Bill #: H.R. 314
Bill Name: (short title) Health Care Choice Act of 2017
Summary: Repeals title I of the Patient Protection and Affordable Care Act (ACA) to amend the Public Service Act so that insurance companies licensed in one state can sell health insurances to residents of another state in which they are not licensed. Such insurance companies would be subject only to the regulations of the state they are licensed in; not the other states they are selling in.
Legislature: U.S. House of Representatives
Sponsors: Blackburn, Gurthre, Olson, Black and Hudson
Where is it now? Referred to Committees on Energy and Commerce, Ways and Means, and Education and the Workforce, for a period determined by the Speaker such as needed for consideration of such provisions as fall within the jurisdiction of the committees.
Stake Holders: Insurance companies, insurance consumers especially the elderly & sickest, taxpayers, state insurance regulators, consumer protection agencies.
Why do we care? Currently health insurance companies must be licensed to sell insurance in a state in order to do so. As such, they must adhere to that state’s insurance regulations. Unlicensed, out-of-state insurance plans pose several problems: (1) In-state insurance plans have specific networks of doctors and hospitals. An out-of-state plan would not necessarily cover those health care providers. (2) State insurance regulations mandate levels of coverage. An out-of-state plan may not provide the level of coverage someone in another state might need. (3) Insurance companies could locate to states with the least regulation (“race to the bottom”) to sell low coverage/low cost plans. This could draw off (“cherry pick”) the healthiest individuals in other states leaving those states with an increased pool of high-risk people to insure resulting in higher rates for those people. (4) Consumers of out-of-state plans would not be backed by their state’s insurance regulations and suffer from a lack of consumer protection. (5) Allowing insurers to choose their regulator is the dynamic that led to the collapse of the financial sector.
How does it meet our stated objectives? Indivisible promotes inclusiveness, tolerance and fairness. This bill promotes exclusiveness by pitting the health against the unhealthy. It promotes unfairness by reducing regulatory consumer protection and allowing insurance companies to sell insurance in a state in which they are not licensed. Such unlicensed selling would otherwise be considered a criminal offense.
Local Impact? Massachusetts has quite strong insurance regulations. Should its citizens purchase health insurance from out-of-state companies, i.e., not licensed in Massachusetts, those regulations and the consumer protections that go with them would not apply. Also, purchasing out-of-state health insurance could decrease the pool of Massachusetts residents buying health insurance and force in-state insurance companies to raise rates due to a decreased number of subscribers. Increased rates could lead to non-coverage for those at highest risk which could result in death and/or use of more costly emergency room services.
Possible Action: Call representatives in the House to oppose. If passed in the House, the bill goes to the Senate where it will require 60 votes to pass because it is not part of the budget reconciliation process; call senators to oppose.
Sources: NAIC: The Center for Insurance Policy Research (“Interstate Health Insurance Sales: Myth vs. Reality”); Kaiser Health News; CNN Money; Business Insider; The Washington Post