens, states will likely be allowed to choose what benefits insurers are required to cover. This can make selling across state lines even harder, as a plan in one state may not be eligible in another. At the same time, Trump stated that removing state barriers will increase competition and eventually lower overall costs. It’s hard to say what’s going to actually happen.
At Senior Market Advisors, we can help you understand your market and get certified to sell in your state. If you’re interested in selling with Senior Market Advisors, check out our “About SMA” video and start contracting today.