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NAIC Considers Model to Regulate Discount "Health Plans"

The National Association of Insurance Commissioners (NAIC) is seeking comments on a draft of its Medical Discount Plan Organization Model Act. The purpose of the...
March 9, 2005

The National Association of Insurance Commissioners (NAIC) is seeking comments on a draft of its Medical Discount Plan Organization Model Act. The purpose of the act is to promote the public interest by establishing standards for medical discount plan organizations so that consumers are protected from unfair or deceptive marketing, sales or enrollment practices.

The law would regulate licensing requirements; minimum capital requirements; deposit requirements; examinations and investigations; fees; refund requirements; bundling of services; filing requirements and provider agreements and listing requirements. The model act would also outline marketing and disclosure requirements.

Consumers are tricked by advertising promising a "health plan" and "health coverage" without ever using the word "insurance," said deputy commissioner of health-care administration for the Vermont Insurance Division Paulette Thabault. The NAIC subgroup working on the model is headed by Florida Insurance Commissioner Kevin McCarty. Under a new state law passed unanimously by the Florida Legislature last year, medical discount plan organizations are required to be licensed with the state's Office of Insurance Regulation by March 31, 2005.