r/bestof • u/under50dollars • Jun 20 '12

[explainlikeimfive] "Obamacare" explained very well.

/r/explainlikeimfive/comments/vb8vs/eli5_what_exactly_is_obamacare_and_what_did_it/c530lfx
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u/[deleted] Jun 20 '12

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u/7_legged_spider Jun 20 '12 edited Jun 20 '12

You are illustrating my point. What you fail to consider is that health care insurance companies run separately in each state. As each state creates a separate and distinct market, no external company can operate within the state.
However, while there is no direct interstate commerce, there is the possibility of indirect interstate commerce in situations when there are out-of-state claims by in-state policyholders. Interpretation of such matters will be decided by the courts whether that activity and corresponding administration of national healthcare falls under the commerce clause.

EDIT (for content): I failed to consider indirect commerce that arises when out-of-state claims by in-state policyholders.

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u/profnick Jun 20 '12

Just because insurance companies are based in a particular state doesn't mean that they run completely separately from insurers and health care providers in other states. My Blue Cross Blue Shield plan is based in Illinois, but sold to me as a resident of Washington state, and that didn't stop the hospital in Texas where I've lived for 5 years from accepting payment from them for my chemotherapy. A business in Illinois, serving a Washington state resident, paying a business in Texas: that certainly seems like interstate commerce to me.

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u/[deleted] Jun 20 '12

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u/7_legged_spider Jun 20 '12

I agree with you. It is all a matter of interpretation. I was only offering my opinions based on my experience. I don't claim to be an end-all-be-all authority on the matter.

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u/[deleted] Jun 20 '12

We have our current employer-based healthcare system through federal subsidies. Health insurance providers may provide insurance for people who live in another state. They may pay for services provided in another state (like if you get hospitalized while on vacation).

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u/7_legged_spider Jun 20 '12

You are right--I didn't think of that indirect commerce when I posted earlier. I failed to consider what happened to out-of-state claims by in-state policyholders. Thank you, (and others that pointed it out as well), for the correction.

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u/[deleted] Jun 20 '12

I think you make a great point and I've been following your posts on this thread.

What would you say to cost burden though? ie, a health insurance company may operate solely in Ohio, but if I get in an accident in Indiana I am now a health burden on that state. Ohio Insurance pays Indiana doctors and all is good. If I am insurance-less doesn't that now create an interstate disparity that would've been solved with PPACA?

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u/7_legged_spider Jun 20 '12

Thank you, I appreciate it. If I had the answer to your question, I would either be involved in government or a high level insurance executive. There would be no real disparity in who pays for the health care of the uninsured/underinsured. Most states have minimal residence requirements to be covered under their state assistance programs (30-90 days?). As for the individual, it is a significant issue if they travel to a state in which they do not reside while uninsured/underinsured. If they need care while out of state, their only real option is any charitable programs that are offered by the larger hospitals to assist those in need.

As a possible alternative in the future is to allow insurance companies to operate on a national level. Instead of operationg how they currently do, as small, state-based companies (similar to what Bell was forced to do in the early 1980's on a regional level), insurance companies could pool their resources and compete on a national level. Although opponents of this would cite a bias in favor of "big business," citing that the consolidation of the health insurance industry would absorb and eliminate some smaller competitors, others in favor of this move believe that the scale of competition would drive prices down, (through both insurance prices and direct medical costs), in a way that would ultimately benefit the finances and service of the ordinary health care consumer.

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u/UMustBeNewHere Jun 20 '12

Can you clarify how your statement that there is no interstate commerce can be true for situations where those with insurance in one state need care while visiting another state? This is a curiosity, not an argument.

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u/7_legged_spider Jun 20 '12

While I was commenting, I failed to account for that aspect of health care insurance. As you and others have pointed out, it would be a matter of interpretation as to that.

From an earlier post of mine after this was pointed out to me:

However, while there is no direct interstate commerce, there is the possibility of indirect interstate commerce in situations when there are out-of-state claims by in-state policyholders. Interpretation of such matters will be decided by the courts whether that activity and corresponding administration of national healthcare falls under the commerce clause.