HHOLDING OLDING PPLANS LANS AACCOUNTABLE IN CCOUNTABLE IN HHEALTH EALTH

RREFORMEFORM

JJOSHUAOSHUA D. G D. GOLDBERGOLDBERGNational Association of Insurance CommissionersNational Association of Insurance Commissioners

August 4, 2010August 4, 2010State Coverage Initiatives Summer MeetingState Coverage Initiatives Summer Meeting

Minneapolis, MinnesotaMinneapolis, Minnesota

Reform TimelineReform Timeline

2010 2011 2012 2013 2014 2015 2016 2017Temporary High Risk Pool Program

Immediate Reforms:•No Lifetime Limits•Restricted Annual Limits•Restrictions on Rescission•First Dollar Coverage of Preventive Services

Medical Loss Ratios with Rebates

2010 2011 2012 2013 2014 2015 2016 2017

Exchanges

Subsidies

Individual/Employer Mandates

Market Reforms•Guaranteed Issue•No Pre-Existing Condition Exclusions for Adults•Rating Rules•Essential Benefits Plans•No Annual Limits for Essential Benefits

Risk Adjustment

•Extended Dependent Coverage•Internal/External Review•No Pre-Existing Conditions for Children•Disclosure of Justifications for Premium Increases

Individual Market Reinsurance Program &Risk Corridors

Temporary Early Retiree Reinsurance Program

Co-Op Plans & Multistate Plans

Preemption

Nothing in this title shall be construed to preempt any State law that does not prevent the application of the provisions of this title.

PPACA §1321(d)

Provisions of PPACA will potentially preempt state laws.

Similar to HIPAA:

Exceptions:Mandated benefits: States must cover cost of mandated benefits beyond essential benefits package.Grandfathered plans: States may not require grandfathered plans to be pooled with post-reform plans.

Rate ReviewRate Review

Federal review of “unreasonable” rate increases.

No federal authority to deny rate increase.• May recommend exclusion from state-run

Exchange• May exclude from federally-run Exchange

$250 million in grants to states to support rate review.

Medical Loss Medical Loss RatiosRatios

Clinical Care Costs + Health Quality Improvement

Premiums - Taxes & Regulatory Fees

• 85% in large group market• 80% in small group and individual markets• HHS has authority to reduce to prevent

individual market instability.

Rating RulesRating Rules

Adjusted community rating• No health status• Limited age (3:1 max)• Limited tobacco (3:1 max)• Geography

Single risk pool requirements• Individual and small group markets• Grandfathered plans excluded

ME

NY

PA

NH

CT

VT

MA

NJ

VA

NC

SC

GA

FL

WV

KY

ALMS

MIWI

MN

IA

HI

AK

KS

NE

ND

SD

MO

IL IN

TX

MT

ID

NVUT

WY

CO

NMAZ

CA

OR

WA

LA

AROK

OH

MD

DE

RI

DC

Community Rating

25.1:1 or greater

Adjusted Community Rating

Rating Band Variability:

No Rating Structure

19.1:1 – 25:1

13.1:1 – 19:113:1 or less

*Note: Michigan HMOs and Blue Cross/Blue Shield are restricted to 3.12:1 maximum variation. All others may use 3.96 maximum variation

TN

Small Group Small Group VariationVariation

ME

NY

PA

NH

CT

VTMA

NJ

VA

NC

SC

GA

FL

WV

KY

TN

ALMS

MIWI

MN

IA

HI

AK

KS

NE

ND

SD

MO

IL IN

TX

MT

ID

NVUT

WY

CO

NMAZ

CA

OR

WA

LA

AROK

OH

MD

DE

RI

Rating BandsHybridMichigan Blue Cross/Blue Shield must use community rating. There is no rating structure for other carriers.

DC

Adjusted Community Rating

Community RatingNo Rating Structure

Individual Market Individual Market RatingRating

ME

NY

PA

NH

CT

VTMA

NJ

VA

NC

SC

GA

FL

WV

KY

TN

ALMS

MIWI

MN

IA

HI

AK

KS

NE

ND

SD

MO

IL IN

TX

MT

ID

NVUT

WY

CO

NMAZ

CA

OR

WA

LA

AROK

OH

MD

DE

RI

Rating BandsHybridMichigan Blue Cross/Blue Shield must use community rating. There is no rating structure for other carriers.

DC

Adjusted Community Rating

Community RatingNo Rating Structure

Reformed Rating RulesReformed Rating Rules

Reporting Reporting RequirementsRequirements

• All plans must report to Secretary, State Insurance Commissioner and the Public:– Claims payment policies and practices– Financial disclosures– Data on enrollment and disenrollment– Data on claims denials– Data on rating practices– Information on cost-sharing for out-of-network providers– Information on enrollee and participant rights under

PPACA– Other information specified by the Secretary

TransparencyTransparency

• Disclosure of premium justifications• Uniform definitions of insurance terms• Uniform summary of benefits• Coverage facts labels• Exchanges• Reporting requirements

Complaints and Complaints and Appeals Appeals

• Internal review– Equivalent to DoL Regulations– Required for rescissions

• External review– Equivalent to NAIC Model– Extended to self-insured plans

• Consumer Assistance Grants

EnforcementEnforcement

• Immediate Reforms• Form review process• States have not had opportunity to change

laws• Fallback enforcement may be tricky

•2014 Reforms• NAIC will develop models meeting federal

minimum standards