One recurring idea in proposals to replace the Affordable Care Act (ACA) is to allow sale of health insurance across state lines. Simply put, expanding plans’ ability to sell across state lines would make circumstances worse for consumers, increase the prevalence of “junk insurance,” and undermine the ability of states to impose consumer protections under current state law.
After reviewing the evidence, we determined that the sale of health insurance across state lines is either unnecessary or problematic. While it is touted as needed to enable insurers to sell on multiple markets, this is something they can already do if they choose to, and few insurers have made that choice. More concerning, another consequence of this policy would be to lower consumer protection standards, as explained below.