Health insurance across state lines, coercion or consent

As of last week, states could form interstate health insurance compacts to allow for a single state to approve insurance that can be sold in all compact member states.  This is part of PPACA, as Charles Gaba has been digging into this week.  Kimberly Leonard of US News and World Report has details:

The little-known provision, found in section 1333 of the roughly 1,000-page Affordable Care Act, allows for states to create “health care choice compacts” permitting insurers to sell policies to consumers in any state participating in the compact, as long as they follow specific rules. Five states – Georgia, Kentucky, Maine, Rhode Island and Wyoming – already have enacted interstate compact statutes,according to the National Conference of State Legislatures.

An interstate compact is a voluntary agreement between states that has the approval of Congress. The most common compact type according to WIkipedia is some type of watershed and littoral water management compact such as the Port Authority of New York and New Jersey or the Great Lakes Commission.

There could be several potential compacts.  Massachusetts may decide that they are happy with the regulatory approaches of Rhode Island, New York, California and New Mexico and those states could form a compact.  On the other hand, Texas could join with Oklahoma and Louisiana for a de minimis compact.  The key aspect is that each particular state could choose what the minimal regulatory level would be appropriate for the home state.  It is a compact of consent.

This is markedly different than the Republican idea of selling insurance across state lines.  In that idea, the federal government would proclaim that a license in a single state is a license for all states.  The insurance industry would become an isomorph of the credit card industry.  The state with the weakest and most easily bought regulatory structure would have 98% of the viable insurance companies headquartered there within nine months of the law being passed.

It would be a race to the bottom for coverage requirements.  Currently, some states require insurers to cover a single wig for people who are receiving chemotherapy.  That requirement would still be in effect for any policy initially approved in that state, but no policy would be approved there.  Instead, a Plains state would have not have a wig coverage requirement.  More commonly, states vary in the required length of state after a non-complicated vaginal birth.  Some states may require 24 hours, other states require 36 hours, while other states require 2 midnights and a few states require 48 hours in the hospital after delivery.  Under the Republican schema, all these requirements would remain on the books, but the only plans offered across the nation would have either no maternal stay requirements or the shortest possible maternal stay requirement.

It is coercive federalism that sets the national standard at the lowest and least protective level as determined by a single state which is easily bought out.  Massachusetts would be regulated by Mississippi or South Dakota or Wyoming or Delaware.

7 replies
  1. 1
    JPL says:

    The few times it has been mentioned on the news, it was reported as a cost saver, without mentioning that many would lose necessary coverage.

  2. 2
    David Fud says:

    Do these compacts face the same approval hurdles as an individual state seeking a waiver for state specific difference from the ACA? It seems intuitively obvious that they can’t gut Obamacare via this mechanism, but sometimes intuitive isn’t what happens.

  3. 3
    Joe Falco says:

    Those hate talk radio SOBs have talked about selling health insurance across state lines just like in Richard’s second scenario for years, especially the contemptible Neal Boortz in Atlanta.

  4. 4
    FlyingToaster says:

    Massachusetts would be regulated by Mississippi or South Dakota or Wyoming or Delaware.

    As a BayStater, trust me, that is NOT going to fly.

    Massachusetts is one of those “48/96” hour maternity states: 48 hours for a vaginal birth, 96 for a c-section. I left the hospital after 89 hours, and they offered me a home health nurse visit to make sure things were going okay. Which I ended up declining, since as soon as she escaped the hospital, WarriorBabyGirl started gaining weight.

    Each state has its own medical boards, its own regulations and standard practices on medical care. I don’t see how it makes sense (except to the grifting class) to try to undercut that. Plus I’m pretty sure the attack lobbyists from Harvard will descend like locusts upon the members of Congress.

  5. 5
    benw says:

    Republicans would bleed out the patriotic blood of liberty to protect the sainted states’ right to care independently for their own citizens UNLESS they can pass a law at the Federal level that overrides what every single state except the shittiest wants in order to make some companies a boatload of fat cash.

    Forcing states to expand Medicare with Federal money: OVERREACH!
    Undercutting states’ ability to provide decent health insurance: FREEDOM!


  6. 6
    Matt McIrvin says:

    @Joe Falco: I’ve always seen that as their magic token substitute for health-care reform. Ask them what they’d do instead of the ACA or single-payer or whatever, and they will usually say “allow selling health insurance across state lines, and tort reform.” It doesn’t have to make any sense, but it’s something.

  7. 7
    Raven Onthill says:

    And so, I think, we have one of the elements of conservative “reforms” of the ACA – allow insurance companies to sell insurance across state lines without regard to the regulations of state where the insured lives.

    We may see this. :-(

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