Health insurance by state
Full Question:
Answer:
Insurance, like banking, is a regulated industry. Historically, insurance has been regulated by the states and not by the federal government. The insurance industry has long opposed federal regulation and has lobbied for state regulation only of the insurance industry. As a consequence of this history, each insurance company must apply for a license to engage in the insurance business in each state in which it chooses to engage in business.
You asked about health insurers. Most health insurers that market themselves nationally, such as Blue Cross/Blue Shield, in fact do business on a state-by-state basis, that is, as BC/BS of Connecticut, BC/BS of Michigan, BC/BS of California. This creates significant problems for insureds who move, for whatever reason, from one state to another. A Connecticut resident insured with BC/BS of Connecticut, for example, who moves to California, may have to undergo a medical underwriting examination, and face possible rejection or exclusion from coverage of pre-existing conditions, when applying for coverage with BC/BS of California.
More in-depth information is available at the linked websites.
The legal bar to interstate health insurance has nothing to do with the interstate commerce clause of the US Constitution, but it has everything to do with political lobbying by the insurance industry to avoid federal regulation, which obviously could lawfully occur under the interstate commerce clause.
