State insurance regulators said they will do their part to enforce elements of the federal healthcare reform legislation where they are required to do so, but acknowledged that state legislatures could fight the mandates.

Oklahoma Insurance Commissioner Kim Holland, secretary-treasurer of the National Association of Insurance Commissioners (NAIC), explained during a recent teleconference she predicts her state’s lawmaking body may put up some resistance to the upcoming federal law. Nevertheless, Kansas Insurance Commissioner Sandy Praeger, chair of the NAIC Health Insurance and Managed Care Committee, said despite the threat of lawsuits, insurance regulators will start implementing reforms where they are required to do so.

“We’ll assume this will become law and any constitutional challenge won’t be effective,” said Praeger. “We have more to lose by not being ready than by waiting and seeing. We’ll move ahead.”

Under the reform measure passed by the U.S. House on March 21, the NAIC is to compile national standards on medical loss ratios to the U.S. Department of Health and Human Services (HHS), according to Praeger. The bill, she said, requires health plans to report the proportion of premium dollars spent on medical services and other costs and provide rebates to consumers for the amount of premium spent on clinical services and quality less than 85 percent for large group plans and 80 percent in the individual and small group markets. This requirement goes into effect for the plan year 2010 with the rebate provision set to take effect at the beginning of 2011.

“The bill calls for the NAIC to work with the HHS in a number of different areas, in terms of developing a process and standards for some of the provisions, so the presumption is, at this point, is that states would be involved on the enforcement side,” said Holland. “Those are still in development.”

State Regulators Ready for Health Reforms (Ins. & Financial Advisor 3/23/10)

April 1, 2010