NAIC appeals for ACA flexibility for territories

The National Association of Insurance Commissioners sent a letter to President Barack Obama to encourage the investigation of steps necessary to provide flexibility to territories on the applicability of the Affordable Care Act, and to quickly resolve the problems altogether.

The NAIC support is a result of territory commissioners requesting more flexibility on health care reform from the Department of Health and Human Services.

The Affordable Care Act, in amending the Public Health Service Act, extended health insurance market reform provisions of the ACA to all territories, including the CNMI, but left out other significant supporting components that ensure “affordability” and “premium-stabilization,” resulting in a reluctance of the CNMI health insurance industry to offer new plans in such an unstable market.

Under the ACA, no health insurance carrier is allowed to issue non ACA-compliant health insurance in the individual and small group market; they must file all health insurance rates for approval before use, they must include the essential health benefits prescribed by the finalized HHS regulations, they are not allowed to deny applicants with limited exceptions, and must comply with other new strict rules. Insurance carriers have expressed that complying with all of the new 2014 rules would open their businesses up to many new risks. As a result, carriers are currently renewing 2013 active insured only, if authorized through the office of the insurance commissioner, and not offering new insurance policies (for individual markets) or plans (for small group markets).

Although the directive from the President and the follow-up letter from NAIC is more clear and comforting than prior messages from HHS, Gov. Eloy S. Inos will continue to push for alternative flexibility and all options albeit legislative or administrative, and most importantly for our ability to have the choice, individually or collectively as U.S. territories, to decide on feasible and realistic options, whilst retaining the authority to regulate overall insurance industry and prevent federal enforcement of health insurance laws in the CNMI.

“As much as we embrace the ACA benchmark and philosophy of healthcare affordability, premium stabilization, and availability, it is prematurely extended to us, in its current form,” added Inos. “Clearly, if the intent of Congress is to extend the ACA to the territories then all adverse selection mitigating provisions would have been made available to territories in the beginning—whether as an option or full mandate.”

“With our President’s direct involvement, I am hopeful that he will ‘change his calculus’ and hear our plea that the current health care reform extension to our CNMI is mathematically and actuarially difficult to implement with market reforms only,” added Inos.

Available economic and actuarial reports for both opponents and proponents of health care reform agree that the ACA, as it is currently extended to the CNMI, is guaranteed to cause adverse selection in the CNMI and is not feasible without an exorbitant local financial drain.

“The industry is pleased that the NAIC followed up with President Obama by sending a letter requesting that his administration investigate steps that can be taken to alleviate the unintended problems that are now being faced in the Territories as a result of the ACA,” said Eric Plinske, branch manager for StayWell Insurance in the CNMI.

The Guam and CNMI health insurance industry supports the NAIC proposed idea of allowing health plans in the territories to not only renew policies that were in effect prior to 2014, but to also allow new policies to be sold as long as they meet the 2013 ACA provisions. The 2014 ACA provisions caused all four Guam-based regional insurance companies to stop selling new individual and small group policies since there are no mandates, health insurance exchange, sufficient federal premium subsidies, or a federal risk mitigation program for the insurance industry (risk adjustment, risk corridors, and reinsurance programs).

Plinske added that if the transitional period through 2016 would allow health plans in Guam and the CNMI to sell new policies that meet the 2013 ACA provisions, rather than 2014 ACA provisions, the regional insurance companies would likely start selling new individual and small group plans immediately. Absent of any health insurance association in the CNMI, Plinske has been very active in representing the health carriers and sharing information to all four CNMI health insurance issuers selling insurance in the small group market: TakeCare, NetCare (Moylans), Island Homes (Staywell), and Tokyo Marine (SelectCare/Calvo’s).

For more information, contact Commerce at 664-3077 or email sec.igisomar@commerce.gov.mp. You may also contact the Consumer Assistance Program to learn more about health care reform in the CNMI at 664-3005 or advocacyoffice@commerce.gov.mp. (Office of the Governor)