BATON ROUGE — State Insurance Commissioner Jim Donelon cautioned Monday that a proposal by President Trump to allow the purchase of health insurance policies across state lines could be “catastrophic” for some Louisiana residents unless the state has the authority to regulate the carriers.
Republican senators filed a bill in Washington on Monday that would require the federal Department of Health and Human Services to issue regulations allowing insurers to sell plans across state lines.
President Trump assured sponsors of the bill, Sens. Lamar Alexander (R-Tenn.) and Susan Collins (R-Maine), that he wants tens of billions of dollars to set up high-risk patient pools and restart cost-sharing payments to insurers to lower health care premiums for consumers. He made the commitment in an hour-long call with the two legislators on Saturday.
Insurance is sold across state lines and always has been. United Healthcare, for example, conducts business selling health insurance within all 50 states.
But Donelon, a Republican, told Louisiana’s House Appropriations Committee that further clarification of health insurance sold across state lines is needed. “If you mean that you are going to authorize a race to the bottom, I have serious concerns,” he says.
Donelon offered an example of a company coming into Louisiana and following another state’s rules that would override the Louisiana Legislature’s rules.
He mentioned the late Doug Talbot, owner of New Orleans-based Lucky Dog Vendors, who came to Donelon when he was a state representative and chaired the House Insurance Committee.
Talbot had faced multiple battles with cancer and had concerns because an insurer from Tennessee had enacted 75 percent to 100 percent increases with each renewal, pushing Louisiana residents into a high-risk pool, Donelon said.
Donelon and fellow legislators then put caps of 25 percent a year on rate increases. The caps worked until the implementation of the Affordable Care Act, when the high-risk pools that existed either went away or were emptied because of the act’s ban on states’ use of high-risk pools.
If the federal government replicates a program that allows an out-of-state group to come into Louisiana and sell similar policies, residents “will be harmed greatly,” Donelon warned. But if federal officials preserve the authority of the state to protect consumers, the program could work, he said.
Selling across state lines without controls for Louisiana policy holders is a “dangerous thing indeed,” he added.
The National Association of Insurance Commissioners has expressed its concerns with President Trump’s proposal, Donelon said. But the president’s talking points, he added, “got ahead of reality, and now they’re trying to accomodate the talking point while not trying to harm consumers.”
Trump had said earlier that he would sign an executive order allowing for people to buy health care across state lines.
A government shutdown will occur if Congress does not pass a spending bill later this week. One of the contentious issues between the two parties is health care.
On other issues, Donelon said he has been clamoring for more protection for homeowners under the National Flood Insurance Program.
Under the proof of loss requirement, if a resident does not file a claim within 60 days, he or she loses the right to receive compensation for damages.
After the 2016 floods, the federal government granted extensions four times in the Baton Rouge/Lafayette area until Congress decided not to extend it any longer at the end of last year.
Donelon said Louisiana is among five states with the highest consumer auto insurance rates.
He said premium costs have risen due to distracted driving, cheap gas allowing motorists to drive more miles, and the cost of auto accidents attributed to more expensive vehicles.
By Drew White, LSU Manship School News Service