State insurance regulators have teamed up to object efforts by the Obama administration to put new curbs on short-term health insurance plans and indemnity health insurance products.
John Huff, the president of the Kansas City, Missouri-based National Association of Insurance Commissioners, and three other top NAIC officers have written on behalf of members to oppose the administration’s draft regulations, which were developed by the Internal Revenue Service, the U.S. Department of Health and Human Services, and the Employee Benefits Security Administration.
The NAIC is a group for insurance regulators.
The so-called “tri agencies” have proposed limiting the duration of an insurer’s short-term medical insurance policies to three months or less, and to prohibit renewals beyond that three-month period.
The tri agencies also have proposed requiring indemnity health insurance policies to pay a fixed benefit per period of time for an insured who qualifies for benefits, rather than letting an issuer choose between paying a fixed benefit per period of time, or a flat benefit per event.
A policy could pay an insured who entered the hospital $100 per day, but it could not pay a $1,000 flat amount to an insured who had surgery.
The tri agencies said they want to take steps to keep consumers from using 364 days of short-term medical insurance, or indemnity health insurance, as a substitute for major medical policies that comply with Affordable Care Act rules.
Huff, who was appointed Missouri insurance director by a Democratic governor, and his colleagues argue in their letter that federal interference in the insurance market may cause new problems, without doing much to solve existing problems.
The tri agency proposal would limit an issuer to issuing short-term medical coverage for no more than three months, for example, but it would do nothing to keep a healthy insured from using four three-month policies from four separate insurers to get a full year of coverage, according to the NAIC officers.