PIA National is strongly opposed to an action taken by the administration that seeks to allow the sale of health insurance across state lines.
In October 2017, President Trump issued an executive order (EO #13813), directing federal agencies to consider ways to increase competition and consumer choice in health care. In accordance with this executive order, the U.S. Department of Health and Human Services’ Centers for Medicare and Medicaid Services (CMS) issued a 60-day request for information (RFI). The request asks for input on how CMS can utilize the provision of the Affordable Care Act (ACA) that allows for the use of “Health Care Choice Compacts” to sell plans across state lines. To date, no state has entered into a Health Care Choice Compact.
PIA National is a steadfast supporter of continued oversight and regulation of insurance by the states as outlined by the McCarran-Ferguson Act of 1945, and opposes all proposals that would bring about federal insurance regulation, whether in full or in part. Allowing the sale of insurance across state lines will strip the states of their authority over health insurance and undermine the regulatory structure set up by McCarran-Ferguson.
A further concern is that allowing the sale of health insurance across state lines could permit an insurance company to engage in regulatory forum-shopping by allowing it to choose the state it would be regulated by. Effectively, permitting the designation of any one state as de facto regulator for all carriers in all states would impose a one-size-fits-all solution dictated by Washington, D.C.—which, ironically, has been one of the main critiques of the ACA.
State governors, legislators, and regulators know best what will work in their own unique markets. Allowing health insurance to be effectively exempt from state regulation by permitting insurers to pick their own regulator in one state—and by so doing, evade the requirements of all 49 other states—would eviscerate local control. Many health insurance policyholders get their coverage through their employers, and “in-network” providers are often determined by, among other factors, geographic proximity. Proposals like this would preempt state authority and transfer regulatory authority to the federal government.
PIA National agrees that the ACA needs to be reformed and that the goal of increasing competition and consumer choice in health insurance is a worthy one. However, we doubt that allowing insurance sales across state lines would succeed in lowering costs or creating more choice for consumers. The solution for these challenges is not the dismantling of the successful state insurance regulatory system.
PIA National will respond to this call for information within the 60-day window and strenuously opposes attempts to subvert the American system of state insurance regulation.