Friday, April 15, 2011

Buying Insurance Across State Lines

The GA legislature approved the sale of non-compliant health insurance, an incredibly stupid idea. Carriers approved to sell health insurance in Georgia will be allowed to offer plans approved in other states that have fewer mandates. The belief is this will create more choice and lower prices.

They are wrong.

With this passing, a company such as Cigna could offer a policy they sell in Texas to be sold in Georgia. On the surface, the policy may seem identical to ones offered here but the devil is in the details.

Details you will not know about unless you read the policy limitations and exclusions section.

Something no one ever does.

These non-compliant plans will have to be filed with the Georgia Dept. of Insurance and approved before they can be sold here. That process can easily take a year or longer. United Healthcare spent 4 years applying to get new policies approved. Those plans were finally approved in October of 2010.

So where will consumers find these policies?

Only by calling the carriers direct and even that is questionable. Good chance the carrier won't have Georgia rates for a Texas plan and will not care to develop that rate structure.

Current quote engines are not programmed to illustrate policies from other states on a side by side basis. If a consumer wants to see the Texas plan and compare it to a Georgia plan they won't be able to do that.

They can run a quote for Georgia, then one for Texas (using a Texas zip code) but even then the Texas quote won't be accurate. That plan is priced based on the cost of health care in Texas, not Georgia, so consumers won't know if the plan is less expensive or not.

With Obamacrap unfolding in 2014, I doubt any carriers will be willing to invest money to reprice plans to be sold in other states. Even if they do, there is the expense of filing the new plan and rates and underwriting guideline with in different states.

In fact, many carriers are withdrawing from the individual major medical market and have no desire to expand since the rules, and rates, will all change in 2014.

Bottom line is this.

The legislators spent all this time and effort to approve a bill that will accomplish nothing.

This is what happens when elected officials, that have no understanding about the industry they are attempting to regulate, make laws.

Just another stupid government trick.

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