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What Will the NAIC's Limited Medical Benefit Panel Cover?

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State health insurance regulators are still thinking about the list of products that the Limited Medical Benefit Plan Working Group ought to handle.

The items on the list could determine how much influence the working group has over matters such as the rules for selling hospital indemnity insurance and the disclosures that come with new critical insurance policies.

The Health Insurance and Managed Care Committee, an arm of the National Association of Insurance Commissioners (NAIC), Kansas City, Mo., approved a report that includes a discussion about the working group’s “charge,” or area of responsibility, during a session in Atlanta at the NAIC’s summer meeting.

Traditionally, regulators have used terms such as “limited medical” insurance or “limited benefit” insurance to refer to medical insurance policies with low coverage, which are also known as “mini medical” or “mini med” insurance plans.

Regulators also have used those terms to refer to products such as hospital indemnity policies, which are supposed to pay fixed amounts when policyholders enter the hospital, and critical illness insurance policies, which are supposed to pay fixed amounts when policyholders suffer from specified diseases, such as cancer.

The drafters of the Patient Protection and Affordable Care Act of 2010 (PPACA) applied the PPACA insurance requirements, such as a ban on lifetime benefits limits, to mini med plans and other limited-benefit products traditionally sold as low-cost alternatives to major medical insurance.

The PPACA drafters include exceptions for critical illness insurance products and hospital indemnity insurance.

The people who represent consumer interests in NAIC proceedings have been trying to get the NAIC and state insurance regulators to pay extra attention to the “excepted benefits” as well as to the limited-benefit products affected by PPACA.

Barbara Yondorf and other reps recently asked the Limited Medical Benefit Working Group to state that excepted benefits products are part of its charge.

The consumer reps say they think the working group charge already includes excepted benefits.

The current charge of the working group is to “coordinate efforts and review issues related to limited medical benefit plans: (1) misrepresentation in sales and marketing; (2) product utility; and (3) authorized and unauthorized agents,” according the working group’s section of the NAIC’s website.

The working group also is supposed to “develop recommendations to address concerns and issues addressed during the review.”

The NAIC has used the term “limited benefit” to describe excepted benefits products, and any problems with efforts to market and sell mini med products could also affect efforts to sell other limited-benefit health products, the reps say.

Some marketers are openly suggesting that the companies and marketers who have been selling mini med plans should move into the excepted benefits market, the reps say.

Mini med issuers who shift could turn limited-benefit products into a “wolf in comprehensive plan clothing,” the reps say. ”Hospital indemnity, other fixed indemnity and specified disease and illness policies present especially significant related issues,”

In the past, the reps say, some consumers bought mini med coverage because they thought that the plans were major medical insurance.

In the future, the reps say, some consumers could buy excepted benefits products because they think the products will help them meet the PPACA minimum coverage ownership requirements.


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