kuntanay: Insurance commissioners: Health care startup may bring 'chaos ...

By Bloomberg News

Published: Tuesday, January 22, 2013, 6:14?p.m.
Updated 5 hours ago

President 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 new system will perform on Oct. 1, when millions of Americans are supposed to begin shopping at online markets created by the law, said Jim Donelon, the NAIC?s president. 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, Louisiana?s insurance commissioner. State officials around the country ?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, on Tuesday named former Democratic Sen. Ben Nelson of Nebraska as its chief executive officer.

?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.

State regulators 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 consumers and insurers well and deserves to be defended, Nelson, 71, said.

?To impose their standard solvency regulation I think is a mistake, and I hope to work to try to convince them of that,? he said. ?It isn?t broken, so we?re not going to let them fix it.?

A former insurance industry executive, Nelson 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.

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