Very little that President-elect Donald Trump said during his 16-month campaign for president about health care was clear or consistent. But there was one vow he stuck by at all times: He would allow insurers to sell health plans across state lines.

“Modify existing law that inhibits the sale of health insurance across state lines,” states his website’s health care policy section. “As long as the plan purchased complies with state requirements, any vendor ought to be able to offer insurance in any state. By allowing full competition in this market, insurance costs will go down and consumer satisfaction will go up.”

Trump’s belief that making the health plan market national will result in lower costs and better products for consumers is not uncommon in conservative circles. It’s been a rallying cry for free market enthusiasts for years.

Many health care policy experts, however, are rolling their eyes in response.

For starters, many states have already passed laws to allow out-of-state insurers to enter their market. But few insurers opt to do so because of the hard work it will take to build up a network of providers in the new state.

“The barriers to entry are not truly regulatory, they are financial and they are network,” Sabrina Corlette, the director of the Georgetown University Health Policy Institute, said in a New York Times interview last year.

A study that Corlette conducted in 2012 found that states that had passed laws aimed at welcoming out-of-state insurers had produced zero interest from the insurance industry. Not one insurer responded to such laws by selling plans in a new state.

The federal government could more aggressively try to end the fragmentation of the insurance market by barring states from imposing many of their own regulations on health plans.

But consumer rights advocates say such a change would leave policyholders in many states in the lurch. Health insurers would respond by setting up headquarters in the lowest-regulation state, much in the way that credit card companies moved to Delaware in the wake of a financial deregulation law in the 1970’s.

If insurers all set up shop in a few low-regulation states, it is likely they won’t go to great lengths to develop robust provider networks for customers in certain parts of the country, particularly sparsely populated rural areas. With a national market in mind, it might not be worth it for a Texas-based insurer to try to provide plans to customers in Wyoming.

Instant Insights /

Selling insurance across state lines likely won't work

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