WASHINGTON BUREAU -- Allowing health plans to sell coverageacross state lines without adopting national consumer protectionstandards could hurt consumers, a federal health insuranceregulator and former insurance commissioner testified heretoday.

Steve Larsen, director of the Center for Consumer Informationand Insurance Oversight (CCIIO), an arm of the Centers for Medicareand Medicaid Services (CMS), made the comments during a hearing on“Expanding Health Care Options: Allowing Americans to PurchaseAffordable Coverage Across State Lines” that was organized bythe House Energy and Commerce Committee.

Larsen argued that the kinds of basic consumer protectionstandards included in PPACA make interstate health insurance salesfeasible.

“Without the consumer protections included in the PPACA, we runthe risk of creating an environment where there is a ‘race to thebottom’ in which insurers have an incentive to sell plans from thestate with the fewest consumer protections,” Larsen said.

PPACA Section 1333

Larsen, who served as Maryland insurance commissioner for 6years before taking over as the head of the CCIIO, told lawmakersthat Section 1333 of the Patient Protection and Affordable Care Act(PPACA) of 2010 contains a mechanism for facilitating interstatehealth insurance sales.

PPACA Section 1333 requires the parent department of CMS, theU.S. Department of Health and Human Services (HHS), to issueregulations governing the creation of “health care choice” compactsby July 1, 2013.

Starting Jan. 1, 2016, two or more states will be able to use acompact to allow qualified health plans based in the participatingstates to sell health insurance in all participating states.

The plans will be subject to the laws and regulations of thestate in which the plan was written or issued, and compact plansmust offer the same benefits required by the consumer’s state,Larsen said.

“These provisions ensure that interstate sale of healthinsurance is not a back-door attempt to disadvantage higher-riskindividuals or preempt critical consumer protections,” Larsentestified.

The Republican Perspective

Rep. Joseph Pitts, R-Pa., chairman of the Energy and CommerceCommittee’s health subcommittee, said consumers should be able toavoid the cost of buying policies that comply with statemandates.

“States have begun to realize that, while well-intentioned,mandating important health benefits and provider coverage for theircitizens has backfired,” Pitts said.

At least 12 states now permit the sale of “mandate-free” or“mandate-lite” policies, “so that people can buy a plan that ismore suited to their needs, with fewer costly mandates,” Pittssaid.

“This should be about consumer choice, not a one-size-fits-allmandate package that may or may not address a particularindividual’s needs,” Pitts said.