Georgia To Allow Cross-State Health Insurance Sales

Some Republicans have been touting a plan to reduce health insurance costs by allowing insurers to sell plans across state lines. Georgia has passed legislation to allow this to happen, and the new law goes into effect next week. But so far, no insurers have taken Georgia up on the offer.

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STEVE INSKEEP, HOST:

We're expecting soon to learn Supreme Court decisions on two gigantic cases. One case involves the Arizona immigration law. The federal government has challenged that law as an intrusion into federal authority.

RENEE MONTAGNE, HOST:

Justices are also deciding the constitutionality of President Obama's health care law. The main challenge is to the individual mandate, which after 2014 would require most people to get health insurance or pay a fine.

INSKEEP: Now, if some or all of the health care law should go away, Republicans have said they want to replace it. They have not said precisely how, though they have discussed a number of ideas for bringing down health care costs, and one of those ideas becomes law in Georgia next week. It allows health insurance companies to sell policies even if those policies do not comply with Georgia laws and come from out of state. Republican politicians have been promoting this idea for years.

REPRESENTATIVE JOHN BOEHNER: The American people ought to be able to buy health insurance across state lines.

REPRESENTATIVE JOE BARTON: So it's obvious if you allow plans that are approved in one state to be offered across the state line, it's going to promote competition and it should lower cost.

REPRESENTATIVE PHIL GINGREY: Number two, allowing people to buy health insurance across state lines.

MITT ROMNEY: And I want these individuals and businesses to be able to buy insurance across state lines to get the best deal they can get anywhere in the country.

INSKEEP: Many Republican voices there. Presidential candidate Mitt Romney, Georgia Congressman Phil Gingrey, Texas Republican Joe Barton, and Speaker of the House John Boehner. But now that the idea of selling insurance across state lines is becoming reality in Georgia, there's a problem, as Jim Burress reports from member station WABE.

JIM BURRESS, BYLINE: Cheap health insurance is on all 10 employees' minds at Techquidation, Inc. From a small office and warehouse in the Atlanta suburb of Woodstock, employees repair, refurbish and consign cash register equipment. Here a worker readies more than a hundred receipt printers for a customer in Pennsylvania. With the boxes fully taped up and slapped with a shipping label, the cargo is ready to go.

BRIAN MAYFIELD: So we're just processing equipment. Repairing equipment here. We do outsource a lot of repairs as well. But a lot of equipment flows through here.

BURRESS: That's Brian Mayfield, Techquidation's owner. He started the business in 2004 in his dining room. It's steadily grown from there. Business is good. Not good enough, though, for Mayfield to offer employees health insurance. So when the Georgia General Assembly passed an insurance bill, Mayfield was excited. The measure allows any insurer licensed in Georgia to sell policies they offer in any other state, even policies that don't meet Georgia's basic standards for what an insurance policy should cover.

MAYFIELD: When it passed, definitely very pleased that we got legislation passed through, and looking very much forward to where that goes.

BURRESS: But it doesn't look like Mayfield, or any other Georgian, will be able to take advantage of the new law. With the new cross-state insurance provision scheduled to go into effect on July 1, not one insurance company has taken the state up on its offer to sell here. State Representative Matt Ramsey sponsored the legislation, bringing this national Republican idea to Georgia. Ramsey speculates that no insurer has signed up because they are paralyzed by the Supreme Court's pending ruling on the Affordable Care Act.

STATE REPRESENTATIVE MATT RAMSEY: Rightfully, they're - everyone's kind of preserving the status quo until they see what direction our nation's health insurance marketplace is going to go.

BURRESS: He says it's not like insurers don't want the business.

RAMSEY: So to the extent they can offer a product to a group of people that heretofore haven't been paying them anything as businesses, I think there's going to be tremendous interest.

BURRESS: To find out why no company's signed on, we contacted Georgia's biggest health insurers - Blue Cross Blue Shield, Aetna, Humana, United Healthcare and Kaiser Permanente. All declined comment.

MILA KOFMAN: I'm a little surprised, but frankly it's a big relief.

BURRESS: George University professor Mila Kofman says no matter what the reason, insurers' lack of action is a good thing for consumers. She says cheap policies are cheap for a reason. They often don't offer adequate coverage. Insurance premiums are expensive because healthcare is expensive.

KOFMAN: When you think about health insurance premiums, really the only way that out-of-state companies could sell products that are cheap is if they cut corners, if the product doesn't cover what the Georgia regulated products cover.

BURRESS: If cost cutting means cutting corners, that's okay, says state lawmaker Matt Ramsey.

RAMSEY: If an individual wants to buy a more bare-bones policy because that's all they can afford, that's all they need, then that's a heck of a lot better than not buying insurance.

BURRESS: Ramsey predicts if the Supreme Court throws out the Affordable Care Act, insurers will jump at the chance to sell more policies here. In the meantime, the only thing Georgia has to offer is a new law, and no takers. For NPR News, I'm Jim Burress in Atlanta.

INSKEEP: Jim's report is part of a partnership of WABE, NPR and Kaiser Health News.

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