Posts Tagged ‘medical loss ratio (MLR)’

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The ACA: Saving Consumers’ Premium Dollars Once Again

Friday, September 14th, 2012

Hot off the heels of $1.1 billion in rebates from insurance companies that failed to meet the medical loss ratio (MLR) standard, the ACA is again saving money for consumers. The Department of Health and Human Services (HHS) just released a new report that finds that rate review, or increasing transparency over insurance premium rate increases, has saved consumers about $1 billion in the past year. These savings, calculated by determining what insurance companies would have set as premiums versus what they actually were allowed to do, is another way the ACA is making insurance companies play by fairer rules.

Rate review practices vary across states, but the ACA provided new tools, including grants to enhance state regulators’ capacity, that have strengthened many states’ ability to review and approve insurance premiums before they go into effect. In addition, the ACA created a federal standard whereby any insurance company with a rate increase of more than 10 percent is automatically subject to review. Under this new scrutiny, HHS found that 50 percent of rate increase requests were lowered or denied – meaning 800,000 consumers saw lower premiums.

States have won concrete savings for consumers because of rate review: New York saved an estimated $20 million for small businesses, and Michigan saved more than $15 million for individuals and small businesses. Overall, HHS estimates that the difference between insurers requested and allowed rates amounted to 1.4 percent lower premiums in the individual market, and 0.8 percent lower premiums in the small group market. These reductions amount to about $1 billion in insurance savings for consumers.

The even better news is that there is opportunity for more savings. While states have improved their rate review processes since the passage of the ACA, many still lack strong authority to negotiate or disapprove premium increases. And there is a lot more work to be done to increase transparency in rate increases and make the process clearer and more accessible to consumers.

Community Catalyst will soon have some materials on how to work with your state on rate review – so stay tuned!

– Christine Barber, Senior Policy Analyst

 

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The checks are in the mail – but for once they’re coming from insurers & going to consumers

Thursday, July 26th, 2012

When was the last time your insurance company wrote you a check? Thanks to the Affordable Care Act (ACA), millions of Americans are beginning to enjoy that very rare – and very satisfying – experience.

Rebates totaling more than $1.1 billion are on the way to 12.8 million consumers, all from insurers who failed to meet requirements under the ACA for effective use of health insurance premiums during 2011. The money being returned to consumers is money that insurers in the past would use for things like administrative expenses, marketing and profits – that is, for things that have nothing to do with providing timely access to needed health care.

Consumers have good reason to celebrate the end to such excessive and inefficient health insurer practices. While not all of the rebates will literally be in the form of checks – some consumers will get credits toward future premiums instead of checks – the effect is the same: here, again, we have proof of the ACA’s ability to level the playing field between powerful insurance companies and ordinary people.

The wonky term for the standards that trigger these rebates is the medical loss ratio (MLR), or the “80/20 Rule.” The MLR, defined as the ratio of health care and quality improvement costs to premium revenues (less some taxes and fees), measures how effectively an insurer uses its premium revenues to pay for health care-related expenses. The ACA sets target MLRs of 80 percent for health insurance plans sold in the individual and small-group markets and 85 percent for plans sold in the large-group market.

For small businesses and their employees, for average people doing their best to stretch their budgets in difficult times, and for a whole host of Americans rightly expecting value for money, the receipt of these MLR rebates means that for the first time all health insurers in every state are being held accountable for delivering good value to consumers. Prior to the ACA, states typically required insurers to spend only 65-70 percent of premiums on health care expenses, if they imposed MLR requirements at all, and only six states required rebates or premium credits when insurers failed to meet their MLR standards. The passage of the ACA put real teeth into the expectation that money paid to insurers for health care benefits ought to be used for covering the health care needs of their enrollees.

These rebates are a big win for consumers, and their roll out is a great opportunity for consumer advocates to aggressively publicize them. In a political environment where opponents of the ACA continue to distort and outright lie about the impact of the ACA, highlighting the real effects of the landmark law remains a crucial task for consumer advocates. Delivery of these rebates is just the most recent way the ACA has produced concrete improvements in the lives of millions of Americans who count on private health insurance to protect them from ill health.

Community Catalyst recently released an MLR Rebate Toolkit to help consumer advocates understand the MLR rebates and the opportunities they offer for effective mobilization and policy advocacy. As the rebates continue to reach consumers across the country, the need to share this good news with family and friends remains particularly important. Let’s hear more stories and testimonies from small business owners and consumers who receive a rebate!

– Gary McKissick, Policy Intern

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Keep talking up the medical loss ratio!

Thursday, April 12th, 2012

Thanks to the Affordable Care Act, consumers have greater protections when buying health insurance. The new medical loss ratio (MLR) rule requires that health insurance companies must spend at least 80 percent of premiums on medical care and quality improvement activities. Health insurers that fail to meet these minimum standards will be required to pay policyholders a rebate reflecting the difference.

If these rules had been in effect in 2010, 15.3 million health care consumers (5.3 million people in the individual market and 10 million in the small and large group markets) would have received $2 billion in rebates nationally, as found in a recent study by the Commonwealth Fund. Florida and Texas have the highest total estimated rebates of $109 million and $172 million, respectively. The estimated rebates per member range from $145 to $285.

Last year, health insurance commissioners in 17 states applied to reduce the amount that insurers must spend on medical claims. Fortunately, due to strong advocacy, consumers successfully have retained the new MLR standards in many states. Since the rule took effect in 2011, we want to see smaller rebates in subsequent years, which would mean insurers are doing the right thing, providing quality medical care to consumers rather than accumulating profits for themselves.

– Quynh Chi Nguyen, Program and Policy Associate

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Some Year-End Cheer

Wednesday, December 28th, 2011

Many of us in the advocacy world have been quick to point out examples of things we’d rather re-gift this season. But, as the days start to get longer, it’s worth acknowledging a big win for consumers in 2011 – the preservation of the medical loss ratio (MLR).

The MLR, or the proportion of a premium spent on medical claims vs. profit and administration, was a topic that previously interested only the wonkiest of health wonks. But this year it became a hot issue that moved thousands of consumers across the country to contact their insurance commissioners and demand greater transparency and understanding of how our premium dollars are spent. And in a surprising turn in early December, the U.S. Department of Health and Human Services released regulations on the MLR that kept one of the more controversial parts of the MLR, broker fees, as part of the calculation.

More recently, there were some significant state wins on retaining a strong MLR standard. Both Florida and Michigan insurance commissioners applied to “adjust” (read: reduce) the amount that insurers must spend on medical claims. After strong advocacy by state partners in FL and MI, the Center for Consumer Information and Insurance Oversight (CCIIO), the federal agency charged with deciding the MLR rule, denied both states’ requests to ease the MLR for insurers. The headline: consumer protections won out over insurers’ financial interests.

So what does this mean? One reason the MLR is a big deal is that if insurers do not actually meet the MLR standards, they must provide consumers with rebates, starting in 2012. This very tangible benefit of the ACA was improved by CCIIO’s recent decision to make these rebates tax-free, and to require notices to consumers detailing the amount of the rebate and health plan’s MLR along with an explanation of what it means. Stay tuned for more details from CCIIO on how those rebates will roll out. And for now, be thankful that the Affordable Care Act provided this valuable tool to help protect consumers.

– Christine Barber, Senior Policy Analyst

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NAIC Commissioner’s Fall Back on Medical Loss Ratio

Wednesday, November 9th, 2011

You know that expression, “Fool me once, shame on you. Fool me twice, shame on me”? Well, it came to mind this past week at the National Association of Insurance Commissioner’s (NAIC) fall meeting in Washington, DC. Just as in March, during the NAIC’s spring meeting in Austin, the NAIC consumer representatives were lulled into a false sense of complacency. “This will be a quiet meeting,” everyone said. “No votes on health care issues.” And that Task Force that had taken up the cause of insurance agents and brokers last summer to push for removing agent compensation from the medical loss ratio (MLR)? “They’re not even meeting,” we were told. “NAIC is done with that issue,” they said.

Imagine our disappointment and surprise when rumors started to swirl Thursday afternoon—the first day of the conference—that the commissioner from Florida planned to introduce a resolution at the NAIC’s final plenary meeting, urging Congress to consider and adopt legislation to “preserve consumer access to agents and brokers.”

When we finally saw a draft, the resolution was alarming. It ignored the considerable data collected by the NAIC’s actuarial task force over the summer, as well as the thoughtful recommendations they had developed. If it passed, it could have given momentum to H.R. 1206, which renders the medical loss ratio (MLR) requirements in the Affordable Care Act (ACA) effectively useless as a tool to help consumers get greater value for their health care dollar.

Once again, the consumer representatives swung into action, alerting the media and networks of advocates in the states. Alerts went out, urging consumer groups to contact their state insurance commissioners and let them know they opposed the resolution. The good news: the advocacy worked. NAIC’s membership agreed to delay a vote on the resolution. The bad news? The issue could come back up on a call scheduled for November 22, which consumer representatives will closely monitor. However, a number of commissioners raised sufficient concerns about the lack of notice that NAIC is likely to revisit their rules for bringing up last-minute resolutions.

MLR wasn’t the only thing on the Commissioners’ minds last week. The subgroup on Exchanges, chaired by Commissioner Sandy Praeger (of Kansas), also met. They heard testimony from one of our own consumer representatives, Sarah Lueck from the Center on Budget and Policy Priorities. She did a great job outlining the importance of a seamless experience for consumers as they seek eligibility determinations and make decisions about enrolling in health plans. The subgroup appears poised to take up model regulations for Exchanges, based on the rulemaking coming out of the United States Department of Health and Human Services (HHS).

In another important development, the regulatory framework task force has begun work on a model state law to implement some of the Affordable Care Act’s 2014 insurance reforms (i.e., guaranteed issue, modified community rating, and elimination of pre-existing condition exclusions). The draft currently applies only to the group insurance market, but members discussed adding individual market reforms as well. Getting this right is really important, because this model law is likely to be the framework many states use to adopt the central reforms of the ACA. The NAIC is taking comments on the first draft, and we would encourage consumer groups to submit comments, particularly those of you from states with protections that are stronger than the minimum standards set by the ACA.

In addition, the NAIC’s health actuarial task force is taking up some challenging topics that will have direct bearing on the success of the ACA:

  • – They will be working with HHS to develop “state-specific” thresholds for reasonable health insurance rate increases. Under the rate review rule, HHS is currently using a national standard of 10 percent (if a rate increase is 10 percent or greater, it triggers an automatic review). Starting in 2012 they will transition to state-based thresholds to better reflect local market conditions.
  • – They will work on recommendations to HHS and states for the ACA’s “3 Rs”—risk adjustment, reinsurance, and risk corridors. Their most immediate task is to finalize comments on a white paper HHS released in September.
  • – They will review data on the use of self-insurance by employers, particularly smaller employers and assess whether it is increasing as a result of the ACA’s insurance reforms. This will be an important study. A number of insurance companies are becoming more aggressive in marketing self-insurance to small businesses, because it allows them to escape key insurance reforms (such as the essential health benefits package and the modified community rating).

Last but not least, I was surprised to hear a couple of broker groups take time out of their Industry Liaison meeting agenda to complain about the NAIC’s consumer representative program. They argued that the consumer reps weren’t “diverse” enough in terms of our perspective on the ACA, complained the media mistakenly report that we speak on behalf of the NAIC, and even suggested many of us have a conflict of interest because some day we might – gasp – take grants to serve as Navigators. For myself, I take their whining as a badge of honor. The fact that they would take the time to complain about our small band of consumer reps suggests that we’re actually having an impact at NAIC.

—Sabrina Corlette, Research Professor
Georgetown Health Policy Institute

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The Insider: News Round Up

Wednesday, November 2nd, 2011

File Under: “…and don’t let the door hit you on the way out”

Recently, two Florida insurers announced their intention to quit the non-group health insurance market in that state. The state of Florida is trying to use the exit to bolster its case for a waiver from the Affordable Care Act’s Medical Loss Ratio requirement. If the waiver is granted, it will cost Florida rate-payers millions of dollars. Given that the carriers in question cover well under one percent of the non-group market, their exit hardly makes for a compelling case in Florida. But setting the specifics of Florida aside for a moment, should we be worried about carriers leaving the market? In general, the answer is no.

When it comes to health insurance, the notion of “the more the merrier” is deeply flawed. Why? Because every insurer has to pay fixed costs for sales and marketing, claims processing, and underwriting. At the same time, unless you are talking about old-school HMOs where the insurer is essentially synonymous with the provider network, small insurers don’t have the ability to negotiate effectively with providers on price or to innovate with respect to quality. Basically, the insurers most likely to call it quits have a business model based on making sure that they don’t cover sick people. That business model is now obsolete thanks to the ACA. The only thing such insurers add to our health care system is cost, not value. (Click here for an economic model illustrating why too many insurers can be a problem.)

File under: “I’ve got some good news and some bad news”

The recent CMS decision to partially allow proposed cuts in California Medicaid rates is a mixed bag. First the good news: The state agreed to withdraw proposals to reduce reimbursements to pediatricians and for home health services. The state has also agreed to a first-of-its-kind Medicaid access monitoring plan to evaluate the impact of the cuts.

Now the bad news: CMS approved rate cuts to a broad cross-section of other providers. Although a few types of providers (family practitioners, internists and pediatricians) will see rate increases starting in 2013 courtesy of the ACA, most others will continue to be reimbursed at the lowest rates in the country. (Decisions on proposed benefit limits and increased cost-sharing are still pending.)

The decision elicited concern from consumer advocates and outrage from some providers. One worry is that cuts will undermine access and provider support in the run-up to the ACA’s Medicaid expansion. Another concern is that, notwithstanding the access monitoring plan agreed to by the state, the recent decision underscores the limits of CMS’s ability to block state cuts that could be harmful to patients. At the same time, the administration has taken a position on the wrong side of the question of whether individuals should have the right to pursue legal action to enforce access to care for Medicaid beneficiaries.

Unfortunately, what is most unusual about the California developments is the state access monitoring plan, not the cuts. Across the country states are cutting Medicaid benefits and rates. This is a dead end strategy. The bottom line is that states cannot solve their budget problems via Medicaid rate cuts. There is an urgent need for states to reform the delivery of care to maximize quality while reducing cost. At the same time, even the best crafted strategies will not be sufficient. Whether we are looking at the federal budget or the states, new revenue has to be part of the solution to balancing budgets without eviscerating services.

And speaking of revenue and budget balancing…

File this one under “What are they thinking (or smoking)?”

The $3 trillion debt reduction proposal by the majority of the “Super Committee’s” Democratic members has, apparently, crashed and burned (though elements of it could still rise from the dead). The proposal had a lifespan even shorter than a Kardashian marriage, and was immediately panned by Republican members and criticized by many Democrats off the committee, as well.

Although details are hard to come by, the $475 billion in proposed Medicare and Medicaid cuts would certainly have included both significant cuts to beneficiaries and cost shifts onto state Medicaid programs, violating the key demands of consumer advocates.

Committee Democrats may have been hoping to get political credit for “being the adults in the room” willing to make tough choices. But it is more likely that the only thing they accomplished was to further arouse the fears of older voters—an important voting bloc that largely turned against the Democrats in 2010—that the Democratic Party was unwilling to defend their health care benefits.

In earlier blog posts, we’ve shown how to achieve substantial federal health savings without harming Medicare and Medicaid beneficiaries, which means supporting proposals that harm seniors is not only politically unwise, but also unnecessary. So in the future, please folks, no more negotiating with yourselves. There is simply no upside to making symbolic gestures toward debt reduction as long as there is “no partner for peace” in the room. As one Democratic Hill staffer put it recently, “Because the GOP is not engaged at all on revenues … this could go on forever and they would still stand there offering a giant middle finger.”

– Michael Miller, Policy Director

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An unexpected win for consumers at NAIC

Monday, March 28th, 2011

There’s been lots of drama at this year’s first meeting of the NAIC (National Association of Insurance Commissioners) in Austin, TX – way more than any of us consumer representatives to the NAIC expected. The good news, as you may have heard by now, is that the NAIC decided to delay a vote to endorse Congressional legislation that would remove broker commissions from the Medical Loss Ratio (MLR). But that outcome seemed like a pipe dream when the NAIC’s consumer representatives first landed in Austin on Thursday night.

Consumer reps had all been told for weeks that nothing was going to happen at this meeting, no votes would be taken, there’d be just a few hearings – that’s all. So when we got word just the day before we arrived that a number of Commissioners were pushing hard to endorse the Rogers bill we were all taken off guard. Even more alarming, we heard from a number of sources that support for the brokers’ position was so strong the vote was almost a “done deal.”

But after intense advocacy by all sides, including from many consumer groups all around the country, the NAIC decided to take another look at the proposal. After all, not only is it likely that the Rogers bill would result in premium increases for consumers, but there’s simply no evidence that consumers or small businesses are suffering from a lack of access to brokers, or whether reductions in broker commissions are actually a result of the MLR. The only state to provide before and after data on MLRs – Colorado – showed that broker commissions were cut from 20 percent to 10 percent of the premium, suggesting they were way above market norms to begin with.

The NAIC’s health committee will now take a few weeks to actually analyze data in the market about broker commissions and the impacts on consumers and small business owners. We think this is the right approach, and applaud NAIC for taking a more thoughtful and deliberative approach.

Addressing broker compensation is not the only thing NAIC was up to this weekend. The meeting kicked off on Friday with a hearing on health insurance Exchanges. The Exchange Working Group heard testimony from Medicaid experts about some of the very challenging issues states are facing to effectively coordinate public programs with the commercial insurance markets, and got demonstrations of Utah and Massachusetts’ web-based health plan finders. Both states have clearly put a lot of work into designing a web interface that is consumer friendly. That said, by emphasizing how easy their process is for employees, Utah’s presentation was slightly misleading. They neglected to mention that enrollees need to undergo health status underwriting before they can access the website, and they glossed over the difficulty many employees have in choosing a plan among more than 100 different product options.

Joel Ario, head of the Exchange division at HHS’ Center for Consumer Information and Insurance Oversight (CCIIO) also testified. He was asked a number of questions about the feds’ plans if a state doesn’t set up its own Exchange. Ario indicated that HHS has been working on a federal fallback plan, but that HHS does not intend to produce a one-size fits all model. And even if they do have to set up a federal Exchange, HHS would have every intention of working with the states to tailor the Exchange to states’ markets and ensure coordination with state-run public programs such as Medicaid and CHIP.

Next up for the Exchange group is to finalize white papers on issues like financing, adverse selection, and Navigators, as well as to issue additional draft white papers on governance and active purchasing. NAIC consumer reps have submitted extensive comments, and will continue to try to shape NAIC’s recommendations on these issues.

Last but not least, NAIC is looking ahead to 2014 and has a task force working to develop a model state law to implement reforms like elimination of pre-existing condition exclusions, the new premium rating rules, and guaranteed issue. They hope to have a model law adopted by the end of this year, which is pretty darn ambitious.

As for the proposed broker bill, we have a short four to six week reprieve before NAIC takes it up again – and consumer advocates will need to continue to make sure their voices are heard during this process.

– Sabrina Corlette, Research Professor at the Health Policy Institute
Georgetown University

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The Insider: House Republicans Win Pyrrhic Victory on repeal Vote

Monday, January 24th, 2011

A Pyrrhic Victory
The outcome of last week’s vote on repeal was a foregone conclusion from the outset, but the victory was a hollow one. Almost no Democrats broke from their party to vote for repeal. While a few more signed on to the “replace” resolution, that was a very soft vote, putting them on record as willing to explore amendments without committing them to any specific alternative policy. At the same time, ACA supporters finally got a break on public opinion, if not exactly of the sort they were hoping for when the law passed. Although the public has yet to embrace the law overall, over the course of the debate, public opinion more or less solidified against a complete repeal, with multiple polls showing only a small percentage of the electorate supporting total repeal (roughly the same percentage believe Barack Obama is a Muslim).

The question is, what comes next? One likely candidate is an attempt to roll back the regulation requiring insurers to spend at least 80 percent of premium dollars on medical care (known as the Medical Loss Ratio or MLR). ACA opponents believe that they can make the case that the MLR regulation represents over intrusion of government into the business of insurance and that they will actually inhibit insurers ability to contain costs. However, most people are likely somewhat skeptical of both the ability and intentions of insurers as agents of cost containment and like the requirement that premium dollars get spent on medical care and the requirement that insurers pay rebates if their non-medical expenses are too high. Like total repeal, this should be an issue that plays to the advantage of supporters. Other issues in the pipeline relating to the Personal Responsibility Requirement and to Medicaid could prove to be more difficult challenges. (More on the threats to ACA implementation in a coming post.)

– Michael Miller, Policy Director

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Mini Meds: The Insurance Industry Swindle

Monday, December 6th, 2010

Is a few thousand dollars worth of health care coverage really insurance? Senator Jay Rockefeller (D-WV) raised this question at a December 1 hearing appropriately entitled Are Mini-Med Policies Really Health Insurance? As chair of the Senate Commerce, Science and Transportation Committee, he is questioning the value of these mini-medical plans. The Senator should be praised for his continued work on health reform, and especially so for focusing a spotlight on limited benefit plans.

You may recall the dust-up in September when McDonalds Corporation threatened to drop coverage for their employees if they were required to comply with the Affordable Care Act’s (ACA) new consumer protections. These protections included the elimination of lifetime caps on benefits, an increase in allowable annual caps and a requirement that insurers use 80-85 percent of premium dollars to pay for the medical care, called a medical loss ratio.

The ACA included this provision to ensure insurance companies were not spending excessively on overhead or profits, and to ensure basic consumer protections in health insurance. McDonalds and other companies offering mini-medical plans said these standards were too tough to meet.

Mini-medical plan carriers claim their affordable coverage, while limited, is better than nothing. Perhaps, but it is not a certainty.

According to a survey of employers done by the consulting firm Mercer, the median annual cap for mini medical plan benefits is $7,000. This amount could easily be exceeded after a short hospital visit. However, misleading plan design and language actually makes these stated limited benefits even more diminished.

For example, mini-meds typically cap hospital, physician, diagnostic, and preventive care benefits. They also limit payments toward hospitalization by establishing a per day maximum rate. The effect of limiting reimbursement to $250 for each day’s stay in a hospital allows mini-med plans to further limit their financial exposure, but means that consumers are left with the bill.

Such trickery lets mini-med plans keep more of the premium dollar while those covered by such plans incur medical debt if they get sick. Many of the estimated 1.4 million Americans with mini-meds were double-crossed. Through The Access Project’s work on medical debt, we have encountered many people who were deceived into believing that their plans offered a modest cushion of protection. Those who got sick learned, after the fact, that they had even less coverage than outlined in bold letters on their policies.

The industry has all but admitted that mini-med plans have not been straightforward about coverage limitations. Just this week, an industry trade group representative noted that federal regulators will require mini-medical plans, next year, to inform enrollees about plan limits. He went on to say the industry supports this increased transparency.

An Act of Congress was literally required for them to take this step. A clear warning that these faux insurance plans offer little or no protection should be a requirement. However, the best protection for Americans is full and prompt implementation of the ACA. Once this is a reality, real insurance protections will be extended to all Americans.

- Mark Rukavina, Guest Blogger
Executive Director, The Access Project

 

 

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Cross Post: Insurance Commissioners Respond to Consumer Concerns

Friday, October 22nd, 2010

This blog was originally posted on 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 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, Georgetown Health Policy Institute

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