State insurance regulators are facing health care challenges on two fronts: deciding what rates are fair both to consumers and health insurers; and using all the resources at their disposal to implement elements of new federal health care reform in a very short time.
The challenges confronting Maine’s Superintendent Mila Kofman typify the work that state insurance commissioners across the country face.
On April 15, the Maine Bureau will hold a public hearing on a request by Anthem Blue Cross and Blue Shield for a proposed rate adjustment for its HealthChoice and Lumenos products which would become effective on July 1, 2010. Anthem, according to the Bureau, says that these adjustments will cause average increases of 22.9% and affect 11,066 policyholders.
Anthem and Kofman are currently involved in a dispute on a premium increase that was recently heard in state court. A ruling is expected in the near future.
The issue of rate increases also surfaced recently in California when Anthem was asked to justify a 39% increase by both Health and Human Services Secretary Kathleen Sebelius and California Insurance Commissioner Steve Poizner.
But if rate increases are keeping regulators busy, the imminent implementation of the new Patient Protection and Affordable Care Act promise to have them stretching already thin department resources.
In a recent interview with the Bellwether, Kofman discussed just some of the challenges that insurance commissioners face. She said that one thing that will help states that have stronger standards than the requirements in the new law is that those states will be able to keep their standards in place. For instance, she said that in her state, there are already strong guidelines on guaranteed access to health care. If states can keep these stronger standards in place, they can focus on areas of the new law where there will need more work to develop, Kofman added.
And team work will be necessary both within state insurance departments and among those departments nationwide to get implementation of regulations completed, she said. For example, Maine Governor John Baldacci has formed a steering committee of state officials who will work to put the law into effect. And within the department, Kofman is implementing teams to start the work.
The National Association of Insurance Commissioners, Kansas City, Mo., has already started marshalling its resources to meet the 12-14 places in the new law that require the organization to take action. One of the first items to address will be defining medical loss ratio.
But Kofman said that there are ambiguities that have to be clarified. For instance, in Maine small businesses covered in the small group market have to pay out 78 cents on the dollar in order to get prior approval on products. But the new federal law requires an 80 cent payout on the dollar. However, the federal law, she explained, allows that ratio to include disease management while the Maine requirement does not. So, Kofman asked, ‘Does the more stringent Maine requirement actually meet the federal requirement?’ These are the types of issues that will have to be worked out, she continued.
She said that in the 1990s when the HIPAA was being implemented, there were regular calls between federal and state officials and that kind of regular dialogue is needed again. For instance, the tax credit for small business owners depends on what HHS ultimately determines is an acceptable formula, Kofman said. But, states will have to begin providing guidance in the near future so that local business owners will know how much to deduct when they file estimated quarterly taxes.