H.B. 1297 says that its purpose is to “preserve the state’s status as the prmary regulator of the business of insurance within New Hampshire,” and that no NH state agency shall plan, create or enable a state-based exchange for health insurance under the Affordable Care (health reform) Act.  At the same time, however, the new law does allow state officials, the NH DOI, to interact with the federal government concerning the creation of a federally facilitied exchange for New Hampshire. 

We will see how this turns out, because the Commissioner of the Department of Insurance still has authority to regulate all insurance products sold in the state.

Media reports have it that we will soon see the decision on the Affordable Care Act (the health reform law) from the U.S. Supreme Court any day now.  I say next week, June 28.  Just my predication, because that way all the Justices will leave for summer vacation immediately afterward.  A scientific analysis?  No.

  

Some people may see rebate checks coming their way as a result of health care reform.  Here’s why:  The Affordable Care Act (ACA) contains a provision called the “Medical Loss Ratio” requirement that requires health insurers (i.e. health insurance companies) in what is called the individual and small-group markets to spend at least 80% of premium dollars they receive on actual medical care (and quality improvements).  For large group market plans, the percentage is 85%.  As a result, 20% of premiums in the individual and small group markets can go to the insurers’ overhead.

 

But what happens under the law if the insurers fail to comply with the required Medical Loss Ratios and only spend, say, 70% of premium dollars on actual health care and 30% goes to overhead (salaries, marketing, etc.)?  The insurers have to pay rebates to policyholders.

 

Based on a recent analysis conducted by the Henry J. Kaiser Family Foundation, rebates should be on their way.  Kaiser estimates that in the individual market, 31% of consumers will receive rebates, with 28% of employers in the small group market receiving rebates.  Admittedly, these rebates on an individual basis will not be large, but in the aggregate the estimated totals are impressive - $426 million in the individual market and $377 million in the small group market.

 

Will this make insurers more efficient in their operations?  Do tax policies and penalties change behavior?  Often the answer is yes.