Insurers and healthcare providers warned the CMS that federal regulations aren't the reason insurers steer clear of selling plans across state lines.
The CMS issued a request for information in March on how to eliminate barriers on insurers' ability to sell cross-border plans, reviving an idea that was a pillar of President Donald Trump's 2016 campaign. The agency also asked whether Farm Bureau insurance plans or short-term, limited duration plans could help facilitate the sale of individual market plans.
Currently there are four states—Georgia, Maine, Oklahoma and Wyoming—that have laws that allow such sales, but they have middling results.
"These states have each taken a different approach, none of which has, to date, resulted in insurers offering comprehensive health insurance in a state in which it is not licensed," the National Association of Insurance Commissioners said in a comment letter. "This shows that the impediments to interstate sales are not in federal law but are inherent in the business of health insurance."
The main insurance lobby America's Health Insurance Plans also noted that states can already allow the sale of plans to other states via Section 1333 of the Affordable Care Act, which allows one or more states to create a healthcare compact to sell plans.
"Section 1333 does not include any requirements that impede selling insurance across state lines," the group said in comments. "The main challenges states face in operationalizing cross-border individual market insurance sales would be the same in any framework. Additional federal action that is outside the option to create compacts under section 1333 would only compound those challenges."
However, healthcare providers and patient advocates also question if selling across lines would even lower premiums.
"Issuers are unlikely to be able to construct provider networks that will support competitive premiums. Network development is expensive and issuers with no presence in a market into which they would like to expand will have little bargaining power with local providers," said Trinity Health, a Catholic healthcare system that operates 99 hospitals across 22 states, in its comments.
If an insurer cannot secure competitive reimbursement rates from the market, they will raise premiums to recoup those costs, Trinity said.
Providers and some state regulators were also worried about the impact on coverage of pre-existing conditions if insurers can sell cross-border plans.
"Some insurers will migrate to the states with the least stringent coverage requirements," Pennsylvania Insurance Commissioner Jessica Altman said. "Coupled with a marketing strategy to aggressively target the healthiest individuals, this will skew the market adversely against less healthy individuals."
Other providers had major concerns about whether short-term and Farm Bureau association health plans should be sold. Both types of plans are cheaper than ACA exchange plans because they do not cover as many benefits or cover pre-existing conditions.
"Many states have adopted regulations restricting access, duration and renewability to short-term, limited duration plans," the American Academy of Family Physicians said. "Allowing states to sell these types of policies across state lines would preempt state authority, erode consumer protections."
The plans could also raise logistical issues, including which state would be responsible for oversight.
"Quite simply, my department would not have jurisdiction to require an issuer of an out-of-state policy to comply with the consumer protections in Pennsylvania (or any other state's) laws," Altman said.
