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Health insurers in Puerto Rico face underwriting fears

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Some officials in Puerto Rico say Patient Protection and Affordable Care Act (PPACA) “market reform” rules could make health insurance there unaffordable.

PPACA does not require Puerto Rico and other U.S. territories to set up a public health insurance exchange. PPACA also exempts the territories from the individual and employer mandates, but PPACA does require insurers in the territories to sell individual health insurance on a guaranteed-issue basis, without considering health risk.

In May, Angela Weyne, Puerto Rico’s insurance commissioner told the U.S. Department of Health and Human Services (HHS) that applying the guaranteed-issue provision to Puerto Rico would expose health insurers there to adverse selection and cause rates to skyrocket.

Gary Cohen, director of the Center for Consumer Information and Insurance Oversight (CCIIO), told Weyne that HHS does not have the legal authority to impose the changes requested.

Territories concerned about those requirements should seek help from Congress or protect insurers from adverse selection by setting their own individual or employer minimum coverage requirements, Cohen said.

Helaine Gregory, a health care industry consultant in Puerto Rico, said in an email interview that Weyne’s request for Puerto Rico be exempted from the guaranteed issue provisions was an attempt to correct “yet another oversight” in PPACA.

“Whether intentional or not, the guaranteed issue provisions have already caused a distortion in the market and some individual premium rates have escalated tremendously (double digit increases), given the potential for adverse selection,” Gregory said. “If action is not taken in short order, individual premium rates will be unaffordable.”

The new taxes that are part of PPACA are “regressive and will have an inflationary effect,” Gregory added.

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