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Industry, Consumer Reps Tell NAIC to Build Multiple Health Coverage Models

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The Blue Cross Blue Shield Association, other industry group and NAIC consumer representatives are suggesting that the NAIC create as many as three separate model laws, not just one, for the group and individual health insurance markets.

The NAIC is working on the Group Market Health Insurance Coverage Model Act to address market issues created by implementation of the Patient Protection and Affordable Care Act. The NAIC asked for comments on the scope of the act through its Regulatory Framework Task Force. The task force is deciding whether to produce a combined model that includes both the group and non-group markets, or whether to continue to have separate model acts for the group market and for the non-group market.

The task force requested comments for any model that seeks to incorporate all current PPACA requirements, and all requirements set to take effect in 2014, that apply to comprehensive major medical health insurance coverage.

“A separate group/non-group approach to this project closely reflects the manner in which most state insurance codes are commonly written,” the BCBSA told the NAIC staff and the chair of the task force, Randy Moses of the South Dakota Division of Insurance.

“Also, we suggest that the NAIC consider the merits of doing a separate model for the small group and the large group given the numerous additional requirements that apply to the small group market,” the association stated.

BCBSA was not alone. The trade association representing the larger health insurance industry, AHIP, or America’s Health Insurance Plans, recommended the creation of three separate models, one for each of the small group market, the individual market and the large group market.  

AHIP cited the degree of complex set of facts and conditions of the PPACA changes as they apply to to different markets’ coverage, clarity and usability in promoting three separate market models.

“Separating the market models will assist in clarifying and highlighting the impact of those ACA changes on the comprehensive major medical coverage offered in each of these markets,” AHIP stated.

“Since there has been more attention focused on small group coverage in the states recently, we recommend the small group market model should be the first model discussed,” AHIP recommended, offering up the individual market model next, for development, and lastly, the large group model.

The NAIC consumer representatives  also recommended against a combined model, as well, but they called for two, not three, separate models. 

“If NAIC were to adopt a combined model, many states would be required to take the additional step of separating the two markets in order to adapt it to their code. We believe it will be simpler and cleaner for state regulators, policymakers, and stakeholders if the NAIC adopts two separate models,” according to a group of representatives led by Sabrina Corlette of Georgetown University. 

Two separate models are better because, “while some states have merged their individual and small group markets, the vast majority of state laws governing the non-group and small group markets are separated into two distinct chapters or sections of the insurance code,” the consumer reps wrote.

The NAIC posted the comments received on its website. Comments were due Dec. 14, and most were received through last week. 


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