The main reason we can’t buy health insurance across state lines is due to the McCarran-Ferguson Act of 1945, which gives states the authority to regulate health insurance. This law allows each state to set its own rules and standards for health insurance, resulting in varying levels of coverage, pricing, and provider networks.Additionally, the Employee Retirement Income Security Act (ERISA) of 1974 also plays a role, as it regulates self-insured health plans offered by large employers, but does not apply to individual health insurance policies.The Health Insurance Portability and Accountability Act (HIPAA) of 1996 also added complexity by allowing states to impose their own requirements on health insurance, further limiting the ability to buy insurance across state lines.In general, buying health insurance across state lines is restricted because each state has its own unique set of regulations, and insurers must comply with these regulations in order to operate within a given state. This makes it difficult for insurers to offer policies that can be sold across multiple states.

The Affordable Care Act’s federal subsidies are set to expire, and President Donald Trump and Republican lawmakers are under pressure to propose a solution to address skyrocketing healthcare costs. One proposed solution is to allow Americans to buy health insurance across state lines. Currently, Americans can only purchase insurance policies from their home state due to the McCarran-Ferguson Act of 1945, which exempted the insurance industry from federal regulation and left primary authority to each state.

The Affordable Care Act of 2010 aimed to provide more uniform regulations, but it did not change the fact that Americans cannot buy health insurance plans across state lines. Insurance companies can sell plans in multiple states as long as they are licensed in each state. The impact of cross-state insurance sales on cost and quality is unclear, as few quantitative studies have been conducted. The debate typically breaks along partisan lines, with Republicans supporting the idea and Democrats opposing it.

Conservative politicians argue that cross-state sales would spark competition, enhance consumer choice, and lower prices. They believe that if Americans could buy insurance from anywhere, they would be more likely to pick a plan best suited to their individual or family’s needs. Additionally, some consumers pay for services they don’t need or want, while others may be unable to access benefits they do want. Advocates also argue that interstate sales would inject competition into an industry with limited options, potentially leading to lower premiums.

However, critics argue that this approach might prompt deregulation and set off a “race to the bottom.” Insurance companies could relocate to states with the least restrictive rules, enabling a national industry to be regulated solely by the most lax state. This could lead to companies selling policies with lower monthly premiums but lower quality care. Furthermore, if consumers could buy insurance from a larger national catalog of plans, healthier consumers might leave more regulated markets to purchase bare-bones plans, leaving sicker or older Americans in smaller pools and potentially increasing insurance premiums for those who need the most care.

State regulators have also pointed out unresolved questions about regulatory authority and consumer protection. The issue remains a contentious debate, with no clear solution in sight. As the deadline for extending federal subsidies approaches, Trump and Republican lawmakers will need to propose a solution that addresses the concerns of both parties and provides a viable solution to the rising healthcare costs.