The Academy's Exchanges Work Group responded on Oct. 4 to a request for comments from the Department of Health and Human Services on the exchange-related provisions in Title 1 of the Affordable Care Act (ACA). The letter included responses to questions related to qualified health plans, actuarial value, increasing and facilitating participation in the exchanges, enrollment and eligibility, quality standards, and risk adjustment.
Legislative and Regulatory Updates
Gov. Arnold Schwarzenegger (R-Calif.) signed several health reform bills into law on Sept. 30. The most notable legislative package (SB 900 and AB 1602) will create the first state insurance exchange in the United States—the California Health Benefit Exchange—and an independent, five-member oversight panel that will determine how the exchange will operate. The ACA gave states a January 2014 deadline to create exchanges to ensure that insurance oversight agencies would have sufficient time to review plans that would qualify to be included in an exchange.
Gov. Schwarzenegger also signed bills that will:
Prohibit insurers selling individual market policies from refusing to sell or renew coverage to children with preexisting conditions.
Require health insurers to cover dependents until the age of 26.
Prohibit health insurers from rescinding an insurance policy unless fraud or intentional misrepresentation of fact was evidenced.
Require independent actuaries to review and certify insurers' rate filings to ensure premium costs are calculated accurately and require all proposed rate increases be posted on both department and insurer websites to increase transparency.
Require health care service plan contracts to cover certain preventive services with no cost-sharing.
The governor vetoed bills that would have:
Prohibited health plans from collecting premiums from a policyholder and then rescinding that coverage after the policyholder became ill.
Banned health plans from raising rates more than once per calendar year.
Required most health insurers to provide coverage for the treatment of mental illness and substance abuse equivalent to the coverage provided for physical illness.
A federal judge in Michigan ruled on Thursday that the new health care reform law, which establishes an individual mandate, is constitutional. The plaintiffs, a number of Michigan residents and the Ann Arbor-based Thomas More Law Center, argued that Congress did not have the power to impose a mandate because the decision to buy insurance is not an "economic activity" covered by the interstate commerce clause in the Constitution. The judge, however, dismissed the argument and ruled that it falls within the scope of Congress's authority. The plaintiffs plan to appeal. Other courts have dismissed similar lawsuits on technical grounds, but this is the first court to rule on the merits of any challenge to the law. Similar suits are pending in Florida and Virginia courts.
The draft regulation on medical loss ratios was unanimously approved by the National Association of Insurance Commissioners' (NAIC) Patient Protection and Affordable Care Act Actuarial Subgroup, Accident and Health Working Group, and Life and Health Actuarial Task Force during a conference call on Oct. 4. The regulation was sent to the NAIC's Health Insurance and Managed Care Committee (B Committee), which exposed it for comments. Comments are due by Monday, Oct. 11. The committee has scheduled an Oct. 14 conference call to adopt the regulation.
Have ideas to share? We want to hear from you. E-mail us at: health@actuary.org