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NAIC Adopts Revised Model Act with Significant Implications for HMOs

Posted in Legislation and Public Policy, Private Insurers, Reimbursement Matters, State Matters

On December 21, the National Association of Insurance Commissioners (NAIC) adopted amendments to the Life & Health Guaranty Association Model Act, previously discussed here.  Among other revisions, the amendments will make three significant changes:

  • extending guaranty association membership (and related assessments for insurance company failures) to HMOs,
  • expanding the assessment pool for long-term care insurer failures to include a 50% contribution from life insurance companies, and
  • banning the use of a market-rate adjustment to inflation provisions of long term care policies when calculating guaranty association covered claims.

The next step in the process will be for states to decide whether to adopt the revised NAIC Model Act, which may be an uphill battle in states with high HMO penetration.

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