Lawmakers in most states better get busy if they want authority to enforce key provisions of the federal health law that go into effect next year.
That’s the takeaway message from a report by the Commonwealth Fund showing that only 11 states and the District of Columbia have passed rules needed to implement the law.
Without action, the other 39 states are “potentially limiting” their ability to ensure that “consumers achieve the full protections of the law,” according to the study done for the liberal think tank by three researchers at Georgetown University.
To be sure, most state legislatures are just beginning their legislative sessions and the federal rules don’t go into effect until next January. Moreover, federal regulators could enforce the rules in states that don’t pass their own legislation. Talks are currently going on between the Obama administration and state regulators outlining the role each will play, according to state sources.
Still, the authors point out that the seven rules in question are at the core of the health law. They include a ban on insurers rejecting applicants with pre-existing medical conditions, limits on how much more consumers who are older can be charged than younger ones and the package of essential health benefits all plans must include.
“This means 2013 will be critical, with regulators telling us that enforcement could be limited if they don’t have the legal authority,” said Katie Keith, an assistant research professor at Georgetown and co-author of the report.
Even without federal backup, states that don’t pass new rules have some recourse.
All states review filings by insurers to ensure they are not selling policies that violate the law, whether state or federal. Many of the federal law’s provisions, including the essential health benefits requirement and the annual limits on what a consumer could face in out-of pocket costs, for example, would be reviewed by state regulators as part of the filing process.
If a state doesn’t have rules in some areas, its authority to enforce some of the other provisions in the health law is less clear, such as the limit on charging older people no more than three times the rate of younger ones, or requiring that premiums charged by insurers selling through new online marketplaces are the same as those charged outside of those marketplaces. Rules prohibiting insurers from rejecting people with medical problems also fall in this area, as only five states currently bar that practice.
State regulators who notice problems in those areas – either through a review of insurer filings or through complaints from consumers – could contact insurers directly and ask that they fix the problems, or could notify the federal government, which can seek penalties against insurers that violate the health law.
The Commonwealth report said that from January 2010 to Oct. 1, 2012, only Connecticut lawmakers had passed legislation addressing all seven areas considered by the researchers. Along with the District of Columbia, states that had passed laws addressing at least one of the provisions include Arkansas, California, Maine, Maryland, New York, Oregon, Rhode Island, Utah, Vermont and Washington.
In an earlier study, the Georgetown researchers reported that states were slow to pass laws needed to address some of the early provisions of federal law, such as allowing adult children to stay on their parents’ insurance plans to age 26.
But by March 2012, about two years after the law’s passage, 49 states and D.C. had taken action, the group reported.