The Purchase of Insurance Across State Lines
Stephanie Kanwit, JD
Proposals to allow the purchase of insurance across state lines (PASL) have gained some support in recent years. Health insurers have traditionally been allowed to sell a policy only within the state that approved and regulates that particular policy. PASL would allow insurers to sell a policy approved in one state to people residing in any state.
Any federal legislation to enact PASL in an individual insurance market would have to address two main legal considerations: 1) the McCarran-Ferguson Act, which allows the states to retain their regulatory authority over insurance, and 2) a constitutional prohibition against the commandeering of state officials by the federal government.
This paper outlines these obstacles and potential solutions, and concludes that as long as the legislation is thoughtfully drafted, there is no significant legal or Constitutional barrier to enacting PASL.
Additionally, the concepts discussed here may be relevant to any federal health reform legislation involving regulation of health insurance or the use of state officials.
About the Author
Stephanie Kanwit, J.D., is a senior health care consultant based in Washington, D.C. She currently serves as Special Counsel to two Washington, D.C.-based healthcare trade associations: America’s Health Insurance Plans (AHIP), and the Pharmaceutical Care Management Association (PCMA).
Ms. Kanwit has been in private law practice and Government service in Chicago and Washington, D.C. for over thirty-eight years. Formerly General Counsel and Senior Vice President of Public Policy and Research at the American Association of Health Plans (AAHP), she also was a Partner at the law firm, Epstein Becker & Green, P.C. in Washington, D.C., where she focused on health litigation and counseling in the managed care industry. Until 1996, she served as Vice President of Health Litigation for Aetna’s health businesses, responsible for managing Aetna’s litigation involving antitrust, provider network issues, Medicare and ERISA issues, health care fraud and abuse in the private and governmental sectors, adverse medical outcomes, and life and long-term disability insurance.
Prior to 1992, she was in private legal practice in Chicago, at Lamet, Kanwit & Davis and before that at Chadwell & Kayser. At both firms, she represented both defendants and plaintiffs in complex commercial litigation, including antitrust, securities, Robinson-Patman, FTC Act and state unfair trade practices. She served for four years as Regional Director for the Federal Trade Commission for a seven-state region, based in Chicago. She has served on the Bureau of National Affairs Health Law Advisory Board since 1999.