Florida “Interstate Purchase of Health Insurance” Bill Dies in Committee

Jeremy Bosso Health Care Freedom Public Health Liberty

Health Care Freedom

March 11, 2016 – Florida legislation (HB 1317) relating to interstate purchase of health insurance died in the House Appropriations Committee. The legislation would have allowed any insurer authorized to engage in the sale of health insurance in any state, district, territory, or commonwealth of the United States, other than Florida, to sell individual health insurance in this state. An insurer selling such insurance would be exempted from the provisions of the Florida Insurance Code, but must meet certain requirements. The legislation also included requirements for annual reports to the Office of Insurance Regulation (OIR). Other legislation aimed at expanding health care freedom (Direct Primary Care) also died in committee.

In general, states regulate the business of insurance within their borders. Insurance firms in each state are protected from interstate competition by the federal McCarran-Ferguson Act (1945). However, the federal government in recent years has enacted or proposed laws that create frameworks for specific types of health insurance product to be sold across state lines. Section 1334 of the Patient Protection and Affordable Care Act (PPACA) established the Multi-State Plan (MSP) Program. As of 2015, at least 36 states had Multi-State Plans. The Patient Protection and Affordable Care Act (PPACA) permits a state to enter into an agreement, called a “health care choice compact,” with one or more other states to offer health insurance plans across state lines. However, states must pass a law, such as the recently defeated HB 1317, allowing their participation in a compact.
According to Florida House of Representatives staff analysis, “Several states have enacted laws permitting the sale of health insurance across state lines, or providing for a study of the sale of health insurance across state lines. Kentucky, Rhode Island, and Washington passed laws directed at researching and evaluating the feasibility of allowing the sale of policies across state lines or forming interstate compacts. Georgia, Maine, and Wyoming passed laws that permit, to varying degrees, the interstate sale of health insurance.”
In part, HB 1317 states:

Section 1. Section 627.6325, Florida Statutes, is created to read:

627.6325 Interstate purchase of individual health insurance.—Notwithstanding any provision of the Florida Insurance Code, a foreign insurer authorized to transact individual health insurance in any state may offer for sale in this state individual health insurance as defined in s. 627.6487 18 if the following requirements are met:

(1) The foreign insurer holds a valid certificate of authority to transact individual health insurance in its domicile.

(2) Individual health insurance offered for sale under this section complies with all applicable laws of the domicile of the foreign insurer and is offered for sale in such domicile.

(3) The foreign insurer files an annual report in the format prescribed by the office. The office must post the report on its website. The report must include:

(a) The state of domicile.

(b) The total number of individual health insurance products sold in this state under this section.

(c) A list of counties in which the foreign insurer sold its individual health insurance products under this section.

(d) The number of individuals covered by such individual health insurance products.

(e) The total premium collected by the foreign insurer on individual health insurance products sold in this state under this section.

(4) An application for individual health insurance and the individual health insurance issued under this section each contain the following statement in at least 12-point conspicuous, boldfaced type:

This …(name of health insurance product)… is issued by a foreign insurer and is governed by the laws and rules of …(domicile of foreign insurer)…. This …(name of health insurance product)… is not subject to any insurance laws or rules of Florida, including state-mandated health benefits. Before purchasing this …(name of health insurance product)…, you should carefully review the terms and conditions of coverage, including any exclusions or limitations of coverage. Please consult your insurance agent to determine which Florida state-mandated benefits are excluded under this …(name of health insurance product)….

(5) The foreign insurer establishes a grievance procedure for residents of this state who purchase individual health insurance offered for sale under this section.

Section 2. This act shall take effect July 1, 2016.

Rep. Doug Broxson voted against HB 1317.