The False Political Narrative About the Sale of Health Insurance Across State Lines
Congress and state politicians have proselytized a false narrative about the inability to sell health insurance across state lines. The simple solution is repeal the Federal McCarran Ferguson Law. Why?
Health insurance providers in each state are protected from interstate competition by the McCarran Ferguson Act of 1945. This law grants the states the sole right to regulate health insurance within their borders. It insulates health insurers from the legal effects of the Interstate Commerce Clause of the United States Constitution. Consequently, McCarran Ferguson permits insurance companies to establish INTRASTATE insurance oligopolies or monopolies “sub silentio” by also exempting them from the Sherman and Clayton antitrust and anti-monopoly laws.
Insurance companies lobby state insurance commissioners, legislators and governors to protect their INTRASTATE oligopolies or monopolies, and when desirable for political or other economic reasons, mandate with the help of the state politicians the purchase of unnecessary insurance such as pregnancy coverage for women who are beyond child bearing age. This allows insurance companies to increase premiums for everybody even though the insured event is low risk for many within the insured pool.
Consider these insurance anomalies. About one-fourth of states require heath insurance to cover acupuncture and marriage counseling. Seven states require coverage for hair pieces and nine for hearing aids.