Obamacare’s state impacts dominate spring NCOIL meeting
Even with Sen. Ted Cruz also in town, the struggle between state lawmakers and regulators over who would take the lead on health-care policy continued to dominate the National Conference of Insurance Legislators’ agenda during the group’s spring meeting in Little Rock, Arkansas this past week. Nearly every facet of health insurance was under examination, from long-term-care credits to telemedicine to the dying, underfunded co-ops set up under Obamacare.
Of the 23 nonprofit state co-op insurers granted seed funding by the Affordable Care Act, 12 already have gone insolvent and the U.S. Department of Health & Human Services estimates that nine of the remaining 11 are in precarious financial condition. At NCOIL, a major focus was on which gets priority for the remaining available revenues – the claimants or the federal loan payments? That question should be easy to answer.
Arkansas Gov. Asa Hutchinson delivered the keynote address to explain why everybody should once again pay attention to his state, as we all did when “private option” Medicaid seemed to be the answer. The second round of the Arkansas approach is a proposal to impose requirements that able-bodied adults have to work or participate in vocational training to qualify for the state Medicaid program.
Interestingly, a major issue in the health insurance exchanges is the “risk corridor” established to even out the odds of catastrophic claims among companies who offer coverage, since there is no more underwriting. During the sessions, it was reported that one of the smaller companies now owes one of the mammoth companies 42 percent of the premium they collected last year. Not gonna happen, in my judgment. This will simply be ignored like many other features of this patchwork law – features that couldn’t be fixed while it was being considered because it would slow down legislative momentum.
Six state regulators attended the meeting, and reported that the National Association of Insurance Commissioners is working on a structure for “network adequacy,” with some urgency. There are reports of large networks, even those covering major cities, that do not include a single anesthesiologist. One proposal is a rule requiring there be providers within 60 miles or 60 minutes in a rural area, and 30 minutes or miles in an urban community. As Arkansas Insurance Commissioner Allen Kerr put it: “Network adequacy was not thought through at the federal level.”
The American Medical Association proposed three model laws, including a bill addressing the conditions under which an out-of-state doctor licensed in his or her own state could practice telemedicine across state lines. The AMA’s second bill made a distinction between telemedicine (“real time two-way electronic audio-visual communications”) and telehealth practices (patient remote monitoring, telephone consultations and education) with regard to health-plan reimbursements to providers. Their final model bill proposal dealt with the accuracy of network-provider directories, as patients increasingly deal with costly surprises when they learn they’ve inadvertently gotten care out-of-network. Both the regulators and the lawmakers oppose any federal benchmark for networks.
NCOIL’s docket for non-health insurance matters included potential guidelines from the Federal Insurance Office on auto insurance “affordability.” The feds are considering a standard that auto insurance should not cost more than 2.0 percent of household income, which did not go over well at all with the states’ representatives.
The major property-casualty interests manifested at the spring meeting concerned opting out of workers’ compensation programs and the projected use of “big data” by the auto and homeowner writers. NCOIL plans to investigate the possibility that the successful model law on credit-based insurance scoring brokered and published by the organization might be a platform for a closer look at an entire range of telematics and data mining, which could have unprecedented impact on the property-casualty insurance business and its customers.
As has often been the case the last couple of years, there was another round of gnashing of teeth over the possible, or even probable erosion of state insurance regulation as our federal agencies negotiate internationally – particularly with regulators from the European Union. State lawmakers and regulators widely fear mandated adoption of European capital and solvency standards. Trade association representatives noted that the first “covered agreement” to take shape will looks to reduce requirements for collateral to be posted in connection with reinsurance written across international borders.
