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New Missouri law Imposes Hurdle For Insurance Exchange

JEFFERSON CITY  — Advocates for uninsured people are worried a bill signed by Missouri Gov. Jay Nixon on Friday could throw a wrench into implementing the upcoming health insurance marketplace.

The new state law requires insurance counselors – known as navigators — get state licenses before they begin helping consumers shop for health plans on the exchange.

But no state regulatory framework is in place. And even if it’s set up quickly, the law could make it hard for navigators to do their jobs because it bars them from providing advice about health plan features or recommending a specific plan.

Critics say the restrictions are anti-consumer, unnecessary and potentially a violation of federal law.

“It’s very clear that states cannot enact state laws that impede the Affordable Care Act,” said Lisa D’Souza, a health law and policy fellow at St. Louis University. “This bill certainly has a great potential to do that.”

Nonprofit groups and other community-based organizations are hoping to hire the navigators in mid-August after the federal government awards grants to pay for them. The counselors must be trained by Oct. 1, when open enrollment begins.

The exchange is intended to be a one-stop shopping site for people who lack affordable, job-based health insurance. Navigators are supposed to help consumers sort through the maze of options and figure out whether they’re eligible for premium tax credits or free or low-cost coverage through Medicaid.

The licensing law was sought by insurance agents and brokers. They say it will keep unscrupulous counselors out of the insurance business and make sure the information they disseminate is correct.

“I don’t understand the opposition,” said Larry Case, executive vice president of the Missouri Association of Insurance Agents. “To me, it’s just common-sense consumer protection.”

The battle is the latest complication for the insurance exchange, a key part of the national health care law and a frequent target of the Republican-led Missouri Legislature.

In November 2012, state voters approved a legislative proposal that prevented Nixon’s administration from creating a state-run exchange without approval from the Legislature or state voters.

As a result, Nixon, a Democrat, announced that Missouri would default to the federal government for operation of Missouri’s online marketplace.

Missouri is one of at least 14 states that passed legislation regulating the navigators, according to an update this month by a health law blog at the Georgetown University Health Policy Institute.

The National Conference of Insurance Legislators drafted the navigator provisions and distributed them to states as model legislation, said state Sen. Scott Rupp, R-Wentzville.

“The state has to have some authority over who are the navigators,” Rupp said. “We have to be able to root out any bad apples.”

Preventing fraud was the main goal, said Case, the insurance agents’ representative.

In determining eligibility for federal subsidies, the navigators will have access to consumers’ tax records, and “that’s just ripe for ID theft,” Case said.

But others contend the licensing bill grew, at least in part, out of a turf battle.

“Agents and brokers are pushing this very hard because they’re concerned about losing market share,” said Tim Jost, a health law expert and professor at the Washington and Lee University School of Law in Virginia.

“It’s interesting that states that don’t care about implementing the Affordable Care Act in any way, shape or form decided this was the one issue that just urgently needed their attention,” Jost said.

In Missouri, the bill passed 128-32 in the House and 28-5 in the Senate.

It says navigators cannot receive federal funds until they are licensed by the state. The state can require them to post a bond, pay a fee and take ongoing training.

Their job, the law says, is to provide “fair and impartial information and services.” They cannot “provide advice concerning the benefits, terms and features of a particular health plan, or offer advice about which exchange health plan is better or worse for a particular individual or employer.”

Critics question the need for state training, since navigators must take a 30-hour federally required training course and pass an exam.

They also say the bill defines navigators so broadly it could include paid staff at social services agencies who are certified to help with Medicaid enrollment.

“We believe the intention was to make it harder for people to access new insurance options,” said Jen Bersdale, executive director of Missouri Health Care for All, a St. Louis-based coalition that supports the Affordable Care Act.

Nixon made no comment on the bill Friday when he announced he had signed it. His news release called it “an omnibus insurance bill that contains a number of provisions relating to health care.”

Because it contained an emergency clause, the parts relating to insurance counseling took effect immediately upon the governor’s signature.

How long the licensing process will take is unclear, because no state rules have been proposed. Insurance department spokesman Chris Cline said Tuesday that the department still was reviewing the bill.

“We are in the process of determining what next steps, regulatory or otherwise, are necessary to implement the provisions of the new law,” he said.

One of the reasons Nixon may have signed the bill was the insertion of a provision softening the voter-passed ban on implementing the insurance exchange.

Under that provision, state regulators can oversee health insurance filings, consumer complaints and investigations, “regardless as to how a health insurance product may be sold or marketed in this state or to residents of this state.”

Another provision will allow managed care plans, known as HMOs, to offer plans with a high deductible.

D’Souza, of SLU, said that change was bad for consumers, too.

Rupp disagreed. “It just gives people another choice, to make health care more affordable,” he said.

The bill is SB262.

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States The Health Law Uninsured