The benefit is increased competition. If an insurance company from outside California can sell here, it might offer cheaper premiums, drive down costs, and consumers might be better off, but there are fears it could also be a race to the bottom.
During his run for the White House, Senator John McCain, R-Arizona, made sales across state lines a prominent part of his health care platform. He said, "I'll bring down the skyrocketing cost of health care with competition and choice."
And now a version of McCain's proposal has found its way into the Senate's health care bill. Under the provision called the Health Care Choice Compact, states could join together allowing insurers from one state to sell in the other states and be governed by the rules in its home state, not in the state where the policy was sold.
"In California we have everything to lose because we have the most advanced consumer protections on the book," says Rep. Jackie Speier, D-San Mateo.
Congresswoman Speier cites the right to an independent medical review of insurance decisions, coverage for second opinions, and screening for osteoporosis and whole host of other conditions, that other states do not require of their insurance carriers. The kinds of benefits Speier fears could be eliminated.
"It's going to undermine all these protections that we have put in place for consumers in California and I'm not about to let that happen," says Speier.
Newly-elected Congressman John Garamendi, D-Walnut Grove, was insurance commissioner in California from 2003 to 2007.
"The problem is with your small insurance companies, you've got to make sure those small insurance companies are able to pay the bills," says Garamendi.
Californians were ripped off by insurance carriers taking the money and running says a spokesman for the state's Association of Health Underwriters, Steve Lindsay.
"Yes, actually we saw a lot of this in the late eighties," says Lindsay.
Lindsay also says the industry organization he represents would oppose outsiders that weren't willing to play by California's rules.
"Everybody needs to be on that same, level playing field for us to have a competitive market place and right now California has arguably the most competitive insurance marketplace in the nation," says Lindsay.
Speier says if the Health Care Choice Compact remains in the bill as written, she will vote against the legislation.
