Health Insurance State Reforms

Connecticut health insurance : The Department of Insurance has submitted its package of proposed legislation for 2011 providing a clear indication of the Department’s current priorities. The package would have to be approved (and/or amended) by the next Administration before any proposed legislation is submitted to the legislature in January. Many of the proposals are re-introductions of bills considered in past years that failed to survive the process. However, some new proposals warrant close review:

  • PPACA authority: This language would adopt PPACA and future changes in their entirety. Once rules are finalized, specific provisions can be drafted in the future.
  • AAC payment/assessment methodology by insurers: Revises the methodology governing the assessment of payments made by domestic insurers. This revision would eliminate an existing inequity in assessments for insurers vs health care centers. The DOI would take the premium data directly from the Annual National Association of Insurance Commissioners (NAIC) statutory blanks which would be retrieved electronically.
  • An Act Concerning Third Party Administrators: The DOI would adopt the National Association of Insurance Commissioners model third party administrator statute. They state that over 100 third party administrators operate in the state without any licensing/registration requirements and absent any statutory oversight.
  • NAIC Model Standard Valuation Law: This proposal makes changes to the Standard Valuation Law, to enable Principles Based Reserving (PBR) of life insurance companies’ actuarial liabilities. PBR uses risk analysis techniques, such as modeling and simulation, to better capture various risks inherent in establishing adequate reserves. Use of a Valuation Manual, which is currently being drafted by the NAIC is intended to be dynamic to consider rapid changes in the marketplace.

Florida health insurance : Florida Insurance Commissioner Kevin McCarty co-signed a letter to National Association of Insurance Commissioners (NAIC) President Jane Cline urging the organization to adopt an amendment to the proposed Regulation for Uniform Definitions and Standardized Methodologies for Calculation of Medical Loss Ratio for Plan Years 2011, 2012 and 2013. The amendment would have excluded producer compensation from the MLR calculations by changing the definition of earned premium. The proposed amendment specifically stated: “For purposes of this regulation only, the term ‘earned premium’ shall not include fees or commissions included in premiums that are collected solely for the purpose of passing such fees or commissions on to an unaffiliated third party insurance producer to the extent such fees or commissions are actually paid.” The NAIC voted down the amendment but also voted in favor of a resolution to continue to work on this issue with HHS as it develops MLR regulations.

Kansas health insurance : Kansas DOI staff recently held a meeting to discuss upcoming legislative proposals that include a health insurance exchange bill and other legislation needed to implement PPACA. Various industry stakeholders were invited. The DOI is also considering a health care database bill that would transfer authority for the administration and collection of health care data required by law from the Kansas Health Policy Authority to the DOI. The staff invited feedback on these topics and promised to provide details about the legislation as soon as they are available.

Missouri health insurance : The Department of Insurance recently issued a bulletinto notify carriers in the individual market of two options regarding issuing policies for children under age 19. The two options listed are: 1) Guaranteed issue for all children under age 19 without limitations or riders based on health status provided throughout the year (while the bulletin states that the Department “expects” carrier to provide coverage throughout the year, the DOI has since clarified that it would prefer that carriers choose this option); or 2) new coverage limited to an open enrollment period — a transitional open enrollment period from September 23 to December 31, 2010, and an annual March open enrollment period beginning in 2011. Under this option, all children under the age of 19 shall be offered coverage on a guaranteed basis, without pre-existing condition exclusions or riders based on health status. If a carrier chooses this option, the carrier may sell child-only policies only during the open enrollment period, with the exception of enrollment of children experiencing a qualifying event. Missouri previously approved Aetna’s removal of the child-only addendum in July, and the company currently does not sell child-only policies in the state.

Texas health insurance : The Texas Department of Insurance has been awarded $2,792,180, the second highest grant in the country, to establish the PPACA consumer assistance program. HHS recently announced the new Consumer Assistance Grants program awards to help states and territories put patients in charge of their health care. These grants will support states’ efforts to establish or strengthen consumer assistance programs that provide direct services to consumers who have questions or concerns regarding their health insurance. These new grants will allow states, that in some cases are partnering with local non-profits, to help strengthen and enhance ongoing efforts to protect consumers.

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