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RSS FeedShould your state government allow you to buy health insurance from out-of-state companies?
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| No | 25% | 3 votes | Total: 12 votes | |
| Yes | 75% | 9 votes |
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Add to FavoritesThe idea of the State Government allowing an individual to purchase health insurance from an out of state company or one located in the state is characteristic of the interference of the state in the personal decision of the consumer. It is the consumer who should decide which health insurance he or she purchases and which one would be beneficial in terms of price as well as service. Many times the State Government or Government in general interferes in what should be the decision of the consumer and in the end it is the consumer who loses. In fact, the United States of America has a crisis secondary to the interference of the Government in the Daily Activities of the people and that includes health care.
The consumer is the sole owner of his or her own destiny and that includes being responsible for decisions made in the right way or wrong way in choosing a health care insurance. The fact that the health care insurance is based in a certain state, out of state, or even out of country should not even be placed in the equation. The important thing is that the company is a solid company, with a good price range, and a great service with great coverage for the consumer. It is these things that the consumer has to look for without the eyes of the state or politicians who lack the scruples. This is the way the United States of America was founded. Let the consumer decide which Health Care Insurance Company is best for him or her.
The State Government or Government for that matter has too much on the plate and cannot juggle everything. It is for this reason that the Consumer should be in charge of what Insurance Company would help his or her Health Care Needs. It is enough that the State Government has involved itself in Health Care to the point that the programs do not work. We only have to look at the problems that Oregon has faced with the Oregon Health Plan since the economy in America has deteriorated. We only have to look at Tennessee and Tenn Care and see how the people have abused Tenn Care to the point where the future looks bleak and even a return to a traditional Medicaid Program in Tennessee will be detrimental to the consumer while the special interest groups, insurance companies, politicians, and certain health care providers receive the dividends from the state interfering in the affairs of the health care consumers. The State Government should give the Health Care Consumer a break by not interfering in his or her decision to but Health Care Insurance regardless of its origin. Let the Market Forces dictate where to purchase.
Learn more about this author, Roberto Alvarez-Galloso.
Click here to send this author comments or questions.
Yes
by David Guzman
Government should allow, even encourage, the purchase of insurance
policies of all types, including health insurance, from out of state
insurance companies. There is a simple reason for this: financial
safety.
Insurance companies pay claims out of premiums, loss reserves and
surplus funds.Imagine what happens to an insurance company
writing business in only one state if there is a catastrophe, such as
an epidemic or a major natural disaster. In such cases, there will
probably not be enough money from all sources to pay all the claims in
full. This means that the insurer will become insolvent and will have to liquidate.
Liquidating an insurance company is a long process, run by special
quasi-government agencies, a process that often takes years. Insureds
rarely receive the full amount they would be entitled to under their
policies, and always receive whatever benefits may be available months
or years after the loss.
This can happen, and actually does. One vivid example is Firemans'
Fund, then a San Francisco company, which was almost forced into
insolvency after the 1906 San Francisco earthquake. It survived by paying
claims in company stock, something that could not happen today. More
recently, 20th Century Insurance and the California State Automobile
Insurance companies were forced to exit the Homeowners' insurance
business because of earthquakes. They only wrote Homeowners'
insurance in Calfornia, and had to receive outside help to remain in
business. Size matters in the insurance business because the larger
the company, the less likely it is to get into financial trouble,
assuming that it is run properly. One cannot have huge insurance
companies in every state, so insurance from an out-of-state company
can be safer than from an in-state one.
This is the reason that I do not buy insurance from any company that
operates in only a single state. I only buy insurance from multi-state
companies that are licensed to write insurance where I live.
That said, the issue is moot. Every reputable insurance company
carries reinsurance, which is insurance against large losses for
insurance companies. Reinsurance is a specialized line of business,
largely unknown to the public, written by relatively small number of
very large national and international insurers. This means that
almost every policy you purchase is at least partially covered by an
insurer with national or international scope.
The insurance industry has one of the most complex regulatory
structures of any industry. Each state and the Federal Government
regulates almost every aspect of the business, and any insurance
carrier that wants to write business in a jurisdiction must comply
with all of its regulations and requirements. This means, for example,
that every health insurer must comply with each state's required
coverages. There are also Constitutional issues: limiting insurance
from out-of-state companies would be interstate restraint of trade,
and would not withstand a court challenge.
Limiting insurance companies to selling insurance within their own
states of domicile is therefore impossible for theoretical,legal and
practical reasons. Even were it possible, it would decrease the financial
safety of the insurance-buying public.
Learn more about this author, David Guzman.
Click here to send this author comments or questions.
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