Insurers are hoping state insurance regulators will find ways to put ideas for more risk management tools in a white paper on setting up health insurance exchanges.

Insurance industry representatives made that plea today during a conference call organized by the Exchanges Subgroup at the National Association of Insurance Commissioners (NAIC), Kansas City, Mo.

The subgroup has been working on several exchange implementation white papers. Insurance industry reps are asking that the subgroup add tool provisions to the white paper on “adverse selection” – the risk that high-cost patients will crowd onto the member lists of more generous or otherwise more attractive plans like vampires into a blood bank, choking those plans with huge numbers of new claims.

If insurers cannot use application denials or high prices to control adverse selection, then they need new tools to deal with that threat, the industry reps said.

PPACA

The Exchanges Subgroup has been developing white papers that would give state insurance regulators’ regulators views on implementation of the provisions in the federal Patient Protection and Affordable Care Act of 2010 (PPACA) that call for the creation of a new system of health insurance exchanges.

Starting in 2014, the exchanges are supposed to help individuals and small groups use tax subsidies to buy health coverage.

That same year, PPACA is supposed to require all major medical insurers to sell coverage on a guaranteed-issue, mostly community-rated basis. A health insurer will be able charge the oldest enrollees 4 times as much as it charges the youngest enrollees, but it will have little or no ability to take health status into account when setting prices.

The exchanges are supposed to make prices for individual and small group coverage “transparent,” by making price information readily available on the Web.

The Call

During the call, participants went over adverse selection white paper drafts.


Representatives from America’s Health Insurance Plans (AHIP), Washington, and the Blue Cross and Blue Shield Association, Chicago, said the white paper should include more ideas about how adverse selection might change in 2014 as a result of PPACA, and not simply focus on describing how adverse selection works in the market today.

The Blues said in a written comment submitted Thursday that the white paper drafters should mention specific types of potential sources of antiselection, such as excluding certain types of specialists from the network.

An AHIP representative suggested that the subgroup should add a paragraph indicating that health insurance is susceptible to adverse selection even in the kind of transparent environment that PPACA is supposed to create.

Individuals who have been selected by the NAIC to represent consumer interests in NAIC proceedings said in a written comment submitted immediately before the meeting that the NAIC should consider recommending in the white paper that regulators take steps to keep self-insured plans from causing antiselection, and to verify that self-insured plans are really self-insured.

Other call participants defended the current language and called for maintaining the current focus of the white paper.

Subgroup members said they will continue to revise the white paper.

Other Exchanges Subgroup coverage from National Underwriter Life & Health: