Monday, April 5, 2010

Health reform implementation

Health insurance reform moves to state policy arenas

The passage of health insurance reform certainly has stirred emotions here in Wyoming, where statewide candidates seem to be in a contest to see who can come up with the most frightening descriptions of it to justify their calls for repeal.

We see it as a major victory for Wyoming children and families.

The new law advances the financial security and personal health of Wyoming citizens. It delivers reliable coverage that won't disappear if they get sick or lose a job.

One of the chief advantages of the new law is the intent to cover everyone. The law prohibits insurers from refusing coverage because of pre-existing conditions and it enables families to keep their children on their policies through age 26.

The requirement that insurance companies spend at least 85% of their revenues on the health care of their customers likewise is positive and is representative of the law's intent to bring some sunshine into a system that for too long has been, shall we say, less than transparent. More transparency is critical to controlling costs and improving the quality of care.

Barb Rea, the ESPC's part-time development director, served on the Wyoming Healthcare Commission for several years as an appointee of Gov. Dave Freudenthal. That service and her own studies have given her a broad knowledge of the issues involved in reforming health care. We asked her to represent the ESPC on the National Association of Insurance Commissioners’ consumer liaison committee. The NAIC will be instrumental in designing the rules under which the states will implement the new health insurance reform legislation.

Rea recently attended the NAIC meeting in Denver and offered the following observations:

I have just returned from the spring meeting of the National Association of Insurance Commissioners (NAIC) as one of several new consumer representatives serving on consumer liaison committee. This organization and this committee will play an important role as we begin implementation of health reform legislation.

Wendell Potter, posts an excellent summary of this meeting and the role of the NAIC in the Huffington Post which you can read here.

The short version is that the states will be responsible for much of the work of implementing the new health reform bill. The law requires that many new regulations be written to govern the way health insurers do business. This work will fall to not only to the U.S. Department of Health and Human Services but also to the National Association of Insurance Commissioners (NAIC).

The NAIC exists to help state insurance regulators achieve five primary goals:
  • protect the public interest;
  • promote competitive markets;
  • facilitate the fair and equitable treatment of insurance consumers;
  • promote the reliability, solvency and financial solidity of insurance institutions;
  • and support and improve the state regulation of insurance.
So, the NAIC will play an important role in developing standards that both protect consumers and promote uniformity throughout the industry. Many of these laws, regulations and/or rules developed on the federal level will then be modified and adopted at the state level to give states the authority to enforce them.

There is no time to waste – many need to be in place within the next 6-12 months. So much of our time was spent determining how to ensure that the consumer perspective was going to be represented as the NAIC moves forward.

The NAIC executive committee stated its intention to utilize its existing committees to complete these responsibilities. The role the consumer liaison committee will play is still not clear. The consumer liaison committee specifically asked the NAIC:

  1. to create a publicly accessible “plan of action” developed with input from consumer representatives;
  2. to fully incorporate consumer advocates into the NAIC health reform work plan;
  3. to prioritize their tasks based on the needs of the consumers;
  4. and to significantly expand consumer participation at the NAIC proceedings.
While we await a response from the governing board of the NAIC, the consumer liaison committee will begin immediately to assess our resources and organize into work groups around the most urgent issues:
  • High risk pools;
  • Grants for establishing ombudsmen offices to assist consumers in every state;
  • Medical Loss Ratio (MLR);
  • Rate reviews;
  • New insurance policy requirements (e.g.) pre existing conditions, keeping young adults on parent policies, first dollar coverage for prevention.
Next steps for Wyoming and the ESPC
It was humbling to be among such knowledgeable and effective colleagues, many of whom have been working on reform for most of their careers. We certainly have a lot to gain as this process will provide both context and product for much of the decision-making that will fall to our legislature. It should make their job easier.

But, it soon became clear to me that the process of implementing anything at a state level here (or in any other state already fighting the intent of this law) was going to be more complicated than cutting and pasting good ideas into Wyoming law. Our first task will be to cut through the rhetoric and talk about how the new law addresses the health care access problems people are facing.