Praeger testifies about insurance exchange activity

Kansas insurance chief speaks before U.S. Senate committee

0 | Health Reform, Insurance

— Kansas Insurance Commissioner Sandy Praeger was one of three state officials who spoke today before a U.S. Senate committee describing implementation of the Patient Protection and Affordable Care Act and efforts by states to create or modify health insurance exchanges.

"I think this (the health reform law) is a step in the right direction for getting everybody covered," Praeger told members of the Committee on Health, Education, Labor & Pensions, "but the critical issue to work on going forward is the ability to reign in health-care costs."

Praeger appeared on a panel with Dr. Joshua Sharfstein, secretary of the Maryland Department of Health and Mental Hygiene and Utah State Rep. David Clark.

They were preceded at the hearing by Steve Larsen, director of consumer information and insurance oversight at the federal Centers for Medicare and Medicaid Services.

Anniversary approaching

With the anniversary of the reform law approaching - it was signed March 23, 2010 - Senate committees, chaired by Democrats, have been holding hearings highlighting the law's progress.

U.S. Secretary of Health and Human Services Kathleen Sebelius appeared before the Senate Finance Committee on Wednesday. Among other things, she said the agency had seen an unexpectedly large number of Medicare beneficiaries taking advantage of new free annual wellness visits. And contrary to expectations, Medicare Advantage enrollment is up 6 percent while average premiums are 6 percent lower than for 2010. Benefits and cost-sharing in the plans have remained about the same.

Republicans had predicted dire outcomes for Medicare Advantage beneficiaries.

Clark was the most critical of those who appeared before the HELP committee today. He said Utah had already developed an exchange by the time the federal law was passed and that the state would like to see more flexibility from HHS in how it is able to operate it. Utah and Massachusetts were the two states that already had exchanges when the reform law was passed.

Praeger, on the other hand, testified that the law allows Kansas and other states considerable flexibility in how they implement the new law and operate the exchanges, which must be operational by January 2014 to meet the law's deadlines. Praeger said most states, and Kansas is among them, still need to pass state laws to move forward with implementing the federal reforms.

"While PPACA defers to state regulation as a default position, in order to enforce these protections state (insurance) regulators must be granted the authority to do so under state law," she told the senators. "While some states have blanket language in their insurance codes requiring insurers to abide by all applicable federal requirements and empowering regulators to enforce them, most do not."

Praeger is a key player in the National Association of Insurance Commissioners and brings some national perspective to the issues of states' implementation of the law.

Most states moving forward

Most states, she said are moving forward. Others are waiting to see what becomes of legal challenges to the law. Kansas and 27 other states have asserted that the ACA is unconstitutional because of its mandate that all who can afford health insurance must have it by 2014 or face tax penalties. Federal district courts have been divided on the question with some judges upholding it and others finding against it.

"Most states have been reviewing their statutes to determine which changes they must make, particularly with respect to the external appeals process and rate review requirements. Some states are taking a wait-and-see attitude pending resolution of the challenge to the constitutionality of the law," Praeger said.

Kansas is among the states moving forward with the implementation, at least with regards to forming an insurance exchange. It was one of seven states to receive a federal innovation grant. The award was for $31.5 million. And Praeger has put together a large group of health and insurance officials to develop recommendations for an exchange to be presented to the 2012 Legislature for consideration.

The reform law was passed without a single Republican vote and the hearing made clear that the partisan divide remains deep.

Partisan differences

Democrats touted the "market-based" features of the exchanges, which are expected to provide consumers a one-stop shop for comparing the features of a variety of insurance plans before buying or enrolling in one. The online exchanges, most of which remain in planning stages, are being described as similar to online airline ticketing services such as Travelocity or Orbitz.

But Republicans continued to complain about too much government intrusion into health care.

"Exchanges cannot fix the fundamental problem with the health care law," said U.S. Sen. Mike Enzi, a Wyoming Republican. "Government bureaucrats will design the insurance plans everyone must buy because the authors of the law believe government knows what's best for all of us."

The law requires that HHS determine which plans meet the law's requirement of providing "essential benefits." The agency still hasn't developed a definition of what the essential benefits must include.