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October 6, 2015

Donald Trump's One Health Care Reform Idea Might Be Bogus

IPI expert referenced: Merrill Matthews | In The News | Media Hit
  Investor's Business Daily

ther than promising to "take care of everybody," the only specific health care reform idea that Donald Trump has proposed so far is to let people buy health insurance across state lines.

"What I'd like to see is a private system without the artificial lines around every state," he said in the first GOP debate. "Get rid of the artificial lines and you will have yourself great plans."

The idea of allowing cross-state purchases of health care is appealing because it looks like a way to put downward pressure on costly state benefit mandates.

If Connecticut's premiums are sky high because the state requires insurers to cover things like "medical complications of alcoholism," consumers ought to be able to buy a policy sold in a state like Idaho that is less regulation-happy. High-regulation states would likely cut back on their mandates to keep their in-state sales.

That's the idea, anyway. But the reality is a bit different.

A report from the Center for Health Insurance Reform notes that states have long had the authority to allow cross-border insurance sales, but only six passed legislation allowing it in one form or another. And the experiment has pretty much been a bust, according to health policy experts whose free-market bona fides are unimpeachable.

"The only problem is that such a reform has no effect," the Independent Institute's John Graham writes in The Hill this week. "Back in 2010, Georgia sacrificed its sovereignty to regulate health insurance, but premiums didn't change."

The reason, he says, is that "by far the largest determinant of insurance premiums isn't mandates, it's the provider network tied to a health plan." And those are inherently local in nature.

Merrill Matthews, a resident scholar at the Institute for Policy Innovation and a longtime advocate of free-market health reforms, came to the same conclusion.

"I've tried for 10 years to explain this to Republicans," he told the New York Times. "Just because a good affordable policy is available in another state doesn't mean that I would be able to get the network of physicians and the good prices that are available in that other state."

To be sure, Trump is hardly the only Republican to propose this idea. It's been a staple of GOP reform plans for years, and just about every other Republican presidential candidate has endorsed it.

But unlike Trump, those other candidates have included cross-state sales as just one piece of a broader package of reforms designed to increase free-market competition and lower premiums.

Before he dropped out, for example, Scott Walker offered a highly detailed reform plan. So has Bobby Jindal. Marco Rubio and others have at least outlined their post-ObamaCare proposals.

Until Trump does the same, he's stuck with one reform idea that could very well be a nonstarter.

Follow John Merline on Twitter: @IBD_JMerline.


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