States scrambling to ensure they comply with health reform law

The New York Times reports that some states are scrambling to ensure they can comply with the new federal health law. "Insurance commissioners in about half the states say they do not have clear authority to enforce consumer protection standards that take effect next month. Federal and state officials are searching for ways to plug the gap. Otherwise, they say, the ability of consumers to secure the benefits of the new law could vary widely, depending on where they live."

States have to enforce many of the consumer protections in the law. For example: "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 Times reports, adding:  "If a state fails to enforce a standard, the federal government will step in to do so — as it did in several states after passage of a health insurance law in 1996" (Pear and Sack, 8/14).

USA Today: States could get federal help to stop some insurance rate hikes. "States plan to use $46 million in grants under the nation's new health law to help curb health insurance rate increases for consumers by seeking new regulatory powers, hiring rate experts and posting insurance company financial documents on the Web, according to grant application details. … Industry spokesman Robert Zirkelbach, of America's Health Insurance Plans, said companies support greater transparency on why rates are rising. 'It's medical costs that are driving those premium increases,' he said. Only about half of states have some authority to approve or deny rates before they take effect" (Young, 8/16).

Reuters: Meanwhile, people with pre-existing conditions who have been uninsured for at least six months are signing up for coverage. "The $5 billion high-risk pool program, which the Department of Health and Human Services (HHS) has said could cover 200,000 people each year until 2014, is an early test case for the healthcare law. Experts have said it will take months before the pools reach capacity. … [The pools] offer subsidized coverage until 2014, when the broader state-run insurance exchanges are due to go into effect and insurance companies can no longer deny coverage to people with pre-existing conditions. In states that opted to allow the federal government to run the risk pools, coverage started in August. Most of the pools are expected to be in effect by September, according to the government website, healthcare.gov"  (Lentz, 8/14).

Richmond (Va.) Times-Dispatch: In Virginia, the pools will help some, but not all. "[A]s plans have rolled out, higher-than-expected premiums, deductibles and eligibility criteria are emerging as barriers. For Virginians, premiums range from $289 per month for people up to age 34, to $616 per month for anyone over 55. There also is the $2,500 deductible and 20 percent co-insurance." Virginia is one of about 20 states that has opted to allow the federal government to run its high-risk pool" (Smith, 8/16).

The Denver Post: Colorado is looking toward setting up its health insurance exchanges. "The goal: a one-stop shop for health insurance where a person can find out whether they qualify for a government insurance plan such as Medicaid or a federal subsidy to meet monthly premiums, and then sign up for it immediately. A spot — either physical or online — where it's easy to compare plainly written plans so there are no surprises about what is covered and where the price of each plan is transparent. … By Sept. 1, Colorado must apply for a slice of $52 million available nationally for states to design their exchanges" (Brown, 8/15).

Finally, at the National Association of Insurance Commissioners' meeting in Seattle, they're focusing on how to define "medical spending" as required in the health law, The Sacramento Bee reports. "Starting in January, health insurance companies will be required to spend at least 80 percent of every premium dollar they collect on medical care for their subscribers [similarly, the law is 85 percent for large plans]. … The federal health care law designated the National Association of Insurance Commissioners to draft medical-loss ratio rules. The U.S. Department of Health and Human Services, however, would need to certify those rules. Concerned that the new rules governing so-called medical-loss ratios will affect their bottom lines, representatives from the insurance industry have arrived in force in Seattle to influence the discussion" (Caina Calvan, 8/14).