I am now back from our adventures at the National Association of Insurance Commissioners (NAIC) meeting in Orlando, FL.
I have enjoyed being one of the advocates designated by the NAIC in 2010 to serve as Consumer Representatives. Our role is to advise the organization from a consumer perspective as they go about drafting policies and model legislation for states to implement health care reform. State regulators, consumer representatives, and the (many) industry representatives have deliberated on conference calls beginning in April 2010 to draft, fine tune, and sometimes revisit policy provisions on key aspects of the health care law. It is customary for 1600+ industry representatives to attend these three-times-a-year NAIC meetings in person and they clearly out-numbered our forces of a dozen or so Consumer Representatives representing the American people.
The marquee issue before the NAIC was their decision regarding the “medical loss ratio.” This arcane term refers, in very technical language, to the requirement that insurance companies have to spend a minimum figure on actual, real-life health care. These percentages depend on the size of the plan but must be at least 80 or 85%. (You may think this is an outrageously low percentage threshold, but some insurance companies admit that they only are spending 50 or 70% of the money they take in on health care. They have allocated larger percentages to CEO salaries, marketing, profit, and other administrative costs. Some insurers say they are currently meeting the 80/85% floor, but are counting a lot of things as “delivery of health care” which no one else in their right mind would think could be construed as health care.) Consumer reps have a sort of traditional definition of “delivery of health care” which includes doctor’s visits, hospital care, laboratory tests, and the like.
So, with the stakes being so high, and “our team” being vastly outnumbered, the outcome on the NAIC policy on medical loss ratio was uncertain. Consumer reps had slogged through dozens of NAIC phone calls over the last six months where this was debated, battling the insurance industry, and providing support to the state departments of insurance staff who voted for an even-handed interpretation of how the medical loss ratio would be calculated. It is not perfect, but we were given many opportunities to speak up on conference calls (where there were as many as 600 participants) and argue for sensible interpretations of the law into model language for implementation.
But the real test was whether the vote of the NAIC commissioners as a whole on the last day would approve this carefully crafted mosaic of regulatory language and actuarial principles drafted by their staff. The insurance industry had mounted a full-court press to urge amendment to significantly weaken the proposal.
The NAIC Consumer Representatives sat in the front row in the huge hotel ballroom in Orlando as the vote was to take place. There was no further opportunity for us to speak before those assembled to influence the vote. We had spoken to almost every commissioner personally throughout the week, some more than once, urging them to vote for the staff policy that we had had a hand in writing. We had shared our written comments, and our rebuttals to industry comments (which often seemed transparently self-serving.) We also argued that the commissioners should not vote against what their staff had drafted over a long and tedious process because of undue industry pressure. We had talked to the press to help them frame the right questions and put this battle in context. We checked in periodically with NAIC leadership and staff to take a temperature on the upcoming vote. No one was willing to predict the outcome. All bets were off.
The medical loss ratio issue was up on the agenda and several commissioners spoke about how home state constituencies would be disadvantaged, how complex this law was to implement, and other reasons why this policy should be tilted more toward the industry, against consumers’ interests. Then other insurance commissioners spoke in favor of this policy as drafted, complimenting the NAIC on their open and transparent process, saying that the compromises woven into the fabric of the document would unravel if even one more provision were altered. All the commissioners who spoke in favor of the draft policy spoke eloquently about the reasonable language representing both industry and consumer positions.
Then Director Mike McRaith of the Illinois Department of Insurance took the floor. He reiterated several arguments in favor of the NAIC document as written and punctuated it with this final exhortation, urging commissioners not to let political considerations influence their vote: “There is no empirical evidence not to vote for this language.” He then called for an end to debate and move directly to the vote. That was challenged by some commissioners who wanted to introduce other amendments or include redrafted language, but the policy was approved as written.
Who would have thought one of the first battles of health care reform at the NAIC would have resulted in such a victory for consumers? And maybe even more amazing was how dramatic that moment was. When I thanked Director McRaith for his eloquent speech and his parliamentary strategy, I told him we all thought he was “The Closer,” referring the role of the pitching ace who takes over during the last inning or two of a high-stakes baseball game to preserve the slim lead of his team. We were all exhilarated with the vote, but I heard a couple people who observed the unfolding of this drama say as they walked out of the hall after the vote: “This is just as exciting the World Series!”–and probably a lot more consequential.
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