The GOP’s long-term goal of allowing health insurance companies to sell plans across state lines is starting to gain traction again in Congress as Republicans struggle to garner support for broader healthcare reform legislation.
Sen. Marsha Blackburn (R-TN) introduced a new bill on Thursday that would allow insurers to sell plans to customers outside of the insurer’s home state, with the intention of putting downward pressure on premium prices by increasing competition.
Blackburn introduced her new bill, called the Health Coverage Across State Lines Act, the same day that two dueling measures aimed at addressing the expiring enhanced premium tax credits for Obamacare subsidies failed in the Senate along partisan lines.
The Democratic measure would have extended the enhanced COVID-19-era subsidies for three more years with no reforms, whereas the GOP measure would have replaced them with subsidized health savings accounts. Without some form of action, the prices that Obamacare enrollees pay for their coverage are poised to double on average come January 2026.
Blackburn’s bill does not attempt to fix the Obamacare subsidy issue but instead seeks a longer-term solution to decreasing costs for all health insurance markets through interstate competition.
“Families shouldn’t be stuck with one or two overpriced insurance options just because of where they live,” Blackburn said in a statement obtained by the Washington Examiner. “The Health Coverage Across State Lines Act would empower Americans to choose the health insurance plan that works for them by allowing insurers to sell plans across state lines.”
As both chambers of Congress have debated what to do about Obamacare premiums, several other senators have made similar suggestions of allowing health insurers to sell their plans across state lines.
In November, Sen. Rick Scott (R-FL) introduced a bill that would have effectively created an HSA option for patients on Obamacare plans and would have allowed states to authorize insurance sales across state lines.
On Wednesday, Sen. Rand Paul (R-KY) introduced another interstate insurance sales bill that would allow multi-state corporations such as Costco or Amazon to purchase insurance for all their employees as a single entity, driving prices down through large-scale collective bargaining.
Blackburn’s framework differs from that of both Paul and Scott, as it allows insurance companies to choose their primary state of operation and be governed by the laws of that state, even when sold in secondary states. This, in theory, would remove regulatory barriers that fragment the insurance market along state borders.
“Opening up the marketplace would drive down costs, expand choice for families, and break up insurance monopolies,” Blackburn said.
Blackburn’s bill echoes the language of the GOP’s 2017 attempt to repeal and replace Obamacare, led by former House Speaker Paul Ryan.
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After the failure of the main Obamacare repeal bill, the American Health Care Act, Ryan attempted to move the interstate sales bill as a stand-alone piece of legislation, which also ultimately failed in the Senate.
It’s not clear when GOP leadership in the Senate will take up Blackburn’s bill or if it will be incorporated into a broader healthcare reform package that could come in 2026.
