NAIC Issues MLR Guidelines; Insurers Lose

The National Association of Insurance Commissioners has finalized the rules it's proposing to determine administrative versus medical expenditures to bring insurers in compliance with the new MLR requirements of PPACA. And it looks like insurers will not be happy. Even the Wall Street Journal can't deny it. According to them, insurance brokers "lose out" and "the proposed rules were adopted without any of the changes proposed by industry." Sweet, sweet music! And WaPo is singing the same tune as WSJ:
State insurance regulators finalized their recommendations to the Obama administration Thursday on how to implement a key provision of the new health-care law, largely favoring the views of consumer advocates over those advanced by the insurance industry.

...Timothy Jost, a law professor at Washington and Lee University who is a consumer representative to the NAIC, countered that the commissioners had granted insurers plenty of leeway. "There's no end to what [insurers] would have wanted to put under 'quality improvement' if they could have," he said. "But the NAIC looked at this really carefully through a process of months, and the industry was on every one of the calls and had a great deal of input."
Naturally, Karen Ignani and AHIP whinged about how the regulations were just oh so onerous, but we knew that would happen. Too bad she's grossly out of tune as Reuters joins the chorus as well:
In a final vote on the recommendations, called for under the new law, the National Association of Insurance Commissioners (NAIC) on Thursday rejected most of the insurance industry's requests.

..."This is placing on them some pretty stringent requirements," Kansas Insurance Commissioner Sandy Praeger, head of a NAIC working committee.
Third verse, same as the first, with the New York Times, who called the new standards "tough," chiming in:
“These are pretty stringent requirements,” said Sandy Praeger, the Kansas insurance commissioner, who supervised the drafting of the rules.

In effect, the rules put a cap on insurance company profits. State regulators resisted intense last-minute pressure from insurers to alter the rules so it would be easier for carriers to comply.

...Consumer advocates and administration officials welcomed the proposed rules.

...Lobbyists for agents and brokers said they were disappointed with the recommendations.
The recommendations of the NAIC are on their way to Sebelius next week, where it is expected they will be adopted without much ado. And insurers have to start abiding the new regulations on January 1. Even CNN Money described it as "insurers were dealt a blow." Awwww...the poor dears! I'm sure they're crying in their champaign. As fun as it is to see just how unanimously the regulations are interpreted as not industry friendly, there's even better news on this front: the new regulations and increased access to health care afforded by PPACA mean jobs, jobs, jobs! And PPACA provides for that, too:
PPACA includes numerous provisions intended to increase the primary care and public health workforce, promote preventive services, and strengthen quality measurement, among other things. It amends and expands many of the existing health workforce programs authorized under Title VII (health professions) and Title VIII (nursing) of the Public Health Service Act (PHSA); creates a Public Health Services Track to train health care professionals emphasizing team-based service, public health, epidemiology, and emergency preparedness and response; and makes a number of changes to the Medicare graduate medical education (GME) payments to teaching hospitals, in part to encourage the training of more primary care physicians. The new law also establishes a national commission to study projected health workforce needs.

...The federal government has a long-standing role in the education and training of the health workforce. PHSA Title VII supports health professions workforce development—including the education and training of physicians, dentists, physician assistants, and public health workers— through grants, scholarships, and loan repayment. Title VII includes a number of programs to support physician training in primary care, including training in rural or otherwise underserved areas, and student loan repayment programs to encourage medical students to enter primary care.

Some researchers have found that Title VII programs increase the number of primary providers and the primary care competency of the physician workforce as a whole.14 Title VII also includes programs to encourage racial and ethnic diversity in the health care workforce. In the early 1970s, annual funding for Title VII programs reached over $2.5 billion (in 2009 dollars); in recent years, it has been about $200 million.

PPACA reauthorizes and expands numerous existing PHSA health workforce programs. The law also creates several new PHSA workforce programs to increase training experiences in primary care, in rural areas, and in community-based settings. Research has found that location and experience during residency training is an important factor in determining future practice.

...PPACA includes programs that provide training opportunities and fellowships to increase the supply of other types of providers with identified shortages such as pediatric subspecialists, public health workers, and geriatricians. Finally, PPACA modifies Medicare graduate medical education (GME) payment policy. Medicare subsidizes medical residency training through GME payments to teaching hospitals. PPACA’s changes to GME payments, along with a new health center grant program and a number of other provisions, are intended to promote primary care training in non-hospital settings.
Such programs are exactly the types of things the GOP would refuse to authorize funding for should they take control of the house. So we simply can't let them.


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