Two new health insurance models receive regulatory approval

With the health insurance market poised to continue its string of dramatic changes for much of the next few years, insurance companies likely got a little bit more surety thanks to a national regulatory body approving two new models for major health insurance plans.

The National Association of Insurance Commissioners approved the proposed Individual Health Insurance Coverage Model Act and the Small Group Market Health Insurance Coverage Model Act. Both were drawn up about two years ago as a means of becoming compliant with the Patient Protection and Affordable Care Act of 2010, according to a report from Life Health Pro. The acts had been approved by the NAIC's Health Insurance and Managed Care Committee late last year.

In general, the two acts attempt to address issues related to guaranteeing coverage to all Americans, as well as the premiums that can be charged. For instance, in the individual model guidelines, health insurers cannot discourage individuals from filling out applications because of their current health status or for any other reasons related to their job or the area in which they live. Essentially the act states that pre-existing conditions must be ignored when dealing with a potential new customer and such factors cannot be taken into account when setting the pricing of that person's policy. Although the NAIC has no formal regulatory power, its recommendations are generally adhered to by state officials across the country.

However, while the NAIC has put these guidelines into place, other federal agencies are still lagging behind, the report said. For instance, the U.S. Department of Health and Human Services still does not have all the necessary regulations in place as mandated by the ACA, and some are concerned that it might not do so before October, when state health insurance exchanges are set to open in anticipation of the coverage mandate going into effect on January 1, 2014. The delay at HHS might, in turn, lead some states to delay making their own changes to insurance regulations – despite the NAIC's model guidance.

Insurers will need to be prepared for whatever comes down the pike in advance of January 2014, since the transition to the insurance exchanges has been filled with uncertainty.