Allowing insurers to sell policies across state lines has been a pillar of Republican health care policy for decades. Candidate Donald Trump repeated it during an early primary debate in New Hampshire.
"We have our lines around each state," Trump said Feb. 6, 2016. " We are going to end that. We're going to take out the artificial boundaries, the artificial lines. We're going to get a plan where people compete, free enterprise."
States have the power to set standards for health insurance companies. Congress hasn't passed a law to change that, but the Trump administration aimed to use a shift in regulations to create an opening.
The administration focused on association health plans. Association health plans have been around a long time. When the U.S. Labor Department released its final rule in June, it created some new insurance options.
Organizations with business members from different industries but located in the same state, such as chambers of commerce, could offer plans. Or people and firms in the same line of business, such as the real estate or restaurant industries, could offer plans to self-employed workers in those fields.
Key requirements from Obamacare remained in place. Insurers couldn't deny coverage or set premiums based on a person's health, including any pre-existing condition. Plus, there could be no annual or lifetime caps on services.
However, on the specific point about selling insurance across state lines, the rule made no difference at all.
"Under the new rule, there are still lines," said Chris Condeluci, a former Republican Senate staffer and now a consultant to groups using the new rule. "The regulations compel the plans to comply with every state law."
Condeluci helped Minnesota-based dairy cooperative Land O'Lakes expand its existing insurance program for its cooperative members in Minnesota to farmers in Nebraska. But to do that, they had to meet Nebraska's requirements, which were not the same as the ones in Minnesota. The policies covered all 10 essential health benefits set by the Affordable Care Act.
Between the two states, Condeluci said they have sold 2,000 policies. That's out of a combined non-group market in both states of about 450,000 people.
A group of three chambers of commerce in Nevada also moved to offer policies.
The policies in Nebraska cost about 15 percent less than plans offered in the individual market. That's partly because they could avoid certain costs, but also, said Kaiser Family Foundation vice president Gary Claxton, because the individual market in Nebraska is particularly pricey.
"Whether that's because they only have one insurance company in rural Nebraska, or something else, there's a lot of room there to come in with a lower cost plan," Claxton said.
So the federal rule change gave farmers in Nebraska a less costly option. If that took place on a wider scale, it could increase competitive pressures, but it's too soon to tell.
However, in terms of selling policies across state lines, it's no different from before.
State insurance regulators have said the association health plan rule allows them to apply their own standards. Some states are more open to the new approach, but not all. A group of Democratic attorneys general from 10 states and the District of Columbia filed a lawsuit to block it.
Pennsylvania insurance commissioner Jessica Altman issued an advisory that said all plans must follow the state's rules for non-group plans. That is precisely what the administration's rule was intended to change.
Condeluci said groups in Texas, Wisconsin and elsewhere are exploring setting up association plans.
For now, we rate this In the Works.