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State Officials Concerned About Oversight of Benefits in Health Law

By Rebecca Adams, CQ HealthBeat Associate Editor

Officials in 10 states question their insurance departments’ abilities to ensure that plans comply with the requirements of the federal health care law, and some are looking to their legislatures to enact measures to give them more authority to do so, according to a report released by The Commonwealth Fund.

The 2010 health care law (PL 111-148, PL 111-152) requires 10 categories of benefits to be offered in new marketplaces that are scheduled to begin operating in January. The Centers for Medicare and Medicaid Services released the final rule on these “essential health benefits” in late February.

Similar requirements are in place for people who will become eligible for Medicaid in states that expand their programs.
States, particularly those that will run their own exchanges, will have the primary responsibility for ensuring that the benefits that insurers propose match federal requirements. But a number of state officials told researchers that they don’t have the ability to do that.
The interviews were conducted from Jan. 1, 2012, through Oct. 15, 2012, by Georgetown University Health Policy Institute’s Center on Health Insurance Reforms for The Commonwealth Fund.

While insurers must follow federal law, the report said that some state departments of insurance may not have explicit legal authority to enforce federal standards. “Because of this limitation, several officials noted that they would likely need to enact state legislation to ensure the [department of insurance's] ability to reject noncompliant policies and conduct ongoing oversight,” said the report.

The study pointed to Arizona, for example, where officials said that the insurance department would not have the authority to enforce the essential health benefits requirements. Montana officials also said their agency does not have explicit authority to enforce federal law, but officials said they could review plans for voluntary compliance with the law’s requirements.

In other places, state officials said that even though they have the legal authority to oversee the standards, they may not have the resources to do a good job.

The report quotes Arizona officials as noting that their staff of experts has been cut. “It’s not just about adding more bodies, but about finding the bodies with the right skill set,” Arizona officials told interviewers.

Some officials worried that relying on software to review many of the forms is risky because they could miss problems.

The report quoted one anonymous official as saying: “A policy might say it covers prescription drugs, but in the fine print there could be an exclusion saying they’ll never pay for drugs in a certain category.”

Rebecca Adams can be reached at [email protected].

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