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State Regulators Meet as Individual Health Gasps for Life

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The National Association of Insurance Commissioners is gathering in Denver now without knowing how the federal government will handle individual major medical coverage in 2018.

The Kansas City, Missouri-based group for state insurance regulators kicked off its spring meeting Thursday, with a session on life insurance actuarial matters. The group will complete the meeting Tuesday, with joint session of its executive committee and its “plenary” — a body that includes the top insurance regulators from all jurisdictions that belong to the NAIC.

The NAIC has scheduled top-level sessions on matters such as a cancer insurance valuation table update, an effort to develop a short-term care insurance regulation, and an ongoing shift to a more flexible “principles-based” approach to setting life insurance and annuity reserves.

— (Related on ThinkAdvisor: 3 ways ACA change failure could affect agents and their clients)

The NAIC has not yet scheduled a high-level session on the future of the individual major medical market.

For now, the Affordable Care Act is still in force. The Centers for Medicare and Medicaid Services, an arm of the U.S. Department of Health and Human Services, has been operating under the assumption that the ACA and ACA-related regulations and policies will continue to govern the individual major medical market in 2018.

Members of Congress say they are trying to change the ACA. They have not made any effort to provide temporary funding for the current ACA subsidy programs or other programs while efforts to make major changes to the ACA are in progress.

Each NAIC committee that will convene at the spring meeting has an agenda item that lets the committee “discuss any other matters,” and the committees can use that time to talk about individual major medical.

The outcome of talks by regulators in state capitals and Congress could affect retirement advisors as well as health insurance agents and brokers. The current turmoil could affect any client, including an affluent early retiree who is not yet eligible for Medicare, who uses individual major medical coverage.

What Congress Is Doing

The U.S. House Rules Committee, a body that gives bills their final shape before the bills come up on the House floor, agreed Thursday to add a $15 billion risk-sharing program, or “invisible risk pool” program, to a major ACA-change bill, the American Health Care Act. Rep. Pete Sessions, R-Texas, the committee chairman, said House leaders could bring the bill up for a vote on the floor in the next few days, even though the House has started what’s supposed to be a two-week break from work in Washington.

The last public version of the AHCA would keep the ACA ban on medical underwriting in the individual market mostly in place, but some are saying that Republican leaders are working on a new version that could let states choose to bring back medical underwriting.

If the House passes a version of the AHCA bill quickly, the Senate would have to approve the bill before President Donald Trump could sign it into law.

— (Related on ThinkAdvisor: Collins and Cassidy unveil partial ACA repeal bill)

Some of the Republican senators needed to get a health bill through the Senate said the last known public versions of the AHCA bill were too much like the ACA to win their support. Other Republican senators said that version of AHCA was too hard on low-income people and sick people for them to vote for the bill.

Kaiser Poll

The Henry J. Kaiser Family Foundation conducted a survey of 1,203 U.S. adults ages 18 and older from March 28 through April 3.

Three-quarters of the Kaiser survey participants said Trump and his administration should do their best to make ACA programs work while the ACA is still law.

About 61% of the Kaiser survey participants said they agreed with the statement that, “President Trump and Republicans in Congress are now in control of the government, and they are responsible for any problems with [the ACA] moving forward.”

Calendar (Image: Thinkstock)

Product Filing Window

Insurers now provide individual coverage for about 19 million U.S. residents. About 12 million of those people bought their coverage through the ACA public health insurance exchange program. The rest bought their coverage outside the exchange system.

Originally, CMS asked insurers to submit individual major medical product applications and preliminary rates for 2018 from April 5 through May 3.

In February, CMS pushed the start of the filing period back to May 10, and the end of the filing period back to June 21.

Health insurers need to make detailed projections about revenue and health claims to create the filings. For now, they do not know whether current rules will apply in 2018, or if completely different rules will apply.

S&P Sees Early Signs of Stabilization in 2016 Numbers

One of the biggest sources of uncertainty is over the future of the ACA cost-sharing reduction subsidy, which helps low-income exchange plan users handle the cost of premiums, coinsurance amounts and co-payments. In the past, Republicans in Congress have tried to block funding for that subsidy, arguing that the administration of former President Barack Obama lacked congressional approval for providing the funding.

“If insurers don’t have clear assurances that they will be paid for [cost-sharing reduction subsidies] in 2018, they will have to make a decision on pricing and participation without adequate information,” according to a commentary from insurance rating analysts at S&P Global.

The individual health market was showing some signs of stabilizing in 2016, the S&P analysts write.

Thanks in part to big 2017 rate increases, they say, the market will probably continue to stabilize this year and next year if policymakers do what they can to increase insurer confidence.

“Every time something new (and potentially disruptive) is thrown into the works, it impedes the individual market’s path to stability,” the analysts write.

— Read 3 ways ACA change failure could affect agents and their clients on ThinkAdvisor.


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