Section 1333 Health Care Choice Compacts
Opportunities for states to improve the individual health insurance market through state compacts under the Affordable Care Act
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The Patient Protection and Affordable Care Act (ACA) is now 14 years old. Since its passage, the law has survived numerous legal and political challenges to overturn or repeal it. Nonetheless, the law remains mired in political controversy. A clear divide has emerged between Democrat and Republican policy positions on how the law should be administered. While the ACA included some popular features and expanded access to coverage, the law also introduced problems that increased health care costs and upset health insurance markets. Division over how to address the problems and strengthen the positives the ACA introduced has led to substantial regulatory instability. During the short history of ACA implementation, a pattern has already emerged of major regulations getting implemented in one presidential administration only to be quickly reversed in the next administration under new political leadership.
This unstable, seesawing regulatory environment creates substantial problems on top of the ACA’s ongoing structural problems which have led to higher premiums and less choice. The ACA, however, does include an opportunity for states to stabilize regulation and improve coverage options through interstate compacts. 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. This report details how states can take advantage of 1333 compacts to improve the regulation of the individual health insurance market and offer better health insurance choices to consumers.