NAIC Cautions CMS Against Establishing Standards for Selling Health Insurance Across State Lines

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On Dec. 5, 2019, the National Association of Insurance Commissioners (NAIC) issued a letter to the Centers for Medicare & Medicaid Services (CMS), requesting that the agency not move forward with plans to establish standards for interstate compacts for the sale of health insurance across state lines. CMS has moved to establish these standards because Sec. 1333 of the Patient Protection and Affordable Care Act (ACA) directs the Department of Health and Human Services to develop them, in consultation with the NAIC. The standards should have been issued no later than Jan. 1, 2013, but the Obama Administration never developed them.

In the letter, the NAIC asserts that federal standards for the sale of health insurance across state lines are unnecessary because states have had the option to adopt Health Care Choice Compacts through the ACA, and no states have chosen to do so. Additionally, the NAIC argues that state barriers and a lack of federal standards are not impediments to the sale of health insurance across state lines. Instead, the very nature of health insurance is a barrier, as it is infeasible to successfully manage insurance networks, risk pools, and costs across state lines. In closing, the NAIC claims that state regulators generally oppose the creation of federal standards for the sale of insurance across state lines because it weakens their ability to enforce consumer protection laws and market conduct laws.

Read the NAIC’s issue brief on the sale of health insurance across state lines to learn more about this issue.

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