Patient Protection and Affordable Care Act; Increasing Consumer Choice Through the Sale of Individual Health Insurance Coverage Across State Lines Through Health Care Choice Compacts
| Published date | 11 March 2019 |
| Citation | 84 FR 8657 |
| Record Number | 2019-04270 |
| Section | Proposed rules |
| Court | Centers For Medicare & Medicaid Services |
Federal Register, Volume 84 Issue 47 (Monday, March 11, 2019)
[Federal Register Volume 84, Number 47 (Monday, March 11, 2019)]
[Proposed Rules]
[Pages 8657-8660]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-04270]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Chapter IV
Office of the Secretary
45 CFR Subtitle A
[CMS-9921-NC]
RIN 0938-ZB45
Patient Protection and Affordable Care Act; Increasing Consumer
Choice Through the Sale of Individual Health Insurance Coverage Across
State Lines Through Health Care Choice Compacts
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Request for information.
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SUMMARY: This request for information (RFI) solicits comment from
interested parties on how to eliminate barriers to and enhance health
insurance issuers' ability to sell individual health insurance coverage
across state lines, primarily pursuant to Health Care Choice Compacts.
This RFI was written in connection with Executive Order 13813,
``Promoting Healthcare Choice and Competition Across the United
States,'' which directs the Administration, including the Department of
Health and Human Services (HHS), to the extent consistent with law, to
facilitate the purchase of health insurance coverage across state
lines. HHS is committed to increasing health insurance coverage options
under Title I of the Patient Protection and Affordable Care Act.
DATES: Comment Date: To be assured consideration, comments must be
received at one of the addresses provided below, no later than 5 p.m.
on May 6, 2019.
ADDRESSES: In commenting, please refer to file code CMS-9921-NC.
Because of staff and resource limitations, we cannot accept comments by
facsimile (FAX) transmission.
Comments, including mass comment submissions, must be submitted in
one of the following three ways (please choose only one of the ways
listed):
1. Electronically. You may submit electronic comments on this
regulation to http://www.regulations.gov. Follow the ``Submit a
comment'' instructions.
2. By regular mail. You may mail written comments to the following
address ONLY: Centers for Medicare & Medicaid Services, Department of
Health and Human Services, Attention: CMS-9921-NC, P.O. Box 8016,
Baltimore, MD 21244-8016.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By express or overnight mail. You may send written comments to
the following address ONLY: Centers for Medicare & Medicaid Services,
Department of Health and Human Services, Attention: CMS-9921-NC, Mail
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT: Cam Moultrie Clemmons, (206) 615-2338.
SUPPLEMENTARY INFORMATION:
Submission of Comments: All submissions received must include the
Agency file code CMS-9921-NC for this notice.
Inspection of Public Comments: All comments received before the
close of the comment period are available for viewing by the public,
including any personally identifiable or confidential business
information that is included in a comment. We post all comments
received before the close of the comment period on the following
website as soon as possible after they have been received: http://www.regulations.gov. Follow the search instructions on that website to
view public comments.
I. Background
On October 12, 2017, President Trump issued Executive Order 13813,
``Promoting Healthcare Choice and Competition Across the United
States,'' which states the policy of the Administration will be ``to
the extent consistent with law, to facilitate the purchase of insurance
across State lines and the development and operation of a
[[Page 8658]]
healthcare system that provides high-quality care at affordable prices
for the American people.'' \1\ The Executive Order reflects the
Administration's intention to put downward pressure on premiums by
providing more meaningful choices for consumers and increasing
competition. The Department of Health and Human Services (HHS) intends
to work with states to innovate within the health insurance market by
considering additional mechanisms for the purchase of individual health
insurance coverage that are less burdened by regulatory requirements
and will therefore simplify operations and lower costs for health
insurance issuers, with the ultimate goal of lowering prices for
coverage and increasing options for United States consumers.
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\1\ https://www.whitehouse.gov/the-press-office/2017/10/12/presidential-executive-order-promoting-healthcare-choice-and-competition.
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Executive Order 13813 further directs the Secretary of HHS, in
consultation with the Secretaries of the Treasury, Labor, and the
Federal Trade Commission, within 180 days from the date of the
Executive Order, and every 2 years thereafter, to provide a report to
the President that details the extent to which existing state and
federal laws, regulations, guidance, requirements, and policies fail to
conform to the policies set forth in section 1 of the Executive Order,
including the facilitation of the purchase of insurance across state
lines, and identifies actions that states or the federal government
could take in furtherance of the policies set forth in section 1 of the
Executive Order. Comments provided in response to this Request for
Information (RFI) may help to inform future reports.
While there is no federal law that generally prohibits the sale of
health insurance coverage across state lines, the McCarran-Ferguson Act
of 1945 \2\ establishes states as the primary regulators of insurance
and declares that a federal law cannot preempt any state law that
regulates the business of insurance, or that imposes a fee or tax upon
such business, unless such federal law specifically relates to the
business of insurance. While several mechanisms to facilitate the sale
of individual health insurance coverage across state lines exist, such
as Interstate Health Compacts enacted through state legislation and the
allowance of the sale of insurance from out-of-state insurers by a
state, this RFI primarily explores options related to Health Care
Choice Compacts related to section 1333 of the Patient Protection and
Affordable Care Act (PPACA) (Pub. L. 111-148) since section 1333
provides a specific role for the federal government.
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\2\ 15 U.S.C. 1011-1015.
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Section 1333 of the PPACA provides for the establishment of a
regulatory framework \3\ that allows two or more states to enter into a
Health Care Choice Compact. For plan years beginning on or after
January 1, 2016, under a Health Care Choice Compact, a health insurance
issuer could offer one or more qualified health plans (QHPs) \4\ in the
individual health insurance market in any state included in the
compact. The QHP generally would only be subject to the laws and
regulations of the state in which the health insurance coverage was
written or issued.\5\ Section 1333 of the PPACA does not address the
sale of group health insurance coverage across state lines or the sale
of individual market policies that are not QHPs. In order to enter into
a Health Care Choice Compact, a state must pass legislation, after
March 23, 2010, specifically authorizing it to do so. To date, no
states have passed legislation authorizing the state to enter into a
Health Care Choice Compact as contemplated by section 1333 of the PPACA
or created a Health Care Choice Compact, and no issuer has offered
health insurance coverage through a Health Care Choice Compact.
However, four states (Georgia, Maine, Oklahoma, and Wyoming) have
passed laws authorizing the sale of health insurance coverage across
state lines. Under Georgia law,\6\ insurers are authorized to offer
individual accident and sickness insurance policies in Georgia that
have been approved for issuance in other states, provided specified
minimum criteria are met. Under Maine law,\7\ domestic insurers or
licensed health maintenance organizations that are authorized to
transact individual health insurance in Maine are permitted to offer
for sale in Maine an individual health insurance policy duly authorized
for sale in Connecticut, Massachusetts, New Hampshire, Rhode Island, or
Vermont by a parent or corporate affiliate, provided specified minimum
criteria are met. Oklahoma law \8\ allows issuers authorized to engage
in the business of insurance in a state which has a legislatively
approved compact with Oklahoma, and not so authorized in Oklahoma, to
issue individual accident and health insurance policies in Oklahoma,
provided specified minimum criteria are met. Wyoming law \9\ allows
insurers authorized to engage in the business of insurance in a state
identified by the Commissioner as having insurance laws sufficiently
consistent with Wyoming laws, and so authorized in Wyoming, to issue in
Wyoming selected comprehensive individual medical and surgical
insurance policies that have been approved in other such states,
provided specified minimum criteria are met.
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\3\ Section 1333 of the PPACA requires that no later than July
1, 2013, the Secretary of HHS, in consultation with the National
Association of Insurance Commissioners, issue regulations for the
creation of Health Care Choice Compacts. To date, HHS has not
promulgated rules implementing section 1333 of the PPACA.
\4\ Qualified health plan, or QHP, means a health plan that has
in effect a certification that it meets the standards described in
subpart C of part 156 issued or recognized by each Exchange through
which such plan is offered in accordance with the process described
in subpart K of part 155. See 45 CFR 155.20.
\5\ Additionally, the issuer would be subject to the market
conduct, unfair trade practices, network adequacy, and consumer
protection standards (including standards relating to rating),
including addressing disputes as to the performance of the contract,
of the state in which the policyholder resides. The health insurance
issuer must be licensed in or submit to the jurisdiction and be
subject to the aforementioned standards of each state in which it
offers health insurance coverage under the compact. In addition, the
health insurance issuer must notify the policyholder that the
coverage may not otherwise be subject to the laws of the state in
which the policyholder resides. Under section 1333 of the PPACA, HHS
has the authority to approve Health Care Choice Compacts if it
determines that they would provide coverage that would be at least
as comprehensive as health insurance coverage sold through the
Exchanges that offer essential health benefits, provide coverage and
cost-sharing protections against excessive out-of-pocket spending at
least as affordable as coverage under Title I of the PPACA, provide
coverage to at least a comparable number of residents as coverage
under Title I of the PPACA, not increase the federal deficit, and
not weaken the enforcement of the laws and regulations of any state
that is included in the compact that would still apply to the issuer
in states in which the purchaser of coverage resides that is not the
state in which the coverage was issued or written under the Health
Care Choice Compact requirements. To date, HHS has not received any
requests for approval of a Health Care Choice Compact.
\6\ Ga. Code Ann., sec. 33-29A-30, et seq.
\7\ Me. Rev. Stat. tit. 24-A, sec. 405-B.
\8\ Okla. Stat. Ann. tit. 36, sec. 4414.
\9\ Wyo. Stat. Ann. sec. 26-18-201, et seq.
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Three other states have passed laws to study the feasibility of
selling insurance across state lines.\10\ Since 2010, bills that would
permit the purchase of health insurance coverage across state lines
have been filed but not passed in an additional 11 states.\11\
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\10\ Kentucky (2012 Ken. H.B. 265. Sec. 10), Rhode Island (RI
General Law 27-67), and Washington (Chapter 303, Laws of the State
of Washington 2008, section 8, (SSB 5261)).
\11\ Arizona (SB 1593 of 2011), Indiana (HB 1063 of 2011 and HB
1013 of 2013), Minnesota (H 1859 and S 349 of 2015), Montana (H 280
of 2013), New Hampshire (H 327 and S 150 of 2011), New Jersey (A
1558, A 4364, and S 2806 of 2017), Pennsylvania (HB 47 of 2011-12
and SB 346 of 2013-14), South Carolina (S 185 of 2011 and S 886 of
2014), Texas (HCR 90 of 2017), Washington (S 5540 of 2013-14), and
West Virginia (HB 2801 and SB 419 of 2011).
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Separately, ``Interstate Health Compacts,'' also known as ``Freedom
[[Page 8659]]
Health Compacts,'' are another type of compact, advocated by
Competitive Governance Action and the American Legislative Exchange
Council, which could provide broader interstate health markets than the
Health Care Choice Compacts under section 1333 of the PPACA. Interstate
Health Compacts include a provision allowing for the suspension of the
operation of all federal laws, rules, regulations, and orders regarding
health care that are inconsistent with the laws and regulations adopted
by the member state pursuant to the compact and aim to secure federal
funding that is not conditional on any action of the member states.\12\
The creation of any such Interstate Health Compact requires formal
Congressional approval pursuant to Article 1, Section 10, of the United
States Constitution. As of January 2017, at least nine states \13\ have
enacted Interstate Health Compacts; however, no requests for
Congressional approval of the Interstate Health Compacts have been
submitted.
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\12\ See e.g., Ala. Code sec. 22-21A; Ga. Code Ann. sec. 31-48-
1; Ind. Code sec. 12-16.5-1-1, et seq.; Kan. Stat. Ann. 65-6230; Mo.
Rev. Stat. sec. 191.025; Okla. St. Ann. tit. 63, sec. 7300; S.C.
Code Ann. sec. 44-10-10, et seq.; and Tex. Ins. Code Ann. sec.
5002.001. The legality of suspending the operation of federal law is
not addressed herein, but this type of provision likely will face
legal challenges.
\13\ Alabama, Georgia, Indiana, Kansas, Missouri, Oklahoma,
South Carolina, Texas, and Utah (expired July 2014).
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No health insurance issuers or consumers appear to have access to
the increased flexibility that could be afforded by state laws related
to the sale of health insurance coverage across state lines.
II. Solicitation of Public Comments
HHS solicits public comments about actions that could further
facilitate selling individual health insurance coverage across state
lines. Comments are requested in response to the questions below with
respect to individual health insurance coverage. The Administration
recognizes and strongly supports the fundamental role states play in
regulating insurance. Providing states with flexibility to address the
unique needs of their health insurance markets is a key component of
achieving the goals stated in the Executive Order. This RFI is not
intended to inform policy which will preempt state law or otherwise
impede the role states play as the primary regulators of insurance.
A. Expanding Access to Health Insurance Coverage Across State Lines
1. What are the practical advantages and disadvantages of allowing
health insurance issuers to sell individual health insurance coverage
across state lines through Health Care Choice Compacts?
2. What actions could the federal government undertake to
facilitate the state implementation of the sale of individual health
insurance coverage across state lines pursuant to section 1333 of the
PPACA?
3. While four states have passed laws specifically authorizing the
sale of individual health insurance across state lines, we understand
that no action to implement these laws has been taken. Additionally,
nine states have enacted laws authorizing the creation of Interstate
Health Compacts, yet we understand that no such Compact has been
created. Why have states not taken advantage of these opportunities?
Are there federal or state statutory and/or regulatory barriers that
prevent states from doing so?
4. Should HHS promote the sale of QHPs through Health Care Choice
Compacts across state lines and why?
5. How would the sale of individual health insurance coverage
across state lines through Health Care Choice Compacts impact access to
QHPs? We are particularly interested in the impact on counties that do
not have many options for QHP coverage in their current markets and
whether the sale of health insurance coverage across state lines would
increase or decrease the number of issuers offering QHPs in these
counties.
6. Are there mechanisms, such as memoranda of understanding or
other contractual arrangements, other than Health Care Choice Compacts
established pursuant to section 1333 of the PPACA, that states could
utilize to facilitate the sale of individual health insurance coverage
across state lines? Would selling health insurance coverage such as
short-term, limited-duration insurance; state-regulated farm bureau
coverage; or insurance licensed by a state as defined under section
2791(d)(14) of the Public Health Service Act (PHS Act) (to include each
of the several states, the District of Columbia, Puerto Rico, the
Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands)
\14\ to individuals pursuant to such state agreements help facilitate
the sale of individual health insurance coverage across state lines?
Consider whether the type of coverage is relevant to, or would impact,
the form or nature of the agreements utilized by states.
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\14\ On July 14, 2016, the CMS Administrator sent letters to the
territories stating the new market reforms in the PHS Act enacted in
title I of the PPACA are governed by the definition of ``state'' set
forth in that title, and therefore do not apply to issuers of health
insurance coverage in the territories. The letter states the
definition of ``state'' set forth in the PHS Act will apply only to
PHS Act requirements in place prior to the enactment of the PPACA,
or subsequently enacted in legislation that does not include a
separate definition of ``state'' (as the PPACA does). This analysis
applies only to health insurance that is governed by the PHS Act.
The PHS Act, the Employee Retirement Income Security Act (ERISA),
and the Internal Revenue Code (Code) requirements applicable to
group health plans continue to apply to such coverage. The letters
are available at https://www.cms.gov/CCIIO/Resources/Letters/index.html#HealthMarketReforms.
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B. Operationalizing the Sale of Health Insurance Coverage Across State
Lines
1. Is the structure of Health Care Choice Compacts contemplated by
section 1333 of the PPACA effective in facilitating the sale of
individual health insurance coverage across state lines? To date, no
states have passed laws specifically authorizing the state to enter
into a Health Care Choice Compact under section 1333 of the PPACA. Why
have states not enacted such laws? Are there any necessary revisions to
section to 1333 of the PPACA that would facilitate the sale of health
insurance coverage across state lines?
2. How difficult is it for small and/or regional health insurance
issuers to develop provider networks in multiple states that could be
used for health insurance coverage sold pursuant to Health Care Choice
Compacts, and what are the causes of any such difficulties? For
individual market health insurance issuers that already have a national
provider network, what are the challenges for selling individual health
insurance coverage across state lines through Health Care Choice
Compacts? In what ways could the federal government facilitate
expanding and strengthening provider networks?
3. How would states allowing health insurance issuers to sell
individual health insurance coverage across state lines through Health
Care Choice Compacts (if the health insurance coverage only covers
health benefits in accordance with federal law and the laws of the
state where the coverage is written) impact access to and the
utilization of medical services?
4. What new and existing consumer protections are needed to protect
policyholders that reside in one state but purchase individual health
insurance coverage from a health insurance issuer in another state
[[Page 8660]]
pursuant to a Health Care Choice Compact? How would allowing health
insurance issuers to sell individual health insurance coverage across
state lines impact the ability of state regulators to assist consumers
or impact the ability of state courts to resolve legal disputes when
the policyholder resides in a state other than that in which the policy
was written, pursuant to a Health Care Choice Compact?
5. To what extent, if any, would the sale of individual health
insurance coverage across state lines pursuant to a Health Care Choice
Compact positively or negatively impact the following populations:
Persons with pre-existing conditions; persons with disabilities;
persons with chronic physical health conditions; expectant mothers;
newborns; American Indians and Alaska Natives and tribal entities;
veterans; and persons with behavioral health conditions, including both
mental health and substance use disorder conditions?
6. In general, which statutes or regulations of the issuing state
should apply to an individual market policy sold in another state
pursuant to a Health Care Choice Compact, and which statutes or
regulations, if any, of the state in which the policy is sold should
apply? To what extent should policies being sold in another state
pursuant to a Health Care Choice Compact be required to cover the
state-required benefits of that state, and to what extent should such
policies be required to cover the state-required benefits of the
issuing state?
C. Financial Impact of Selling Health Insurance Coverage Across State
Lines
1. What policies, including how premiums and rates are established
and reviewed, and how risk is pooled, should be in place with respect
to rating and pricing of health insurance coverage sold across state
lines pursuant to Health Care Choice Compacts?
2. What impact would the sale of health insurance coverage across
state lines pursuant to Health Care Choice Compacts have on health
insurance coverage premiums for purchasers of insurance across state
lines and for policyholders purchasing in-state insurance in the state
where the across-state-lines purchasers live or in the state in which
the issuer is located? Would the impact be different for policyholders
in different states?
3. What impact would the sale of health insurance coverage across
state lines pursuant to Health Care Choice Compacts have on
policyholders' out-of-pocket expenses? Would the impact be different
for different policyholders?
4. What impact would the sale of health insurance coverage across
state lines pursuant to Health Care Choice Compact have on a health
insurance issuer's operating costs?
5. What impact would the sale of health insurance coverage across
state lines pursuant to Health Care Choice Compacts have on market
participation in each state?
6. What impact would the sale of health insurance coverage across
state lines pursuant to Health Care Choice Compacts have on competition
and the viability of health insurance issuers that elect not to sell
health insurance coverage across state lines?
7. What impact would the sale of health insurance coverage across
state lines pursuant to Health Care Choice Compacts have on health care
cost growth and medical inflation?
8. What impact would the sale of health insurance coverage across
state lines pursuant to Health Care Choice Compacts have on
consolidation of health insurance issuers?
9. What impact would the sale of health insurance coverage across
state lines pursuant to Health Care Choice Compacts have on the market
risk pools of the states where the health insurance issuer is domiciled
and where the policyholder resides?
10. What impact would the sale of health insurance coverage across
state lines pursuant to Health Care Choice Compacts have on the size
and composition of the uninsured population?
III. Collection of Information Requirements
This document does not impose information collection requirements,
that is, reporting, recordkeeping or third-party disclosure
requirements. This RFI constitutes a general solicitation of comments.
In accordance with the implementing regulations of the Paperwork
Reduction Act (PRA) at 5 CFR 1320.3(h)(4), information subject to the
PRA does not generally include ``facts or opinions submitted in
response to general solicitations of comments from the public,
published in the Federal Register or other publications, regardless of
the form or format thereof, provided that no person is required to
supply specific information pertaining to the commenter, other than
that necessary for self-identification, as a condition of the agency's
full consideration of the comment.'' Consequently, there is no need for
review by the Office of Management and Budget under the authority of
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501, et seq.).
IV. Response to Comments
Because of the large number of public comments we normally receive
on Federal Register documents, we are not able to acknowledge or
respond to them individually. We will consider all comments we receive
by the date and time specified in the DATES section of this preamble,
and, in the event we issue a subsequent document, we will respond to
the comments in the preamble to that document.
Dated: January 28, 2019.
Seema Verma,
Administrator, Centers for Medicare & Medicaid Services.
Dated: February 14, 2019.
Alex M. Azar II,
Secretary, Department of Health and Human Services.
[FR Doc. 2019-04270 Filed 3-6-19; 4:15 pm]
BILLING CODE 4120-01-P
