Health Reform WK-EDGE Can selling health insurance across state lines be easier?
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Friday, March 15, 2019

Can selling health insurance across state lines be easier?

By Cathleen Calhoun, J.D.

CMS is seeking input on eliminating access barriers and improving issuers’ ability to sell insurance across state border.

CMS issued a request for information (RFI) regarding how to eliminate barriers and enhance health insurance issuers’ ability to sell individual health insurance coverage across state lines. The RFI was written in connection with an executive order that directs HHS, and others, to facilitate the purchase of health insurance coverage across state lines (Notice, 84 FR 8657, March 11, 2019).

Policy. An executive order was issued on October 12, 2017, that states that the policy of the administration will be to facilitate the purchase of insurance across state lines and the development and operation of a healthcare system that provides high-quality care at affordable prices. The RFI mentions that HHS intends to work with states to innovate and consider additional mechanisms for the purchase of individual health insurance coverage. Specifically, mechanisms that are less burdened by regulatory requirements and will simplify operations and lower costs for health insurance issuers—with the goal of lowering prices and increasing options.

Health Care Choice Compacts. While several mechanisms to facilitate the sale of individual health insurance coverage across state lines exist, such as Interstate Health Compacts enacted through state legislation and the allowance of the sale of insurance from out-of-state insurers by a state, the RFI primarily explores options related to Health Care Choice Compacts related to §1333 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). Two or more states may enter a Health Care Choice Compact since a regulatory framework is established under §1333 of the ACA.

Topics needing input. CMS will be seeking responses to questions on the following topics:

  1. Expanding health care coverage across state lines. Specifically, among other questions, the advantages and disadvantages of allowing health insurance issuers to sell individual health insurance coverage across state lines through Health Care Choice Compacts.
  2. Operationalizing the sale of health insurance coverage across state lines. Among the questions—is the structure of Health Care Choice Compacts contemplated by §1333 of the ACA effective in facilitating the sale of individual health insurance coverage across state lines?
  3. Financial impact of selling health insurance across state lines.

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