The individuals who speak for consumers at the National Association of Insurance Commissioners (NAIC) have come up with ideas for how regulators and lawmakers could keep new federal guaranteed issue rules from wrecking the individual health insurance market.
The reps included a collection of recommendations for dealing with the guaranteed issue rules in a discussion of strategies for implementing the Patient Protection and Affordable Care Act of 2010 (PPACA).
The reps presented the discussion this week at the NAIC’s summer meeting in Atlanta.
PPACA provisions set to take effect in 2014 call for insurers in the individual market to stop considering applicants’ health when selling and pricing coverage.
Insurers will be able to charge higher rates for older consumers than for younger consumers, but the difference between the highest rates an insurer charges and the lowest will be limited, and an insurer will not be able to consider factors such as whether an applicant has cancer or has had an organ transplant when setting prices.
The Supreme Court recently ruled that Congress does have the authority to impose a tax on individuals who fail to buy a minimum level of health coverage, but the tax will be modest, and some say the Internal Revenue Service will have trouble collecting the tax.
Some have suggested that consumers may try to game the system by paying the modest tax on uninsured individuals, then acting as “free riders” and waiting until they are seriously ill to buy health insurance.