In what sense (if any) is interstate commerce “disallowed” when it comes to health insurance?
And whatever the applicable laws, why were they passed?
(I’m asking this pursuant to some comments an acquaintance of mine made which are mysterious to me probably due to my own ignorance.)
Insurance companies have traditionally been regulated by the states, not the federal government. Thus you get phenomena like mamograms being covered by insurance in one state but not another, or businesses with branches in adjoining states having to contract with different insurance companies to cover their employees.
The applicable law is the McCarran-Ferguson Act of 1945 which specifically gave the states the power to regulate. This was the result of a 1944 Supreme Court decision that said insurance companies were a form of interstate commerce. That decision, however, reversed an 1868 decision that said insurance was not interstate commerce.
Why did states regulate insurers in the first place? Because it was originally the states that granted companies the right to hire agents, underwrite and sell insurance. In fact, the first American insurance companies pre-dated the Revolution.
You may also want to look at the concept of ERISA pre-emption. In a nutshell, this means that for employers that have people all over the country, they have their employee health plans regulated by federal law, not state law. Since state law can be more strict than federal law, this reduces the regulation of health insurance. More detail is here: http://www.nashp.org/Files/ERISA_Primer.pdf