IB 
Union Calendar No. 207 
109TH CONGRESS 
2D SESSION 
H. R. 2355 
[Report No. 109–378] 
To amend the Public Health Service Act to provide for cooperative governing 
of individual health insurance coverage offered in interstate commerce. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 12, 2005 
Mr. SHADEGG (for himself, Mr. AKIN, Mr. BARTLETT of Maryland, Mr. CAN-
NON, Mr. CARTER, Mr. COLE of Oklahoma, Mr. COX, Mrs. CUBIN, Mr. 
FEENEY, Mr. FLAKE, Mr. FRANKS of Arizona, Mr. GUTKNECHT, Mr. 
HENSARLING, Mr. HERGER, Mr. HOEKSTRA, Mr. HOSTETTLER, Mr. 
ISTOOK, Mr. JONES of North Carolina, Mr. KENNEDY of Minnesota, Mr. 
KING of Iowa, Mr. LINDER, Mr. MCHENRY, Mr. MILLER of Florida, Mrs. 
MUSGRAVE, Mrs. MYRICK, Mr. OTTER, Mr. PAUL, Mr. PENCE, Mr. 
PRICE of Georgia, Mr. RADANOVICH, Mr. RENZI, Mr. ROHRABACHER, 
Mr. RYAN of Wisconsin, Mr. RYUN of Kansas, Mr. SENSENBRENNER, 
Mr. SESSIONS, Mr. SOUDER, Mr. WAMP, Mr. WELDON of Florida, Mr. 
WICKER, Mr. WILSON of South Carolina, and Mr. GREEN of Wisconsin) 
introduced the following bill; which was referred to the Committee on En-
ergy and Commerce 
FEBRUARY 16, 2006 
Additional sponsors: Mr. CHOCOLA, Mr. TANCREDO, Mr. INGLIS of South 
Carolina, Mr. SODREL, Miss MCMORRIS, Mr. STEARNS, Mr. MARCHANT, 
Mr. WHITFIELD, Mr. PUTNAM, Mr. BILIRAKIS, Mr. HALL, Mr. SHIMKUS, 
Mr. UPTON, Mr. MCCAUL of Texas, Mrs. BONO, Mrs. CAPITO, Mr. TOM 
DAVIS of Virginia, Mr. TIAHRT, Mrs. NORTHUP, Mr. BOUSTANY, Mr. 
SHAW, Mr. SIMMONS, Mr. KINGSTON, Mr. BURTON of Indiana, Mr. PE-
TERSON of Pennsylvania, Ms. HART, Mrs. BLACKBURN, Mr. POMBO, Mr. 
CALVERT, and Mr. PLATTS 
Deleted sponsor: Mr. TOWNS (added June 27, 2005; deleted June 30, 2005) 
FEBRUARY 16, 2006 
Reported from the Committee on Energy and Commerce with an amendment
[Strike out all after the enacting clause and insert the part printed in italic] 
[For text of introduced bill, see copy of bill as introduced on May 12, 2005] 
A BILL 
To amend the Public Health Service Act to provide for 
cooperative governing of individual health insurance cov-
erage offered in interstate commerce. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as ‘‘Health Care Choice Act of 
2005’’. 
SEC. 2. SPECIFICATION OF CONSTITUTIONAL AUTHORITY 
FOR ENACTMENT OF LAW. 
This Act is enacted pursuant to the power granted 
Congress under article I, section 8, clause 3, of the United 
States Constitution. 
SEC. 3. FINDINGS. 
Congress finds the following: 
(1) The application of numerous and significant 
variations in State law impacts the ability of insur-
ers to offer, and individuals to obtain, affordable in-
dividual health insurance coverage, thereby impeding 
commerce in individual health insurance coverage.
(2) Individual health insurance coverage is in-
creasingly offered through the Internet, other elec-
tronic means, and by mail, all of which are inher-
ently part of interstate commerce. 
(3) In response to these issues, it is appropriate 
to encourage increased efficiency in the offering of in-
dividual health insurance coverage through a collabo-
rative approach by the States in regulating this cov-
erage. 
(4) The establishment of risk-retention groups 
has provided a successful model for the sale of insur-
ance across State lines, as the acts establishing those 
groups allow insurance to be sold in multiple States 
but regulated by a single State. 
SEC. 4. COOPERATIVE GOVERNING OF INDIVIDUAL HEALTH 
INSURANCE COVERAGE. 
(a) IN GENERAL.—Title XXVII of the Public Health 
Service Act (42 U.S.C. 300gg et seq.) is amended by adding 
at the end the following new part: 
‘‘PART D—COOPERATIVE GOVERNING OF INDIVIDUAL 
HEALTH INSURANCE COVERAGE 
‘‘SEC. 2795. DEFINITIONS. 
‘‘In this part: 
‘‘(1) PRIMARY STATE.—The term ‘primary State’ 
means, with respect to individual health insurance
coverage offered by a health insurance issuer, the 
State designated by the issuer as the State whose cov-
ered laws shall govern the health insurance issuer in 
the sale of such coverage under this part. An issuer, 
with respect to a particular policy, may only des-
ignate one such State as its primary State with re-
spect to all such coverage it offers. Such an issuer 
may not change the designated primary State with 
respect to individual health insurance coverage once 
the policy is issued, except that such a change may 
be made upon renewal of the policy. With respect to 
such designated State, the issuer is deemed to be 
doing business in that State. 
‘‘(2) SECONDARY STATE.—The term ‘secondary 
State’ means, with respect to individual health insur-
ance coverage offered by a health insurance issuer, 
any State that is not the primary State. In the case 
of a health insurance issuer that is selling a policy 
in, or to a resident of, a secondary State, the issuer 
is deemed to be doing business in that secondary 
State. 
‘‘(3) HEALTH
INSURANCE
ISSUER.—The term 
‘health insurance issuer’ has the meaning given such 
term in section 2791(b)(2), except that such an issuer 
must be licensed in the primary State and be quali-
fied to sell individual health insurance coverage in 
that State. 
‘‘(4) INDIVIDUAL
HEALTH
INSURANCE
COV-
ERAGE.—The term ‘individual health insurance cov-
erage’ means health insurance coverage offered in the 
individual market, as defined in section 2791(e)(1). 
‘‘(5) APPLICABLE STATE AUTHORITY.—The term 
‘applicable State authority’ means, with respect to a 
health insurance issuer in a State, the State insur-
ance commissioner or official or officials designated 
by the State to enforce the requirements of this title 
for the State with respect to the issuer. 
‘‘(6) HAZARDOUS
FINANCIAL
CONDITION.—The 
term ‘hazardous financial condition’ means that, 
based on its present or reasonably anticipated finan-
cial condition, a health insurance issuer is unlikely to 
be able— 
‘‘(A) to meet obligations to policyholders 
with respect to known claims and reasonably an-
ticipated claims; or 
‘‘(B) to pay other obligations in the normal 
course of business. 
‘‘(7) COVERED LAWS.— 
‘‘(A) IN GENERAL.—The term ‘covered laws’ 
means the laws, rules, regulations, agreements,