Health Insurance Regulation:

Wide Variation in States' Authority, Oversight, and Resources

HRD-94-26: Published: Dec 27, 1993. Publicly Released: Jan 11, 1994.

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Pursuant to a congressional request, GAO provided information on how states regulate health insurance, focusing on state insurance departments': (1) role in regulating health insurance; (2) standards and regulatory responsibilities; (3) budget and staff resources; and (4) oversight activities.

GAO found that: (1) although state insurance departments are responsible for overseeing health insurers and protecting consumers, their authority varies widely among states, is limited to only a part of the insurance market, and does not extend to many companies because they have self-insured health plans; (2) about 24 percent of health care is paid for by private health insurance and regulated by state insurance departments; (3) although the National Association of Insurance Commissioners has developed models for establishing a national health insurance regulation system, it does not have sufficient authority to require that states adopt and implement its model policies; (4) funding for insurance departments' regulatory activities varies among states; (5) state insurance departments often have difficulties in estimating the amount of staff needed for oversight activities; (6) state insurance departments' regulatory functions include protecting consumers from insurer failures, unfair policy provisions, excessive premiums, and unfair insurer business practices; (7) the practices that state insurance departments use to monitor insurer solvency, approve health premium rates and policy forms, and respond to consumer complaints vary significantly; and (8) Congress needs to consider how and to what extent state insurance departments will be used in regulating health insurance as health insurance reform is implemented.

Jun 29, 2020

Apr 27, 2020

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    Priority Open Recommendations:

    Department of Commerce
    GAO-20-497PR: Published: Apr 20, 2020. Publicly Released: Apr 27, 2020.

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