Centers for Medicare and Medicaid Services (Photo: CMS)

The Centers for Medicare and Medicaid Services (CMS) has taken a step that could, possibly, eventually lead to some interstate sales of health insurance.

CMS — a division of the U.S. Department of Health and Human Services — is about to publish a request for comments about the idea of encouraging the formation of Health Care Choice Compacts.

The compacts could give states themselves a mechanism for encouraging the sale of health insurance across state lines, CMS officials say in a preview version of the request for information.

“What are the practical advantages and disadvantages of allowing health insurance issuers to sell individual health insurance coverage across state lines through Health Care Choice Compacts?” officials ask. “What actions could the federal government undertake to facilitate the state implementation of the sale of individual health insurance coverage across state lines?”

Officials refer in some questions to the possibility that creating interstate health insurance sales compacts could reduce competition in the health insurance market, rather than increasing it.

“What impact would the sale of health insurance coverage across state lines pursuant to Health Care Choice Compacts have on consolidation of health insurance issuers?” officials ask.

The history

Section 1333 of the Patient Protection and Affordable Care Act — one of the two statutes in the Affordable Care Act (ACA) package — already establishes a framework that could let two or more states create multistate health insurance sales compacts.

Georgia, Maine, Oklahoma and Wyoming already allow some interstate sales of health insurance products, but, so far, no states have used PPACA Section 1333 to create a compact, officials say.

“No health insurance issuers or consumers appear to have access to the increased flexibility that could be afforded by state laws related to the sale of health insurance coverage across state lines,” officials say.

The administration of President Donald Trump has issued an executive order calling for the federal government to facilitate the sale of health insurance across state lines. The request for information will support efforts to achieve that goal, CMS officials say.

The states

In the past, officials in many states have objected to the idea of allowing interstate health insurance sales.

CMS officials address that concern in the new notice.

“The administration recognizes and strongly supports the fundamental role states play in regulating insurance,” officials write.

The request for information “is not intended to inform policy which will preempt state law or otherwise impede the role states play as the primary regulators of insurance,” officials write.

The Mechanics

The request for information is set to appear in the Federal Register Monday.

Comments will be due 60 days after the official publication date.

The notice lists Cam Moultrie Clemmons as someone with more information about the matter.

Resources

A copy of the request for information is available here.

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Instant Insights /

Are interstate health insurance sales on the horizon?

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