Insurance Regulators Struggling To Implement Federal Health Law
Legislative Session Coverage
TALLAHASSEE (CBSMiami) – Insurance regulators across Florida have a Herculean task on their hands.
Conflicting legal requirements and what one described as a “torrential rain” of filings by health insurers are hampering their ability to carry out the federal health law, better known as Obamacare.
Insurance regulators told a House select committee Friday that they need legislative direction about how to deal with a complex mix of issues, including differences between the federal health law and state requirements related to insurance rates, the News Service of Florida reported.
They also face a time crunch, as insurers this spring are slated to start filing for approvals needed to comply with the federal law. That has fueled questions about whether the state Office of Insurance Regulation has enough staff to review the filings.
“The deadlines are so short, and we are really under the gun,” said Rep. Gayle Harrell, a Stuart Republican who serves on the House Select Committee on PPACA, an acronym for the Patient Protection and Affordable Care Act, the full name of the federal law.
But Democratic lawmakers asked pointed questions about whether regulators are in a bind because state Republican leaders refused for more than two years to carry out the health law, which was approved in 2010 by President Obama and congressional Democrats. Gov. Rick Scott and GOP legislative leaders now face the virtual inevitability of the law fully taking effect, after a landmark U.S. Supreme Court ruling in June and Obama’s re-election in November.
“We’re reacting now at the eleventh hour, essentially,” said Rep. Dwight Dudley, a St. Petersburg Democrat who serves on the select committee. “We’re flat-footed and completely unprepared to implement the law as it is.”
Wences Troncoso, a deputy insurance commissioner, told the committee that the Office of Insurance Regulation had “policy direction” to not work toward implementing the federal law. He said the agency could not move forward without getting direction from the Legislature.
“I don’t have the authority to do anything but that,” Troncoso said.
Belinda Miller, general counsel for the Office of Insurance Regulation, said she doesn’t think the agency is being caught “flat-footed.” She said, for example, that it has worked to identify conflicts between state regulations and the federal law.
Also, she said the agency drafted legislation about the regulatory issues in 2010 but did not move forward with it. She said there was no “appetite” at the time to pursue the legislation and also pointed to constantly changing federal guidelines.
Perhaps the most-difficult problem facing regulators stems from differences between the federal law and the state insurance code about issues affecting rates. For example, Florida allows rates to vary by gender — a 25-year-old man, as an illustration, could have lower premiums than a 25-year-old woman — but the Affordable Care Act will not allow such variations.
Similarly, Florida allows rates to vary more broadly based on age than the Affordable Care Act will allow.
Such conflicts pose something of a conundrum for regulators. If insurers make rate filings that comply with the Affordable Care Act, they might not comply with parts of the state insurance code. That could leave state regulators in the position of denying approval of the filings.
Lawmakers during the spring legislative session could take a variety of approaches to the issues. One possibility would be to change state law to incorporate requirements in the Affordable Care Act.
Also, the state could rely on what is known as federal “preemption” — which essentially would involve the Affordable Care Act trumping conflicting state regulations. But Troncoso said regulators are concerned such an approach could create uncertainty and potential litigation, as the different state regulations would remain.
Another possibility, aimed at helping deal with the large number of upcoming filings, would allow insurers to move forward with their offerings without first receiving the usual review and approval from the Office of Insurance Regulation. That would be a temporary step that Troncoso said could help resolve the “bottleneck effect” of insurers filing at the same time.
But that idea already has an influential critic in Sen. Joe Negron, a Stuart Republican who is chairman of a Senate select committee studying the Affordable Care Act.
“I’m not a particular fan of having insurance policies being sold to our constituents without some level of review to make sure that they’re fair and appropriate and that they protect the rights of consumers,” Negron said this week.
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