Insurance Commissioners Respond to Consumer Concerns – Say Ahhh! A Children’s Health Policy Blog

By now many of you have probably heard about the big news
coming out of the NAIC meeting this week in Orlando.  After seven months of intense debate and negotiation, the
NAIC voted in favor of a regulation defining the ACA’s required “medical loss
ratio” (MLR)
.  They rejected several
amendments that were heavily pushed by insurance companies and brokers, scoring
a big win for consumers who deserve better value for their health care dollar.

What hasn’t been reported so widely is all the other work
NAIC did this past week, from advancing model state laws on major consumer
protections required by the ACA, developing a model law on state insurance
exchanges,  and defining how an
insurer must justify an “unreasonable” rate increase.  Here are a few highlights:

  • A key NAIC task force adopted model state laws
    implementing three market reform provisions of the ACA: rescissions, young
    adult coverage up to age 26, and choice of health professional.  These now will be reported up to the
    NAIC’s “B” Committee, which is the umbrella committee for health issues.  The same task force is also developing
    model laws on: lifetime/annual limits, elimination of pre-existing condition
    exclusions for children under 19, access to preventive benefits, and grievances
    and appeals, all of which are ACA provisions that went into effect on September
    , 2010. 
  • Consumer representatives are urging changes to the
    model law on the kids’ “pre-ex” provision to encourage states to prevent “child
    only” health plans from withdrawing from the marketplace.  We also made formal presentations
    applauding Commissioner Sevingy from New Hampshire and Commissioner Kreidler
    from Washington
    for their leadership and toughness in requiring their states’
    insurers to offer coverage to kids.  
The consumer reps also pushed for better notice requirements for health plans that have received a waiver from the ACA’s restrictions on annual benefit limits, so that consumers know that the plan doesn’t provide the full range of consumer protections promised under the health reform law. The NAIC’s working group on state insurance exchanges
also met in Orlando.  They’ve
received a whopping 200+ pages of comments on their first draft of a
state law
sometime within the next two weeks they’ll schedule a conference call to
receive oral comments.  A few
issues were raised in the meeting that are worth watching:

  • Coordination with Medicaid.  My impression is that the model law will probably not delve
    into the tricky issues of how the exchanges will coordinate with state Medicaid
    agencies.  When one of the
    Commissioners asked about this, the chair of the work group, Commissioner
    McRaith from Illinois, said that they have not been working with Medicaid
    Directors, and emphasized that it would be a “NAIC Model” and therefore would
    focus on insurance-related issues. 
  • Dual regulation. 
    The members of the work group were very concerned about exchanges
    potentially usurping their traditional role regulating health insurance through
    rate review, market conduct exams and grievances.  They’ll probably add new language to the model that will have
    a more clear delineation of regulatory roles between state insurance
    departments and the exchange.
  • Pediatric dental. 
    The current draft model doesn’t have any language reflecting the ACA’s
    provision allowing the inclusion of stand-alone dental plans that offer
    pediatric dental benefits in the exchange.  A representative from Delta Dental pointed that out to the
    group and Commissioner McRaith asked him to submit legislative language.  The consumer reps will keep an eye on
    this issue as it develops.
  • Another key NAIC task force has been working for many
    months to develop the form that insurance companies will have to fill out if
    they are proposing an “unreasonable” rate increase.  This form will provide unprecedented transparency on rate
    increases, and will include essential information for consumers and employers
    to better understand the factors driving proposed increases.  The task force finalized the form this
    week and reported it to the “B” Committee, in spite of last-minute opposition
    from America’s Health Insurance Plans (AHIP) and the Blue Cross Blue Shield
    Association.  Even in the face of
    many hours of open and inclusive conference calls and meetings, both trade
    associations claimed that the form had been developed without sufficient
    industry input.
  • Last but not least, the NAIC has created a new working
    group to tackle the issue of limited benefit plans, or “mini-meds.”  A joint effort of the “B” Committee and
    an anti-fraud committee, the group will investigate whether plans are making
    misrepresentations about their products and whether they are being sold by
    unlicensed brokers.  Because many
    of these plans provide little or no real coverage if someone actually gets
    sick, the group will also be looking into the “utility” of these products for
Sabrina Corlette is with the Georgetown University Health Policy Institute and serves as an NAIC consumer representative. 

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