RFI on selling health insurance across state lines

March 27, 2019 | Health care

CMS issued the RFI in response to an executive order signed by President Trump on October 12, 2017. The executive order also directed federal agencies to revisit regulations on Association Health Plans, short-term limited duration insurance, and HRAs. These rules are part of a larger effort to increase competition and expand the availability of lower-premium coverage options.

The RFI poses important questions about provider networks, access to and utilization of health care services, and other issues that could present new opportunities and risks for health plans, health care providers, and other stakeholders if CMS were to move forward with Health Care Choice Compacts.

The RFI was published in the Federal Register on March 11, 2019, and is open for public comment through May 6, 2019.

Background

Section 1333 of the ACA provides for the establishment of a regulatory framework to allow multiple states to enter into Health Care Choice Compacts that would allow the issuer of a Qualified Health Plan (QHP) to offer plans on the individual insurance markets of any Compact-participating state. Importantly, the provision does not address the sale of group health insurance coverage across state lines or the sale of individual market policies that are not QHPs. Thus, the insurance market rules governing plans available through the ACA Exchanges would apply to plans available via Health Care Choice Compacts.

The RFI poses 22 questions across three themes. Below is a summary of select key questions within each theme.

Expanding access to health insurance coverage across state lines

In this section, the RFI asks about the practical advantages or disadvantages that could arise by selling QHPs across state lines. In particular, the RFI asks for feedback on why states that have passed authorizing legislation for various forms of interstate health compacts have not gone ahead with offering such plans, including whether any federal or state regulatory barriers are at issue.

The RFI also seeks information on the impacts that such compacts could have on counties with limited choice in the individual insurance market.

Most notably, the RFI asks whether states may now enter into agreements through mechanisms such as memoranda of understanding to sell other insurance products such as Association Health Plans and Short-term Limited Duration Insurance across state lines.

Operationalizing the sale of health insurance coverage across state lines

This section of the RFI asks about the challenges for small or regional health insurance issuers to develop and maintain provider networks across state lines, and whether there are any federal actions that could facilitate the creation of such networks.

In addition, the RFI seeks input on how the sale of health insurance across state lines might affect access to and utilization of health care services.

The RFI seeks comment on what new and existing consumer protections are needed to protect policyholders who live in one state and purchase coverage from a health insurance issuer in another state via a Health Care Choice Compact. CMS also seeks information on which statutes or regulations of the issuing state should apply to an individual market policy sold in another state pursuant to a Health Care Choice Compact.

The financial impact of selling health insurance across state lines

The last set of questions deals with how premiums would be set, and the scope of the risk pool for cross-state QHPs. CMS is also interested in any impact on out-of-pocket spending by consumers, and the effects that such a policy might have on health care costs. In particular, the RFI asks whether Health Care Choice Compacts might bring more competition to limited markets, whether such a policy could lead to a consolidation of insurance issuers, and shifts in the makeup of a state’s uninsured population.

Contact us