States may tighten ancillary product rules

Some insurance regulators want to tighten the state laws and regulations that apply to health insurance products other than major medical products.

The regulators hope to update the standards that apply to critical illness insurance, hospital indemnity insurance, short-term medical insurance, dental insurance, vision plans and other products that fall outside the scope of most or all of the Patient Protection and Affordable Care Act major medical coverage rules.

Members of the Regulatory Framework Task Force, part of the Health Insurance and Managed Care Committee at the National Association of Insurance Commissioners, agreed this weekend that updating NAIC "gap filler" product models should be a top priority.

The task force — which helps shape how state insurance regulators implement PPACA and other federal health laws — talked about ancillary products at the NAIC's spring meeting in Orlando.

Task force members said the next NAIC models to be "prioritized for review and revision" should be the Accident and Sickness Insurance Minimum Standards Model Act, the Model Regulation to Implement the Accident and Sickness Insurance Minimum Standards Model Act and the Group Health Insurance Standards Model Act.

The insurers that sell ancillary products persuaded PPACA drafters in Congress to treat those products as "excepted benefits."

That status frees ancillary products from the PPACA medical underwriting restrictions, rate review rules, minimum medical loss ratio standards and annual and lifetime benefits limit ban.

States can decide for themselves whether to impose rules similar to the PPACA major medical rules, different rules or no rules.

America's Health Insurance Plans put updating the accident and sickness models near the bottom of its model update priority list.

Consumer group representatives and regulators from Utah and Virginia put accident and sickness model updates at or near the top of their priority lists.

Missouri regulators gave updating the models a mid-level priority ranking.

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