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Health Reform Implementation
Brian WebbNational Association of Insurance
Commissioners
August 2, 2010
Reform Timeline2010 2011 2012 2013 2014 2015 2016 2017
Temporary High Risk Pool ProgramTemporary High Risk Pool Program
Immediate Reforms:•No Lifetime Limits•Restricted Annual Limits•Restrictions on Rescission•First Dollar Coverage of Preventive Services
Immediate Reforms:•No Lifetime Limits•Restricted Annual Limits•Restrictions on Rescission•First Dollar Coverage of Preventive Services
Medical Loss Ratios with Rebates/Rate Reform/Data CollectionMedical Loss Ratios with Rebates/Rate Reform/Data Collection
2010 2011 2012 2013 2014 2015 2016 2017
ExchangesExchanges
SubsidiesSubsidies
Individual/Employer MandatesIndividual/Employer Mandates
Market Reforms•Guaranteed Issue•No Pre-Existing Condition Exclusions for Adults•Rating Rules•Essential Benefits Plan•No Annual Limits for Essential Benefits
Market Reforms•Guaranteed Issue•No Pre-Existing Condition Exclusions for Adults•Rating Rules•Essential Benefits Plan•No Annual Limits for Essential Benefits
Risk AdjustmentRisk Adjustment
•Extended Dependent Coverage•Internal/External Review•No Pre-Existing Conditions for Children•Disclosure of Justifications for Premium Increases
Individual Market Reinsurance Program &Risk CorridorsIndividual Market Reinsurance Program &Risk Corridors
Temporary Reinsurance Program For Early RetireesTemporary Reinsurance Program For Early Retirees
Co-Op Plans & Multistate PlansCo-Op Plans & Multistate Plans
Medical Loss Ratio
PPACA Requires:
• Beginning January 1, 2011, issuers shall, each plan year, pay rebates to enrollees if the Medical Loss exceeds:
• 80% in the non-group market
• 80% in the small group market
• 85% in the large group market
NOTE: A state may set a higher percentage – The Secretary may set a lower percentage in a state if the non-group market is destabilized or adjust the rates due to volatility caused by the Exchanges.
• By December 31, 2010, the NAIC shall establish uniform definitions and standardized methodologies for calculating the components included in the Medical Loss Ratio. This is subject to Secretary certification.
Medical Loss RatioComponents of the Medical Loss Ratio:
Reimbursement for clinical services +
Expenditures to improve health care quality
____________________________________________
Total premium revenue –
Federal and State taxes and licensing or regulatory fees
(and accounting for risk adjustment, risk corridors and reinsurance)
• The issuer must provide an annual report to the Secretary on the above expenditures/revenues and other non-claims costs, including and explanation of the nature of such costs.
NAIC: Other Issues• Rate Review
– Definitions of “unreasonable” and “excessive”– Forms and processes for filing rates for review
• Uniform Fraud Reporting Form• Consumer Information
– Uniform Enrollment Form– Standardized Explanation of Coverage– Definitions
• Data Collection• Risk Adjustment/Risk Corridors (2014)• Medigap Reforms (2015)• Standards for Interstate Compacts (2016)
Questions?
Contacts at the NAIC
Brian Webb Josh GoldbergManager Health Policy and Leg
AnalystHealth Policy and Legislation [email protected]@naic.org 202-471-3984202-471-3978
