The National Association of Insurance Commissioners (NAIC) was in a sticky situation regarding its regulatory oversight stance this week with regard to statements by a top official concerning implementation of the health insurance exchange provisions of the Patient Protection and Affordable Care Act (PPACA).
However, state regulators may need to look at the reform act from a broader perspective—enforcement of the Act from the federal government if the states don’t enact PPACA model laws, some say.
At issue is whether states that are not moving forward under PPACA to set up their own health care exchanges, and trying to meet a host of deadlines, would be giving up state regulatory control of health insurance regulation to the federal government.
Although health care experts are divided, an NAIC official made it seem that the federal government would be taking over health insurance regulation in many states, perhaps in total, and the NAIC doesn’t want people to think that.
Washington-based NAIC health policy team manager Brian Webb, made public statements as recorded in a piece published by Reuters on July 30th to the effect that states would be ceding regulatory control to the federal government against their wishes.
“If the states do not get ready for this, then they lose the ability to regulate. It’s the whole marketplace,” Webb told the forum hosted in Washington by Alliance for Health Reform, Reuters wrote. Webb’s presentation can be found here.
PPACA opponents continue to fight implementation of the law in Congress, in the courts and elsewhere. The law calls for states to set up exchanges, or Web-based health insurance marketplaces, for individuals and small groups by 2014.
“They may get their wish and not be able to do anything in their marketplaces,” Webb was quoted by Reuters as saying. “There’s not an insurance commissioner in the country who wants to say, ‘No, we’re not going to regulate that.’”
However, Republican governors in many states are not scurrying to get an exchange in place and have rejected grants and attempts to set up an exchange, and their appointed commissioners are following suit in some cases.
The NAIC President, Kevin McCarty, is from one of those states—Florida—and reacted on behalf of the NAIC, along with Kansas’ elected insurance commissioner, who heads the association’s health insurance committee, in a statement posted on its website and distributed to media.
“It is well established that the NAIC has no position on the Affordable Care Act (ACA), nor the type of health exchange implemented in the individual states,” stated McCarty and Kansas Insurance Commissioner Sandy Praeger, chair of the NAIC Health Insurance and Managed Care Committee.
Indeed, states will continue to regulate health insurance, noted Chris Petersen, a health insurance industry lawyer with Morris Manning & Martin in Washington who lobbies before the NAIC.
All products in the health insurance exchanges will still have to comply with state insurance laws and be filed with state insurance departments to be included on the exchanges.
And one federal health care lawyer noted that, “if you think about it, the states will be doing licensing and solvency and critical things like that.”