1. Health Reform Implementation Brian Webb National Association of Insurance Commissioners August 2, 2010

2. Reform Timeline 20102011201220132014201520162017 Temporary High Risk Pool Program Immediate Reforms: No Lifetime Limits Restricted Annual Limits Restrictions on Rescission First Dollar Coverage of Preventive Services Immediate Reforms: No Lifetime Limits Restricted Annual Limits Restrictions on Rescission First Dollar Coverage of Preventive Services Medical Loss Ratios with Rebates/Rate Reform/Data Collection 20102011 2012 20132014201520162017 Exchanges Subsidies Individual/Employer Mandates Market Reforms Guaranteed Issue No Pre-Existing Condition Exclusions for Adults Rating Rules Essential Benefits Plan No Annual Limits for Essential Benefits Market Reforms Guaranteed Issue No Pre-Existing Condition Exclusions for Adults Rating Rules Essential Benefits Plan No Annual Limits for Essential Benefits Risk Adjustment Extended Dependent Coverage Internal/External Review No Pre-Existing Conditions for Children Disclosure of Justifications for Premium Increases Individual Market Reinsurance Program & Risk Corridors Individual Market Reinsurance Program & Risk Corridors Temporary Reinsurance Program For Early Retirees Co-Op Plans & Multistate Plans

3. Medical Loss Ratio PPACA Requires: Beginning January 1, 2011, issuers shall, each plan year, pay rebates to enrollees if the Medical Loss exceeds: 80% in the non-group market 80% in the small group market 85% in the large group market NOTE: A state may set a higher percentage – The Secretary may set a lower percentage in a state if the non-group market is destabilized or adjust the rates due to volatility caused by the Exchanges. By December 31, 2010, the NAIC shall establish uniform definitions and standardized methodologies for calculating the components included in the Medical Loss Ratio. This is subject to Secretary certification.

4. Medical Loss Ratio Components of the Medical Loss Ratio: Reimbursement for clinical services + Expenditures to improve health care quality ____________________________________________ Total premium revenue – Federal and State taxes and licensing or regulatory fees (and accounting for risk adjustment, risk corridors and reinsurance) The issuer must provide an annual report to the Secretary on the above expenditures/revenues and other non-claims costs, including and explanation of the nature of such costs.

5. NAIC: Other Issues Rate Review –Definitions of unreasonable and excessive –Forms and processes for filing rates for review Uniform Fraud Reporting Form Consumer Information –Uniform Enrollment Form –Standardized Explanation of Coverage –Definitions Data Collection Risk Adjustment/Risk Corridors (2014) Medigap Reforms (2015) Standards for Interstate Compacts (2016)

6. Questions? Contacts at the NAIC Brian WebbJosh Goldberg ManagerHealth Policy and Leg Analyst Health Policy and Legislationjgoldberg@naic.orgjgoldberg@naic.org bwebb@naic.orgbwebb@naic.org202-471-3984 202-471-3978