Governor Time Pawlenty (R-MN) recently outlined a set of proposed healthcare reforms to be considered during Minnesota’s 2010 legislative session.

One of these proposals would allow Minnesotans to purchase health insurance plans from other states.  Like many other states, Minnesota law currently prohibits its citizens and businesses from buying health insurance plans from other states.  According to the governor, Minnesotans would benefit from more choice in the state’s health insurance marketplace, which is dominated by three health insurance companies with a combined market share of 80%.

Governor Pawlenty’s proposed amendment would allow Minnesotans to purchase health insurance plans issued by health insurance companies in other states that meet the following requirements:  (i) the state insurance regulator where the health insurance company is domiciled must be accredited by the National Association of Insurance Commissioners; (ii) the health insurance company must have a certificate of authority in Minnesota; (iii) the insurance regulator in the state of domicile must review and approve policy forms; (iv) the health insurance company must agree to abide by Minnesota’s claims practices and other consumer protection laws; and (vi) the health insurance company would be subject to standard Minnesota fees and taxes.

The proposal contains one other restriction: the Minnesota Commissioner of Commerce would determine the top 20 states that are most effective in terms of regulating health insurance and have the best health outcomes for their residents.  Only policies approved in those 20 states and meeting Minnesota’s new criteria would be available for sale to Minnesotans to purchase across state lines.

Governor Pawlenty also proposed that Minnesota lead the charge in establishing an “Interstate Health Insurance Compact that would allow states to join and share common regulatory standards to facilitate the purchase of health insurance across state lines.”  The governor gave limited details on the Interstate Health Insurance Compact, except to state that it would be modeled after the existing Interstate Insurance Product Regulation Compact for life insurance.

To see the full version of Governor Pawlenty’s proposal, click here.