Representatives for expatriate and international health insurance plans have told state insurance regulators that they think the plans should be excluded from the new Affordable Care Act medical loss ratio (MLR) standards.
The Affordable Care Act — the legislative package that includes the Patient Protection and Affordable Care Act (PPACA) and the Health Care and Education Reconciliation Act – requires the National Association of Insurance Commissioners, Kansas City, Mo., to help implement the MLR provisions. Health insurers will have to spend 80% of large group premiums and 85% of individual and small group premiums on medical care and quality improvement activities or else pay rebates to their customers.
The NAIC’s PPACA Actuarial Subgroup of the Accident and Health Working Group is dealing with many questions about how to apply the MLR provisions, and one is how regulators ought to treat expatriate and international policies. The subgroup is giving members of the public a chance to read and comment on an “issue resolution document” (IRD), IRD035, concerning expatriate and international policies and the NAIC’s authority to keep the policies out of the minimum MLR system.
Some commenters spoke Thursday during a subgroup conference call.
Katharine Wade, a vice president at CIGNA Corp., Philadelphia (NYSE:CI), told the subgroup that Congress did not intend for PPACA to apply to expatriate plans.
“Expatriate plans should be excluded from the MLR requirement,” Wade said.
A representative from Aetna Inc., Hartford (NYSE:AET), expressed similar views, and so did Thomas Fitzgerald, a principal at Groom Law Group Chartered, Washington.
The NAIC itself has very clearly explained in IRD035 why expatriate and international plans should be carved out of the new minimum MLR requirements, Fitzgerald said. “The issue is whether the NAIC has the authority to do so,” he said.
In a written comment, Groom has noted that the PPACA minimum MLR provision states that regulators should take “different types of plans” into account when developing minimum MLR definitions and methodologies. Expatriate plans qualify as “different types of plans” and should have their own, separate method for calculating loss ratios, and the U.S. Health and Human Services secretary has the authority to promulgate the regulations needed to implement PPACA, the firm says.
Groom thinks the NAIC has the responsibility to tell HHS Secretary Kathleen Sebelius to exclude expatriate plans from the minimum MLR system now being developed, Fitzgerald said during the conference call.
Members of the actuarial subgroup said they they will continue to work on IRD035.