Commissioner Jones on pending Trump exec order on insurance

Last week, reports first emerged that President Trump was planning an executive order that would allow for the sale of insurance products across state lines.  While the situation is still hypothetical until an order is released (tentatively scheduled for Thursday), Commissioner Jones was gracious in sharing his early thoughts on the subject in this interview.

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DJW:  What do you make of this news that President Trump is planning an executive order which may allow insurance companies to sell across state lines?

Commissioner Jones:  Insurance commissioners on both sides of the aisle think this is a really bad idea, and we hope the president will reconsider.

Depending on how he does it, I plan to sue him.  But your question was what do I think.  And, commissioners across the country think it’s a bad idea to undermine state-based consumer protections.

DJ:   I know this is all hypothetical until he actually does it, but assuming that it’s relatively straight forward and that plans that are domiciled and approved in Nevada can feel free to sell into California, skirting California regulatory code…

Jones:  That would be illegal. So depending on how he does it, I plan to sue him. But your question was what do I think and insurance commissioners on both sides of the aisle think it’s a really bad idea to undermine state based consumer protections when insurers already are able to sell across state lines.

In California for example, the majority of insurers are from other states. They just simply have to get a license here, which we grant them. Then they must comply with California’s consumer protections, which most do. So the way our national system of state-based regulation works is that states decide what the appropriate level of business and consumer protection is for them.

So it’s fundamentally grounded in the notion of states’ rights and states’ selection of the appropriate level of consumer protection.  Depending on how he issues the order, it could be directly contrary to federal and state law, in which case I would sue him to block it.

DJ: Any plan that is going to sell to Californians will have to have, at a minimum, an adequate provider network.  They can’t sell absent a network, right? So at a minimum, they’d still have to have a provider network.

Jones:  Well, there’s all sorts of things they’d have to have. They’ve have to have medical providers, they’d have to have a claims handling capacity, they’d had to the ability to sell the insurance.  I mean you know the list goes on and on and on, but they can and do do those things already even though they are headquartered in other states.

So, there’s no need to do this other than to score some political points, which is unfortunate. I think that the state-based system of insurance regulation has stood the test of time. It’s a system that’s worked for consumers.