WASHINGTON BUREAU — President Obama today met with 35 state and territory insurance commissioners and talked about the role they will play in implementing the Affordable Care Act.
The regulators also met with U.S. Health and Human Services (HHS) Secretary Kathleen Sebelius.
Conversation focused on the provisions in the Affordable Care Act – the legislative package that includes the Patient Protection and Affordable Care Act (PPACA) – that are set to take effect Thursday, or for policy or plan years that begin on or after Thursday.
Some of the provisions that are about to take effect include a ban on lifetime caps on health insurance benefits; a requirement that plans that offer dependent coverage offer coverage to dependents up to age 26; and a ban on plans or insurers refusing to provide coverage for minor children with pre-existing health conditions.
Obama entered midway through the meeting.
Jane Cline, the West Virginia insurance commissioner and president of the National Association of Insurance Commissioners (NAIC), Kansas City, Mo., said during a press conference after the meeting that Obama was “very clear that we [the NAIC] have an important role in this.”
“It clearly has got to be a partnership with the federal government,” Cline said.
Some state commissioners may lose their positions as a result of the November elections, but the institutional knowledge of the NAIC as a body will create the continuity needed to implement the reforms, NAIC officials said.
The Affordable Care Act calls for the NAIC to help implement new minimum medical loss ratio (MLR) provisions, which will require large plans to spend at least 85% of revenue on health care and quality improvement activities, and individual and small group plans and insurers to spend at least 80% of revenue on health care and quality improvement efforts.
Most of the minimum MLR provisions are set to take
effect on or after Jan. 1, 2014.
Implementing the minimum MLR requirement is proving to be the most challenging PPACA issue the NAIC has taken up thus far, officials said.
State regulators want to write regulations that are narrow enough to conform with the law but broad enough to avoid forcing insurers out and disrupting the health insurance market, Cline said.
Meanwhile, many companies are saying they will have to drop out of the individual health insurance market because they cannot meet the 80% MLR requirement, officials said.
Iowa and Maine already are looking to HHS for a minimum MLR requirement waiver, according to Iowa Commissioner Susan Voss. It is unclear how many other states could follow suit.
NAIC Vice President Kevin McCarty, the Florida insurance commissioner, said he will hold a hearing in his state Friday to gather evidence about arguments that the minimum MLR requirements will cause disruption.
McCarty said Jay Angoff, director of the HHS Office of Consumer Information and Insurance Oversight, needs more to go on than reports of “amorphous displeasure” in the marketplace.
Some carriers might simply have trouble adapting to the new paradigm, and “we might lose some of those players,” McCarty said he told Sebelius.
Sebelius is a former Kansas insurance commissioner and former Kansas governor.
Sandy Praeger, the current Kansas commissioner and chair of the NAIC Health Insurance Committee, said she cannot imagine Sebelius spending time reviewing every states’ progress in implementing the minimum MLR requirement, and she said she is looking for flexibility from HHS.
The NAIC and some commissioners have a weekly conference call with HHS. Dialogue on PPACA implementation will continue, and state regulators said they expect HHS to provide more detailed guidance.