Implementing Health Care Reform

Where We Are Jessica Fulginiti Waltman

Senior Vice President, Government AffairsNational Association of Health Underwriters

Recap on Legislation• President signed Patient Protection and Affordable Care

Act (PPACA) on March 23

• Makes significant statutory changes affecting the regulation of and payment for many types of private health insurance – many insurance market reforms

• Will require almost all private sector employers to evaluate the health benefits they currently offer and consider whether they are compliant

• For those without access to employer coverage, new individual mandate to purchase and maintain minimum coverage

Recent Regulations

• Many regulations have been issued:– Dependent to Age 26

– Retiree Reinsurance Program

– Insurance Plan “Grandfathering”

– Annual and Lifetime Limits for “Essential Benefits”

– Small Business Tax Credit

– Preventive Services

– Medical Loss Ratios

– Preexisting Condition Insurance Plan Program

– State Based Waivers

Political Impact• Federal Election Results—Factors to

Consider– Historic number of new legislators– Tremendous turn-over in staff and committees– Need to off-set repeal changes with other spending

cuts– House actions will be tempered by tight

Democratic majority in the Senate and President Obama

– GOP will need to balance delivering on promises now and goals for 2012• What realistic improvements can be made to

PPACA in the short-term?• What may need to wait until 2012 and beyond?

– How will the budget battles impact PPACA moving forward?

• State Elections Impact Health Reform Too– Litigation (26-state suit, Virginia’s

independent challenge)– State impact on implementation (Medicaid,

Exchanges)– Extreme variations in State political change—

California to Wisconsin

PPACA and the Federal Budget• Congress currently considering another stopgap spending bill

– Includes minor cuts to health spending

– Designed to avoid a government shutdown while House leaders work out their differences with the Senate and administration

– Long-term bill passed by House includes $60 billion in cuts

– Many amendments target PPACA implementation including those offered by Congressman Price and Congressman Burgess

– Their proposals would defund MLR implementation efforts and also defund the HHS Center for Consumer Information and Insurance Oversight

Medical Loss Ratio Requirement• 85% Large Group and 80% Small Group/Individual

• NAIC was charged with determining definitions, rebate process– Passed resolution in support of Agents in August and sent multiple letters to DHHS

– Attempt to amend NAIC MLR regulation definition of earned premium to exclude agent commissions was withdrawn

– DHHS and NAIC agreed to a taskforce to resolve this issue

– NAIC group on this issue actively meeting with a public hearing scheduled for March 27

• DHHS charged with governing regulation, certification, enforcement, regulatory authority, waiver process– IFR issued on December 1 does not provide adequate compensation relief

– Individual market waiver with agent/broker access and compensation a market disruption criteria

– NAHU has formally requested a pass through or failing that an implementation delay

MLR• NAHU pursuing a multi-faceted strategy

• MLR is our #1 Legislative/Regulatory Priority

• Avenues we are working on include:– federal bipartisan legislation for a permanent statutory fix

– working with state legislators, insurance regulators, and governors on state-related action

– providing media outreach about the impact the requirements will have on consumer access to agents and brokers and private-sector insurance jobs

– helping states with MLR waiver applications

– continuing talks with DHHS

Exchanges• Exchange creation is not optional under PPACA– States must push forward or HHS will step in if sufficient

progress is not made by January 1, 2013

– HHS exchange guidance to states is expected in the very late spring 2011

• HHS requested comments relating to specific questions concerning exchange development– NAHU met with HHS repeatedly on this issue over the last six

months, including during the last few weeks

– NAHU submitted formal comments

– Role of the agent and role of the navigator top subjects

State Exchange Activity• NAIC issued basic framework of a model

– NAHU submitted comments on model and participated in development process

– NAIC is also developing topic-specific exchange white papers on policy areas not included in their model

– NAHU has a modified NAIC model with a governance structure that allows for a very specific role of the agent

– Currently working with NAIC to address the role of the agent in their exchange white paper concerning producers

• NAHU chapters and our exchange coordinators are actively working on development in all 50 states

Key Exchange Issues

• Our Key Exchange Issues:– State-based exchange, not federal intervention

– Role of the agent/broker and role of navigators

– Preservation of an outside market

– Reasonable governance structure

– Separation of Risk Pools

– Subsidies

– Assessments

Moving Ahead• Targeted health reform legislation centered on business friendly

adjustments/low-hanging fruit– 1099 requirements

– 105 (h) non discrimination

– MLR requirements

– Small business affordability requirements

– Grandfathered plans

– Exchange provision adjustments

– Transition and changes to rating requirements

• Other issues– CLASS ACT

– State Waivers

– Use of subsidies inside and outside exchanges

– True cost containment measures

• Lots of interest in making adjustments—depends whether or not Congress and Obama are serious about making reasonable changes or if they will just play politics

Moving Ahead

• NAHU visibility is high

• Broker role in the spotlight

• MLR is our top priority

• Press initiatives

• Grassroots efforts

• Public Relations initiatives

• Community service highlights

• Business friendly initiatives

For More Information

Jessica Fulginiti Waltman

703-276-3817

jwaltman@nahu.org