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Purchasing insurance across state lines supported by primary candidates

Purchasing insurance across state lines supported by primary candidates

Mitch Coffman
May 10, 2012

Rising costs in the health insurance industry moved to the forefront before one committee in the Idaho Legislature during the 2012 session. The discussion was on a proposal to open up the Idaho market to insurance providers from out of state.

Rep. Julie Ellsworth, R-Boise, introduced House Bill 587, which would have allowed insurance companies from other states to offer their services in Idaho. The bill garnered bipartisan support as it passed the House on a 59-6 vote. However, the bill never got out of the Senate.

There was a lot of testimony in favor of the bill, especially from business owners, saying there are companies in other states that offer better plans for their employees.

Ahead of the May 15 primary, the Idaho Freedom Foundation asked candidates if they would support opening up Idaho’s borders and allowing insurance companies from out of state to sell in the Gem State.

The answer was a resounding, yes. Sixty-six candidates supported the idea, three opposed and nine said they were unsure. Some candidates did not answer the question.

Supporters cited competition and the free market as reasons they were in favor of the idea. They also said with competition comes lower insurance costs.

Donna Capurso, a Republican candidate for the House in District 1, responded with an answer that summarized why supporters like the idea. “When there is competition in any industry, that is good for the people. We are limited in Idaho regarding health insurance so competition from other insurance companies from other states would be welcome. Then the Idaho insurance companies would have to become competitive or lose the business of the populace.”

Though there were just three candidates opposed to the idea, they said the industry would be less-regulated and, therefore, end up being more costly to customers.

Gus Voss, an Independent running for the House in District 17, said he believes in single-payer health care and allowing competition across state lines would lead to customers being “extorted.” He also said, “I'm not interested in health insurance agencies clustering in the least-regulated state in order to gut services and coverage at the expense of the insured.”

Of the nine who were unsure, most said they support free markets and getting the best for your money, but voiced concerns over the regulation and needed oversight on out-of-state companies.

Sen. John Goedde, R-Coeur d’Alene, expressed concern specifically over the issue of companies in other states making good on their coverage and had concerns about regulation. “Companies in New Jersey, for example, may choose not to pay claims or pay them in a timely manner, leaving Idaho citizens with no benefit for the premiums they pay.”

The Ellsworth bill attempted to answer concerns about out-of-state companies not being accountable in Idaho. Her reasoning was accepted in the House, but not in the Senate.

Her legislation said health insurance carriers outside Idaho would be able to sell their services in the Gem State provided they are licensed in another state. External health carriers would be required to settle any litigation or disputes over prices or policies in Idaho courts or through a mediation process within the state.

Companies would also have been forced to pay the Idaho Department of Insurance 1 percent of their premium costs for oversight and regulation. The department would then monitor a company’s activities and ensure they keep their license to do business in other states.

Health carriers would also have been required to pay into a state fund that helps insure a pool of indigent residents who don’t qualify for Medicaid or other government welfare programs.

Note: IdahoReporter.com is published by the Idaho Freedom Foundation.

Idaho Freedom Foundation
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