The large multi-state plans that show up on health insurance exchanges in 2014 should follow state insurance rules, state insurance regulators say.
Officers at the National Association of Insurance Commissioners (NAIC), Kansas City, Mo., make that case in a response to a request for information (RFI) about “multi-state plans offered through exchanges” that the federal Office of Personnel Management (OPM) issued in June.
Section 1334 of the Patient Protection and Affordable Care Act of 2010 (PPACA) requires the OPM to arrange for at least two multi-state health plans to start selling through the new health insurance exchanges when the exchanges open for business in 2004.
A multi-state plan must offer the new PPACA “a essential health benefits” package in each state. A state can require additional benefits, but, if it does, it must “defray the cost of those additional benefits,” OPM officials say in the RFI.
In one place, OPM officials ask, “Do certain state laws create opportunities for or barriers to the operation of multi-state plans? If yes, please explain.”
Elsewhere OPM officials ask, “What challenges/advantages would you foresee if reserves were combined across all states where multi-state plans are offered?”
NAIC President Susan Voss and other officers have submitted a comment on the RFI, and they also have sent a separate letter offering their assistance and expressing concern about how the multi-state plan concept might be implemented.
“Insurance commissioners and the NAIC have serious concerns about the potential for market disruption and adverse selection, and the resulting negative impact on consumers and health insurance markets, which would arise if multi-state plans are allowed to operate under different rules than their competitors,” the NAIC officers say.
The multi-state plans will have an automatic right to sell coverage through the health insurance exchanges, and that will give them a built-in competitive advantage over other plans, the NAIC officers say.
“As a result, multi-state plans have the opportunity to write a significant percentage of the policies offered to individuals and small groups, allowing sulti-state plans to spread administrative costs over a larger number of lives,” the NAIC officers say. “This is an inherent advantage for multi-state plans. It is important not to exacerbate this built-in advantage by exempting multi-state plans from the regulatory oversight of insurance commissioners and programmatic oversight by state exchanges.”
The NAIC recommends, for example, that the multi-state plans should pay all the same exchange fees and assessments that other plans pay.
Moreover, as the law is written, if OPM tries to help a multi-state plan by exempting it from a state regulation such as a market conduct regulation or a privacy regulation,, OPM then would cause all other plans — on and off the exchange, to become exempt from the same regulations, NAIC officers warn.