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Tuesday, March 23, 2010

Health Insurance Reform






















A weekly compilation from Aetna of health care-related developments in Washington, D.C. and state legislatures across the country





Week of March 22, 2010


Late in the night Sunday, the House of Representatives helped President Obama deliver what no other President has been able to do -- a significant reform of the nation's health care system. The process is complicated by the fact that the House first had to pass the Senate's version of health care reform, and then pass a package of fixes that the Senate will have to take up separately through a "reconciliation" procedure requiring only a simple majority vote. To help figure out what health care reform will look like if the reconciliation bill is adopted, a number of news organizations are offering their own summaries or guides to the changes, including: The New York Times, USA Today, and the Chicago Tribune. Also, you can read online what theCongressional Budget Officehad to say about the bill it estimates will cost $940 billion over the next decade.


Federal


On Sunday, the House approved the previously passed Senate version (219 to 212) of health care reform, which sends this measure to the President for signature on Tuesday.The House also approved (220 to 211) the House-initiated "fix" to this Senate bill (called the Reconciliation bill) to revise items in the Senate bill that are repugnant to the House. This Reconciliation measure has to be approved by the Senate (scheduled for this week) to legally change the Senate bill. While Republicans in the Senate have more procedural tools at their disposal to derail the Reconciliation bill, the very nature of a reconciliation bill is that it only takes 51 votes, rather than the "normal" 60 filibuster-proof votes in the Senate on such major items as health care. Therefore, it seems likely that the Senate will indeed approve the changes, though perhaps not this week. If there are any changes on the Senate floor to the Reconciliation bill, even one word, it would have to go back to the House for yet another vote.


Since the beginning of the year, Congress has extended for one month at a time two health-related items: 1) suspension of imposition of a 21 percent cut in doctor reimbursements under Medicare; and 2) continuation of worker eligibility for a 65 percent subsidy to pay for COBRA coverage. The end of March deadline will be extended yet again through April, once the Senate agrees with the extenders bill passed by the House last week. Both chambers have passed a lengthier extension of these two items (the "doc fix" would go through September and the COBRA item would go to the end of 2010) as part of a separate larger bill, but with no compromise in sight Congress may have to extend these two items yet again at the end of April.


States


COLORADO: The bill requiring maternity and contraceptive coverage in individual policies and eliminating pregnancy as a pre-existing conclusion took a turn for the worse last week.Originating in the House, the measure had been amended to only require that a coverage option be provided. The Senate, which was expected to accept the bill as amended, passed a version requiring that coverage for reproductive services be included in the majority of the individual plans marketed by a carrier. At the request of the governor, the bill has now been referred to a conference committee.


CONNECTICUT: The Insurance and Real Estate Committee reported out a number of bills of interest last week, including: An Act Concerning Rate Approvals For Individual Health Insurance Policies-- the committee substituted language 1) removing the ability of AG and Health Care Advocate (HCA) to bill the plans for consultants, 2) removing the ability of the HCA and AG to appeal to the court, 3) narrowing the filing time frame for the approval to 120 days, and 4) starting to define terms and processes. The Committee's Republicans all voted no on the bill, indicating that they were concerned that the Committee hadn't gotten it right yet. An Act Concerning Appeals of Health insurance Benefits Denials -- the bill currently requires that upon the request of a member that a health plan provide all specific documents and information that were NOT provided by the enrollee or their provider that were considered in the denial. An Act Concerning Standards in Health Care Provider Contracts-- although a "standards in contracting" bill was enacted into law last session, providers continue to push for even greater limitations on contracting, including prohibitions on down-coding of claims. Other bills reported out include bleeding disorder coverage bill, a bill that would require hospitals to charge uninsured patients no more than 110 percent of Medicare, and a bill that would raise the medical malpractice threshold requirements for various providers.


GEORGIA: The legislation imposing limitations on the use of rental networks was deferred after Aetna helped educate legislators about the need for further amendments to the bill.Most importantly, the bill still does not contain an exemption for the requirements of ERISA plans and non-ERISA self-funded plans. Aetna continues to work with the legislators on this issue and anticipates the bill may be heard next week. No further action has been taken on the House bill imposing a 1.6 percent tax on the premiums of health plans. Indications from the Governor's office are that it may decide not to pursue this bill. However, we are watching the issue closely.


INDIANA: The legislature adjourned March 13 with no resolution to the major issues in Indiana.Specifically, the Republicans were unable to move a bill to delay imposition of new taxes to support the unemployment compensation fund or authorize a ballot initiative to permanently cap property taxes, and the Democrats were unable to move their agenda on education funding, creating jobs and providing greater assistance to the unemployed. With the exception of a bill dealing with emergency medical treatment of employees covered by workers' compensation, no insurance bills survived. Bills defeated included a push by the Indiana State Medical Association (ISMA) to allow providers to pick and choose the plans offered by an insurer that they would participate in and an initiative that would have required health insurers to provide extensive data to Indiana DOI regarding premiums and loss ratios. In addition mandatory recognition of assignment of benefits for out-of-network providers and the Indiana Dental Association's initiative to prohibit dental plans from imposing or negotiating fee schedules on non-covered services were defeated. Of note is that ethics legislation did pass both houses, and it is expected that the Governor will sign the bill impacting lobbying registration and reporting; it also limits who may serve as a lobbyist.


MISSOURI: With eight weeks to go in the legislative session, the House overwhelmingly approved the "Freedom of Health Care Act," which would send voters a constitutional amendment to prevent them being compelled to participate in any federal health care plan. The "yes" votes included all House Republicans and more than a third of Democrats. The Senate gave final approval to a bill requiring health plans to cover the diagnosis and treatment of autism spectrum disorders. On the budget front, Governor Nixon cut another $126 million in state spending, which means he has now vetoed or withheld almost $850 million from the budget the General Assembly approved last May. Because falling revenues show no immediate signs of improving, further cuts appear certain before the fiscal year ends on June 30. Analysts are projecting a $500 million shortfall in the budget blueprint the Governor proposed in January, prompting serious talk about restructuring state government and broad promises of bone-nicking budget cuts. One large target is the Medicaid program, and a preliminary draft of the appropriations bill is holding $100 million for physician services contingent upon a $300 million windfall that might come Missouri's way if the U.S. Congress extends the federal budget stimulus package.


NEW JERSEY: The governor recently gave his fiscal year 2011 budget address to a joint session of the legislature, outlining his plan for addressing a $10.7 billion state deficit.The proposed budget calls for drastic cuts across all sectors of government including: schools districts, FamilyCare (the state health program for the uninsured), the earned income tax credit, and the elimination property tax rebates. In contrast to past years, there were no new proposed tax increases. However, some cost shifting is anticipated in the form of increased assessments on individuals and businesses. Of note is a $2 million expenditure increase at the Department of Banking & Insurance, which will be borne by insurers in the state. In his effort to stimulate the state economy, the governor proposed discontinuing a 4 percent corporate business tax surcharge as well as allowing the surtax on high income earners to sunset. Further analysis will be done in the coming months, as the legislature begins its deliberation of the budget, to determine what, if any, impact the budget could have on Aetna. The budget must be signed by into law by June 30. The Senate unanimously confirmed Tom Considine as the next commissioner of the Department of Banking & Insurance. During his testimony before the senate judiciary committee, Considine advised that Horizon Blue Cross Blue Shield of New Jersey application to convert to a for-profit entity has been put on indefinite hold at the request of Horizon. In addition to Considine, the senate confirmed Dr. Poonam Alaigh as commissioner for the Department of Health and Senior Services.




NEW YORK: According to data recently released by the Department of Insurance to bolster the Governor's demand for prior approval of insurance rates, New York HMOs had premium increases of 17 percent on average this year, with some increases as high as 51 percent. The data showed that premium changes varied widely between companies and between counties. The state continues to claim that reinstating prior approval will save $70 million. A coalition of insurers, business groups and providers strongly opposed the prior approval proposal as a measure that would impose price controls on insurance. In both press statements and full-page ads, the coalition underscored that reinstating prior approval ignores the real reason for rising health insurance premiums-increases in the underlying cost of health care services-and does nothing to address those costs. Real reform is needed that addresses the underlying costs of care, reduces the hidden taxes and ensures that health plans can continue to provide coverage to New Yorkers. The prior approval opposition group includes the Health Plan Association, the Employer Alliance, the hospital associations HANYS & GNYHA, the Business Council of New York State, the National Federation of Independent Business and several upstate business alliances.




OKLAHOMA: Two bills seeking to streamline state employee health insurance benefits, in an effort to improve choice and lower costs, passed the House last week. The bills are based on recommendations made in a report by Milliman Inc. to the Oklahoma State Employee Health Insurance Review Working Group, which met during the interim last year. The report was requested to examine the functions of the Employees Benefit Council (EBC) and the Oklahoma State Education and Employees Group Insurance Board (OSEEGIB) and to determine if a duplication of efforts existed between the two agencies. The report concluded that the functions of the two groups should be integrated to form a new organization focused not only on the payment of health and other insurance claims but also on the wellness of the covered individuals; one oversight board should be created that would include members from backgrounds that include medical and employee benefits, as well as those from legal and fiscal backgrounds; the new organization should include a stronger wellness component; the state employee benefit allowance is artificially inflated and should be recalculated; and more choice is needed in rural areas of the state. The bills now move to the Senate for consideration.




WASHINGTON: Legislation authored by Democrat Eileen Cody to allow health insurance consumers the opportunity to purchase health insurance across state lines failed to gain traction in the legislature, despite support from the small business community and an endorsement from the chair of the health committee.Although some regional insurance carriers had expressed concerns, the main opposition came from chiropractors and mental health providers who believed that provider protection laws would be uncut by the legislation.



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