New report: ACA allows states to work together to improve health care

Center of the American Experiment released a new report today that outlines how states can take advantage of Health Care Choice Compacts under Section 1333 of the Affordable Care Act (ACA) to reclaim regulatory authority over health insurance and offer better health insurance choices to consumers. Compacts are agreements between two or more states to allow individual market health insurance to be sold across all participating states and, with certain exceptions, only be subject to laws and regulations of one participating state.

The report is titled Section 1333 Health Care Choice Compacts: Opportunities for states to improve the individual health insurance market through state compacts under the Affordable Care Act.

Throughout its history, ACA implementation has been hampered by instability as federal regulations lurch from liberal to conservative with changes in presidential leadership. The structure of the ACA also poses ongoing challenges for state insurance markets such as premium inflation, narrow networks and poor coverage for people with pre-existing health conditions. Health Care Choice Compacts are a tool available to states through the ACA to provide stability and improve coverage options no matter what happens in the next election.

“We need to end the seesaw effect of dramatic health care policy changes every time someone new occupies the White House,” said Peter Nelson, Senior Policy Fellow for Health Care at Center of the American Experiment and author of the report. “Compacts are a great tool for states to work together to put in place lasting policies that will benefit consumers.”

Section 1333 of the ACA allows the Secretary of Health and Human Services to approve state agreements to allow the sale of insurance across state lines and, in doing so, give regulatory authority over these sales back to the participating states. Today’s report provides a detailed analysis of the opportunities for states under section 1333.

A congressionally approved compact under the Compact Clause of the U.S. Constitution is more permanent than other ACA waivers because it actually amends federal law. That means a future administration cannot undo it with the stroke of a pen as President Biden has done with Medicaid and ACA waivers. 

The full report can be accessed here.