I hope you all had a wonderful Thanksgiving. Now it is over, Congress is back in session and the Senate is addressing the issue of healthcare reform.
One of the things we are discussing the reform of our health insurance system is allowing people to buy insurance plans from other states where they might be able to find cheaper plans. I’m not sure how it’s supposed to work, and here’s why.
One of the reasons for the cost of the plans is lower in some other states that are the number of mandatory services requires a covered health plan. The more a plan is needed to cover the higher cost of coverage. For example, California has 56 services required that each plan must cover. By contrast, Idaho has 13 state mandates. We are not at the top of the list by any means, Virginia has 60 mandates and Maryland has 66. Want to see what kinds of things are mandatory, click here.
Another area that must be addressed is how doctors and others are paid. HMO plans in California tend to be more expensive than PPO plans in the individual market, but they have lower out of pocket expenses in obtaining care in an HMO. (The opposite is often true in the group health insurance.) The reason for this may be through very specific networks of doctors hired. Most people know that if you do not have coverage outside the HMO network, unless it is an emergency. So maybe we do not offer the HMO between states. However, PPOs are networks as well. If you see a doctor employed are covered at a level higher than the non-contracted physicians. So if you are in California and buy a plan from Kansas, who always treated at the lowest reimbursement rates? Major companies like United Healthcare and Aetna have networks in most states, but what about the smaller, regional carriers without the networks of other states? How would that work?
Another aspect of the provider payment affecting premiums is the number of suppliers are paid. Care in some states is more expensive than others, so how to pay providers in the “face” in front of the least expensive, and what to do to the cost of insurance in states with lower care costs are included in the cost of insurance? You could still end the problem of some people insured under the refund based on how it is made.
So be careful what you ask, you can gt. The more you want covered in a plan, the more it will cost. Just remember the old adage of marketing, if it sounds too good to be true, it usually is.