Effective rate review office to enhance regulatory framework for ACA in CNMI

The CNMI Office of the Insurance Commissioner is one step closer to becoming an effective rate review office for health insurance carriers and providers in the CNMI. Rep. Edmund S. Villagomez has pre-filed House Bill 18-159, “To amend the Commonwealth Insurance Act of 1983…to provide for a premium rate review process…”

“The filing of this bill is a milestone for us, as we have been working diligently with Commerce since early this year to get this bill together so as to provide their office with clarity on the authorization to review health insurance rates in the CNMI,” said Villagomez.

Under the new federal health care law, all health insurance carriers are required to file their insurance rates and get approval from the states/territories and U.S. Department of Health and Human Services before they are used. Currently, under the CNMI law, all rates are file-and-use with the exception of tariff rates (Workers Compensation and Automobile rates). House Bill 18-159 provides the Insurance Commissioner with authorization and framework necessary for the CNMI Rate Review Office to become “effective” under definition and guidance of the Affordable Care Act. The Rate Review Office is a federally funded program, through a federal grant award from HHS.

“In essence, this bill provides the proper regulatory framework for rate review under the Office of the Insurance Commissioner to determine whether rate increases or filings are deemed as reasonable or unreasonable, a much needed process that will be informative and transparent to all carriers and issuers, as well as to the consumers—giving them the opportunity to comment on all future rate review filings,” said Brien Sers Nicholas Jr., the newly hired project manager for the Rate Review Office.

The ACA has been commonly referred to as a three-legged stool, meaning that, for the ACA to function properly, all three legs must be put into place. This includes the individual and employer mandates, and the market reforms. Of the three, only the market reform extends to the territories. The rate review process is a requirement under the market reforms. The ACA mandated pre-filing of rates for 2014 and beyond, and the CNMI health insurance carriers and/or issuers are subjected to the same federal law. With the new market reform requirements in place, health insurance carriers in the CNMI are required to file first with the CNMI Office of the Insurance Commissioner before implementing or charging their fees.

“Throughout this year, the carriers voiced their concerns, threatened to pull out from the CNMI insurance market, and warned of significant rate increases as the extension of ACA provisions to the territories are unbalanced,” said Kaitlyn R. Neises-Mocanu, consumer advocacy officer under the CAP Office. “The ACA is about affordability and availability, and now that availability is guaranteed by federal law, we need to work toward bringing the best and most affordable health insurance product to our citizens and the rate review process is a gap we need to fill.”

The CNMI OIC, working closely with House legal counsel Joe Taijeron, has identified other areas requiring regulations, such as the handling of individual polices and small group plans, financial examinations, market conducts, solvency review, amongst others, that are under review.

“Overall, this bill is not only about complying with the ACA, the rate review process is an important component for the insurance division,” said Commerce Secretary and Insurance Commissioner Sixto K. Igisomar. “This bill is the first step toward becoming an ACA effective rate review office and toward becoming an NAIC [National Association of Insurance Commissioners]-accredited CNMI Department by 2020.”

The Department of Commerce will hold a town hall meeting on the Affordable Care Act tomorrow, Jan. 8, 2014, from 5:30pm to 7pm at the American Memorial Park theater. Representatives will discuss the background of the ACA in the CNMI as well as where we are currently regarding implementation and future implementation plans. Questions and comments from the public will also be taken. [I](Office of the Governor)[/I]