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Regulators Struggling to Balance State, Federal and NAIC's SERFF roles in Exchanges

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State insurance regulators grappled with many questions on setting up exchanges and which direction to go in at their Spring meeting in New Orleans, even as federal regulators are working long hours to come up with final rules that offer more guidance.

The Exchanges Subgroup of the NAIC Health Insurance and Managed Care Committee will be developing a white paper on six or seven aspects of plan management  to be completed before the NAIC late summer meeting, as state regulators try to do their part preparing for exchanges in the face of uncertainty about what their state governments will be doing.

They are licensure and solvency, network adequacy, rate review, benefit design standards, marketing, accreditation, and quality ratings and improvement strategies. Different states’ regulators volunteered to take on the individual areas.

Regulators are still struggling with the practical effect of the health care law that mandates  that Department of Health and Human Services must establish an exchange if states don’t.  

Several states that had put their foot down and said they weren’t moving forward are now exploring setting up an exchange while others are  now wondering what a federal “partnership” would look like, if they defaulted to it and who would pay for certain aspects of it, The role of producers, the applications of solvency, how to handle complaints and market conduct issues brought before the state departments and how to feed the information to the exchanges, and how to add completion to the exchanges, the bottom tier of which must satisfy the mandates of the essential health benefits guidelines. “How are states going to be charged,” under a federal partnership asked Pennsylvania Insurance Commissioner Mike Consedine, who is keen to point out budget issues at the state level.

Tersea Miller, the point person for the HHS Center for Consumer Information & Insurance Oversight (CIIO), told the assembled group that “states want to think about plan management beginning today. DOI (Departments of Insurance) should be working very closely with the exchange on plan management systems.”

However, Miller, who was Oregon’s insurance administrator before going to work for HHS on health care reform, was unable to provide precision on time tables or answers for guidance and final rules on many aspects of exchange management and rules on the producers’ roles on the front lines with consumers for regulators whose states were flip-flopping and strategizing anew on how to go forward.

“We anticipate some collaboration with states on plan management functions,” Miller said, but  get a hold of us, start those conversations earlier rather than later.. and  we are aware you are awaiting for more information –we are working very very hard to get  that out,”

“Red states are seeing if they can outwit Obamacare by having a competitive (market) exchange that still gets the subsidies,” said one industry observer at the meeting.

If Obama wins re-election and the health care act stands scrutiny in the Supreme Court, states that did not want any federal involvement will get much more than other states who have opted to create their own table.

Meanwhile, the hope of utilizing SERFF to help with exchange plan management was presented by Julienne Fritz, chief business strategy and development officer for the NAIC.

“We are not talking about expanding the role of SERFF, only supporting plan management,” she said. “There is a tremendous amount of data needed to feed the exchange,” and “rather than reinvent the wheel,” SERFF could integrate its data into the exchange’s data needs, she noted.

Of course, states have to come to SERFF—the NAIC cannot mandate or unilaterally decide that SERFF be used, as has been  suggested.

If states don’t take control of the data management, rate review and form filing for the exchanges, the federal government will come in and create a data collection system, as it needs uniformity, one regulator noted after the meeting, so some see SERFF as the most expedient way to get on board with necessary components of the exchanges. See:

The “primary purpose is to handle functions related to the submission and certification of QHPs (qualified health plans,)” Fritz wrote as part of her presentation. “ However, the full scope of SERFF “is evolving based on state needs, insurer input and CCIIO requirements,” Fritz stated.