However, rather than completely displacing existing state insurance regulation, federal reform should embrace a cooperative federalism model patterned on the ACA. This model would rely on federal law to establish key rules for selling, underwriting, pricing, and subsidizing homeowners insurance, while allowing states to implement and customize these rules to their local markets. Substantively, it would require homeowners insurers to offer coverage that meets comprehensive federal minimum standards and to avoid discrimination that does not plausibly promote social goals like climate change resilience. At the same time, Obamacare-based reform to homeowners insurance markets would dispense with heavy-handed state regulation of insurers’ rates, instead relying on managed competition among private insurers via state-run insurance exchanges.
It is provocative, but it’s not really a viable idea. You can’t price homeowner’s insurance the way that the ACA does, because homes differ in market value.
The ACA can start from the premise that all people are equally valuable. They might have different risks of incurring a particular medical event, but if one of those risks manifests then the coverage outcome is the same for every person - they get the cost of the treatment covered (subject to co-pays or deductibles and whatnot). So if you have community rating and force insurers to charge the same premium to every covered person (subject to some limited things like age or smoking status), all you’re doing is shifting risk among folks.
But houses aren’t like that. One house might be worth $100K and another worth $1M. Even if they have the same risk, the insurer’s responsibility in a coverage event is 10x larger for the second home. There are all kinds of operational and fairness problems in treating homes with different values as if they’re the same that are very different than those in health insurance.
I don’t think much of the paper, since it doesn’t even appear to recognize this fundamental difference between people and homes - let alone try to figure out how to adjust the system to accommodate it.
I think you are conflating a bit. The paper isn’t about applying 100% of ACA to Home Insurance. For example, I didn’t see any attempt to set up exchanges or to standardize pricing in the paper.
A large part of what ACA did was set federal standards for health insurance. I did not read every word of the paper but it seems to be largely focuses on that aspect, and not on how to set exact prices for a 100 sq ft home vs a 5000 sq ft home.
It is exceptionally difficult to compare home owners insurance between different companies because it is not standardized. If home owner insurance was similar to Medicare (Plan G, H, etc,), it would be easier to shop.
To wit:
Obamacare addressed these pervasive gaps in coverage for catastrophic
health events by requiring that all health insurance policies offered in the
individual market provide a minimum baseline of coverage. It accomplished
this in part by prohibiting insurers from using common exclusions, like
preexisting condition exclusions and annual or lifetime limits.237
Additionally, Obamacare mandated that health insurers cover a
comprehensive suite of “essential health benefits” (EHBs), including
hospitalization, outpatient care, ambulatory care, maternity care, prescription
drug coverage, and preventive care.238 It required these EHBs to be
comparable in scope to the benefits provided by “a typical employer plan.”239
Although the ACA initially contemplated that Health and Human
Services (HHS), a federal agency, would further define the content of EHBs,
HHS ultimately delegated this responsibility to states. Under this approach,
state insurance regulators select a “benchmark” plan recently offered in the
state, with EHBs linked to that plan, subject to certain adjustments.240
Additionally, the ACA specifically allowed states to impose coverage
mandates beyond those contained in the statute.
It’s in the section that begins around page 51 or so of the PDF - where he discusses the community rating part of the ACA, and how it would be applied to the home insurance market.
That’s a core element of the ACA - insurers cannot charge different prices to different insureds - and it would be a core element of this proposal. Without it, there’s just not really not much there.
I didn’t read the article, but just the headline makes me squirm. The ACA is a terrible program, it just happens to be the only one we could get through our dysfunctional legislature and achieves some - not all - of the goals of socialized medicine.
Piggybacking a bad system into another industry, unless it is crying for help (maybe it is, dunno) seems fraught.
ACA was originally about spreading the risk over a wider range of insured people. Specifically getting young healthy people to buy health insurance.
The same concept could work for home owners insurance. A national base could mean modest payments to the pool for many. But greatest premiums should still go to those at highest risk. The decision to live in a high risk area is your choice. You should be responsible for that risk.