Health Coverage Across State Lines Act

The "Health Coverage Across State Lines Act" aims to amend the Public Health Service Act to enable the sale of individual health insurance coverage across state borders. It seeks to address issues like varying state laws and the impact of the Affordable Care Act on affordability, which are seen as impeding interstate commerce in health insurance. The bill proposes a cooperative governing model where a designated "primary State" regulates an issuer's policies, even when sold in other "secondary States," to encourage efficiency and lower costs.

Under this model, health insurance issuers selling in a secondary State are largely exempt from that State's covered laws, except for specific areas. Secondary States can still require issuers to pay applicable taxes, register for service of legal documents, and undergo financial examinations if the primary State has not done so within recommended periods. They also retain authority over fraud and abuse, unfair claims settlement practices, and the licensing of agents or brokers.

The bill mandates a clear consumer notice for policies sold in secondary States, informing purchasers that the policy is governed by the primary State's laws and may not include all benefits or consumer protections mandated by the secondary State. Furthermore, issuers are prohibited from reclassifying individuals or increasing premiums based on health status-related factors upon policy renewal. However, this does not prevent general premium rate increases for an entire class or changes related to wellness activities, provided they are disclosed and not universally obtainable.

To ensure financial stability, an issuer can only sell in secondary States if its primary State uses a risk-based capital formula for determining capital and surplus requirements for all health insurance issuers. The bill also requires an independent external appeals process for coverage denials, either through existing state legislation or by the issuer providing a mechanism substantially identical to the NAIC's model. Finally, the Comptroller General is directed to conduct an ongoing study and submit annual reports for five years on the legislation's effects on uninsured rates, costs, benefit variations, and fraud.