The Senate health bill allows sates to form “compacts” to sell policies across state lines and permits insurers to market so-called ‘national plans.’ Under the bill, insurers in the individual and small group markets “may offer a qualified health plan nationwide, which is subject to only the State benefit mandate laws of the State in which the plans are issued.” Insurers are required to “provide the essential benefits package and states can enact “a law to opt out of allowing the offering of nationwide plans.”
Progressives maintain that the policy would allow health insurers to circumvent critical consumer regulations and further fragment risk pools. As Jon Walker explains, “these nationwide health plans will, in effect, gut state health insurance regulations and create a race to the bottom. What will likely happen is what happened with the credit card industry — all the card companies moved to the two states with the absolute lowest regulations”:
I can easily envision a scenario in which insurance companies stop selling in-state plans that meet the state benefit requirements laws, and only offer nationwide plans in those states. States that don’t opt out will lose their ability to make sure insurance companies cover what the people of those states think is essential.
Well now, Sens. Olympia Snowe (R-ME), Mary Landrieu (D-LA) and Blanche Lincoln (D-AR) have offered an amendment that would deny states the option to ‘opt out’ of “the offering of nationwide plans.” SA 2859 deletes the state opt out language and adds rating requirements to the plan requirements. If the amendment is adopted, the national plans would be required to offer a standard benefits package and abide by the rating rules in any state the policy is sold (previously, an insurer was only subject to the rate regulations of a single primary state.)
The amendment is a less extreme version of the Republican alternative. A Republican health proposal in the House would have allowed the health insurer to self-designate a “primary state” “whose covered laws shall govern the health insurance issuer” and market policies to other states without adhering “to all of the consumer protection laws or restrictions on rate changes of the state.” In fact, that bill explicitly expanded the definition of ‘State’ to allow insurers to designate the Virgin Islands, Guam, American Samoa and the Northern Marianas as a “primary state.”