Wyoming is one of only six states where the federal government will directly enforce insurance regulations in the Affordable Care Act when key pieces of the law take effect in January.
Federal officials made the decision after learning the state’s Department of Insurance lacks the authority to enforce the rules, according to a notification letter sent to the state. Wyoming also passed on a collaborative arrangement with the federal government, as some other states with limited regulatory systems chose to do.
The decision means the Centers for Medicare and Medicaid Services will investigate consumer complaints that relate to Obamacare insurance regulations, such as the ban against denying people coverage because of pre-existing conditions. The federal agency will also review insurance company policy forms to ensure they comply with the federal health reform law, CMS spokesman Mike Fierberg said.
The work will be done from the agency’s Denver office. Wyoming’s own Insurance Department will keep its authority over state rules.
“We are not taking over regulation in Wyoming,” Fierberg said.
In a March 15 letter, CMS official Gary Cohen notified the state his agency would enforce market reforms in the federal health care law. He noted Wyoming “has not enacted legislation to enforce” the provisions.
The federal government will also be enforcing Obamacare insurance regulations in Arizona, Alabama, Missouri, Oklahoma and Texas.
Federal oversight isn’t necessarily permanent. States that have the means can take over regulatory responsibility in the future, Cohen wrote in his letter.
At the same time the federal regulations take effect, the federal government will begin operating a health insurance exchange on Wyoming’s behalf. State leaders chose to not to develop their own exchange, an online insurance marketplace, in line with federal deadlines.
Cohen’s letter did not surprise Wyoming Insurance Commissioner Tom Hirsig. The state simply doesn’t have the authority to enforce the federal regulations, he said.
“That doesn’t mean we won’t be involved in the things going on in the state,” he said. “But when push comes to shove, and somebody has an issue with the regulations, it will be the feds who have ultimate authority.”
Federal regulators, for example, will be responsible for ensuring insurance plans meet the minimum benefit standards required by the reform law. Hirisg said he doesn’t have the ability to require companies to adhere to those standards.
Wyoming’s Insurance Department will continue to oversee state regulations. And if contacted by an unhappy consumer, officials there would try to resolve the issue -- even if it relates to a federal provision, Hirsig said.
“We are not just going to pass the buck on,” he said. “We are still going to stand ready to help Wyoming consumers.”
Rick Schum is president of Blue Cross Blue Shield of Wyoming, which serves more than 150,000 customers in the state. He’s not sure federal oversight will have much of an impact on insurance companies.
“The whole industry is in a time of major change right now,” he said. “There will probably be a lot of tweaks to regulatory interpretation. I really don’t have a sense of whether that will make a big difference in the long run.”
Consumers, on the other hand, probably enjoy better and more efficient service from a local agency, rather than from one based outside the state, Schum said.
Others believe consumers will benefit from federal involvement. Dan Neal, executive director of the Equality State Policy Center, a progressive think tank, said state leaders decided decades ago to limit the power of Wyoming’s Insurance Department. Federal enforcement will mean better protections for consumers, he said.