CommunityFDL Action

At The Request of AHIP, Senate Bill Guts State Health Insurance Regulations

The Senate bill contains a provision long sought by the health insurance industry lobby AHIP. It would allow for the sale of “nationwide plans.” Theses plan would not be required to follow the state laws regarding what medical treatments must be covered. It is described as:

Allows insurers in the individual and small group markets to 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; but requires such plans to provide the essential benefits package. Allows States to enact a law to opt out of allowing the offering of nationwide plans.

That sounds just like what AHIP has been strongly lobbying for:

Adoption of an “Essential Benefits Plan”: Small firms would benefit from the establishment of an essential benefits plan (outlined below), available nationwide, that provides coverage for prevention and wellness as well as acute and chronic care, and that is not subject to varying and conflicting state benefit mandates.

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.

This is a dramatic move by the federal government, forcing states to deregulate their health insurance markets. It forces states to pass another law just to make sure all the previous laws they passed will not be nullified.

I fear for the millions of Americans who will lose their current health insurance coverage because of this law. If you have a medical condition that your insurance company must cover by state law, but is not part of the new essential benefit package, you are in serious danger of losing that coverage. Unless your state opts out of the “nationwide plans,” there is a very high probability that your insurance company will “leave the state” and drop your coverage. That company will just move to another state and start selling a “new,” less regulated, nationwide plan in your state.

This provision completely breaks Obama’s promise that you will “be able to keep the health insurance coverage you have now.” How long do you think insurance companies will keep offering the coverage you have when the insurance companies are given a way to avoid your state’s regulations regarding what they must cover? The inclusion of this provision was a huge victory for the lobbyists from the for-profit health insurance corporations.

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Jon Walker

Jon Walker

Jonathan Walker grew up in New Jersey. He graduated from Wesleyan University in 2006. He is an expert on politics, health care and drug policy. He is also the author of After Legalization and Cobalt Slave, and a Futurist writer at