Minnesota Gov. Tim Pawlenty sent a letter today (Wednesday, Oct. 21) to the other 49 governors asking their states to join with Minnesota to create an Interstate Health Insurance Compact. (IHIC)

The proposed compact, modeled after the Interstate Insurance Product Regulation Compact (IIPRC), would allow participating states to share common regulatory standards and facilitate the purchase of health insurance across state lines, increasing competition and choice while holding down explosive health care costs.

Last week, Gov. Pawlenty proposed creation of the IHIC along with proposals to apply successful cost-containment strategies to the state's publicly-subsidized health care programs.

Such a compact would allow participating states to share common regulatory standards and facilitate the purchase of health insurance across state lines, increasing competition and choice. Pawlenty sent the letter to the 49 governors, inviting them to join with Minnesota to begin formation of an IHIC.

The new organization would be moded after the Interstate Insurance Product Regulation Compact (IIPRC), which was established in 2004 and now has 33 member states. Prior to implementation of IIPRC, some critics argued that it would result in a dilution of consumer protection in the member states.

Pawlenty writes: "Time and experience have proven those fears unfounded. In many instances, the standards set up by the IIPRC are stronger than existing state standards. With the valuable input of consumer representatives, state legislators and regulators, the IIPRC has been able to ensure consumer protection while promoting a modern, competitive national marketplace. as with the IIPRC, we would seek congressional consent ot formalize the IHIC."

Pawlenty says that "like life insurance, health insurance is an area that would benefit from a consistent set of standards to enable true market competition to flourish nationally. Those standards should be informed by the collective wisdom of those closest to consumers -- states and their insurance regulators. Our citizens will benefit from more robust competition, leading to increased choices and better values."