The National Association of Insurance Commissioners (NAIC) held its annual summer meeting in Atlanta this past weekend. The meeting was striking more for what was not accomplished than for what was. State health insurance commissioners have an extraordinary amount of work to do before the full range of Affordable Care Act reforms goes into effect on January 1, 2014, but you couldn’t tell from their leisurely approach at this meeting. While many commissioners are eager to move forward with implementation, the NAIC effectively bowed to the political reality that, for most, little will be done before the November elections.
Whether it was about setting state rules for health insurance Exchanges, issuing model state laws to implement the 2014 private insurance reforms, closing loopholes in the law that could harm small businesses and individual consumers, or devising a plan for consumer outreach and assistance, NAIC members largely chose to kick the can down the road. In at least one case, a planned discussion about oversight of the ACA’s private insurance reforms was scrubbed from the agenda because members simply didn’t want to talk about it. So what did happen?
Here are a few highlights from the meeting:
• The NAIC consumer representatives released a comprehensive report with recommendations for state and federal officials on the 2014 private insurance reforms. This guide to consumer-friendly implementation covers critical consumer protections such as prohibiting discrimination against people with pre-existing conditions and the minimum standards for essential health benefits (EHBs).
• The working group on Health Insurance Exchanges agreed to discuss the need to educate and engage consumers in time for open enrollment periods starting October 1, 2013, but delayed this discussion until some point in the future. Previously, the Exchange group had adopted five white papers to help state officials certify and provide ongoing oversight of exchange health plans. Also at this meeting, the NAIC agreed to create a working group designed to provide assistance to states likely to have a federally facilitated exchange.
• The NAIC’s task force charged with developing a model state law to implement the ACA’sprivate insurance reforms (i.e., guaranteed issue, community rating, and the prohibition on pre-existing condition exclusions) discussed two new drafts, one for individual market reforms and one for group market reforms. But the task force did not vote to advance the models and, instead, will possibly schedule some conference calls this fall to refine them.
There were also some disappointments. Since last year, the NAIC has been examining the sale of stop-loss insurance to businesses that self-insure their employees’ coverage. “Stop-loss” coverage helps protect a self-insured employer from facing potentially ruinous costs if employees have higher health care needs than expected. Although self-insurance with stop-loss coverage has historically been the province of large businesses of 500 or more employees, since the passage of the ACA, some insurers have aggressively marketed self-insurance to smaller employers with young and healthy employees, often with stop-loss policies that effectively insulate the employer from real risk. These insurers are successfully selling these plans as a cheaper alternative because they help employers escape many of the ACA’s consumer protections, including coverage of essential health benefits, the medical loss ratio requirements, and the examination of unreasonable rate increases.
Unfortunately, what many employers don’t realize is that, if they have one or more employees who get sick, the insurer can dump them – the coverage is not guaranteed to be renewed like traditional health insurance. The NAIC consumer reps have urged NAIC to address this loophole in the ACA by encouraging states to regulate the sale of stop-loss coverage. The consumer representatives stressed that the NAIC’s failure to act could destabilize the state Exchanges as the only place sicker small businesses can enroll in coverage and could hurt small businesses and consumers. Although some NAIC commissioners agreed that fixing the problem should be a “no brainer,” the NAIC essentially deferred the issue until after the election. Many state commissioners were lobbied hard by insurance companies who sell stop-loss policies, and by brokers who expect to see future commissions. The issue has been incredibly contentious – probably because there is so much money at stake for the insurers.
Speaking of contentious, the broker community is pursuing greater regulation of organizations that could become Navigators under the ACA. They argue that would-be Navigators should be required to obtain a license and be subject to oversight by each state’s Department of Insurance (DOI), like a broker would. They also say Navigators should be required to register with the National Producer Registry, a databank that tracks brokers state-to-state. The consumer representatives agree with brokers that Navigators need intensive education and training and meaningful oversight by the Exchange or DOI to ensure they are meeting people’s needs. But many of the brokers’ proposals would erect insurmountable barriers to becoming Navigators, particularly for small, community-based non-profits.
Unfortunately brokers have a very sympathetic ear from many of the state commissioners. The NAIC committee responsible for the regulation of brokers ultimately took no action at this meeting, but the NAIC consumer representatives are concerned that states will move forward with overly onerous requirements for Navigators – which could limit the reach of the immense amount of much-needed outreach and assistance. The NAIC is unlikely to take much concrete action on any of these issues before November, when their next meeting will be held in Washington, DC. Unfortunately, this delay may be too little too late for consumers.
Sabrina Corlette, Research Professor and Project Director Center on Health Insurance Reforms Georgetown University Health Policy Institute