The ACA, State Health Insurance Policies and Regulations and New Benefit Exchanges

Health insurance is not simple. Not only that policies, rates and regulations vary state by state.  All the states have different insurance rules.  On top of that some states have elected insurance commissioners other states have appointed insurance commissioners.  Some states do not have Departments of Insurance and therefore the insurance companies in those states are not required to file financial statements with the National Association of Insurance Commissioners (

In Washington State, insurers are regulated by the Office of the Insurance Commissioner under the Insurance Fair Practice Act, except for health insurers that are ‘regulated’ by the Patients’ Bill of Rights.    (See question “Does this apply to health insurance companies?”)

When I was exploring an issue of potential insurance fraud recently, I called the Attorney General’s Office only to be told any questions about health insurance fraud falls under the jurisdiction of the Office of the Insurance Commissioner. 

The differences in insurance and health benefit exchange functions among the states and between the states and the federal government will have a significant and potentially differing impact on the role of the ‘Navigators’ who are supposed to be the consumers’ ombudsman, advocate under the ACA.  They are specifically prohibited, however,  from being ‘producers’ like current insurance brokers and agents.   The issue of the Navigators is a heated one, as exemplified by the action of Minnesota’s governor.

This is a complicated issue, especially given the diversity of state insurance regulations, and for states using a joint state/federal exchange and states using the federal exchange.  For a quick over view of some of the issues being raised, see Frequently Asked Questions paper published by Health and Human Services.

We are already seeing some of these issues crop up in California where the insurance commissioner is having problems regulating health care premium increases.

With less than 20 states so far indicating they will have state-based exchanges, the issue of regulation, state-based vs. federal based regulation will be a delicate dance in the months ahead.  Not only do insurance regulations differ state by state, so does Medicaid coverage.   It is worth reading the FAQ on the exchanges to see all the heady questions that need to be addressed when people start calling when  Open Enrollment starts in less than 10 months on October 1st.

Kathleen O’Connor

January 7, 2013

The New Health Care Reform Conversation

One of the key discussions here in Washington State is about the extensive variations in health care treatments.  The State has applied to CMS for a $34 million grant to reduce variations in care in obstetrical care and chronic care.  These studies come from the work of the Foundation for Health Care Quality and The Bree Collaborative.

Discussions about costs will increasingly turn to clinical practices and outcomes. Last year was also when the fines for excessive hospital re-admissions kicked in.  Hospitals can now be fined for too many re-admissions.  I will take a look at how this works soon.

The focus on reducing health care costs is now moving into the clinical arena in New York

And also here in Washington State about babies:  You would think that given the centuries we have been delivering babies we would have a better handle on this by now.

The problem of over treatment was well covered in Shannon Brownlee’s  2007 book Overtreated

I’ll have to double check the data, but I recall that only 50% of every health care dollar actually goes to patient care.

Coming next:  the rampant problems and costs of Medicare fraud.

Kathleen O’Connor  January 7, 2013

About Kathleen

Kathleen O’Connor: 30+ year health care consumer advocate, non-profit executive and author. For more information about Kathleen, please see "About" on the main content bar above.
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4 Responses to The ACA, State Health Insurance Policies and Regulations and New Benefit Exchanges

  1. Kathleen,

    Thank you so much for your dedication to this issue, and for taking the time to keep us all so informed. With all the new changes afoot, it is such a relief to see your posts and blogs on the topic.

    Much gratitude,

  2. Gerald Roller says:

    Thanks for getting back “in the saddle”! I need to see how Virginia fits into the
    overall pattern. Do you think a single regulatory is the way to go in all 50?

    • Kathleen says:

      Gerald, so wonderful to hear from you! So very glad to still be in touch. Having been doing some fights here in WA state over an insurer, I think at some point we may need to have standard regulations and oversight. But I don’t think we will get there overnight. I do think having different states have different rules and regulations, or few at all will highlight the need for some consistent and enforceable standards. That said, we are supposed to have that for Medicare and it is not working. And I don’t know why. Many, many thanks for being back in touch! Fondly, Kathleen

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