Protesters who say insurance company lobbyists are working to undermine state efforts to implement the federal health care reform law interrupted the summer meeting here of the National Association of Insurance Commissioners, while the regulators themselves were split about the law's wisdom and expressed concern about their ability to enforce consumer protections handed down by Washington.
Amidst the ruckus, regulators managed to adopt a medical loss ratio form that leans more toward a narrow definition opposed by the health insurance industry.
During the NAIC's State Government Liaison Committee meeting, a group of protesters yelling that there was an "infestation of lobbyists" in the room handed out "lobbyist pandemic kits." The protesters quickly left the room before security could arrive.
Outside of the Washington Convention Center, a group of about 60 protesters were handing out the kits to meeting attendees as they exited the building.
Joshua Welter, a representative for the Washington Community Action Network, which organized the protest, said the group was there to support the insurance commissioners' efforts to implement the federal reforms–specifically the medical loss ratio, which is aimed at determining how much of an insurance carrier's premium must be directed toward payment of health care claims versus administrative costs.
Under the recently passed Patient Protection and Affordable Care Act, insurers will have to spend at least 80 percent of the premiums they collect on individual health care coverage, and no more than the remaining 20 percent on administrative costs. For carriers writing group coverage, the split will be 85/15.
"We have to support the insurance commissioners against more than a thousand lobbyists," according to Mr. Welter, who said the protesters were having some fun–handing out face masks to "protect from inhalation of lobbyist lies" and a clothespin to "combat lobbyist stench"–but at the same time wanted to underscore the seriousness of the topic.
"The money should be going to people's health care, not to health care companies' profits," he said. "This is an important thing that is affecting many people's lives."
Speaking before the NAIC, consumer advocate Wendell B. Potter, a member of the Center for Media and Democracy, told regulators they need to champion consumer interests rather than health care companies as they contemplated the form insurers will use to report their MLR.
Mr. Potter–a public relations executive with CIGNA, a major health insurer, before joining the CMD–argued that for-profit insurers, dominated by seven large carriers, will manipulate their MLRs to improve earnings and, in turn, enhance shareholder value. He called on the NAIC to keep a narrow scope in its form proposal and not allow health insurance interests to broaden the definition of the MLR calculations. "A lot of people are watching what you are doing here," he said.
He said he understands the pressure exerted by Wall Street interests on the writing of these rules is intense, but commissioners should not give in to them.
"You are the ultimate consumer representatives, and we trust that you will decide what is in their best interests and that premium dollars will go to their needs," he declared.
As it turned out, regulators adopted an MLR form that leans more toward a narrow definition opposed by the industry. With adoption of the form, it now goes to the U.S. Department of Health and Human Services for review and approval.
Agent and industry groups had called for a broader definition of "medical loss," arguing a narrow definition could adversely impact spending on such important health plan activities as case management, wellness, disease management, and fraud and abuse prevention programs.
Consumer groups countered that a broad definition would go against the intent of the health care reform law, and Sen. Jay Rockefeller, D-W.Va., had even threatened to revive the fight for a public option if the MLR was "watered down."
Under the form passed unanimously by the NAIC (with one abstention–Pennsylvania Commissioner Joel Ario cited a conflict of interest because he will be taking a job at the U.S. Department of Health and Human Services), insurers will have to report spending on categories such as:
o "Expenses for health improvements other than health information technology."
o "Health information technology expenses related to health improvement."
o "Deductible fraud and abuse detection recovery expenses."
Health Care for America Now–a group that wanted regulators to make the minimum MLR requirements as tight as possible–called the adoption of the blanks proposal "a step toward ending the health insurance companies' stranglehold on our health care."
"The top state insurance regulators from across the nation voted to put patient care above insurance company profits," said HCAN Executive Director Ethan Rome in a statement.
America's Health Insurance Plans, meanwhile, praised the openness of the process at the NAIC but expressed concerns about the blanks. The version approved "could have the unintended consequence of turning back the clock on efforts to improve patient safety, enhance the quality of care and fight fraud," AHIP President Karen Ignagni said in a statement.
AHIP sent a letter to the NAIC contending that regulators should let insurers include fraud prevention and detection expenses, utilization review costs, individual policy wellness expenses, and other expenses in MLR calculations.
In a related development, Maine Insurance Superintendent Mila Kofman introduced a resolution, co-sponsored by Florida Insurance Commissioner Kevin McCarty and approved by the NAIC Executive Committee, recognizing the "invaluable" role agents and brokers play in the service of health insurance to both individuals and small businesses.
Commenting on the MLR form, Nicole Allen, senior vice president of strategic resources for the Council of Insurance Agents and Brokers, said: "I think [the NAIC] did go more narrow on some of the definitions than we wanted."
But she praised the NAIC for recognizing the part agents and brokers will play in the health insurance exchanges called for in the reform law once they are set up. She said agents and brokers are critical in guiding individuals and small businesses in finding coverage that suit their needs.
As regulators gathered in Seattle, some commissioners cited concerns about their authority to enforce consumer protections, according to The New York Times.
In an Aug. 14 story, the Times said insurance commissioners "in about half the states say they do not have clear authority to enforce consumer protection standards that take effect next month."
Without the proper authority, the Times noted, "the ability of consumers to secure the benefits of the new law could vary widely, depending on where they live."
The story added that regulators are taking different approaches to correct the issue, from asking state legislators to expand their authority to relying on "their powers of persuasion, the good will of insurers, or general state laws that ban unfair or deceptive trade practices."
If a state fails to enforce new federal standards in the law, the federal government will step in to do so, according to the Times.
"Under the new federal standards," the story explains, "insurers generally must offer coverage to children under 19 and must allow adult children up to age 26 to stay on their parents' policies. Insurers cannot charge co-payments for preventive services or impose a lifetime limit on benefits; must allow consumers to appeal a denial of benefits; and cannot rescind coverage, except in cases of fraud or intentional misrepresentation."
The full Times story–including a list of the states that believe they may have issues and possible solutions they are exploring–is available at http://nyti.ms/d7tPq6.
Allison Bell and Phil Gusman contributed to this article.
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.