According to Consumer Watchdog, the Baucus-WellPoint Plan would eventually allow insurance companies to set up quaintly-named "compacts" in states with the most lenient regulations -- a "race to the bottom" of the regulatory ladder -- and the policies they sell would only be regulated by the laws of the state from which the policies were issued.
Put another way, the insurance companies would all gather in the most lenient states and issue policies from there. Policies that would absolutely screw the policy-holder.