States regulate the business of insurance within their jurisdictions in accordance with the McCarran-Ferguson Act of 1945.  Health insurance products are specifically regulated by the states.  Recently, several states have enacted interstate health insurance legislation that permits health insurance companies to sell health insurance policies across state lines.  The federal government has also enacted the Patient Protection and Affordable Care Act which contains a provision to allow individual states to form compacts authorizing health insurance companies to sell insurance across state lines. A recent account indicates that such reform legislation has been approved in six states and is under consideration in seventeen additional states (National Conference of State Legislatures).   In addition, health insurance companies and employers may take advantage of the reform legislation and expanded access to small-business association health plans, further intensifying competition in the healthcare insurance marketplace.  Insurance companies may offer a wider range of health insurance products and alternative coverage options to consumers.  The state legislative insurance initiatives vary in terms of scope and consumer protection standards.  Prior research to examine provisions associated with the interstate sale of health insurance within the United States has been limited. To address this gap in the literature, this paper will examine health insurance reform measures including financial reserve requirements, annual reporting requirements, payment of state taxes, grievance procedures, resolution of disputes, actuarial standards, disclosure statements and filing requirements.

Keywords: interstate health insurance, health benefits, coverage limitations