Bloomberg News

Obama Health Law Needs Delay, State Insurance Head Says

January 22, 2013

President Barack Obama may need to delay his health-care overhaul or risk “chaos” when subsidized insurance plans go on sale in October, the head of the National Association of Insurance Commissioners said.

It’s unclear how well the federal government or any of the participating states will perform on Oct. 1, when millions of Americans are supposed to begin shopping at online markets created by the law, Jim Donelon, the NAIC’s president, said in an interview at Bloomberg headquarters in New York. While the administration has shown no sign of seeking a delay, it may be in the president’s best interest, he said.

“It’s his calling-card, signature issue and to rush it into implementation before it’s ready would not be in his overall interest,” said Donelon, a Republican who’s also Louisiana’s insurance commissioner. State officials around the U.S. “don’t want it to create chaos.”

The Obama administration and 18 states are preparing to establish the insurance markets, a centerpiece of the 2010 law designed to extend coverage to millions of uninsured people. The association, which represents state regulators, today named former Democratic Senator Ben Nelson of Nebraska as its chief executive officer, in an attempt to expand its influence in Washington.

“We needed the gravitas, the phone calls returned, to go to Capitol Hill, to tell our story, defend our turf, and beyond, protect and promote our system around the world,” Donelon said. “I think all the way up to and including President Obama would return Senator Nelson’s phone calls.”

Dodd-Frank

Regulators in the U.S. states are contending with the Federal Insurance Office created by the Dodd-Frank law, expanded U.S. involvement in health insurance and European efforts to regulate capital known as Solvency II. State regulation has served U.S. consumers and insurers well and deserves to be defended, Nelson, 71, said in the interview.

“To impose their standard solvency regulation I think is a mistake, and I hope to work to try to convince them of that,” Nelson said in an interview in New York. “It isn’t broken, so we’re not going to let them fix it.”

A former insurance industry executive, Nebraska governor and state regulator, Nelson was considered one of the more conservative Democrats in the Senate. He provided the 60th vote to help push Obama’s Affordable Care Act through the Senate.

Eighteen states are building exchanges that will let uninsured residents buy medical plans starting in October. People who don’t get insurance through their employers would use the exchanges to select coverage from private insurers, often with taxpayer-subsidized premiums.

30 Million

Some states are also revamping Medicaid programs for the poor by broadening eligibility rules. Congressional budget projections show that more than half of the 30 million uninsured targeted by the law will eventually buy subsidized plans through the state exchanges and at least 11 million others will become eligible for state-run Medicaid coverage.

The U.S. government is giving states that run their own exchanges a share of about $2 billion to help get them started. The remainder of the 50 states will let the U.S. run the exchanges or choose to provide services such as consumer assistance in a partnership with the federal government.

To contact the reporters on this story: Alex Nussbaum in New York at anussbaum1@bloomberg.net; Zachary Tracer in New York at ztracer1@bloomberg.net

To contact the editors responsible for this story: Reg Gale at rgale5@bloomberg.net; Dan Kraut at dkraut2@bloomberg.net


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