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NAIC: Selling Health Insurance Across State Lines An Unlikely Solution

The Affordable Care Act includes a provision to allow payers to sell insurance across state lines. The provision took effect in January and allows two or more states to enter interstate healthcare compacts...
November 8, 2016

The Affordable Care Act (ACA) includes a provision (Section 1333) to allow payers to sell insurance across state lines. The provision took effect in January and allows two or more states to enter interstate healthcare compacts. As of October, roughly 16 states have explored post-ACA legislation to create interstate healthcare compacts, according to the National Conference of State Legislatures (NCSL).

Advocates say there are potential benefits to selling insurance across state lines, such as access to lower premiums and more options. But this is not necessarily how things would play out in a market that allowed interstate health insurance sales, according to a fact sheet from the National Association of Insurance Commissioners.

The NAIC concludes that while some consumers could find cheaper plans under in-state health insurance sales proposals, payers would most likely seek regulations that allow them to cherry pick the healthiest patients.