HM Medical Clinic

 

Agenda - health insurance and managed care (b) committee

Agenda Item #1
Hear Presentation Related to Tackling Rising Drug Costs—Robert Darin (CVS
February 20 t
How we cut
pharmacy
more than
Proactive pharmacy management cut our clients' 2015 trend by more than half. despite record levels of drug price increases Payers face a highly volatile prescription market today, marked by an unprecedented level of drug price increases and a stream of high-cost new specialty launches. The double-digit drug trend we experienced in 2014 increased the sense of urgency among our clients to implement programs and plan designs to mitigate growth in their benefi t costs. I'm happy to share with you that in 2015, the pharmacy management solutions they implemented were effective.
This result is gratifying, but market forces and trend drivers persist. I want to assure you that we are vigilant in monitoring market developments, and our new interactive RxInsights trend surveil ance tools are helping clients see the impact of market forces and cost management solutions in real time. In the coming weeks we will be launching our Dynamic Trend Manager, which will provide additional cost savings opportunities for our clients while helping to improve the health of their plan members.
Jonathan C. Roberts
President, CVS Caremark
After reaching a double-digit high of 11.8 percent in 2014,
CVS Health pharmacy benefit management clients' prescription
drug trend dropped dramatically to 5 percent in 2015.
While the trend drivers—including CVS Caremark Commercial Gross Trend brand, specialty and generic price inflation—were similar to what was seen in 2014, broad adoption of proactive CVS Caremark® cost management strategies successful y mitigated their impact in 2015.
Specialty pharmaceuticals continue to be a major driver of trend. Growth rates for clients exceeded 30 percent in 2014. In 2015, due to our differentiated cost management approach, we were able to reduce the specialty rate of growth for our clients on average by more than one third.
Prescription drug trend is the measure of growth in prescription spending per member per month (PMPM). Trend calculations take into account the effects of drug price, drug utilization and the mix of branded versus generic drugs as well as the positive effect of negotiated rebates on overall trend. The 2015 trend cohort represents CVS Caremark commercial clients—employers and health plans. Brand price inflation
primary driver of 2015 trend.
Price inflation was again the primary antidiabetics. Importantly, despite driver of trend. Inflation in non- the launch of specialty blockbusters specialty brands far outweighed al like Harvoni® and increases in both other factors. This inflation impact price and utilization, specialty as a is largely due to double-digit price whole had less impact on trend than increases for high-volume drugs non-specialty brand inflation.
in high-volume categories such as 2015 Gross Trend and Drivers: Brand Price Inflation Primary Driver Specialty
How CVS Caremark Cost Management Approach Helps Deliver Lowest Net Cost Real-Time Trend Surveillance
and Dynamic Management
Intel igent purchasing begins with a The second leg of our approach With our real-time trend surveil ance strategic assessment of the market, is a range of versatile cost and dynamic management—the including the pharmaceutical pipeline, management strategies to manage third leg of our cost management clinical evidence and actions by other product selection and utilization. approach—we help clients anticipate purchasers. The assessment helps These solutions, including formulary and stay ahead of evolving market us utilize market competition to obtain management and the use of narrow factors such as dramatic increases aggressive rebates and enable us to and preferred networks, enable clients in price or utilization. In recent years, offer competitive pricing terms to our to tailor their management approach, for example, the market experienced clients. More than 90 percent of our utilize targeted strategies and ensure explosive growth in compounds. manufacturer contracts include price that the right members get the right Our response included utilization protection, a critical element to protect drug at the right price.
management measures and cost our clients in a market characterized limits for client adoption, resulting by excessive drug price increases. In in $1 bil ion in savings across our addition, with generic dispensing rates commercial lives. In 2016 we wil above 80 percent, we saw a modest continue to focus on identifying key impact on trend due to generic inflation drug trend drivers in real time and coming in at 0.7 percent in 2015. Our quickly deliver flexible solutions to creation of Red Oak Sourcing, the our clients to rapidly help mitigate largest generic sourcing entity in the predicted increases in our clients' U.S., in 2014 has proven to be a critical pharmacy spend.
asset to help drive competitive generic pricing when your members utilize one of our pharmacy channels. Hyperinflation gets headlines, but inflation in standard
categories is a bigger contributor.
Hyperinflation, increases of Generic Inflation Impact
more than 100 percent and ranging up to 5,000 percent, Specialty Brand
generated headlines and a great deal of buzz although it affected a limited number of products and added under a percentage point to trend.
Non-Specialty Brand
Traditional Inflation
Clients with Standard Formulary saved more than
$700,000 per 100K lives due to Glumetza alone.
These drastic price increases typical y drug metformin, was removed from raised the drug's price twice in occur when the rights to a product our Standard Formulary several years three months, a total increase of are acquired by a new drug company. ago. A review by our independent more than 800 percent. Clients who The new owner raises the product's Pharmacy and Therapeutics had adopted our Standard Formulary price, sometimes several times in Committee found that the drug added were protected from the impact of a matter of months. For example, little value and was overly expensive. this hyperinflation and saved on Glumetza®, a branded form of the In 2015, the drug was acquired by average more than $700,000 per widely available generic antidiabetic Valeant Pharmaceuticals. Valeant 100,000 lives in 2015.
Aligned with Standard Formulary
In 2015, Valeant acquired the
rights to Glumetza, and raised
the price twice in 3 months.
PMPM costs for Glumetza were nearly 60¢ less for clients aligned with our Standard Formulary.
2014 PMPM Cost
2015 PMPM Cost
Formulary management is fundamental in
combating drug price inflation.
CVS Caremark has led the industry on careful clinical evaluation of need. Clients who adopted our most in formulary management offering therapeutic options and are designed selective formulary, Value Formulary, clients a range of choices which to help deliver lowest net cost while in 2015 could have saved $20 mil ion deliver varying levels of savings. Al helping ensure that members have or more depending on the number of our formulary offerings are based access to the medications they plan members they support.
A client with 100K lives could have saved more than Opt-Out Standard
Standard
PMPM gross costs could have been reduced by more than $35 for clients aligned with our Value Formulary.
Adopting formularies that exclude certain products and drive generics is critical to help deliver the lowest net cost.
Recently published research from generic dispensing rates, they also the CVS Health Research Institute make medication more affordable demonstrated that selective formulary for members and result in improved design has several effects. In terms of adherence and member satisfaction. behavioral economics, it limits choice For the payer, the study shows that and reduces confusion, simplifying a selective formulary can lower the process for members. Because medication costs by $20 per utilizing selective formularies general y improve member per month.
Insights is a series of communications focused on providing context and perspective about key pharmacy and health care topics. Payers continual y face new chal enges such as volatility in the pharmaceutical market, costly new treatments, and regulatory changes. The Insights Executive Briefing is intended to support our clients in understanding and managing the impact of new marketplace developments to help them achieve their goals of lowering costs while improving the health of their plan members. You can subscribe to the Insights Executive Briefing
by emailing [email protected]
Data Source: CVS Health Enterprise Analytics All of the savings and/or trend changes discussed in this Executive Briefing will vary based on a variety of factors, including things like demographics, plan design and programs adopted by the client. Client-specific modeling available upon request.
This document contains references to brand-name prescription drugs that are trademarks or registered trademarks of pharmaceutical manufacturers not affiliated with CVS Health.
2016 CVS Health. All rights reserved.
Volume 2, 2 t
How Dermatologicals
Became a Top Trend Driver
In 2015, the dermatological category trended at 39.5 percent and contributed 1.8 percent to our gross trend.
Over the last few years, the dermatological category has emerged as a top driver of drug trend. In 2015, the category trended at 39.5 percent and its impact on our gross trend was second only to that of antidiabetics. Of the ful -year CVS Health 2015 trend of 5.0 percent, the dermatologic category contributed 1.8 percent. What's behind this category spike? Although one word (onycomychosis—or toenail fungus) may come to mind, the answer is far more complex. Toenail treatment Jublia® was the top trend driver in the category, but it's not the whole story. The dermatologic category is diverse. It includes oral and topical drugs that treat multiple conditions. Generics account for more than 80 percent of dermatological prescriptions dispensed to CVS Caremark members, but specialty drugs also contribute significantly.
New drugs, high prices, heavy promotion drove
antifungal trend to triple digits
Jublia®, the top trend driver among 2015. Copay coupons are easily percent in 2015 and contributed drugs in the dermatological class, accessed online and provided directly significantly to a nearly 10 percent was one of two new products to dermatologists for distribution to drop in GDR in the antifungals. approved for toenail fungus in 2014. patients at the point of prescribing. Meanwhile, British treatment Drug company Valeant promoted it Furthermore, a preferred pharmacy guidelines for onychomycosis heavily to consumers, including during arrangement between manufacturer recommend Lamisil®, an over-the- the 2016 Super Bowl at a reputed Valeant and Walgreens circumvented counter product in the United States, cost of $4.5 mil ion.1 The ads don't payer strategies aimed at enhancing as treatment of choice. Compared mention the drug's cost, over $500 cost management through the use of to Jublia, British researchers cited per bottle. The promotional campaign mail service pharmacies where co- Lamisil for greater efficacy and a was very effective. Utilization growth pay cards are typical y not accepted. shorter duration of treatment.2 for Jublia topped 700 percent in Jublia posted a trend rate of 948 Jublia's High Price
Heavy Promotion
High Utilization
Reduced GDR
And pushed trend
(Over $500 a bottle) ($4.5M for an ad (700% increase in for antifungals to
at the Super Bowl) 2015) which
which fueled
There's More to Dermatologicals than Antifungals
Jublia is the major factor in the high Stelara® was the top drug by PMPM topped 55 percent for the trend in this category, but payers also spend in the entire dermatologic corticosteroid clobetasol, pushing face other chal enges: category. Cosentyx®, another trend for the sub-class over specialty product approved to treat Movement to higher priced
psoriasis in early 2015, was also products, and not just in the
among the top 20 dermatology antifungals. Products such as
drugs. Cosentyx targets a specific Absorica® and Veltin® gained protein in the immune system, a share in the acne sub-class. These new mechanism of action. Other products are heavily promoted and manufacturers have similar products cost hundreds of dol ars per month. in the pipeline, but for the time being Among acne products, gross costs Cosentyx is one-of-a-kind, without PMPM rose from $1.24 in 2014 to competitors, and it's gaining utlizers. $1.51 in 2015. Generics represent a 68 percent savings within this class.
Isolated examples of generic
inflation. Generics continue to offer
Increased use of specialty
great value and cost management, products as more drugs are
but for selected medications, price approved to treat psoriasis.
inflation has translated a generic A specialty product that was into a trend driver. In 2015, average approved for psoriasis in 2013, wholesale price (AWP) inflation Top 5 Dermatological Sub-Classes
Represent 76.6% of category spend
Gross Cost
Key Drivers of Trend
(change from ‘14 to ‘15)
Increased utilization of high-cost brand alternatives Corticosteroids, High AWP Inflation on generics (e.g., clobetasol) Increased utilization of specialty medications Stelara® and Cosentyx® Antifungals, Topical High utilization of new high-price Local Anesthetics, Increased utilization in high-cost topicals and patches Trend, cost and other analysis based on the 2015 CVS Caremark commercial trend cohort.
PMPM per member per month. GDR generic dispensing rate. AWP average wholesale price.
Key Points About the Top Five
Double-digit or greater trend
Declining utilization of generics
GDR decline is unusual in the
in four out of the five sub-classes.
in four out of five sub-classes, and current landscape. In most categories, in the category as a whole—from brand utilization is declining. Despite Triple-digit trend for the antifungals,
81.8 percent in 2014 to 80.1 percent this, generics remain a key cost the sub-class that includes Jublia.
management strategy in this category. Blunting the Spike in Dermatology with Formulary
Gross Cost PMPM 2014
Gross Cost PMPM 2015
$1.36 $4.52
Standard
Opt-Out Standard
Standard
Opt-Out Standard
Reported cost differentials and other results are averages based on analysis of actual experience by those clients who have adopted the specified program. A review of performance for the (UM) programs, and lifestyle class 85.7 percent. Clients who aligned with dermatological category bears out the controls. Our Opt-Out Standard the Opt-Out Standard Formulary faced value of careful formulary strategies. Formulary is for clients who want the gross PMPM costs nearly three dol ars Our most selective offering, Value broadest coverage using a commercial higher—$7.43—and had a GDR seven Formulary, delivers significant savings by template formulary. In 2015, gross percentage points lower—78.5 percent. driving substantial increases in generic PMPM costs for clients aligned with Overall costs also rose the most in utilization through a combination of a our Value Formulary settled at $4.52, the Opt-Out Standard Formulary narrow drug list, utilization management with a generic dispensing rate (GDR) of ($2.21 PMPM).

Enhance Your Dermatology
Management Strategy Now for 2016
The diverse factors that are driving spend in the dermatological category complicate management. Direct-to-consumer advertising and offers of copay assistance for high-priced new products can undermine payer strategies. Price increases, including in generics, underscore the need for careful purchasing and price protection. Products that offer a new mechanism of action merit comprehensive review prior to formulary inclusion as well as a utilization management approach that aligns with payer priorities.
Recently, as part of our ongoing commitment to helping deliver the lowest net cost while improving health, we introduced Dynamic Trend Manager. Dynamic Trend Manager uses our real-time surveil ance and monitoring tools to identify potential trend drivers (e.g., new costly drugs, price increases and spikes or changes in utilization, etc.) and offers new opt-in solutions or enhancements you can apply throughout the year to your existing cost-management strategy. Due to all the factors and concerns discussed here, we focused our first Dynamic Trend Manager solution on
the dermatological category. Dermatology Management, launching now, is a utilization management package
for select specialty and non-specialty dermatology drugs (such as Jublia, Stelara, Cosentyx and others)
identified as key drivers of spend in the category. This opt-in program al ows clients that have aligned to our
Standard Formulary to manage dermatologicals with coverage similar to that offered by our Value Formulary
option. There is no additional charge to implement the Dermatology Management program.3 Your account
team will be reaching out to you to discuss the program and your projected savings soon, if they
have not already done so.
As always, thank you for your business and your trust.
Jonathan C. Roberts
President, CVS Caremark
1 http://worldofdtcmarketing.com/jublia-wastes-money-dtc-spot-super-bowl/bad-practices/2 Br J Dermatol. 2014;171(5):937-958. Br J Dermatol. 2004; 150(3):537-44. J Am Acad Dermatol. 2013; 68(4):600-8. Lamisil prescribing information; 2015 February.
3 Note: In some instances, a contract addendum may be required. Clients will pay their contracted rate for prior authorizations, appeals and Specialty Guideline Management.
Data Source: CVS Health Enterprise Analytics As used throughout this document, prescription drug trend (or "Drug Trend") is the measure of growth in prescription spending per member per month (PMPM). Drug Trend calculations take into account the effects of drug price, drug utilization and the mix of branded versus generic drugs. The 2015 Drug Trend cohort includes CVS caremark clients in the commercial segment—health plans and employers. Overall gross Drug Trend includes the effect of negotiated rebates. Dermatological category trend does not include the effect of formulary rebates.
All of the savings and/or trend changes discussed in this Executive Briefing will vary based on a variety of factors, including demographics, plan design and programs adopted by the client. Client-specific modeling available on request.
This document contains references to brand-name prescription drugs that are trademarks of pharmaceutical manufacturers not affiliated with CVS Health.
2016 CVS Health. All rights reserved.
Agenda Item #2
Hear Updates on the Center for Health Insurance Reforms' (CHIR) Work Related to
the Federal Affordable Care Act (ACA)—JoAnn Volk (CHIR, Georgetown Health
Policy Institute)

Agenda Item #3
Consider Adoption of its 2015 Fall National Meeting Minutes
Draft Pending Adoption
Health Insurance and Managed Care (B) Committee National Harbor, Maryland November 20, 2015 The Health Insurance and Managed Care (B) Committee met in National Harbor, MD, Nov. 20, 2015. The following Committee members participated: Roger A. Sevigny, Chair (NH); Mike Kreidler, Vice Chair (WA); Andy Tobin (AZ); Marguerite Salazar represented by Peg Brown (CO); Katharine L. Wade (CT); Mike Rothman (MN); Laura N. Cali (OR); Teresa D. Miller and Jessica Altman (PA); Ángela Weyne (PR); Todd E. Kiser represented by Tanji Northrup (UT); Jacqueline K. Cunningham represented by Althelia Battle (VA); Ted Nickel represented by Dan Schwartzer and J.P. Wieske (WI); and Tom Glause (WY). Also participating were: Steve Ostlund (AL); Dave Jones and Perry Kupferman (CA); Lisa Parker (FL); Karl Knable (IN); Megan Mason (MD); and Angela Nelson and William Leung (MO). 1. Heard a Presentation on Health Care Costs Lynn Quincy (Consumers Union) discussed health care value with "value" defined as the health outcomes achieved per dollar spent. She highlighted the symptoms of poor health care value and said regulators have a role in addressing it. Ms. Quincy explained what that role entailed: 1) supporting/using all payer claims datasets in order to: a) inform rate review; b) support price transparency tools for consumers and other audiences; and c) understand the pricing "landscape" and identify outliers/areas of excessive price variation; 2) expanding factors used in rate review; and 3) working across state agencies to comprehensively address health care spending and quality. She suggested that the NAIC could play a role in addressing this issue by establishing a working group and/or developing a white paper on: 1) health care cost drivers; 2) effective quality measures at the plan and provider level; 3) the impact of proposed health plan mergers on consumers; 4) the impact of proposed pharmaceutical benefit manager (PBM) mergers on consumers; 5) interventions that successfully address health care value; and 6) best practices with respect to inter-agency efforts to maximize health care value. Ms. Quincy also identified what she believes to be the important cost drivers in the rise of health care costs. She also explained that the Consumers Union's "Health Care Value Hub" monitors, synthesizes, translates and disseminates evidence about interventions intended to improve value for the health care dollar. It also supports and connects consumer advocates across the U.S., providing comprehensive fact-based information to help them advocate for change and connect them to researchers and other resources, such as Easy Explainers and research briefs. 2. Heard a Presentation on Health Insurance Mergers David Balto (Law Offices of David A. Balto) discussed the vital role that state insurance commissioners play in investigating health insurance mergers, noting the importance of that role as related to the pending mergers of Anthem-Cigna and Aetna-Humana. He focused on the powers that state insurance commissioners have as a result of the Insurance Holding Company System Regulatory Act (#440) versus those of the U.S. Department of Justice (DOJ). Mr. Balto said state insurance commissioners' review of health insurance mergers involves an independent, public investigation different from the DOJ. He noted that this review not only focuses on competition, but also focuses on the ability of the company to offer health insurance and the interest of policyholders and the general public. Mr. Balto also discussed why the state insurance commissioners' review of mergers is superior due to their authority, expertise, transparency and other factors. He suggested that the NAIC form a task force or working group to investigate the Anthem-Cigna and Aetna-Humana mergers. With respect to Mr. Balto's suggestion that the NAIC form a task force or working group to investigate the Anthem-Cigna and Aetna-Humana pending mergers, Commissioner Jones noted that the states where these companies are domiciled have already reached out to the other affected states. As such, there is no need for the NAIC to form a task force or working group. Mr. Balto acknowledged Commissioner Jones' comment, but said that some states may have different issues of concern than the domiciliary states, which may justify the NAIC establishing a task force or working group to investigate the pending mergers. 3. Heard an Update from the CCIIO on its ACA Implementation Activities Christen Link-Young (Center for Consumer Information and Insurance Oversight—CCIIO) updated the Committee on the CCIIO's activities related to federal Affordable Care Act (ACA) implementation, particularly as to the progress of the third 2015 National Association of Insurance Commissioners Draft Pending Adoption
open enrollment into the health insurance exchanges and the provisions of the recently released "Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2017" (Payment Parameters) proposed rule. Ms. Link-Young noted that the third open enrollment period has been smoother than previous ones. She said that, to date, there have been around one million plan selections through the federally facilitated exchanges (FFEs), with additional plan selections being made through the state-based exchanges (SBEs). Ms. Link-Young said the CCIIO has improved the Healthcare.gov website to make it more consumer-friendly. She also said there are new consumer tools to assist consumers in selecting plans. Ms. Link-Young highlighted some of the provisions in the Payment Parameters proposed rule. Those provisions include: 1) standardized options to simplify the shopping experience for consumers on the individual market FFEs; 2) minimum threshold requirements for network adequacy to be selected by the state in which the FFM is operating, subject to certain minimum criteria established by the U.S. Department of Health and Human Services (HHS); 3) new network adequacy continuity of care requirements applicable to qualified health plans on FFEs that would require the issuer to provide written notice to enrollees of discontinuation of a provider 30 days prior to the effective date of the change or otherwise as soon as practicable and in the case where a provider is terminated without cause, would require the issuer to allow an affected enrollee to continue treatment until the treatment is complete or for 90 days, whichever is shorter, at in-network cost-sharing rates; and 4) a new requirement that issuers count the cost sharing charged to the enrollee for certain out-of-network services provided at an in-network facility towards the enrollee's annual limitation on cost sharing unless the issuer provides 10 days' notification to the enrollee that an out-of-network provider may be providing these services and that the enrollee may incur additional costs. 4. Adopted its Nov. 3, Oct. 12 and Summer National Meeting Minutes Commissioner Kreidler made a motion, seconded by Commissioner Rothman, to adopt the Committee's Nov. 3 (Attachment One), Oct. 12 (Attachment Two) and Summer National Meeting minutes (see NAIC Proceedings – Summer 2015, Health Insurance and Managed Care (B) Committee). The motion passed unanimously. 5. Adopted the Reports of its Subgroups, Working Group and Task Forces a. Consumer Information (B) Subgroup Ms. Nelson said the Consumer Information (B) Subgroup completed its work on the summary benefits and coverage (SBC) template document, which the Committee adopted Oct. 12 via conference call. She said the Subgroup continued to meet twice a week via conference call to work on the uniform glossary and recently completed its work, as reflected in an Excel spreadsheet that details the Subgroup's agreed upon definitions. Ms. Nelson requested that the Committee permit the Subgroup to forward the Excel spreadsheet to the CCIIO, with the understanding that a formal implementation package for the agencies implementing the ACA will follow. Commissioner Kreidler made a motion, seconded by Commissioner Rothman, to adopt the report of the Consumer Information (B) Subgroup, including its request to forward the Excel spreadsheet reflecting the Subgroup's work concerning the uniform glossary to CCIIO, with the understanding that a formal implementation package for the agencies implementing the ACA will follow. The motion passed unanimously. b. Medical Loss Ratio Quality Improvement Activities (B) Subgroup Ms. Altman said the Medical Loss Ratio Quality Improvement Activities (B) Subgroup met Nov. 20. During this meeting, the Subgroup adopted its Oct. 19 minutes, which included reviewing its charge and discussing the current definition of "medical loss ratio quality improvement activities," as found in the Supplemental Health Care Exhibit (SHCE), Part 3. Ms. Altman said the Subgroup also heard testimony from several stakeholders concerning the current definition of "medical loss ratio quality improvement activities" for purposes of calculating the federal medical loss ratio (MLR) and whether it could, or should not, be amended. She said the Subgroup set a Jan. 15, 2016, public comment deadline to receive more detailed information on the stakeholders' recommendations regarding the definition, particularly on value-based care initiatives and antifraud expenditures. Commissioner Rothman made a motion, seconded by Commissioner Miller, to adopt the report of the Medical Loss Ratio Quality Improvement Activities (B) Subgroup (Attachment Three). The motion passed unanimously. 2015 National Association of Insurance Commissioners Draft Pending Adoption
c. Health Care Reform Regulatory Alternatives (B) Working Group Mr. Schwartzer said the Health Care Reform Regulatory Alternatives (B) Working Group met Nov. 19. During this meeting, the Working Group disbanded the Territories (B) Subgroup and the Legal Authority (B) Subgroup. Mr. Schwartzer said the Working Group will incorporate their activities within its work. He said the Working Group also heard a presentation on state innovation waivers under Section 1332 of the ACA. Mr. Schwartzer said the Working Group also discussed its activities for 2016, which will include a continuation of its current activities and new work concerning health care costs. Mr. Schwartzer made a motion, seconded by Commissioner Glause, to adopt the report of the Health Care Reform Regulatory Alternatives (B) Working Group (Attachment Four). The motion passed unanimously. d. Health Actuarial (B) Task Force Mr. Ostlund said the Health Actuarial (B) Task Force met Nov. 18. During this meeting, the Task Force adopted its Sept. 15 and Summer National Meeting minutes and the interim minutes of its subgroups. Mr. Ostlund said the Task Force also adopted the reports and the interim minutes of the Health Care Reform Actuarial (B) Working Group and its Long-Term Care Actuarial (B) Working Group. He said the Health Care Reform Actuarial (B) Working Group has requested the American Academy of Actuaries (Academy) conduct a study of the ACA's risk adjustment program for the individual and small group markets, with particular emphasis on the perceived adverse effect on smaller issuers. Mr. Ostlund said the Long-Term Care Actuarial (B) Working Group began discussion of ideas for developing a set of long-term care (LTC) insurance rate review guidelines that will be more uniform among the states and discussed a set of charges for the Long-Term Care Valuation (B) Subgroup. He said the Task Force also adopted the Medicare Supplement Refund Formula (B) Subgroup's report. The Subgroup continued discussion of the Academy's recommendations on modifications to the Medicare supplement refund formula. Mr. Ostlund said the Task Force will gather refund data from the states to determine the impact of making the recommended changes. The Task Force also heard several updates, including an update from the American Academy of Actuaries (Academy) Individual Disability Table Work Group concerning its work to related updating the incidence modifiers used in active life reserve calculations for employer-sponsored disability income policies. Mr. Ostlund said the Task Force plans to meet via conference call in December to discuss the proposed modifications. He said the Task Force also heard an update from the Academy/Society of Actuaries (SOA) Cancer Claim Cost Table Work Group. The Work Group presented graduated valuation tables and sample reserve calculations. Mr. Ostlund said the Work Group plans to finish work on extending ages in the tables and the development of factors for hospitalization limits. He said once this work is complete, the Work Group will draft a report for the Task Force's review. Commissioner Cali made a motion, seconded by Commissioner Kreidler, to adopt the report of the Health Actuarial (B) Task Force. The motion passed unanimously. e. Regulatory Framework (B) Task Force Mr. Wieske said the Regulatory Framework (B) Task Force met Nov. 19. During this meeting, the Task Force discussed its work plan for continuing its work on revising the Accident and Sickness Insurance Minimum Standards Model Act (#170) and the Model Regulation to Implement the Accident and Sickness Insurance Minimum Standards Model Act (#171). Mr. Wieske said the Task Force set a Jan. 22, 2016, public comment deadline to receive comments on whether the provisions concerning disability income protection coverage should be retained in the models and in addition, what specific revisions, if any, should be made to those provisions. He said the Task Force also set a Jan. 22, 2016, public comment deadline to receive comments on what revisions should be made to the Health Carrier Prescription Drug Benefit Management Model Act (#22) related to its 2016 Proposed Charge from the Committee. Mr. Wieske said the Task Force adopted the Network Adequacy Model Review (B) Subgroup's report. He noted that the Subgroup completed its work on revising the Managed Care Plan Network Adequacy Model Act (#74), which the Executive (EX) Committee and Plenary will consider for adoption on Nov. 22. Mr. Wieske said the Task Force also adopted the ERISA (B) Working Group's report. He said that during its meeting Nov. 19, the ERISA (B) Working Group discussed its plan for revising and updating the Health and Welfare Plans Under the Employee Retirement Income Security Act: Guide to State and Federal Regulation (ERISA Handbook). Mr. Wieske said the Working Group plans to work on the revisions section-by-section and anticipates releasing an initial draft of proposed revisions to the case law section in a few weeks for public comment. He said the Working Group anticipates meeting via conference call sometime in January 2016 to discuss the comments received. 2015 National Association of Insurance Commissioners Draft Pending Adoption
Mr. Wieske made a motion, seconded by Commissioner Wade, to adopt the report of the Regulatory Framework (B) Task Force. The motion passed unanimously. Senior Issues (B) Task Force Commissioner Rothman said the Senior Issues (B) Task Force met Nov. 19. During this meeting, the Task Force adopted the reports of its subgroups and heard a federal legislative update on issues and legislation of interest to the Task Force. Commissioner Rothman said the Long-Term Care Consumer Disclosure (B) Subgroup continues to meet via conference call to discuss revisions to the personal worksheet in the Guidance Manual (Appendix B). He said the Medigap (B) Subgroup also continues to meet via conference call to consider revisions to the Medicare Supplement Insurance Minimum Standards Model Act (#650) and the Model Regulation to Implement the NAIC Medicare Supplement Insurance Minimum Standards Model Act (#651) as a result of H.R. 2, the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015, which prohibits coverage of the Medicare Part B deductible for beneficiaries that become eligible for Medicare beginning on or after Jan. 1, 2020. Commissioner Rothman said the Task Force established a new subgroup, the Long-Term Care Innovation (B) Subgroup, to address the future of LTC insurance and examine innovations. He said the Task Force also discussed a potential concern that as a result of MACRA, agents and other organizations could be misleading those currently enrolled in Plan C or Plan F, indicating that these plans will no longer be available on or after Jan. 1, 2020, which is not the case. Commissioner Rothman made a motion, seconded by Commissioner Weyne, to adopt the report of the Senior Issues (B) Task Force. The motion passed unanimously. 6. Heard an Update from the CHIR of the Georgetown Health Policy Institute JoAnn Volk (Georgetown Health Policy Institute, Center on Health Insurance Reforms—CHIR) updated the Committee on the CHIR's work related to the ACA through the State Health Reform Assistance Network. The update focused on the CHIR's discussion of the CHIR's navigator resource guide and findings from its study of ACA transparency provisions. Ms. Volk said the study examines data that is currently collected and reported to the states and discusses how data can be used to guide enforcement and inform policymaking, particularly with transaction level data rather than summary level data. She also discussed the CHIR's findings and observations related to a study titled "Post-Affordable care Act Trends in Health Coverage for Small Businesses." Additionally, Ms. Volk discussed the CHIR's upcoming work, which includes work tracking state market reforms and state exchange decisions, as well as a 50-state review of continuing of care provisions for new enrollees and for mid-year changes in provider network and balance billing protections. 7. Heard a Presentation on "Increasing Transparency for Consumers and Regulators" Joel Ario (Manatt Health Solutions) and Katherine Hempstead (Robert Wood Johnson Foundation—RWJF) gave a presentation on increasing transparency for consumers and regulators. They suggested that state insurance regulators can broaden and deepen market transparency in ways that serve consumers, enhance regulatory expertise and improve competition in health insurance markets. Ms. Hempstead noted the RWJF's support for robust individual and small group markets because they are critical to a comprehensive coverage strategy. She noted that by supporting transparency initiatives, the RWJF is helping to make these markets easier for researchers to study and consumers to navigate. Ms. Hempstead suggested a potential partnership with the NAIC and the states to make SERFF and other data more available in user-friendly formats. The RWJF and Manatt are using the data currently available to create publicly available datasets with individual exchange plan-level information for all 50 states. Mr. Ario explained the benefits of having an open access database. Mr. Ario and Ms. Hempstead noted that such transparency lags in the off-exchange market. They noted that the off-exchange market is larger than the public marketplace in many states and that because of this and other factors, the lack of transparency about this market will be a growing problem for consumers and regulators. Mr. Ario outlined what state departments of insurance can do to increase transparency. Having no further business, the Health Insurance and Managed Care (B) Committee adjourned. W: National Meetings 2015 Fall Cmte B 11-Bmin.docx 2015 National Association of Insurance Commissioners Agenda Item #4
Consider Adoption of the CO-OP Solvency and Receivership (B) Subgroup's Charges
CO-OP Solvency and Receivership (B) Subgroup
Proposed 2016 Charge:
The CO-OP Solvency and Receivership (B) Subgroup will:

A. Provide a forum for state regulators to discuss and share information on the status of the Consumer Oriented and Operated Plans (CO-OPs) created under the federal Affordable Care Act (ACA) via conference calls and in-person meetings.—Essential Agenda Item #5
Consider Adoption of the Revised Senior Issues (B) Task Force Charges
Adopted by the Senior Issues (B) Task Force – Feb. 18, 2016 2016 REVISED CHARGES
SENIOR ISSUES (B) TASK FORCE

The mission of the Senior Issues (B) Task Force is to 1) consider policy issues; 2) develop appropriate regulatory standards;
and 3) revise, as necessary, the NAIC models, consumer guides and training material on Medicare supplement insurance,
senior counseling programs and other insurance issues which affect older Americans.
Ongoing Maintenance of NAIC Programs, Products or Services

1. The Senior Issues (B) Task Force will:
A. Develop appropriate regulatory standards and revisions, as necessary, to the NAIC models, consumer guides and training material on Medicare supplement insurance, senior counseling programs and other insurance issues that affect older Americans.—Essential B. Continue to monitor and work with federal agencies to advance appropriate regulatory standards for Medicare supplement and other forms of health insurance applicable to older Americans.—Essential Review the Medicare Supplement Insurance Minimum Standards Model Act (#650) and the Medicare Supplement Insurance Minimum Standards Regulation (#651) to determine if amendments are required based on changes to federal law, and revise if necessary.—Essential C. Monitor the Medicare Advantage and Medicare Part D marketplace, assist the states as necessary with regulatory issues, and maintain a dialogue and coordinate with the U.S. Centers for Medicare & Medicaid Services (CMS) on regulatory issues, including solvency oversight of waived plans and agent misconduct.—Essential D. Monitor and assist the states in the implementation of changes to Model #651 to modernize the Medicare supplement market, as approved by the NAIC in March 2007 and as required by the federal Medicare Improvement for Patients and Providers Act of 2008 and the federal Genetic Information Nondiscrimination Act of 2008.—Essential E. Continue to monitor the changes in the Medicare supplement insurance market and assist states with implementation of Medicare supplement model amendments due to federal statutory changes.—Essential F. Provide the perspective of state insurance commissioners to the U.S. Congress, as appropriate, and CMS on insurance issues, including those concerning the effect and result of federal activity on the senior citizen health insurance marketplace and regulatory scheme.—Essential G. Review and monitor state and federal relations with respect to senior health care initiatives and other impacts on the states. Work with federal agencies as appropriate.—Essential H. Work with CMS to revise the annual joint publication, Choosing a Medigap Policy: A Guide to Health Insurance for People with Medicare.—Essential Monitor developments concerning the State Health Insurance Assistance Programs (SHIPs), including information on legislation impacting the funding of SHIPs, provide assistance to states with issues relating to SHIPs, support strong partnership between SHIPs and CMS, and provide the perspective of state insurance commissioners to federal officials, as appropriate on issues concerning SHIPs.—Important J. Assist the states and serve as a clearinghouse for information on Medicare Advantage plan activity. —Important K. Monitor and maintain, in accordance with changes to Model #651 approved by the NAIC in March 2007, a record of state approvals of all Medicare supplement insurance new or innovative benefits for use by regulators and others.—Important L. Review, in accordance with changes to Model #651 approved by the NAIC in March 2007, state-approved new or innovative benefits, and consider whether to recommend that they be made part of standard benefit plan designs in the model regulation.—Important M. Develop appropriate regulatory standards and revisions, as necessary, to the NAIC models, consumer guides and training material on long-term care insurance. Work with federal agencies as appropriate. —Essential N. Continue to study and evaluate evolving long-term care insurance product design, rating, suitability and other related factors, and review the existing Long-Term Care Insurance Model Act (#640) and Long-Term Care Insurance Model Regulation (#641) to determine their flexibility to remain compatible with the evolving delivery of long-term care services and remain compatible with the evolving long-term care insurance marketplace. —Essential O. Monitor and provide assistance to the states on the implementation of the 2000 and 2014 rating practices amendments to Model #641, and the model bulletin adopted by the NAIC in December 2013 regarding alternative filing requirements for long-term care premium rate increases.—Important P. Examine whether there is anything the NAIC can or should do to address possible long-term care insurance reserve deficiencies and rating issues, such as mitigation against rate increases and death spirals.—Essential 2016 National Association of Insurance Commissioners Q. Explore options, in line with the NAIC's current long-term care insurance models, where appropriate, and monitor efforts to ensure the fair or equal treatment of policyholders, including those in situations where policyholders live in multiple states.—Essential R. Examine how regulators should treat the spin-off or transfer of closed blocks of long-term care insurance business to another entity, including process issues related thereto.—Essential S. Examine examples of health-related financial exploitation of seniors and work with other NAIC committees, task forces, and working groups on possible solutions.—Essential
2. The Long-Term Care Consumer Disclosure (B) Subgroup will:
A. Review the existing requirements for consumer disclosures contained in Model #640, Model #641 and the Guidance Manual for Rating Aspects of the Long-Term Care Insurance Model Regulation (Guidance Manual) and make recommendations for needed improvements to the Task Force.—Essential B. Continue to consider all consumer disclosure requirements for long-term care insurance, including those provided at the time of issue as well as those provided at the time of rate increase.—Essential
3. The Medigap (B) Subgroup will:
A. Review the specific changes made to Medicare supplement insurance (Medigap), under HR 2, the Medicare Access and CHIP Reauthorization Act of 2015, which was signed into law April 16, 2015 (Public law 114-10).—Essential B. Revise and conform Model #650, Model #651 and consumer guides and training material on Medigap to the specific enacted changes prohibiting coverage of the Medicare Part B deductible for beneficiaries that become eligible for Medicare beginning on or after Jan. 1, 2020.—Essential
4. The Long-Term Care Innovation (B) Subgroup will:
A. Examine the future of financing long-term care given the significant impact of long-term care costs on state budgets through state Medicaid programs, including an assessment of the role the private market should play.—Essential B. Review the number of alternative products structures being developed and, in some cases, sold by companies (i.e., long-term care/life combination products, term products, and universal long-term care insurance policies). Consider whether these are viable alternative products and what other types of products may assist in financing long-term care costs. This does not include examination of rating issues facing the legacy long-term-care insurance products.—Essential C. Examine whether amendments are needed to current NAIC models or regulations, whether there is a need for new models or regulations to accommodate a changing market, or whether federal action may be necessary and should be encouraged.—Essential D. Discuss the legal and regulatory barriers that may need to be overcome to improve the functioning of the private long-term care insurance market to assist in financing long-term care needs.—Important E. Consider the pricing issues with any potential new long-term care financing products and whether the pricing of these products creates a stable market.—Important F. Work with private insurance companies, consumers, and consumer advocates about the future role of insurance in financing long-term care given the history of long-term care insurance over the last few decades, including the role they see for the private market and the types of products that are most appealing to them.—Important NAIC Support Staff: David Torian and Brian R. Webb 2016 National Association of Insurance Commissioners Agenda Item #6
Consider Request from the Health Actuarial (B) Task Force for Extension of Model Law
Development for the Health Insurance Reserves Model Regulation (#10)
REQUEST FOR MODEL LAW DEVELOPMENT
This form is intended to gather information to support the development of a new model law or amendment to an existing
model law. Prior to development of a new or amended model law, approval of the respective Parent Committee and the
NAIC's Executive Committee is required. The NAIC's Executive Committee will consider whether the request fits the
criteria for model law development. Please complete all questions and provide as much detail as necessary to help in this
determination.
Please check whether this is:
New Model Law
Amendment to Existing Model
Name of group to be responsible for drafting the model:
Health Actuarial (B) Task Force NAIC staff support contact information:
Eric King [email protected] 816-783-8234 Please provide a description and proposed title of the new model law. If an existing law, please provide the
title, attach a current version to this form and reference the section(s) proposed to be amended.
Health Insurance Reserves Model Regulation (#010). Appendix A needs to be revised to reference a new table for the valuation of Individual Long-Term Disability liabilities. Does the model law meet the Model Law Criteria?
(Check one)
(If answering no to any of these questions, please reevaluate charge and proceed accordingly to address
issues).
a. Does the subject of the model law necessitate a national standard and require uniformity amongst all
(Check one)
If yes, please explain why
Current valuation standards are uniform and national. b. Does Committee believe NAIC members should devote significant regulator and Association resources to
educate, communicate and support this model law?
(Check one)
What is the likelihood that your Committee will be able to draft and adopt the model law within one year
from the date of Executive Committee approval?
(Check one)
High Likelihood
Low Likelihood
Explanation, if necessary:
What is the likelihood that a minimum two-thirds majority of NAIC members would ultimately vote to adopt
the proposed model law?
(Check one)
High Likelihood
Low Likelihood
2014 National Association of Insurance Commissioners Explanation, if necessary:
What is the likelihood that state legislature will adopt the model law in a uniform manner within three years
of adoption by the NAIC?
(Check one)
High Likelihood
Low Likelihood
Explanation, if necessary:
Is this model law referenced in the Accreditation Standards? If so, does the standard require the model law to
be adopted in a substantially similar manner?
Is this model law in response to or impacted by federal laws or regulations? If yes, please explain.
W: National Meetings 2014 Summer Cmte B Model Regulation Request 010 - Individual Disability.docx 2014 National Association of Insurance Commissioners REQUEST FOR MODEL LAW DEVELOPMENT
This form is intended to gather information to support the development of a new model law or amendment to an existing
model law. Prior to development of a new or amended model law, approval of the respective Parent Committee and the
NAIC's Executive Committee is required. The NAIC's Executive Committee will consider whether the request fits the
criteria for model law development. Please complete all questions and provide as much detail as necessary to help in this
determination.
Please check whether this is:
New Model Law
Amendment to Existing Model
Name of group to be responsible for drafting the model:
Long-Term Care Actuarial (B) Working Group NAIC staff support contact information:
Eric King [email protected] 816-783-8234 Please provide a description and proposed title of the new model law. If an existing law, please provide the
title, attach a current version to this form and reference the section(s) proposed to be amended.
Health Insurance Reserves Model Regulation (#010). Section 4. and Appendix A need to be revised to reference new standards for the valuation of long-term care insurance liabilities. Does the model law meet the Model Law Criteria?
(Check one)
(If answering no to any of these questions, please reevaluate charge and proceed accordingly to address
issues).
a. Does the subject of the model law necessitate a national standard and require uniformity amongst all
(Check one)
If yes, please explain why
Current valuation standards are uniform and national. b. Does Committee believe NAIC members should devote significant regulator and Association resources to
educate, communicate and support this model law?
(Check one)
What is the likelihood that your Committee will be able to draft and adopt the model law within one year
from the date of Executive Committee approval?
(Check one)
High Likelihood
Low Likelihood
Explanation, if necessary:
What is the likelihood that a minimum two-thirds majority of NAIC members would ultimately vote to adopt
the proposed model law?
(Check one)
High Likelihood
Low Likelihood
2014 National Association of Insurance Commissioners Explanation, if necessary:
What is the likelihood that state legislature will adopt the model law in a uniform manner within three years
of adoption by the NAIC?
(Check one)
High Likelihood
Low Likelihood
Explanation, if necessary:
Is this model law referenced in the Accreditation Standards? If so, does the standard require the model law to
be adopted in a substantially similar manner?
Is this model law in response to or impacted by federal laws or regulations? If yes, please explain.
W: National Meetings 2014 Summer Cmte B Model Regulation Request 010 - LTC Reservers.docx 2014 National Association of Insurance Commissioners Agenda Item #7
Consider Adoption of its Subgroup, Working Group and Task Force Reports:
Conference Call
MEDICAL LOSS RATIO QUALITY IMPROVEMENT ACTIVITIES (B) SUBGROUP
Summary Report
The Medical Loss Ratio Quality Improvement Activities (B) Subgroup met via conference call March 10, 2016. During this meeting, the Subgroup: 1. Adopted its 2015 Fall National Meeting minutes, which included hearing testimony from America's Health Insurance Plans (AHIP), the National Association of Health Underwriters (NAHU), the American Medical Association (AMA), NCQA and an NAIC consumer representative on how the current definition of "quality improvement activities" for purposes of calculating the federal medical loss ratio could, or should not, be amended and set a Jan. 15, 2016, public comment deadline to receive additional written comments on the recommendations of the speakers, especially on value-based care initiatives and antifraud expenditures. 2. Discussed the comments received by the Jan. 15 public comment deadline. The Subgroup heard representatives from the Association for Community Affiliated Plans (ACAP), AHIP, the AMA, the Coalition Against Insurance Fraud, the Consumers Union, the NAIC consumer representatives, the National Health Care Anti-Fraud Association, and the NCQA. Each representative summarized the comments submitted by their organizations and answered questions from Subgroup members. 3. Requested additional information on: a) the impact of the requested changes on the medical loss ratio (MLR) and rebates; anti-fraud expenditures; b) incentives that may not be included now in the definition; and c) allocation of administrative costs certain purposes. 4. Discussed plans to meet via conference call after receiving the requested additional information. 2016 National Association of Insurance Commissioners Draft Pending Adoption
Attachment Three Health Insurance and Managed Care (B) Committee Medical Loss Ratio Quality Improvement Activities (B) Subgroup National Harbor, Maryland November 20, 2015 The Medical Loss Ratio Quality Improvement Activities (B) Subgroup of the Health Insurance and Managed Care (B) Committee met in National Harbor, MD, Nov. 20, 2015. The following Task Force members participated: Tom Donovan, Chair (ID); Jessica Altman, Vice Chair (PA); Karl Knable (IN); Molly White (MO); Kristi Bohn and Melinda Domzalski-Hansen (MN); Jean Holliday (NC); Brendan Peppard (NJ); Terry Seaton (NM); Gayle L. Woods (OR); and J.P. Wieske (WI). Also participating were: Mary Ellen Breault (CT); Lisa Parker (FL); Kevin Dyke (MI); and Martin Swanson (NE). 1. Adopted its Oct. 19 Minutes Ms. Altman said the Subgroup met Oct. 19 via conference call. She noted that the minutes of the call were posted on the Subgroup's Web page and were included in the packet for the meeting. Ms. White made a motion, seconded by Mr. Donovan, to adopt the Subgroup's Oct. 19 minutes (Attachment Three-A). The motion passed unanimously. 2. Heard a Presentation from AHIP on MLR Quality Improvement Activities Candy Gallaher (America's Health Insurance Plans—AHIP) encouraged the Subgroup to consider several adjustments to the current definition of "quality improvement activities" that is used to calculate the medical loss ratio (MLR) under the federal Affordable Care Act (ACA). In particular, Ms. Gallaher recommended that the Subgroup consider including issuer funding for such programs as PROMETHEUS, a payment and benefit design program that emphasizes value-based care and systemic change by compensating providers on the basis of their performance and treatment outcomes. She also suggested other areas that should be included in the definition of quality improvement activities under the MLR formula, such as: 1) fraud detection and prevention programs; 2) medical identity fraud prevention; 3) value-based care and integrated systems development and operation costs; 4) a portion of credentialing costs; and 5) quality improvement reporting costs required of qualified health plans (QHPs). Mr. Peppard questioned whether fraud expenditures really go toward improving the quality of care provided to consumers and asked for more details from AHIP. Mr. Seaton inquired whether, as quality improvement activities are added to the list of exempt expenditures, those activities that have fulfilled their purpose in improving quality should be deleted from that list. 3. Heard a Presentation from the NAHU on MLR Quality Improvement Activities Jessica Waltman (National Association of Health Underwriters—NAHU) requested that the Subgroup look beyond the five categories of quality improvement expenditures in the current definition and think broadly about how to incentivize innovation in quality improvement. Accountable care organizations (ACOs), value-added payment models and fraud prevention efforts all help improve quality, but may not be able to be measured and quantified as required under the current definition. Mr. Peppard asked how the value of system designs, like ACOs, could be quantified. Ms. Waltman noted that this would be difficult. She said that the Subgroup would need to look outside the current categories and identify activities that enhance the overall quality of the care provided to the consumer. Ms. White said that fraud prevention is not new or unique to quality improvement. She asked if its benefit to health care quality can really be identified and asked for more justification for this request. 2015 National Association of Insurance Commissioners Draft Pending Adoption
Attachment Three Health Insurance and Managed Care (B) Committee Mr. Wieske noted that the impact of quality improvement activity costs on small, regional plans are more pronounced than on larger companies due to economies of scale. The MLR formula should provide incentives for innovation to smaller carriers, too, and recognize the impact these costs can have. Ms. Waltman agreed. Mr. Peppard stated that the primary purpose of fraud prevention expenditures is to reduce costs—not improve quality—although there is sometimes an impact on quality. As such, more justification is needed for this request. Ms. Waltman said she would provide more information to the Subgroup. Mr. Seaton noted that medical cost reduction is not necessarily the intended nor actual result of quality improvement activities, and questioned whether NAHU would support quality improvement expenditures if they were in competition with commissions. 4. Heard a Presentation from the AMA on MLR Quality Improvement Activities Daniel Blaney-Koen (American Medical Association—AMA) recommended that the Subgroup take no action at this time, because any changes to the definition would be premature. He noted that the purpose of the MLR is to create value for consumers, drive administrative efficiencies and promote true quality improvement initiatives. The current formula strikes the right balance and achieves these goals. Mr. Blaney-Koen urged the Subgroup to carefully and transparently consider any adjustments to the formula. He admitted that there are some areas, like prenatal care initiatives, that could be considered, but measurable outcomes would need to be identified before making any changes to the formula. He concluded by noting that premiums are still going up. He said that the MLR has not impeded quality activities, as opponents of the MLR had suggested when the program began, nor has it "turned back the clock" on coverage choices. Mr. Wieske said that the full effect of the ACA on costs is still unknown, noting that some carriers are dropping out of the market. He asked how small, regional carriers can compete in the long term. Mr. Blaney-Koen responded that adjustments could be made to the formula, but they must be based on measurable outcomes. Mr. Peppard asked whether the impact of ACOs on quality of care could be measured. Mr. Blaney-Koen said he is not sure if this is possible. ACOs are a contracting model, although they may have some impact on quality. 5. Heard a Presentation from the NCQA on MLR Quality Improvement Activities Frank Micciche (National Committee for Quality Assurance—NCQA) acknowledged that the fees charged by NCQA for quality accreditation are included in the current definition of "quality improvement activities." The NCQA is developing accreditation standards for value-based payment systems, and Mr. Micciche recommended that the Subgroup consider whether some of the costs of value-based initiatives could or should be included in the definition. Such an addition would need to be adequately quantified. 6. Heard a Presentation from NAIC Consumer Representatives on MLR Quality Improvement Activities Jackson Williams (Dialysis Patient Citizens), representing the NAIC consumer representatives, noted that the focus of the quality improvement should be care, not insurance. Activities such as payment systems, accreditation and fraud prevention deal with the quality of insurance, not the quality of care. Mr. Williams argued that the current formula is very generous and that no problems have been identified. He recommended that the Subgroup suspend this inquiry until audits have completed and issues identified. 7. Received Additional Comments from Regulators and Interested Parties Ms. White expressed concern about the new quality improvement activities data that has been pulled from the Supplemental Health Care Exhibit (SHCE), which does not provide much detail and appears to have some errors. Brian Webb (NAIC) said the chart on the Subgroup's Web page is for initial consideration only. He said if there is interest in more details about the carrier submission, then the entire SHCE and supplemental materials need to be seen. He also noted that the "X" on the chart 2015 National Association of Insurance Commissioners Draft Pending Adoption
Attachment Three Health Insurance and Managed Care (B) Committee denote new initiatives that the carrier would like considered for inclusion the definition of qualtiy improvement activities; the "E" on the chart denote expenses for prospective utilization review and the costs of rewards or bonuses associated with wellness and health promotion that may need further evidence of their impact on health care quality. Lynn Quincy (Consumer Union) said Consumers Union is looking at the impact of value-based insurance designs and on customized cost-sharing. She will share the findings with the Subgroup. 8. Discussed Other Matters Mr. Webb suggested that the Subgroup request additional information and comments from regulators and interested parties, with a deadline of Jan. 15, 2016. The members of the Subgroup agreed. Calls will resume in early 2016 to review the comments received at this meeting and during the comment period. Having no further business, the Medical Loss Ratio Quality Improvement Activities (B) Subgroup adjourned. W: National Meetings 2015 Fall Cmte B MLRQISG MLRQIASG Minutes - Fall 2015.docx 2015 National Association of Insurance Commissioners 2016 Spring National Meeting New Orleans, Louisiana HEALTH CARE REFORM REGULATORY ALTERNATIVES (B) WORKING GROUP
Sunday, April 3, 2016
3:30 – 5:00 p.m.
Meeting Summary Report

The Health Care Reform Regulatory Alternatives (B) Working Group met April 3, 2016. During this meeting, the Working
Group:
1. Heard a report from J.P. Wieske (NAIC) on the NAIC Health Benefit Plan Network Access and Adequacy Model Act (#74) as it relates to surprise billing. The NAIC model attempts to hold consumers harmless if they have done their due diligence of utilizing their provider network to seek medical care. 2. Heard a report from Sean Dugan (NAIC) on finalized U.S. Department of Health and Human Services' (HHS) Notice of Benefit and Payment Parameters for 2017 as it relates to surprise billing. The HHS final rule reduces an enrollee's annual limitation in the event that surprise billing occurs. 3. Heard a presentation from America's Health Insurance Plans (AHIP) on surprise billing. AHIP discussed innovative strategies that various states are utilizing to protect consumers and insurance carriers from surprise billing. 4. Heard a presentation from Blue Cross and Blue Shield Association (BCBSA) on special enrollment periods. BCBSA discussed the importance of utilizing verification mechanisms to prevent fraudulent enrollments, which can increase the premiums for all consumers. W: National Meetings 2016 Springl Summaries HCRRAWG.docx 2016 National Association of Insurance Commissioners 2016 Spring National Meeting New Orleans, Louisiana HEALTH ACTUARIAL (B) TASK FORCE
Saturday, April 2, 2016
3:00 – 5:00 p.m.
Meeting Summary Report

The Health Actuarial (B) Task Force met April 2, 2016. During this meeting, the Task Force:
1. Adopted its Feb. 12, 2016, and Dec. 11, 2015, minutes of the Individual Disability Valuation Table Implementation (B) Subgroup, the March 22, Feb. 23, Feb. 9 and Jan. 21, 2016, and Dec. 10, 2015, minutes of the Long-Term Care Valuation (B) Subgroup, the Feb. 25, Feb. 18, Feb. 11 and Feb. 4, 2016, minutes of the Long-Term Care Pricing (B) Subgroup, and its 2015 Fall National Meeting minutes, which included the following action: a. Adopted its 2015 Summer National Meeting Minutes. b. Adopted the report of the Long-Term Care Actuarial (B) Working Group c. Adopted the report of the Medicare Supplement Refund Formula (B) Subgroup. 2. Adopted the report of the Long-Term Care Actuarial (B) Working Group. At its April 2 meeting, The Working Group received status updates from the American Academy of Actuaries (Academy) Long-Term Care Principle-Based Work Group and Long-Term Care Credibility Monograph Work Group, heard an update from the Society of Actuaries (SOA) on its Long-Term Care Experience Basic Tables, and adopted the reports of the Long-Term Care Pricing (B) Subgroup and the Long-Term Care Valuation (B) Subgroup. 3. Adopted the report of the Individual Disability Valuation Table Implementation (B) Subgroup. The Subgroup, along with the Task Force, will hold a joint conference call April 14 to consider adoption of amendments to the Health Insurance Reserves Model Regulation (#10) that incorporate the 2013 Individual Disability Income Valuation Table as a valuation standard. 4. Heard an update from the American Academy of Actuaries (Academy)/Society of Actuaries (SOA) Cancer Claim Cost Table Work Group. The Work Group plans to deliver its final report and associated cancer claim cost valuation tables to the Task Force at the Summer National Meeting. 5. Heard an Academy professionalism presentation concerning requests for revisions to Actuarial Standard of Practice (ASOP) No. 5 Incurred Health and Disability Claims, and the Academy's online qualified actuary attestation form. 6. Heard an update from the Academy Health Practice Council, which included details on the Council's annual visit to Capitol Hill, and its February webinar with the federal Centers for Medicare and Medicaid Service (CMS) about national health spending. 7. Adopted the report of the Health Care Reform Actuarial (B) Working Group. The Working Group recently held a regulator-to-regulator call with representatives from the federal Center for Consumer Information and Insurance Oversight (CCIIO) to discuss recommendations for changes to the federal Affordable Care Act (ACA) Uniform Rate Review Template (URRT). 8. Heard a briefing on and discussed the March 31 federal CMS Risk Adjustment Conference with representatives from 9. Heard an Academy Risk Sharing Committee report. The Academy plans to deliver the paper on ACA risk adjustment as requested by the Task Force soon. 10. Heard an update on the SOA federal ACA papers and other health research projects in progress. 11. Discussed ACA rate and form review with representatives from CCIIO. W: National Meetings 2016 Springl Final Summaries HATF.docx 2016 National Association of Insurance Commissioners 2016 Spring National Meeting New Orleans, Louisiana LONG-TERM CARE ACTUARIAL (B) WORKING GROUP
Saturday, April 2, 2016
1:00 – 3:00 p.m.
Meeting Summary Report

The Long-Term Care Actuarial (B) Working Group met April 2, 2016. During this meeting, the Working Group:
1. Adopted the March 22, Feb. 23, Feb. 9 and Jan. 21, 2016, and Dec. 10, 2015, minutes of the Long-Term Care Valuation (B) Subgroup, the Feb. 25, Feb. 18, Feb. 11 and Feb. 4, 2016, minutes of the Long-Term Care Pricing (B) Subgroup, and its Fall 2015 National Meeting Minutes, which included the following action: a. Adopted its 2015 Summer National Meeting Minutes; b. Adopted the report of the Long-Term Care (B) Valuation Subgroup; and c. Adopted the report of the Long-Term Care Pricing (B) Subgroup. 2. Heard a presentation from Claude Thau (Thau Inc.) on concerns with the validity of Boston College Center of Retirement Research long-term care insurance (LTCI) articles. Mr. Thau said he has spoken with the authors of the articles, and they will issue revised articles soon. 3. Heard an update on Long-Term Care Experience Basic Tables from the Society of Actuaries (SOA). The SOA will issue a formal response to questions received concerning the tables as published in April, 2015. 4. Heard a status report from the American Academy of Actuaries (Academy) Long-Term Care Principle-Based Work Group. The Academy completed its report on the demonstration principle-based reserving model January, 2015, and gave a summary of the report. 5. Heard a status report from the Academy Long-Term Care Credibility Monograph Work Group. The Academy expects to deliver the monograph to the Working Group prior to the Summer National Meeting. 6. Adopted the report of the Long-Term Care Pricing (B) Subgroup. The report included details of the Subgroup's work on addressing rate increases for small remaining blocks (SRB) of LTCI. The Working Group charged the Subgroup with examining rate filings for SRB to inform its recommendations for addressing SRB rate increase issues. 7. Adopted the report of the Long-Term Care Valuation (B) Subgroup. The report included details of the Subgroup's discussions of a recently published SOA/Life Insurance Research Marketing Association (LIMRA) voluntary lapse and mortality study. The Working Group charged the Subgroup with requesting assistance from the Academy and the SOA with developing new voluntary lapse and mortality standards for LTCI reserving. W: National Meetings 2016 Springl Final Summaries LTCAWG.docx 2016 National Association of Insurance Commissioners 2016 Spring National Meeting New Orleans, Louisiana REGULATORY FRAMEWORK (B) TASK FORCE
Sunday, April 3, 2016
12:30 – 1:00 p.m.
Meeting Summary Report

The Regulatory Framework (B) Task Force met April 3, 2016. During this meeting, the Task Force:
1. Adopted its Feb. 11, 2016, and 2015 Fall National Meeting minutes, which included the following action:
a. Appointed two new subgroups—the Accident and Sickness Insurance Minimum Standards (B) Subgroup and the Model #22 (B) Subgroup—to work on its main projects for 2016, which are considering revisions to the Accident and Sickness Insurance Minimum Standards Model Act (#170), the Model Regulation to Implement the Accident and Sickness Insurance Minimum Standards Model Act (#171) and the Health Carrier Prescription Drug Benefit Management Model Act (#22). 2. Adopted the report of the Accident and Sickness Insurance Minimum Standards (B) Subgroup, which included adopting the Subgroup's April 7 and Feb. 29 minutes during which the Subgroup discussed its work plan for revising Model #170 and Model #171 and decided, with the option to revisit its decision at a later date, to retain the disability income protection coverage in the models. 3. Adopted the report of the Model #22 (B) Subgroup, which included adopting the Subgroup's Feb. 29 minutes during which the Subgroup discussed its work plan for revising Model #22. The Subgroup heard comments from various stakeholders concerning their suggested revisions to Model #22. The Subgroup plans to meet via conference call April 21 to continue its review and discussion of the comments received on Model #22. 4. Adopted the report of the ERISA (B) Working Group. The Working Group released an initial draft of proposed revisions to one section of the Health and Welfare Plans Under the Employee Retirement Income Security Act: Guide to State and Federal Regulation (ERISA Handbook). The Working Group plans to continue its work on revisions to the ERISA Handbook section-by-section. The Working Group anticipates meeting via conference call at least once prior to the Summer National Meeting. W: National Meetings 2016 Spring Summaries Final Summaries RFTF.docx 2016 National Association of Insurance Commissioners Conference Calls ACCIDENT AND SICKNESS INSURANCE MINIMUM STANDARDS (B) SUBGROUP
March 17, 2016 / March 7, 2016 / February 29, 2016
Summary Report

The Accident and Sickness Insurance Minimum Standards (B) Subgroup of the Regulatory Framework (B) Task Force met
via conference call March 17, 2016, March 7, 2016 and Feb. 29, 2016. During these calls, the Subgroup:
1. Decided to meet via conference call every two weeks to discuss and consider revisions to the Accident and Sickness
Insurance Minimum Standards Model Act (#170) and the Model Regulation to Implement the Accident and Sickness Insurance Minimum Standards Model Act (#171). 2. Decided to retain provisions in Model #170 and Model #171 concerning disability income protection coverage and to discuss what, if any, revisions should be made to those provisions. 3. Began its review and discussion of the comments received on Model #170 and Model #171. 2016 National Association of Insurance Commissioners 2016 Spring National Meeting New Orleans, Louisiana MODEL #22 (B) SUBGROUP
Sunday, April 3, 2016
11:30 a.m. – 12:30 p.m.
Meeting Summary Report

The Model #22 (B) Subgroup of the Regulatory Framework (B) Task Force met April 3, 2016. During this meeting, the
Subgroup:
1. Heard comments from industry, consumer, agent and pharmacy representatives on suggested revisions to the Health
Carrier Prescription Drug Benefit Management Model Act (#22). The Subgroup decided to continue the discussion via conference call April 21. 2016 National Association of Insurance Commissioners 2016 Spring National Meeting New Orleans, Louisiana ERISA (B) Working Group
Sunday, April 3, 2016
10:00 – 11:30 a.m.
Meeting Summary Report

The ERISA (B) Working Group met April 3, 2016. During this meeting, the Working Group:
1. Adopted its 2015 Fall National Meeting minutes, which included the following action: a. Discussed revising and updating the Health and Welfare Plans Under the Employee Retirement Income Security Act: Guide to State and Federal Regulation (ERISA Handbook). 2. Discussed draft revisions and updates to the ERISA Handbook on the U.S. Supreme Court ERISA-related case 3. Adjourned into regulator-to-regulator session pursuant to paragraph 2 (pending investigations which may involve either the NAIC or any member in any capacity), paragraph 3 (specific companies, entities or individuals) and paragraph 8 (consideration of strategic planning issues relating to federal legislative and regulatory matters or international regulatory matters) of the NAIC Policy Statement on Open Meetings. W: Spring16 Summaries Final Summaries ERISA.docx 2016 National Association of Insurance Commissioners 2016 Fall National Meeting New Orleans, Louisiana SENIOR ISSUES (B) TASK FORCE
Sunday, April 3, 2016
2:00 p.m. – 3:30 p.m.
Meeting Summary Report


The Senior Issues (B) Task Force met April 3, 2016. During this meeting, the Task Force:
1. Adopted its Feb. 18, 2016 minutes and its 2015 Fall National Meeting minutes. The Feb 18 minutes included the
proposed 2016 charge of the Long-Term Care Innovation (B) Subgroup. 2. Adopted the report of the Long-Term Care Consumer Disclosure (B) Subgroup. The report included its March 24, Feb. 25, and Jan. 21, 2016, and Dec.3, 2015 minutes. 3. Adopted the report of the Medigap (B) Subgroup. The report included its Feb. 22, Feb. 8, Feb. 1, and Jan. 4, 2016, and Dec. 14, and Nov. 30, 2015 minutes, as well as a Benefit Chart of Medicare Supplement Plans Sold on or after January 1, 2020, a new Medicare Supplement Plan G/High G Benefit Chart, a new Medicare Supplement Plan F/High F Benefit Chart, and changes to Section 9.1 E and Section 9.2 of the Model Regulation to Implement the NAIC Medicare Supplement Insurance Minimum Standards Model Act (#651). 4. Adopted the report of the Long-Term Care Innovation (B) Subgroup. The report included its March 21, March 14 and Feb. 22 minutes. 5. Received an update from Perry Kupferman (CA) about the Long-Term Care Actuarial (B) Working Group. 6. Heard an update from David Torian (NAIC) on federal legislative matters. The update included information about the State Health Insurance Assistance Program (SHIP) and its funding in the next fiscal year. 7. Heard from Bonnie Burns (California Health Advocates—CHA) requesting the Task Force to take up review of short- term long-term care (LTC) policies and requesting the NAIC be more inclusive of SHIP directors at the national meetings and provide funding assistance to attend NAIC national meetings. 8. Heard an update from Steve Ostlund (AL) regarding completion by the Health Actuarial (B) Task Force of its actuarial work on the Medicare Supplement Refund Formula. The Health Actuarial (B) Task Force will make a request to the Health Insurance and Managed Care (B) Committee to refer to the Senior Issues (B) Task Force to review the policy side of the Medicare Supplement Refund Formula. 9. Heard an update from Chlora Lindley-Myers (TN) on the survey sent to states on Employer Group Waiver Plans 10. Heard from the Task Force's chair encouraging Task Force members to look at the North American Securities Administrators Association (NASAA) Model Act, the An Act to Protect Vulnerable Adults from Financial Exploitation, and the federal legislation, S 2216, the Senior$afe Act of 2015—which are posted on the Senior Issues (B) Task Force Web page. W: National Meetings 2016 Spring SUmmaries Final Summaries SITF.docx 2016 National Association of Insurance Commissioners Medigap (B) Subgroup
• Adopted a new Benefit Chart of Medicare Supplement Plans Sold on or after January 1, 2020, a new Medicare Supplement Plan G/High G Benefit Chart, and a new Medicare Supplement Plan F/High F Benefit Chart • Adopted changes to Section 9.1 E and Section 9.2 of the Model Regulation to Implement the NAIC Medicare Supplement Insurance Minimum Standards Model Act (#651). Benefit Chart of Medicare Supplement Plans Sold on or after January 1, 2020

This chart shows the benefits included in each of the standard Medicare supplement plans. Some plans may not
be available. Only applicants who became eligible for Medicare before 2020 may purchase Plans C, F, and high
deductible F.
Plans Available to All Applicants
Medicare
eligible before
2020 only
Benefits
Medicare Part A coinsurance and hospital coverage (up to an additional 365 days after Medicare benefits are used up) Blood (first three pints) Part A hospice care coinsurance or copayment Skilled nursing facility Medicare Part A deductible Medicare Part B deductible Medicare Part B excess Foreign travel emergency (up to plan limits) Out-of-pocket limit in
[2016]2
[$4,960]2
[$2,480]2
Note: A ✔means 100% of the benefit is paid. 1Plans F and G also have a high deductible option which require first paying a plan deductible of [$2180] before the plan begins to pay. Once the plan deductible is met, the plan pays 100% of covered services for the rest of the calendar year. High deductible plan G does not cover the Medicare Part B deductible. However, high deductible plans F and G count your payment of the Medicare Part B deductible toward meeting the plan deductible. 2 Plans K and L pay 100% of covered services for the rest of the calendar year once you meet the out-of-pocket yearly limit. 3Plan N pays 100% of the Part B coinsurance, except for a co-payment of up to $20 for some office visits and up to a $50 co-payment for emergency room visits that do not result in an inpatient admission. PLAN G or HIGH DEDUCTIBLE PLAN G
MEDICARE (PART A) – HOSPITAL SERVICES – PER BENEFIT PERIOD
• A benefit period begins on the first day you receive service as an inpatient in a hospital and ends after you have been out of the hospital and have not received skilled care in any other facility for 60 days in a row. • [**This high deductible plan pays the same benefits as Plan G after one has paid a
calendar year [$2180] deductible. Benefits from the high deductible plan G will not
begin until out-of-pocket expenses are [$2180]. Out-of-pocket expenses for this
deductible include expenses for the Medicare Part B deductible, and expenses that
would ordinarily be paid by the policy. This does not include the plan's separate
foreign travel emergency deductible.]
[AFTER YOU PAY
[IN ADDITION
TO $[2180]
SERVICES
MEDICARE PAYS
PLAN PAYS
Semiprivate room and board, general nursing and miscellaneous services and 61st thru 90th day All but $[322] a day 91st day and after: All but $[644] a day —While using 60 Lifetime reserve days Once lifetime reserve 100% of Medicare eligible expenses —Additional 365 days Beyond the additional [AFTER YOU
[IN ADDITION
TO $[2180]
SERVICES
MEDICARE PAYS
PLAN PAYS
SKILLED NURSING
FACILITY CARE*
You must meet Medicare's requirements, including having been in a hospital for at least 3 days and entered a Medicare- approved facility within 30 days after leaving the 21st thru 100th day All but $[161] a day Up to $[161] a day 101st day and after Additional amounts HOSPICE CARE
You must meet Medicare's All but very limited requirements, including a doctor's certification of coinsurance for out- terminal illness. patient drugs and inpatient respite care *** NOTICE: When your Medicare Part A hospital benefits are exhausted, the insurer stands in the
place of Medicare and will pay whatever amount Medicare would have paid for up to an additional 365 days as provided in the policy's "Core Benefits." During this time the hospital is prohibited from billing you for the balance based on any difference between its billed charges and the amount Medicare would have paid. PLAN G or HIGH DEDUCTIBLE PLAN G
MEDICARE (PART B) - MEDICAL SERVICES - PER CALENDAR YEAR
*Once you have been billed $[166] of Medicare-approved amounts for covered services (which are noted with an asterisk), your Part B deductible will have been met for the calendar year. • [**This high deductible plan pays the same benefits as Plan G after one has paid a
calendar year [$2180] deductible. Benefits from the high deductible plan G will not
begin until out-of-pocket expenses are [$2180]. Out-of-pocket expenses for this
deductible include expenses for the Medicare Part B deductible, and expenses that
would ordinarily be paid by the policy. This does not include the plan's separate
foreign travel emergency deductible.]
[AFTER YOU PAY
[IN ADDITION TO
SERVICES
MEDICARE PAYS
PLAN PAYS
MEDICAL EXPENSES
IN OR OUT OF THE Such as physician's Services, inpatient and Outpatient medical and Surgical services and Supplies, physical and Diagnostic tests, First $[166] of Medicare $0 (Unless Part B Approved amounts* deductible has not Remainder of Medicare Approved amounts Part B excess charges
Approved Amounts) Next $[166] of Medicare Approved amounts* $0 (Unless Part B deductible has not Remainder of Medicare Approved amounts [AFTER YOU
[IN ADDITION
TO $[2180]
SERVICES
MEDICARE PAYS
DEDUCTIBLE,
PLAN PAYS
CLINICAL LABORATORY
FOR DIAGNOSTIC SERVICES 100% PLAN G or HIGH DEDUCTIBLE PLAN G
PARTS A & B
AFTER YOU
[IN ADDITION
TO $[2180]
SERVICES
MEDICARE PAYS
PLAN PAYS
HOME HEALTH CARE
MEDICARE APPROVED Medically necessary skilled care services and medical —Durable medical equipment First $[166] of Medicare Approved Amounts* B deductible has Remainder of Medicare — Approved Amounts OTHER BENEFITS - NOT COVERED BY MEDICARE
AFTER YOU
[IN ADDITION
TO $[2180]
SERVICES
MEDICARE PAYS
PLAN PAYS
FOREIGN TRAVEL -
NOT COVERED BY
MEDICARE
Medically necessary Emergency care services Beginning during the first 60 days of each trip outside the USA First $250 each calendar year Remainder of charges 80% to a lifetime over the $50,000 Section 9.1 Standard Medicare Supplement Benefit Plans for 2010 Standardized
Medicare Supplement Benefit Plan Policies or Certificates Issued for
Delivery on or After June 1, 2010
The following standards are applicable to all Medicare supplement policies or certificates delivered or issued for delivery in this state on or after June 1, 2010. No policy or certificate may be advertised, solicited, delivered or issued for delivery in this state as a Medicare supplement policy or certificate unless it complies with these benefit plan standards. Benefit plan standards applicable to Medicare supplement policies and certificates issued before June 1, 2010 remain subject to the requirements of [ -insert proper citation- ].
Drafting Note. Each state should insert the proper citation(s) to its statutes or rules that govern Medicare supplement
insurance policies and certificates issued prior to the June 1, 2010 effective date of the 2010 Standardized benefit plan standards found in Sections 8.1 and 9.1 of this regulation. It is recommended that each state's applicable statutes or rules for Medicare supplement benefit plans for policies and certificates issued prior to June 1, 2010 be retained and that this section of the Model be adopted in its entirety as a new section to govern policies and certificates issued on and after June 1, 2010. (The benefit plan standards of the Medicare Supplement Model Regulation for policies issued prior to June 1, 2010 are found in Section 9 of this regulation.) An issuer shall make available to each prospective policyholder and certificate holder a policy form or certificate form containing only the basic (core) benefits, as defined in Section 8.1B of this regulation. If an issuer makes available any of the additional benefits described in Section 8.1C, or offers standardized benefit Plans K or L (as described in Sections 9.1E(8) and (9) of this regulation), then the issuer shall make available to each prospective policyholder and certificate holder, in addition to a policy form or certificate form with only the basic (core) benefits as described in subsection A(1) above, a policy form or certificate form containing either standardized benefit Plan C (as described in Section 9.1E(3) of this regulation) or standardized benefit Plan F (as described in 9.1E(5) of this regulation). No groups, packages or combinations of Medicare supplement benefits other than those listed in this Section shall be offered for sale in this state, except as may be permitted in Section 9.1F and in Section 10 of this regulation. Benefit plans shall be uniform in structure, language, designation and format to the standard benefit plans listed in this Subsection and conform to the definitions in Section 4 of this regulation. Each benefit shall be structured in accordance with the format provided in Sections 8.1B and 8.1C of this regulation; or, in the case of plans K or L, in Sections 9.1E(8) or (9) of this regulation and list the benefits in the order shown. For purposes of this Section, "structure, language, and format" means style, arrangement and overall content of a benefit. In addition to the benefit plan designations required in Subsection C of this section, an issuer may use other designations to the extent permitted by law.
Drafting Note: It is anticipated that if a state determines that it will authorize the sale of only some of these benefit plans,
the letter codes used in this regulation will be preserved. The Guide to Health Insurance for People with Medicare published jointly by the NAIC and CMS will contain a chart comparing the possible combinations. In order for consumers to compare specific policy choices, it will be important that a uniform "naming" system be used. Thus, if only Plans A, B, D, F, F with High Deductible, and K (for example) are authorized in a state, these plans must retain their alphabetical designations. An issuer may use, in addition to these alphabetical designations, other designations as provided in Section 9.1D of this Make-up of 2010 Standardized Benefit Plans: Standardized Medicare supplement benefit Plan A shall include only the following: The basic (core) benefits as defined in Section 8.1B of this Standardized Medicare supplement benefit Plan B shall include only the following: The basic (core) benefit as defined in Section 8.1B of this regulation, plus one hundred percent (100%) of the Medicare Part A deductible as defined in Section 8.1C(1) of this regulation. Standardized Medicare supplement benefit Plan C shall include only the following: The basic (core) benefit as defined in Section 8.1B of this regulation, plus one hundred percent (100%) of the Medicare Part A deductible, skilled nursing facility care, one hundred percent (100%) of the Medicare Part B deductible, and medically necessary emergency care in a foreign country as defined in Sections 8.1C(1), (3), (4), and (6) of this regulation, respectively. Standardized Medicare supplement benefit Plan D shall include only the following: The basic (core) benefit (as defined in Section 8.1B of this regulation), plus one hundred percent (100%) of the Medicare Part A deductible, skilled nursing facility care, and medically necessary emergency care in an foreign country as defined in Sections 8.1C(1), (3), and (6) of this regulation, respectively. Standardized Medicare supplement [regular] Plan F shall include only the following: The basic (core) benefit as defined in Section 8.1B of this regulation, plus one hundred percent (100%) of the Medicare Part A deductible, the skilled nursing facility care, one hundred percent (100%) of the Medicare Part B deductible, one hundred percent (100%) of the Medicare Part B excess charges, and medically necessary emergency care in a foreign country as defined in Sections 8.1C(1), (3), (4), (5), and (6), respectively. Standardized Medicare supplement Plan F With High Deductible shall include only the following: one hundred percent (100%) of covered expenses following the payment of the annual deductible set forth in Subparagraph (b). The basic (core) benefit as defined in Section 8.1B of this regulation, plus one hundred percent (100%) of the Medicare Part A deductible, skilled nursing facility care, one hundred percent (100%) of the Medicare Part B deductible, one hundred percent (100%) of the Medicare Part B excess charges, and medically necessary emergency care in a foreign country as defined in Sections 8.1C(1), (3), (4), (5), and (6) of this regulation, respectively. The annual deductible in Plan F With High Deductible shall consist of out-of-pocket expenses, other than premiums, for services covered by [regular] Plan F, and shall be in addition to any other specific benefit deductibles. The basis for the deductible shall be $1,500 and shall be adjusted annually from 1999 by the Secretary of the U.S. Department of Health and Human Services to reflect the change in the Consumer Price Index for all urban consumers for the twelve- month period ending with August of the preceding year, and rounded to the nearest multiple of ten dollars ($10). Standardized Medicare supplement benefit Plan G shall include only the following: The basic (core) benefit as defined in Section 8.1B of this regulation, plus one hundred percent (100%) of the Medicare Part A deductible, skilled nursing facility care, one hundred percent (100%) of the Medicare Part B excess charges, and medically necessary emergency care in a foreign country as defined in Sections 8.1C(1), (3), (5), and (6), respectively. Effective January 1, 2020, the standardized benefit plans described in Section 9.2 A. (4) of this regulation (Redesignated Plan G High Deductible) may be offered to any individual who was eligible for Medicare prior to January 1, 2020. Standardized Medicare supplement Plan K is mandated by The Medicare Prescription Drug, Improvement and Modernization Act of 2003, and shall include only the following: Part A Hospital Coinsurance 61st through 90th days: Coverage of one hundred percent (100%) of the Part A hospital coinsurance amount for each day used from the 61st through the 90th day in any Medicare Part A Hospital Coinsurance, 91st through 150th days: Coverage of one hundred percent (100%) of the Part A hospital coinsurance amount for each Medicare lifetime inpatient reserve day used from the 91st through the 150th day in any Medicare benefit period; Part A Hospitalization After Lifetime Reserve Days are Exhausted: Upon exhaustion of the Medicare hospital inpatient coverage, including the lifetime reserve days, coverage of one hundred percent (100%) of the Medicare Part A eligible expenses for hospitalization paid at the applicable prospective payment system (PPS) rate, or other appropriate Medicare standard of payment, subject to a lifetime maximum benefit of an additional 365 days. The provider shall accept the issuer's payment as payment in full and may not bill the insured for any balance; Medicare Part A Deductible: Coverage for fifty percent (50%) of the Medicare Part A inpatient hospital deductible amount per benefit period until the out-of-pocket limitation is met as described in Subparagraph (j); Skilled Nursing Facility Care: Coverage for fifty percent (50%) of the coinsurance amount for each day used from the 21st day through the 100th day in a Medicare benefit period for post-hospital skilled nursing facility care eligible under Medicare Part A until the out-of- pocket limitation is met as described in Subparagraph (j); Hospice Care: Coverage for fifty percent (50%) of cost sharing for all Part A Medicare eligible expenses and respite care until the out-of- pocket limitation is met as described in Subparagraph (j); Blood: Coverage for fifty percent (50%), under Medicare Part A or B, of the reasonable cost of the first three (3) pints of blood (or equivalent quantities of packed red blood cells, as defined under federal regulations) unless replaced in accordance with federal regulations until the out-of-pocket limitation is met as described in Subparagraph (j); Part B Cost Sharing: Except for coverage provided in Subparagraph (i), coverage for fifty percent (50%) of the cost sharing otherwise applicable under Medicare Part B after the policyholder pays the Part B deductible until the out-of-pocket limitation is met as described in Subparagraph (j); Part B Preventive Services: Coverage of one hundred percent (100%) of the cost sharing for Medicare Part B preventive services after the policyholder pays the Part B deductible; and Cost Sharing After Out-of-Pocket Limits: Coverage of one hundred percent (100%) of all cost sharing under Medicare Parts A and B for the balance of the calendar year after the individual has reached the out-of-pocket limitation on annual expenditures under Medicare Parts A and B of $4000 in 2006, indexed each year by the appropriate inflation adjustment specified by the Secretary of the U.S. Department of Health and Human Services. Standardized Medicare supplement Plan L is mandated by The Medicare Prescription Drug, Improvement and Modernization Act of 2003, and shall include only the following: The benefits described in Paragraphs 9.1E(8)(a), (b), (c) and (i); The benefit described in Paragraphs 9.1E(8)(d), (e), (f), (g) and (h), but substituting seventy-five percent (75%) for fifty percent (50%); and The benefit described in Paragraph 9.1E(8)(j), but substituting $2000 Standardized Medicare supplement Plan M shall include only the following: The basic (core) benefit as defined in Section 8.1B of this regulation, plus fifty percent (50%) of the Medicare Part A deductible, skilled nursing facility care, and medically necessary emergency care in a foreign country as defined in Sections 8.1C(2), (3) and (6) of this regulation, respectively. Standardized Medicare supplement Plan N shall include only the following: The basic (core) benefit as defined in Section 8.1B of this regulation, plus one hundred percent (100%) of the Medicare Part A deductible, skilled nursing facility care, and medically necessary emergency care in a foreign country as defined in Sections 8.1C(1), (3) and (6) of this regulation, respectively, with co-payments in the following amounts: the lesser of twenty dollars ($20) or the Medicare Part B coinsurance or co-payment for each covered health care provider office visit (including visits to medical specialists); and the lesser of fifty dollars ($50) or the Medicare Part B coinsurance or co-payment for each covered emergency room visit, however, this co- payment shall be waived if the insured is admitted to any hospital and the emergency visit is subsequently covered as a Medicare Part A
Drafting Note: The NAIC expects to periodically review the co-payment levels for Medicare supplement Plan N and make
adjustments to this regulation as necessary. New or Innovative Benefits: An issuer may, with the prior approval of the [commissioner], offer policies or certificates with new or innovative benefits, in addition to the standardized benefits provided in a policy or certificate that otherwise complies with the applicable standards. The new or innovative benefits shall include only benefits that are appropriate to Medicare supplement insurance, are new or innovative, are not otherwise available, and are cost-effective. Approval of new or innovative benefits must not adversely impact the goal of Medicare supplement simplification. New or innovative benefits shall not include an outpatient prescription drug benefit. New or innovative benefits shall not be used to change or reduce benefits, including a change of any cost-sharing provision, in any standardized plan.
Drafting Note: Recognizing the challenge in maintaining standardization while ensuring availability of new or innovative
benefits, the drafters have included additional guidance to states in the NAIC Medicare Supplement Insurance Model Regulation Compliance Manual. This guidance includes a recommendation that states consider making publicly available all approved new or innovative benefits, and requests states to report the approval of all new or innovative benefits to the NAIC Senior Issues Task Force, who will maintain a record of these benefits for use by regulators and others. The Senior Issues Task Force will periodically review state approved benefits and consider whether to recommend that they be made part of standard benefit plan designs in this regulation.
Drafting Note: A state may determine by statute or regulation which of the above benefit plans may be sold in that state.
Plan A, which consists of the basic (core) benefits must be made available by all issuers. Therefore, Plan A must be one of the authorized benefit plans adopted by a state. If an issuer offers any benefit plan in addition to Plan A, then the issuer must also offer either Plan C or Plan F. Therefore, if any benefit plan is authorized by a state other than Plan A, then either Plan C or Plan F must be among the authorized benefit plans adopted by a state. Except where a new or innovative benefit is approved by the [commissioner] for sale in a state, a state may not authorize the sale of any Medicare supplement plan other than the standardized Medicare supplement benefit plans (that is, Plans A, B, C, D, F, F With High Deductible, G, K, L, M and N) set forth in this regulation.
Drafting Note: The Omnibus Budget Reconciliation Act of 1990 preempts state mandated benefits in Medicare supplement
policies or certificates, except for those states which have been granted a waiver for non-standardized plans.
Section 9.2. Standard Medicare Supplement Benefit Plans for 2020 Standardized
Medicare Supplement Benefit Plan Policies or Certificates Issued for
Delivery to Individuals Newly Eligible for Medicare on or After January 1,
The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) requires the following standards are applicable to all Medicare supplement policies or certificates delivered or issued for delivery in this state to individuals newly eligible for Medicare on or after January 1, 2020. No policy or certificate that provides coverage of the Medicare Part B deductible may be advertised, solicited, delivered or issued for delivery in this state as a Medicare supplement policy or certificate to individuals newly eligible for Medicare on or after January 1, 2020. All policies must comply with the following benefit standards. Benefit plan standards applicable to Medicare supplement policies and certificates issued to individuals eligible for Medicare before January 1, 2020, remain subject to the requirements of [-insert proper state citation-]. Benefit Requirements. The standards and requirements of Section 9.1 shall apply to all Medicare supplement policies or certificates delivered or issued for delivery to individuals newly eligible for Medicare on or after January 1, 2020, with the following exceptions: Standardized Medicare supplement benefit Plan C is redesignated as Plan D and shall provide the benefits contained in Section 9.1 E. (3) of this regulation but shall not provide coverage for one hundred percent (100%) or any portion of the Medicare Part B deductible. Standardized Medicare supplement benefit Plan F is redesignated as Plan G and shall provide the benefits contained in Section 9.1 E. (5) of this regulation but shall not provide coverage for one hundred percent (100%) or any portion of the Medicare Part B deductible. Standardized Medicare supplement benefit plans C, F, and F with High Deductible may not be offered to individuals newly eligible for Medicare on or after January 1, Standardized Medicare supplement benefit Plan F With High Deductible is redesignated as Plan G With High Deductible and shall provide the benefits contained in Section 9.1 E. (6) of this regulation but shall not provide coverage for one hundred percent (100%) or any portion of the Medicare Part B deductible; provided further that, the Medicare Part B deductible paid by the beneficiary shall be considered an out-of-pocket expense in meeting the annual high deductible.
Drafting Note: Subsection A.(4), above implements the High Deductible Plan G as a redesignation of the prior High
Deductible Plan F because federal law "deems" any reference to Plan F as Plan G for "newly eligible" Medicare beneficiaries. High Deductible Plan G is the same as the High Deductible Plan F except that where the annual out-of-pocket expenses are met with Medicare Part A expenses only, any subsequent Medicare Part B deductible expense incurred by the beneficiary after the required annual out-of-pocket expenses is met may not be paid for by the High Deductible Plan G. Federal law prohibits the sale or issuance of any Medigap policy that provides coverage (i.e. third party payment) of the Part B deductible to a "newly eligible" Medicare beneficiary and was enacted for the purpose of increasing cost-sharing and reducing "first dollar coverage". Treating the Medicare Part B deductible as an out-of-pocket expense of the beneficiary under Plan G High Deductible meets this purpose. The reference in Plans C or F contained in Section 9.1 A(2) is deemed a reference to Plans D or G for purposed of this section. Applicability to Certain Individuals. This Section 9.2, applies to only individuals that are newly eligible for Medicare on or after January 1, 2020: by reason of attaining age 65 on or after January 1, 2020; or by reason of entitlement to benefits under part A pursuant to section 226(b) or 226A of the Social Security Act, or who is deemed to be eligible for benefits under section 226(a) of the Social Security Act on or after January 1, 2020. Guaranteed Issue for Eligible Persons. For purposes of Section 12.E, in the case of any individual newly eligible for Medicare on or after January 1, 2020, any reference to a Medicare supplement policy C or F (including F With High Deductible) shall be deemed to be a reference to Medicare supplement policy D or G (including G With High Deductible) respectively that meet the requirements of this Section 9.2A. Applicability to Waivered States. In the case of a State described in Section 1882(p)(6) of the Social Security Act ("waivered" alternative simplification states) MACRA prohibits the coverage of the Medicare Part B deductible for any Medicare supplement policy sold or issued to an individual that is newly eligible for Medicare on or after January 1, 2020. Offer of Redesignated Plans to Individuals Other Than Newly Eligible. On or after January 1, 2020, the standardized benefit plans described in subparagraph A.(4), above may be offered to any individual who was eligible for Medicare prior to January 1, 2020 in to the standardized plans described in section 9.1 E of this regulation.
Drafting Note: The standardized benefit plans described in subparagraphs A.(1) and A.(2), above in this Section are also
included as benefit plans D and G in Section 9.1.E (4) and (7). Agenda Item #8
Discuss Any Other Matters Brought Before the Committee

Source: http://www.naic.org/meetings1604/committees_b_2016_spring_nm_materials.pdf