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Implementing Early Insurance Reforms in States

State Strategies for ImplementationNovember 12, 2010

Stacey Pogue, Senior Policy Analyst, pogue@cppp.org Center for Public Policy Priorities

900 Lydia Street - Austin, Texas 78702 (512) 320-0222 – www.cppp.org

Can your state enforce ACA early insurance reforms now, or must it pass conforming state laws?

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Survey on State Authority

Does state have authority to: • enforce immediate ACA reforms in federal

law?• enforce changes in policy form ?• to investigate ACA complaints?• to conduct market conduct exams regarding

failure to comply?Does state have resources for enforcement?

NAIC compilation: http://www.naic.org/documents/index_health_reform_section_ppaca_state_enforcement_authority.pdf

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Authority to Enforce Federal Law

CT: Yes, CT does not believe it needs to adopt the federal laws to be able to enforce them, but can use general power of commissioner.

AK: No specific authority to enforce federal laws. Have successfully required insures to comply with federal laws by questioning compliance in the form review process.

Policy Form Approval/Denial:AL: No, but we will review forms for compliance and request companies to make any changes required by ACA

Investigate Complaints:MT: Yes, we will investigate complaints about ACA provisions and advise companies if out of compliance. But can’t take legal action without state law

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Other Authority

Considerations• Many states with general authority to enforce

indicated interest in legislation to give DOI clear authority to enforce ACA.– General authority to regulate insurers– General authority for rulemaking– General authority to act in best interest of consumers

• Political considerations of enforcing under general authority

• Sufficient resources/staff needed for enforcement

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NAIC Model Laws

• Provide drafting help to states for issues that are priorities across states.

• Help ensure consistency across states.

• 2 bites at the apple.7

Model Laws for Early ACA Reforms

• Utilization Review (existing model)• Grievance Procedure (existing model)• Under 19 Preexisting Condition Exclusions• Dependent Coverage to Age 26• Lifetime and Annual Limits• Rescission• Choice of Health Care Professional• Preventive Services

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Appeals

Model Laws for Early ACA Reforms

NAIC starting point:

Consumer rep goal:

Models consistent with ACA, federal regulations, and federal guidance.

Identify any remaining consumer concerns. At a minimum, introduce drafting notes to highlight concerns/options for states.

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General Notes on Ability To Go Beyond ACA

Drafting Note: The Affordable Care Act’s preemption standards permit states to impose more stringent consumer protection requirements.

States may have additional consumer protections in their laws or regulations related to [rescissions of coverage determinations, dependent coverage beyond age 26, etc.]

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Annual and Lifetime Limits

• Drafting note: Consistent with federal rule, the model law makes a person in a group health plan eligible for reenrollment if they had reached prior lifetime limit, even if not currently in the plan. In the individual market, states can provide for reinstatement in the same or substantially similar plan when policy has been dropped.

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Dependent Coverage to 26• Drafting note: Model does not define dependent

child. States define it differently. The intent of ACA is to require the availability of dependent coverage to age 26 and that coverage cannot be conditioned based on certain dependency factors, support, residency, student status, or marital status.

• Asked for broad definition including step kids, adopted and foster kids, kids raise by legal guardians or other relative, and kids of domestic partners enrolled in plan.

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No Pre-ex for Children• Drafting note: States have options to reduce

adverse selection due to enrollment of children with pre-existing conditions:– Permit insurers to have open enrollment

periods– Require one or more open enrollment periods– Establish qualifying events like group market,

ex: employer termination of a contribution for dependent coverage

– Year-round guaranteed issue

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Grievance/Utilization Review (Appeals)

• Drafting note: States may need to revise statute on notices to consumers to provide contact information of new ACA ombudsman’s offices that help with appeals.

• In model: notices must be provided in a culturally and linguistically appropriate manner consistent with federal law.

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Rescission

• In model: notice of rescission must have reason, why act is fraud or intentional, and date coverage is rescinded back to.

• Not in model: consumer have the right to external review of rescission (goes beyond federal regulations).

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NAIC Model Laws

• Goal to finish by end of year.• Drafts posted now at Regulatory Framework

(B) Task Force page: www.naic.org/committees_b_regulatory_framework.htm

• When finished, likely posted at NAIC central site for ACA work: www.naic.org/index_health_reform_section.htm

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Strategy for State Advocates

• Identify areas where additional consumer protections are possible

• Meet with insurance department

• Have legislators introduce model law with your changes

• Pursue amendments

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