The National Association of Insurance Commissioners held its Spring Meeting in New Orleans earlier this month, and although the town is known for the great night life that awaits conference goers when work is done, the NAIC meeting is no ordinary work conference. I’m not sure there are many organizations that can match the standing-room-only attendance at the 2-hour hearing on Big Data that began at 8 am on Sunday morning. But more on that later.
Moving Forward on Rules for Prescription Drug Benefit Management
For those who follow health insurance matters, the meeting covered everything from the routine to the rousing (for health policy wonks, anyway). On the routine end, work continued on revisions to Model #22, the Health Carrier Prescription Drug Benefit Management Model Act. The Regulatory Framework Task Force Model #22 (B) Subgroup began calls in late February to consider comments from consumer representatives and other stakeholders on the model act, which addresses prescription drug benefit transparency, tiered formularies, and exceptions processes. The Task Force met at the Spring Meeting to hear stakeholder comments, and will continue with calls every other week to complete a revised Model. As observers of the effort to update the network adequacy model act can attest, the process is likely to require many calls over many months before a final version is adopted.
Debates over Special Enrollment Periods for Marketplace Plans
On the rousing side, there was some spirited discussion in the Health Care Reform Regulatory Alternatives (B) Working Group on Special Enrollment Periods (SEPs). The Blue Cross Blue Shield Association (BCBSA) shared findings from an industry-funded Oliver Wyman report on the use of SEPs. BCBSA said the report suggests those who use SEPs to enroll in Marketplace coverage outside of open enrollment are generally enrolled for shorter periods of time and use more health care services. The recent federal guidance requiring greater documentation for those who request an SEP is helpful, BCBSA said, “but it’s after coverage has started.” Regulators pressed the representative for more details on the findings, asking, for example, whether the report lumps all SEPs together or if the data breaks down enrollment length and claims costs by the different SEPs that are available (for example, due to a permanent move rather than loss of other coverage). However, that data is not available in the report, nor is there data to show reasons enrollees allow coverage to lapse (for example, because an enrollee obtained other coverage).
My fellow consumer representative, Sarah Lueck, offered a consumer perspective on SEPs, noting that any solutions to the issues raised by insurers must be evidence-based and targeted at specific, documented problems. She reported that SEPs are actually underutilized; fewer than 15% of those who are eligible are using them, and churn – where individuals cycle between sources of coverage – is normal in the non-group market. Furthermore, one proposed solution – to require greater documentation before people may enroll in coverage – may actually exacerbate the concerns raised by insurers. That’s because the people who are going to work the hardest to obtain documentation from a former employer or hunt down proof of address will be those who really want health insurance, resulting in lower enrollment, particularly among young and healthy.
Regulators had a range of reactions to the presentations. A regulator from Montana noted that federal regulators had eliminated the requirement for health plans to provide a certificate of creditable coverage to individuals when they leave an employer’s health plan. Those certificates, which documented a period of coverage, would have been helpful for individuals who need to document a loss of coverage to trigger an SEP. Another regulator from Wisconsin noted that the majority of states have Federally Facilitated Marketplaces, so it will fall to CMS to address SEPs, not state regulators. And although the Working Group didn’t indicate any further action on SEPs, the Wisconsin regulator said it was an issue to watch, particularly with insurers’ claims that their experience with SEPs may affect 2017 rates.
States Interested in Balance Billing Regulation
The Health Care Reform Regulatory Alternatives (B) Working Group also heard a report from America’s Health Insurance Plans (AHIP) on the status of balance billing legislation, something CHIR has been tracking in the states and in the President’s proposed budget. Consumer representative Claire McAndrew provided the consumer perspective, thanking the regulators for the work the NAIC has done to include balance billing in the Network Adequacy Model Act and noting that the provisions there are more consumer protective than what was adopted in the federal Notice of Benefit and Payment Parameters rule. While the Working Group didn’t indicate any plans to take further action on balance billing, the B committee has said balance billing is an issue it will watch and consider for further action, including possibly a model act that addresses any issues not resolved in the network adequacy model act adopted last year.
Adjusting Risk Adjustment: Assessing Proposals to Modify one of the ACA’s Risk Mitigation Programs
In the main health care committee of the NAIC, known as the Health Insurance and Managed Care (B) Committee, representatives of the National Alliance of State Health CO-OPs presented a proposal for a state-based solution to what they said are the shortcomings of the federal risk adjustment program. The risk adjustment program has been under considerable scrutiny. CMS has issued a white paper describing the current risk adjustment program and options to modify it, and held a national meeting in March to hear from stakeholders. At the New Orleans Meeting, state regulators heard from the American Academy of Actuaries (AAA) on their own analysis of the program, which concluded that it was working largely as intended. In contrast, the coalition of CO-OPs and small insurers, known as CHOICES, says the CMS proposal would provide help that is too little and too late for plans that are struggling to stay afloat. At NAIC, an actuarial subcommittee is now undertaking its own review with a meeting this week; however, it’s not clear if the NAIC will weigh in with CMS in support of the CHOICES proposal, as representatives of that coalition have requested.
Using Big Data in Insurance: Debating the Benefits and Risks
And finally, on that Big Data hearing that packed a big convention hall so early on a Sunday morning, the Market Regulation and Consumer Affairs (D) Committee Big Data Working Group heard testimony from representatives of insurers and consumers on the use of Big Data in all lines of insurance – auto, life, homeowners, and health insurance. The hearing largely focused on the data insurers have and use in evaluating claims, setting prices, and designing products, and only touched on privacy concerns, disclosures to consumers, and risks for consumers. Unfortunately, there was relatively little discussion of how regulators can use all the data insurers already have to better target oversight and enforcement, something CHIR mapped out in this paper last year. But the work group has said this hearing was a first step in obtaining a broad understanding of how Big Data is being used in the insurance industry and how regulators can make use of it “to enhance the efficiency and effectiveness of insurance regulation.”
As work unfolds on these issues and others before the NAIC, we’ll provide updates here on CHIRblog, regardless of whether it falls under “routine” or “rousing” for the health policy wonks among us.