The U.S. Department of Health and Human Services (HHS) may let a major category of fixed indemnity insurance products live.
Officials at the Center for Consumer Information & Insurance Oversight (CCIIO), an arm of Centers for Medicare & Medicaid Services (CMS), say HHS will write regulations that will get many of the products out of having to comply with the new Patient Protection and Affordable Care Act (PPACA) major medical insurance rules.
The new regulations will help individual indemnity products that pay a fixed amount of cash to a consumer who has a heart attack, suffers from a stroke, enters the hospital, or experiences some other event.
CCIIO talks about individual indemnity products in a new batch of guidance.
PPACA now requires major medical issuers to comply with a long list of underwriting and benefit design rules. The issuers have to meet minimum medical loss ratio rules, eliminate annual and lifetime benefits, and cover a basic package of preventive health services without imposing co-payments or deductibles on the patient.
PPACA exempts indemnity insurance from the rules, but HHS is using a narrow definition of indemnity insurance to try to keep employers from using the product to escape from PPACA.