Insurance across state lines?

As the Democratic health-reform plans have developed, Republicans have consistently offered one suggestion in opposition: allow individuals to purchase health insurance across state lines. In doing so, the argument goes, persons could shop via the Internet for a policy with a cheaper premium that was being sold in another state, thereby saving money.

This seems perfectly sensible to anyone who has purchased a pair of running shoes over the Internet for a price lower than that available locally. Unfortunately, it won't work with health insurance.

States have regulated health insurance since the 1945 passage of the McCarran Ferguson Act, which, among other things, forbids interstate sale of insurance (health, auto, homeowners). States have regulated insurance ever since. Many insurance companies sell policies in different states but, in doing so, must comply with a given state's regulations. For example, I have car insurance from the same company as my dad who lives in Georgia.Some already purchase health insurance across state lines. The ERISA Act of 1974 allows businesses that self-insure their employees to include all employees in one health insurance pool, even if they live in different states. Self-insurance means that the company is responsible for paying the health expenditures of its employees after the employees have paid the specified deductibles and co-pays. Such companies typically hire an insurance company to process claims and are predominantly large employers who have chosen to self-insure to remove the insurance middleman.

But individuals are prevented from purchasing health insurance across state lines. Allowing them to do so would require a federal law that replaces state regulation of insurance with federal regulation. This is an odd policy prescription for Republicans to champion, because they tend to reject federal regulation in favor of state autonomy.


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4 Days Of Car Insurance Enforcement, 17 Vehicles Impounded

EL PASO, Texas -- It's been a few days since the enforcement of this new law and some El Pasoans are learning the hard way that it pays to have car insurance.
"No doubt. I wish I had insurance," said Enrique Munoz.
Munoz was pulled over on Tuesday because of a moving violation. He didn't know that it would become such a hassle.
"When he pulled me over he turned around and said, 'Do you have insurance?' And I don't. He said I had to impound the car," said Munoz.
AD Towing picked up his car and he had to call his wife for a ride. He said it seemed like bad luck was following him because he was insured before.
"I had been working on the car and it's been only a week since I got it out," said Munoz.
El Paso Police officials said so far since the ordinance went into effect on Sunday, officers have had 17 cars impounded. Outside AD Towing, KFOX talked to Miguel Angel Ledesma who discovered that his wife car was towed Wednesday morning.
"This morning my wife was in a fender bender. They towed the car because she didn't have insurance. I came to get the car," said Ledesma.
Drivers outside AD towing said they don't think the new ordinance is fair. Amanda Teran said some people can't afford car insurance.
"They need to check first if a person has had insurance. If it has lapsed within a certain amount of time, then give them a break, cite them for no insurance, but don't tow the car," said Teran.
Munoz and his wife already got coverage for the vehicle and they came to pick it up. They'll pay about $85 to AD Towing. But the longer it stays, the more you pay. And for Ledesma, he still doesn't have insurance and he's leaving empty handed.
"I know they're forcing people to get car insurance, but it's too much. It's a lot of money," said Ledesma.



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