State Insurance Heads Snub Obama on Policy Cancellations

Kansas, North Dakota and other state insurance commissioners snubbed a meeting with President Barack Obama set up to discuss allowing some people to keep medical plans that don’t meet the requirements of the U.S. health law.

Six commissioners e-mailed their counterparts to say they weren’t invited or wouldn’t attend yesterday’s meeting at the White House because of reservations about the one-year reprieve for substandard health plans. The Patient Protection and Affordable Care Act requires that all health plans next year meet minimum rules for coverage.

The president offered a compromise last week after hundreds of thousands of people began receiving cancellation notices from their insurers and were told that new policies complying with the law known as Obamacare would cost more. States, which individually oversee insurance regulations, are divided on whether to follow Obama’s request, a split they said undermined the purpose of the meeting.

“Because the topic for the meeting (Affordable Care Act) is so delicate and potentially divisive among the nation’s insurance commissioners, a meaningful discussion between all the commissioners needs to take place before a meeting with the president,” North Dakota Insurance Commissioner Adam Hamm said in an e-mail. “Unfortunately, that did not happen so I had to respectfully decline to participate.”

The commissioners who attended the meeting in the Oval Office said they conveyed the lack of consensus to the president.

Different Views

“The president acknowledged our diversity at the state-based regulatory level and also acknowledged the complexity of the issues that we’re dealing with and the change that he suggested last week,” Louisiana Insurance Commissioner Jim Donelon, president of the National Association of Insurance Commissioners, said on a conference call yesterday after the 50-minute meeting. “We discussed all of those issues, pricing, solvency, different state laws, and he acknowledged all of that.”

Donelon said the association’s role isn’t to advocate for or against implementation of the president’s policy.

Connecticut Insurance Commissioner Thomas Leonardi and Wayne Goodwin, the commissioner in North Carolina, attended the meeting as well as Ben Nelson, the association’s chief executive officer and a former U.S. senator from Nebraska, according to a statement from the group.

U.S. Health and Human Services Secretary Kathleen Sebelius also was there.

Agreement Needed

Commissioners of six states -- North Dakota, Montana, Pennsylvania, Florida, New Hampshire and Kansas -- wrote in a letter to the association that they wouldn’t attend because they want to see greater consensus.

“This meeting has not been discussed in any meaningful way with the entire membership of the NAIC nor have we worked to build consensus among the members on what our positions will be in the meeting,” the six states wrote.

Kansas Insurance Commissioner Sandy Praeger didn’t attend the meeting as she was working with insurers in her state to determine how the fix might be implemented, Bob Hanson, a spokesman, said in an e-mail.

“Those business and regulatory discussions are keeping the commissioner here in Kansas to make sure any details are hammered out in the best interest of our citizens,” he said.

Opting Out

The $1.4 trillion Affordable Care Act sought to raise the bar for the U.S. health system through provisions that included mandating an end to discrimination against people with pre-existing health conditions and requiring all policies to meet minimum coverage rules in return for an obligation that all Americans obtain insurance or pay a fine.

Republican opponents of the law recently seized on reports that hundreds of thousands of Americans got notices that their existing plans had been canceled, contradicting Obama’s repeated pledge that people who liked their existing coverage would be able keep it.

The president’s new strategy protects insurance plans sold to individuals in place in 2013 for as long as a year if state officials approve. The fix exempts existing plans with renewal dates as late as Oct. 1, 2014, extending non-compliance well into 2015.

Washington state and Massachusetts have already opted out while the heads of health exchanges in California and New York have said Obama’s reprieve may jeopardize the “risk pool” of patients needed to make the health law viable. Goodwin, of North Carolina, has called on companies not to cancel plans.

To contact the reporters on this story: Anna Edney in Washington at aedney@bloomberg.net; Alex Wayne in Washington at awayne3@bloomberg.net

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net

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