H OLDING P LANS A CCOUNTABLE IN H EALTH R EFORM J OSHUA D. G OLDBERG National Association of Insurance Commissioners August 4, 2010 State Coverage Initiatives Summer Meeting Minneapolis, Minnesota

Reform Timeline Temporary High Risk Pool Program Immediate Reforms: No Lifetime Limits Restricted Annual Limits Restrictions on Rescission First Dollar Coverage of Preventive Services Medical Loss Ratios with Rebates Exchanges Subsidies Individual/Employer Mandates Market Reforms Guaranteed Issue No Pre-Existing Condition Exclusions for Adults Rating Rules Essential Benefits Plans No Annual Limits for Essential Benefits Risk Adjustment Extended Dependent Coverage Internal/External Review No Pre-Existing Conditions for Children Disclosure of Justifications for Premium Increases Individual Market Reinsurance Program & Risk Corridors Temporary Early Retiree Reinsurance Program Co-Op Plans & Multistate Plans

Preemption Nothing in this title shall be construed to preempt any State law that does not prevent the application of the provisions of this title. PPACA §1321(d) Provisions of PPACA will potentially preempt state laws. Similar to HIPAA: Exceptions: Mandated benefits: States must cover cost of mandated benefits beyond essential benefits package. Grandfathered plans: States may not require grandfathered plans to be pooled with post-reform plans.

Rate Review Federal review of “unreasonable” rate increases. No federal authority to deny rate increase. May recommend exclusion from state-run Exchange May exclude from federally-run Exchange $250 million in grants to states to support rate review.

Medical Loss Ratios Clinical Care Costs + Health Quality Improvement Premiums - Taxes & Regulatory Fees 85% in large group market 80% in small group and individual markets HHS has authority to reduce to prevent individual market instability.

Rating Rules Adjusted community rating No health status Limited age (3:1 max) Limited tobacco (3:1 max) Geography Single risk pool requirements Individual and small group markets Grandfathered plans excluded

ME NY PA NH CT VT MA NJ VA NC SC GA FL WV KY AL MS MI WI MN IA HI AK KS NE ND SD MO IL IN TX MT ID NV UT WY CO NM AZ CA OR WA LA AR OK OH MD DE RI DC Community Rating 25.1:1 or greater Adjusted Community Rating Rating Band Variability: No Rating Structure 19.1:1 – 25:1 13.1:1 – 19:1 13:1 or less *Note: Michigan HMOs and Blue Cross/Blue Shield are restricted to 3.12:1 maximum variation. All others may use 3.96 maximum variation TN Small Group Variation

ME NY PA NH CT VT MA NJ VA NC SC GA FL WV KY TN AL MS MI WI MN IA HI AK KS NE ND SD MO IL IN TX MT ID NV UT WY CO NM AZ CA OR WA LA AR OK OH MD DE RI Rating Bands Hybrid Michigan Blue Cross/Blue Shield must use community rating. There is no rating structure for other carriers. DC Adjusted Community Rating Community Rating No Rating Structure Individual Market Rating

ME NY PA NH CT VT MA NJ VA NC SC GA FL WV KY TN AL MS MI WI MN IA HI AK KS NE ND SD MO IL IN TX MT ID NV UT WY CO NM AZ CA OR WA LA AR OK OH MD DE RI Rating Bands Hybrid Michigan Blue Cross/Blue Shield must use community rating. There is no rating structure for other carriers. DC Adjusted Community Rating Community Rating No Rating Structure Reformed Rating Rules

Reporting Requirements All plans must report to Secretary, State Insurance Commissioner and the Public: –Claims payment policies and practices –Financial disclosures –Data on enrollment and disenrollment –Data on claims denials –Data on rating practices –Information on cost-sharing for out-of-network providers –Information on enrollee and participant rights under PPACA –Other information specified by the Secretary

Transparency Disclosure of premium justifications Uniform definitions of insurance terms Uniform summary of benefits Coverage facts labels Exchanges Reporting requirements

Complaints and Appeals Internal review –Equivalent to DoL Regulations –Required for rescissions External review –Equivalent to NAIC Model –Extended to self-insured plans Consumer Assistance Grants

Enforcement Immediate Reforms Form review process States have not had opportunity to change laws Fallback enforcement may be tricky 2014 Reforms NAIC will develop models meeting federal minimum standards