NAIC Wades into State/Federal Role in Health Insurance Regulation, Enforcement

Indeed, HHS is trying to say there are no federal exchanges, just state exchanges managed by the federal government to get around the premium subsidies issue granted only to state exchanges.

Although Webb may have been overstating the exchanges situation, there are legitimate concerns about the broader question of federal regulation of states if states don't enact PPACA reforms, according to Petersen.

For guarantee issue, if a state insurance department won't enforce guarantee issue—perhaps Florida, as it has postured, as Petersen noted, then the federal government can come in and become the enforcer.

"States need to look at the provisions of the ACA to determine whether they will have the ability to enforce those if they did not take additional state actions," Petersen said.

The NAIC is working on model PPACA laws for the states to adopt mostly through the graces of the state legislatures. Although there is precedent for this, like when HIPAA was passed and then states passed their own HIPAA, there is a much larger question about whether every state will adopt a state-based PPACA given the political nature of the health care reform law, Petersen acknowledges.

McCarty serves under (but was not appointed by) Florida Republican Rick Scott and has fought almost every aspect of PPACA, from medical loss ratios to exchanges to Medicaid expansion, but has said in press reports he will comply with the law even as he is committed to repealing it, perhaps under a change of administration come November's elections. Florida fought the PPACA all the way to the Supreme Court.

Although Praeger is elected and has expressed desire to move forward on exchanges, her Kansas governor has made no bones about his contempt for the PPACA.

According to a report in the Insurance Journal, Republican Kansas Gov. Sam Brownback said he wants to wait until after the presidential election to move forward on exchanges.

See also: Where States Stand on Implementing PPACA

Praeger, in press calls and appearances, has always championed moving forward exchanges, and indeed works at the nuts of bolts implementation in a variety of subcommittees and task forces as the key state insurance regulator in discussions with HHS.  Praeger, who is married to a doctor (which, she noted, gives her a perspective on wasteful utilization of health services, such as multiple X-Rays) said that health care costs are rising at an unsustainable level. She has said that PPACA is not so much about health insurance as it is a way to keep costs under control and get everybody the health care they need.

"Health insurance is the ticket in the door," Praeger has said.

 "A recent media report about the implementation of health exchanges citing NAIC comments regarding state regulatory authority deserves clarification," the McCarty/Praeger statement stated in reference to Webb's remarks in the Reuters story. "States have full authority to establish their own exchanges, partner with the federal government, or defer to the federal government. Although the PPACA sets forth minimum standards, the states have the opportunity to regulate and enforce their own market rules, including rate and form approval. The NAIC continues to advocate for maximum state authority and flexibility for those states implementing ACA."

The NAIC is a body that has many members, of all political persuasions at the state level, and nothing has made this more clear in recent years than PPACA, where commissioners, often under direction from their governors have tussled with issues from the medical loss ratios to the creation of state health insurance exchanges.

Some at the NAIC might want to switch "from a 'we're screwed' mode to saying affirmatively that they will continue to handle the same functions they do now, like reviewing products, advising consumer, handling complaints, licensing agents and so forth," said the federal health care official.

Webb was out of the office this week and could not personally be reached.