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 23, 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 model state law and 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 consumers.
Sabrina Corlette is with the Georgetown University Health Policy Institute and serves as an NAIC consumer representative.
