NAIC Considers ‘Stricter’ Regulations for Association Health Plans
A panel of the National Association of Insurance Commissioners this week considered creating stricter regulations to prevent abuses in health insurance sold through associations, the Wall Street Journal reports (Terhune, Wall Street Journal, 12/12). Last month, the Journal reported that an increasing number of Americans are purchasing health insurance through various associations, which offer "enticing promises" of group discounts and "independent endorsements of the best policies available at the best rates." Many states exempt the associations from state insurance regulations and, as a result, associations typically do not need to explain how rates are set, nor do they need government approval for premium increases (Terhune, Wall Street Journal, 11/21). The panel discussed creating a model law for states that could "address the lack of regulation" on association carriers' rates and also might "tackle the failure of" some insurance companies to "disclose their ties to not-for-profit groups" offering the health plans. The Journal reports that in some cases associations, while "independent on their face," are "little more than a marketing arm for a particular insurer or insurance agency." According to the Journal, insurers selling association policies said that they already "face considerable" state regulations and that further rules could "drive up the cost" of insurance and "deny more people access" to health coverage. The insurers also said that not-for-profit groups make "independent decisions" and offer "numerous other benefits" besides health plans to members. Panel members said that they will take "further action" early next year, after a survey on the association health insurance market is available; preliminary report findings indicate that "few states" track the number of policyholders who have health coverage through associations. While the NAIC's decisions are not "binding," state lawmakers and insurance departments often follow the group's recommendations, the Journal reports (Wall Street Journal, 12/12).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.