Should residents and small employers be able to purchase health insurance from out-of-state companies that do not necessarily follow NH’s insurance rules?

Rep. Glenn Cordelli is the primary sponsor of HB 1362, a bill that would allow New Hampshire residents and small employers to purchase health insurance from out-of-state companies.  Seven other representatives and four senators have signed on as co-sponsors.

The details of HB 1362

HB 1362 would specifically do the following:

• Individuals and employers with fewer than 100 employees would be able to purchase health insurance from companies that are not approved by the New Hampshire Insurance Department.
• Out-of-state health insurers would have to be approved in a state that is a member of the National Association of Insurance Commissioners (NAIC).
• Out-of-state health insurers would still have to negotiate with health care providers in New Hampshire to set up networks.
• Any disputes between policyholders and insurers would be adjudicated in New Hampshire.
• If the federal government changes the essential benefits required under the Affordable Care Act (also called “Obamacare”), this bill would require out-of-state insurers to offer at least one plan that follows New Hampshire’s health insurance rules.

HB 1362 is identical to a bill from last year, SB 149.  The Senate tabled that bill.

Arguments in favor of out-of-state insurers

Supporters argue that allowing out-of-state insurers to sell policies in New Hampshire will lower premiums two ways.  First, by welcoming out-of-state insurers, New Hampshire will increase the number of companies competing to attract New Hampshire customers.  Second, insurers will be able to offer cheaper policies by avoiding New Hampshire regulation.

HB 1362 also has several protections for New Hampshire consumers.  Notably, if the Affordable Care Act is amended in a way that changes what all insurers must cover, any out-of-state insurance company would have to offer a plan that complies with New Hampshire’s health insurance rules.

Arguments against out-of-state insurers

Opponents believe that HB 1362 and similar bills take away the power of the state to protect consumers, with minimal if any cost savings.  Opponents argue that health insurance costs vary regionally due to the healthiness of the population and the cost of medical services – not due to state regulations. 

Out-of-state companies, meanwhile, would have a hard time negotiating good prices with New Hampshire health care providers without a base of in-state customers.  This is one reason why other states with similar laws haven’t seen any out-of-state companies offering insurance.

Should residents and small employers be able to purchase health insurance from out-of-state companies that do not necessarily follow New Hampshire’s insurance rules? Share your opinion in the comments below