March 8, 2019

CMS wants to know how it can help insurers sell health plans across state lines

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    CMS on Wednesday issued a request for information (RFI) seeking recommendations on how it can remove barriers that prevent insurers from selling health plans across state lines—an approach long-touted by President Trump.

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    CMS in a release said the RFI builds on an executive order Trump signed in October 2017 that is intended to ease some health insurance regulations and create an avenue for certain health plans to bypass requirements under the Affordable Care Act (ACA). CMS said the executive order directs the Trump administration to make it easier for insurers to sell health plans across state lines.

    CMS seeks recommendations on how to allow individuals to purchase health plans across state lines

    CMS in the RFI said the agency is seeking recommendations on how it can "eliminate regulatory, operational, and financial barriers" that prevent insurers from selling health plans across state lines.

    One such barrier is the complexity of insurance regulations, which vary by state and can make it difficult for an insurer to enter a new market.

    CMS said the agency is primarily seeking input on:

    • How to expand access to health plans across state lines;
    • How to manage the sales of health plans across state lines; and
    • The financial implications of selling health plans across state lines, including the potential effects on health insurance premiums.

    In particular, CMS said it is seeking recommendations on how states can leverage Section 1333 of the ACA, which provides a regulatory framework for two or more states to enter into a so-called "Health Care Choice Compact" that would allow insurers to sell health plans across state lines. CMS said few states have taken advantage of the Health Care Choice Compact provision. Six states have passed legislation to allow interstate health plan sales, but no insurer currently is selling health plans across state lines.

    CMS is accepting public comments on the RFI for 60 days.

    Some experts raise concerns

    CMS Administrator Seema Verma said, "Eliminating the barriers to selling health insurance coverage across state lines could help provide access to a more competitive and affordable health insurance market."

    However, the National Association of Insurance Commissioners (NAIC) has said allowing insurers to sell health plans across state lines could prevent state regulators from taking action to protect their state's residents. An NAIC spokesperson said NAIC plans to respond to the RFI.

    Some experts have said allowing insurers to sell health plans across state lines could result in insurers selling lower-cost health plans with fewer benefits to healthy U.S. residents—which could lead to higher premiums for other, less-healthy U.S. residents. Leslie Dach—campaign chair for advocacy group Protect Our Care, which supports the ACA—warned that allowing insurers to sell health plans across state lines could "let insurance companies pick the state with the least regulation, and allow insurers to bypass much needed consumer protections."

    However, some experts have argued that allowing insurers to sell health plans across state lines would not have a substantial effect on premiums, because premiums are based on the local cost of care, Modern Healthcare reports. In addition, Modern Healthcare reports that other experts have said out-of-state insurers likely will have difficulty negotiating and establishing provider networks (Commins, HealthLeaders Media, 3/6; Armour, Wall Street Journal, 3/6; Livingston, Modern Healthcare, 3/6; Baker, "Vitals," Axios, 3/7; Leonard, Washington Examiner, 3/6; CMS release, 3/6).

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