What do regulators, insurers and consumer advocates all concur on? The new health care law, the Patient Protection and Affordable Care Act, signed into law on March 23, will require a lot of work right away that is accomplished as a coordinated effort of a lot of different interests.
The leadership of the National Association of Insurance Commissioners, Kansas City, Mo., detailed what those efforts would be during a press conference at the organization’s spring meeting here. The issue was then discussed in detail in a packed session of the Health Insurance and Managed Care ‘B’ Committee. The ‘B’ Committee’s huge room was filled with several hundred attendees who heard a table of over 25 commissioners speak about the Herculean effort that lay ahead. Also listening was Jay Angoff, a former Missouri insurance commissioner now representing the U.S. Department of Health and Human Services.
Jane Cline, NAIC president and West Virginia insurance commissioner, said that commissioners recognize that there are mixed thoughts among the states about benefits and concerns of the law but noted that there are certain requirements that the NAIC by law have to implement and that implementation will have to begin now. There are 12-14 places in the where the NAIC is specifically referenced as the entity that will have to provide guidance, Kevin McCarty, NAIC vice president and Florida insurance commissioner added.
State insurance regulators need to assert that they are the experts and to the degree possible states must maintain sovereign authority where they can, said Kim Holland, secretary-treasurer of the NAIC and Oklahoma insurance commissioner. There is diversity to how different states approach health care and to some extent there is flexibility in the law that will allow states to exercise those differences, she added.
Sandy Praeger, former NAIC president, chair of the “B” Committee and Kansas insurance commissioner, said that state insurance regulators will “establish ourselves as the go to experts” on implementing the new law. This will play an important role because any legislation is affected by the ‘law of unintended consequences’ that will require a fleshing out of rules and regulations.
Praeger said that insurance regulators will focus on implementing the requirements that the law makes them responsible for and not focus on any challenges to the law by states attorneys general. “This is the law of the land now and we will focus on the best possible implementation.”
Regulators are faced with two huge projects that to some degree overlap, according to Susan Voss, president-elect of the NAIC and Iowa insurance commissioner. “We are addressing regulatory modernization as well. So, we have two major heavy lifting projects we’re working on,” Voss said. The one commonality to both projects is the solvency issue, she added.
Voss also addressed the flexibility in the law, noting that while there are a lot of requirements for states to adhere to, many of them are floors and not ceilings, allowing for flexibility.
Among the immediate issues that regulators need to focus their attention on are the establishment of exchanges as required by the new law and the establishment of high risk pools, according to Praeger. She said that 35 states already have high risk pools and there are a variety of ways to establish these pools. There are ways in which the existing high risk pools can be used to meet requirements so that states “don’t have to reinvent the wheel,” she said.
The NAIC intends to use the existing committee structure to start work on the law’s implementation, according to Cline. Cline also says that the NAIC will reach out to groups including the National Governors Association, Washington, and the National Conference of State Legislatures, Denver.
Other groups including the American Academy of Actuaries, Washington, are planning a huge effort to be a resource to state regulators and legislators during this transitional time.
The intent to use the existing structure will save time and effort and make it easier to begin necessary work, testified Randi Reichel, speaking for America’s Health Insurance Plans, Washington, during the hearing that followed the press conference.
Joel Ario, vice chair of the ‘B’ Committee and Pennsylvania insurance commissioner, noted that using the existing NAIC committee structure will help facilitate regulators’ work.
And Mila Kofman, director of the Maine Bureau of Insurance and a former NAIC funded representative specializing in healthcare, said that the use of the NAIC Website to detail the work of the NAIC and how that work is being parsed out would be helpful not only to consumers but also to state regulators.
Chris Petersen, representing Delta Dental, noted that work will have to be done to ensure a pediatric dental benefit and suggested cataloguing all of the NAIC models that will be impacted by the new law. Mary Beth Senciewicz, deputy commissioner in Florida responded that the NAIC had already started that work but added that any such information from industry would also be welcome.
Joan Gardiner, representing Blue Cross/Blue Shield, said that “we can’t underestimate what needs to be done very, very quickly.” As an example, Gardiner cited development of a definition for medical loss ratios.
Consumer advocates also offered suggestions for getting the work started. Bonnie Burns, an NAIC funded consumer representative with California Health Advocates, said that the Medicare Advantage law is an example of “what not to do” as work on the law’s implementation starts. The regulations developed offered a “multitude of different plans and complexity of information. Benefits and plans must be clearly stated in simple language because too much choice is worse than no choice at all.” The reason, she explained, is because “it is an open choice for abusive behavior.” Consumers who are unable to make a choice turn to others for help which leaves them exposed to those who would take advantage of them.
Burns said that if implementation of the new regulations are done right, it is a tremendous opportunity for state regulators to show that the state insurance system works well.
Lynn Quincy of Consumers Union also expressed concern that points such as medical loss ratios be adequately defined so that it is clear what they will do and what they won’t do. She noted that medical loss ratios will not be a “silver bullet.”
And, Sabrina Corlette, of the National Partnership for Women & Families, said the immediate focus will need to be on development of the risk pool requirement, work that should incorporate the existing risk pool structure.