2014 Brings New Protections for Consumers – and New Oversight Responsibilities for States

NAIC Consumer Representatives Release New Report on Enforcement of ACA Protections

January 1, 2014 marked the last day of school vacation in my household, but it was the very first day of some momentous changes in our nation’s health insurance system. We celebrated a series of firsts, including:

  • The first time individuals – no matter where they live, their age, or their health status – are guaranteed issue of a health insurance policy.
  • The first time individuals are entitled to a basic, minimum set of comprehensive health benefits to cover things like hospitalization, prescription drugs, doctor visits, mental health services, and maternity care.
  • The first time individuals can be assured they won’t be charged more for health insurance because of their health status or gender.
  • The first time individuals won’t have to face a pre-existing condition exclusion on their health insurance policy.
  • The first time individuals are guaranteed real financial protection from their insurance – through requirements that insurers provide a minimum level of coverage and a cap on consumers’ out-of-pocket costs.

These consumer protections will offer people greater access to more affordable and more comprehensive coverage. But they also impose new and important responsibilities on the primary regulators of private health insurance – state insurance departments (DOIs). In most states, it will fall to DOIs to ensure that consumers receive the full benefits they have been promised under the law. States oversee insurers’ behavior and ensure they comply with the law through both pre-market review of plans and rates and ongoing monitoring of insurers’ conduct in the marketplace. This latter activity – often referred to as “market conduct regulation” is the subject of a new report, recently published by Consumer Representatives to the National Association of Insurance Commissioners (NAIC). As one of those consumer representatives, I’m proud to be associated with this report, which is titled Strengthening the Value and Performance of Health Insurance Market Conduct Examination Programs: Consumer Recommendations for Regulators and Lawmakers.

Funded with support from the Robert Wood Johnson Foundation and the Nathan Cummings Foundation, the report provides recommendations to ensure that the ACA’s insurance reforms work for consumers. Through a review of best practices and interviews with state regulators, the report recommends that DOIs:

  • Develop and support specialized teams to conduct market conduct reviews of health insurance companies and products, with formal continuing education programs and technical training on specific policy issues.
  • Conduct both regular and targeted market conduct exams, and coordinate with other states, particularly for insurers whose business crosses state borders.
  • Ensure that market conduct checklists reflect the changes made by the ACA, and incorporate a broader set of data sources into exams, such as accreditation data, HEDIS and CAHPS.
  • Make market conduct reports publicly available.
  • Establish multi-agency teams to meet on a regular basis to compare notes about marketplace activity and trends among insurers.
  • Regularly update the coding system for tracking consumer complaints, and improve education and outreach to consumers so they know who to call and what to do when a problem arises.

While not all the recommendations will be feasible in every state, the report provides thoughtful suggestions for states looking for ways to enhance their market conduct strategies and consumer protections. These and other recommendations are available in the full report, which can be downloaded here.

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