A proposal to allow health insurers from other states to sell their plans in Idaho won enough support to advance to the Senate floor on Feb. 22, despite concerns from lawmakers the bill will likely not deliver on its promises.
“I don’t see land mines in this, I don’t think, but this language makes me wonder does it really have any utility,” said Sen. Grant Burgoyne, a Democrat from Boise, before voting favor of the measure. “And if it doesn’t, I kind of wonder what we’re doing here.”
Despite the concerns the Senate Commerce and Human Resources Committee unanimously agreed to advance the bill to the full Senate. It still must pass the House and be signed by the governor.
Sen. Dan Foreman, a Republican from Moscow, says his bill will provide Idahoans with more options and drive down costs.
“This should introduce increased competition,” Foreman said. “The intended results are lower health insurance premiums.”
Selling insurance across state lines is a longtime GOP idea now embraced by President Donald Trump as a way to encourage competition by introducing low-premium plans into high-cost areas. Consumer advocates and state regulators counter that it will set off a “race to the bottom” as out-of-state insurers flood the market with plans that circumvent state requirements.
Six states have enacted similar proposals and to date no out-of-state insurer has offered plans in those states.
That’s largely because out-of-state insurance companies are still required to build a network of service providers, which can be costly and challenging. Also, the price of health insurance reflects local markets.
Idaho Department of Insurance Director Dean Cameron says his agency is neutral on the legislation, but said the bill provides another option for the state.
“I’m dubious if it will work, but it does give us an opportunity,” Cameron said.
However, Cameron pointed to the executive order signed by Gov. C.L. “Butch” Otter and Lt. Gov. Brad Little earlier this year to permit insurance companies to sell cheap policies that don’t include key provisions of the Affordable Care Act.
If that executive order effort is successful, Cameron said Idaho might be asked to also start selling plans across state lines.
“I already know one of our neighboring states was applauding our efforts and wants to be able to sell our plans in their own state,” Cameron said.