Panel warns against possible ACA loopholes

Commissioners will have consumer recommendations in hand when they draft model health insurance legislation and regulations.

By — Posted Aug. 28, 2012

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The Affordable Care Act takes some major steps to rein in insurance company abuses, but a panel of consumer advisers to the National Assn. of Insurance Commissioners says it will be up to government regulators to make sure health plans don’t discover and exploit loopholes in the new rules.

The group of 20 consumer representatives to the NAIC released a report Aug. 13 with dozens of detailed recommendations to state insurance regulators and the U.S. Dept. of Health and Human Services that the authors want to see followed as states implement the ACA (link).

The authors work for organizations such as the American Heart Assn., American Cancer Society and Consumers Union as well as state-specific advocacy groups. However, the report does not represent the policy of those groups specifically.

The report is limited to the insurance reforms in the ACA, so it does not address the other elements in the reform law, such as Medicaid expansion or health care delivery models.

Many of the recommendations identify ways insurers could circumvent the spirit, if not the letter, of the law and suggest ways to block that from happening. For example, the report said insurers could intentionally delay responding to applications for coverage from people with chronic illnesses. Doing so could prompt them to choose other insurers, meaning insurers that are slow to respond avoid paying for costly medical care associated with the applicants’ illnesses. For that reason, the group recommends setting a time limit by which a company has to respond to an application for coverage.

There have been no accusations or indications that insurance companies have done anything specified in the report.

The report was distributed to NAIC members as well as staff at the U.S. Center for Consumer Information and Insurance Oversight, said Sabrina Corlette, a consumer representative and research professor at the Center on Health Insurance Reforms at Georgetown University in Washington.

She said NAIC members are drafting model legislation for states implementing the ACA, so the consumer recommendations hopefully will help them understand the implications state rules could have on people buying and depending on health insurance beginning in 2014.

“We try to come at these issues with a consumer lens — what it means for patients and for families trying to navigate this crazy health system we have,” Corlette said.

Health insurance trade group America’s Health Insurance Plans is reviewing the report and has no comment, said spokeswoman Clare Krusing.

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