A bill that would require Arizona health insurance carriers to provide written claim reports to plan sponsors up to twice a year, upon request, has been favorably amended in the House to make compliance less onerous. Modeled after a Texas law enacted in 2007, the bill originally required the reports to be provided within 30 days of a request. The type of information that can be requested includes aggregate claims and premium by month, the number of employees covered and pending claims.

Republican-sponsored legislation that would permit cross-border sales of individual health insurance remains in play despite strong opposition by the business community and consumer advocates. The bill would require that out-of-state insurers be subject to the jurisdiction of another state’s department of insurance; maintain reserves not less than the amount required in Arizona; register with the Arizona Department of Insurance (DOI); and that the coverage offered meet, at a minimum, the benefit requirements of the state where the company holds a certificate. The DOI would have authority to revoke the foreign insurer’s registration for reasons that include: inadequate reserves; failure to comply with the unfair practices and fraud statute; and violation of the prompt-pay law. The bill was amended in the House and now goes back to the Senate.

COLORADO:

As the deadline for filing legislation approaches, the Division of Colorado health Insurance released drafts of two bills aimed at bringing the state’s preventive coverage and adverse determination appeal requirements into conformity with the federal health reform law. Health insurers will have a small window of opportunity to provide comments before the bills are formally introduced. Also, a bill was filed to reclassify any product containing pseudoephedrine or ephedrine as a prescription drug to help prevent access to the drug by people illegally manufacturing methamphetamines. The bill has raised strong concerns because it would require a prescription for frequently used allergy medicines and drastically increase medical costs. The sponsor has introduced a joint memorial to Congress requesting the federal government address the issue.

CONNECTICUT:

The fiscal note for the Connecticut health insurance Healthcare Partnership bill, which would allow voluntary municipal and small employer pooling with the state employees’ health plan, has been released and indicates the legislation would be costly to the State. Known costs (those concerning the administration of the program) would be hundreds of thousands of dollars. Other costs that could not be precisely determined include those associated with the public option (similar to the SustiNet legislation but on a much smaller scale) and lost tax revenue from the premium tax.

In other action, the Judiciary Committee passed the Cooperative Health Care Agreements bill out of committee. The legislation would permit health care providers to enter into cooperative arrangements that would not be subject to certain antitrust laws, after approval by the Attorney General. In past years, health insurance plans have successfully argued against action on the bill despite support from the committee’s membership, including both Democrats and Republicans. However, this year the new Chairs have brought the bill forward for a vote. It will now go to the House floor where it will assessed for a fiscal note. The bill still has a long road to travel, including through the Insurance Committee.

FLORIDA and GEORGIA:

The Florida Office of Insurance Regulation and Georgia Department of Insurance have both asked health plans for additional information to help support their requests to HHS for a waiver from MLR regulations under ACA. The requests were prompted by an initial response from HHS asking for the additional information.

GEORGIA:

A bill that includes a prompt-pay provision that would
require third-party administrators to pay for service claims in the same timely fashion as primary insurers, or face penalties, has been passed by both chambers. The bill is opposed by the Georgia Chamber of Commerce, as it would erode current employer protections under the federal Employee Retirement Security Income Act (ERISA). The Georgia Chamber will ask Governor Deal to veto this legislation.

MARYLAND:

Governor Martin O’Malley signed several bills into law last week that will impact Aetna insurance and its customers. The Health Benefit Exchange Act of 2011 establishes the Maryland Health Benefit Exchange as a public corporation and an independent unit of state government. The law sets the purposes, powers and duties of the insurance exchange, establishing the Board of Trustees and providing for the qualifications, appointments, terms, and removal of members of the Board. It requires the board to appoint an executive director of the Maryland health insurance exchange, with the approval of the Governor, and determine the executive director’s compensation. The effective date is June 1, 2011. Another law alters the circumstances under which a person has the right to a hearing and to an appeal from an action of the Maryland Insurance Commissioner. The law provides that provisions of federal law apply to specified health insurance coverage issued or delivered by insurers, non-profit health service plans, and HMOs; authorizing the Commissioner to enforce specified provisions of law. The effective date is July 1, 2011.

MICHIGAN:

Newly elected Governor Rick Snyder continues to push for a 1 percent tax on all Michigan health insurance claims, which would require insurers and third-party administrators to pay $400 million in order to generate $1.2 billion in revenue for Medicaid. The tax would replace the existing 6 percent tax on all products among the 14 Medicaid HMOs. The $400 million tax would trigger $800 million in matching funds from the federal government, thereby generating $1.2 billion in total. Should the tax be passed, the Governor promised no cuts to Medicaid reimbursement rates, services or eligibility. The claims tax is the same type being phased out in Maine that was used to fund the Dirigo Health Plan.

MISSOURI:

The attorney general, a Democrat, broke with his party last week and urged a federal judge to invalidate the central provision of the new Missouri health insurance law. The filing of the brief by Attorney General Chris Koster, a onetime Republican state legislator who switched parties in 2007, underscores ACA’s political tenuousness in a critical Midwestern swing state. Koster’s action followed months of pressure from state Republicans that he join attorneys general from other states who are challenging the constitutionality of the law. Instead, Mr. Koster chose to file a “friend of the court” brief in the U.S. Court of Appeals for the 11th Circuit. In Missouri, a ballot referendum aimed at nullifying the law was approved by nearly three to one last year, and the legislature recently passed resolutions urging Koster to join the legal challenges. In a letter to the Republican leaders of the legislature announcing his decision to oppose the law, Koster acknowledged that the legislative resolutions, though nonbinding, were impactful as they give voice to the political will of state residents. His central argument echoed those made by plaintiffs in a number of the lawsuits.

NORTH CAROLINA:

Legislation was introduced last week prohibiting most favored nation clauses in North Carolina health insurance contracts. The Insurance Committee in the House has already held one hearing on the bill.

OKLAHOMA:

Governor Mary Fallin last week joined other state leaders in announcing that Oklahoma will establish an Oklahoma Health Insurance Private Enterprise Network to prevent the establishment of a federal health care exchange in Oklahoma. To address concerns expressed by some, state leaders added specific safeguards into legislation to prevent the implementation of a federal health care exchange, while creating an Oklahoma-based health insurance network.  The Health Insurance Private Enterprise Network, based on a concept by the conservative Heritage Foundation and legislation passed by the legislature in 2009, would increase access to portable, private, affordable health insurance plans through a market-based network featuring competition and offering choice to consumers. The network would be governed by a board made up mostly of private sector members and chaired by the Insurance Commissioner.  The network would be funded through state or private resources. The state will not accept the federal $54 million Early Innovator Grant. The legislation is expected to be amended onto a pending bill and make its way through the legislative process. which is scheduled to end May 27, 2011.

TEXAS:

A bill designed to squeeze savings out of social programs won unanimous approval from a Senate budget subpanel last week. The bill includes about 10 ideas for greater economies – primarily in Medicaid but some in food stamps and the Children’s Texas Health Insurance Program. The biggest single savings — $290 million over the next two years — would come from eliminating a South Texas “island” of fee-for-service payments under Medicaid. Since 2003, Cameron, Hidalgo and Maverick counties have been exempt from the managed care trend at work elsewhere in Texas. The bill also would save $51 million by carving prescription drugs into Texas Medicaid managed care programs and requiring most Medicaid patients to use medicines on a state preferred drug list; save $15.9 million by moving children from the State Kids Insurance Program to the Children’s Health Insurance Program; and save $28 million by requiring Texans with disabilities who receive in-home attendant care services to use a Medicaid state program first at a lower cost to the state. The measure now heads to the full Senate Finance Committee, which is crafting its version of the much-reduced budget for 2012-13.

Federal
In response to various requests for clarification (including from Aetna insurance), federal regulators last week issued a Question & Answer document that further refines the previous proposed rule on student health. In short, this clarification makes it clear that nothing from PPACA applies to student health plans until policy years beginning in 2012 or until academic year 2012-2013. The Q & A also clarified that the proposed regulation must be finalized to show what parts of the PPACA would apply to student health plans. This is welcome news in the college and university community. Aetna is communicating with its clients in a manner that is consistent with last week’s clarification, though many schools were hearing conflicting advice from state regulators.

The House-passed continuing resolution includes language that would “prohibit the use of funds to pay any employee, officer, contractor, or grantee of any department or agency to implement the provisions” of the PPACA. In a letter to Finance Committee Chairman Max Baucus, HHS Secretary Kathleen Sebelius made several claims that, should the de-funding provisions in the resolution be enacted into law, seniors will lose access to Medicare Advantage plans and other services. Senate Republicans were quick to dispute these allegations stating, the scenarios the Secretary envisions are not allowed under Congressional rules, are not assumed by the Congressional Budget Office (CBO), and can be prevented by HHS.  Senator Orrin Hatch and Ways and Means Committee Chairman Dave Camp also sent Secretary Sebelius a letter expressing their disappointment in what they called the letter’s “baseless allegations,” and expressing hope that “the urgency with which this letter was sent to Chairman Baucus is also being applied in answering a growing backlog of serious questions.”  The CBO also released a letter regarding the impact of the resolution, including the impact of the de-funding provisions on Medicare Advantage. The letter shows the de-funding provisions would have a minimal MA budgetary impact of $5.7 billion over 10 years.

States
Governor Jan Brewer’s Special Advisor on Arizona health insurance Health Care Innovations held a meeting last week with the state’s major health insurers, including Aetna insurance, to discuss identifying IT gaps the state must address to develop the online product selection and enrollment mechanism for an insurance exchange. Social Interest Solutions, the organization that developed the enrollment form currently used by Medicaid applicants, provided a demonstration of that application process. Individual interviews will be conducted with the IT staff of each company to obtain recommendations for the new system.

The Real Estate Committee last week voted out a substitute prior-approval rate bill that retains all the problematic sections of the original bill. The sections of concern cover public hearings, new subpoena powers for the Attorney General and Connecticut health insurance Healthcare Advocate, multiple notice requirements, and new definitions of inadequate, excessive, and unfairly discriminatory. The only change is that the Commissioner would have to promulgate regulations to carry out the proposed public hearing process. The full contingent of Republicans and Rep. Linda Schofield (Dem.) voted against the bill, with Schofield stating that she was concerned the bill gets rid of any timeline under which the Department must act and would require public hearings, nonsensically, for group rates. She also said the bill would provide the Attorney General and Advocate with extraordinary subpoena powers. The Chairs indicated that the bill is a work in progress.

Florida health insurance Insurance Commissioner Kevin McCarty has disclosed that he will be submitting a medical loss ration (MLR) waiver request to HHS this week.

Georgia health insurance Insurance Commissioner Ralph Hudgens has indicated he will be submitting an MLR waiver request to HHS within a week.  Aetna insurance continues to work with the Chamber of Commerce and plan sponsors to help defeat legislation that would apply prompt-pay requirements to self funded plans, in violation of ERISA.

Oklahoma health insurance Last week State Rep. Mike Ritze, one of two doctors serving in the Oklahoma legislature, called on state officials to turn down $54 million that would be used to implement the new federal health care law. Shortly thereafter, Governor Mary Fallin joined other state leaders in announcing that Oklahoma will accept the grant to help design and implement the information technology infrastructure to operate an Oklahoma health insurance exchange. Fallin listed the creation of such an exchange as one of her top priorities in her State of the State address earlier this month. She and others announced their support for the grant after working with state agencies to ensure that no unworkable federal mandates were included.

Later in the week, the legislature continued taking steps forward to reduce the number of uninsured Oklahomans. House Speaker Kris Steele authored a bill that defines the membership and appointments to the Health Care for the Uninsured Board (HUB), which is designed to establish a system of counseling, including a website, to educate and assist consumers in selecting an insurance policy that meets their needs.  The seven-member HUB consists of representatives from the Insurance Commissioner’s Office, the Oklahoma Healthcare Authority, insurance companies, agents and also consumers. The purpose of HUB is to implement a market-based insurance exchange.  The bill passed the House Public Health Committee at the end of the week and will proceed to the floor of the House.

Texas health insurance Legislators are wrestling with to what extent they should intervene in what residents eat, drink and breathe. In a state with some of the nation’s highest obesity and diabetes rates, supporters of various proposals say they are trying to give Texans more ways to combat unhealthy decisions by others, as well as make good choices for themselves. The president of the Texas Medical Association testified last week in favor of a bill banning the sale of unhealthful drinks (sugary fruit juices, sodas, whole milk) to students during school hours. Other related bills would allow the state to raise taxes on sweet sodas and fine restaurants for not posting nutritional information.

About 30 percent of Texas schoolchildren are obese or overweight, according to the Texas Public School Nutrition Policy. And last month, Republican Comptroller Susan Combs released a report saying obesity cost Texas businesses $9.5 billion in 2009 — that could rise to $32 billion by 2030 due to the cost of health care services, absenteeism, decreased productivity and disability. Legislators will continue debate on these bills until the session adjourns on May 31.

A federal district court judge has ruled that the individual mandate provision of the health reform law was an unconstitutional exercise of regulatory power by the federal government under the Commerce Clause and that the rest of the PPACA was not “severable” from the mandate provision and, therefore, the whole law could not survive under the Constitution.  This is but one case among many around the country focused on the constitutionality of the law, but it is the most prominent because 26 states from all over the country are plaintiffs. However, the decision is conclusive of little. First, the jurisdiction of this federal district court is limited to a handful of counties in Florida. Second, no Circuit Court has yet ruled on this or any other case either in support or against the mandate or other provisions of the law, and the Supreme Court is down the road. Third, it is not yet clear how the insurance provisions will fare in the higher courts should the mandate itself not survive. This key subordinate issue is expected to be clarified first in the May 2011 oral arguments in the 4th Circuit (the Virginia case) where the Department of Justice will reportedly “embrace” the notion that the mandate and the insurance access provisions are linked and not severable. If the cases out there are not fast-tracked to the Supreme Court (right now, quick action is favored by the states and other plaintiffs but opposed by the DOJ and the Administration) we will likely not see a decision until mid-2012 or just before the November elections that year.

The Senate last week handily (81 to 17) passed a bill to repeal outright the PPACA provision that imposes on business a burdensome and costly 1099 reporting requirement for any payment to any payee of $600 or more. While the House of Representatives has to agree (quite likely) to the repeal and the President is expected to sign it if it gets to his desk, it is unclear when and how this item will proceed through the Congress and whether it becomes a legislative vehicle for other “fixes” to the health reform act.  During the same floor debate, the Senate considered and defeated a Republican amendment to repeal the entire PPACA. This vote got only 47 votes; it needed 60.  It is unclear whether the Senate Republican leadership will force the Senate to vote yet again on total repeal at a later date.

The Senate Judiciary Committee held a hearing last week on the constitutionality of PPACA with three witnesses testifying that the act is constitutional and two saying it is not. Rather than settle the issue, the hearing can be seen to have energized each side to rally around its position. It is still going to take Congressional action or (more likely) a Supreme Court opinion to settle this issue.

Connecticut health insurance The Joint Committee on Insurance and Real Estate held a hearing on a number of insurance bills, including legislation that would require the insurance commissioner to hold a symposium for public comment prior to approving any individual or group long-term care policy rate filing. The Connecticut Association of Health Plans (CTAHP) testified in opposition to the bill as being unlikely to be of any practical assistance to the Department of Insurance’s rate review process. Requiring symposiums with every rate increase would tax the limited resources of the DOI and delay the rate review process. The Committee also heard testimony on two bills re-introduced from last session that would prohibit the offset of retirement benefits under disability income policies and prohibit the offset of SSDI dependent benefits under disability income policies. Both bills would increase the cost of disability premiums for employers.

Governor Dannel P. Malloy announced the appointment of Thomas B. Leonardi to serve as the new commissioner of the state Department of Insurance. Currently, Leonardi is Chairman and CEO of Northington Partners, Inc, an insurance specialty venture capital and investment banking firm founded in 1989 and based in Avon, CT. Leonardi was quoted as saying the job “requires a balanced approach, which includes efficient and timely responses to consumer complaints, making sure that products are clearly marketed and suitable for those people to whom they are sold, and, importantly, making sure that insurers in Connecticut are financially sound and able to pay policyholders’ claims as they come due.” He noted that the insurance industry has been a key part of Connecticut’s economy but that insurance jobs have been in decline. “Connecticut’s families need affordable and reliable health insurance coverage and they need good jobs. My goal as Insurance Commissioner will be to do everything within my power to make sure they get both.”

Florida health insurance After the Florida Court ruling regarding the PPACA, Governor Rick Scott announced the state would not pursue any further health care reform activity. Governor Scott stated, “We are not going to spend a lot of time and money with regard to trying to get ready to implement that until we know exactly what is going to happen, I hope and I believe that either it will be declared unconstitutional or it will be repealed.” In addition, the Commissioner of Insurance announced the state would be returning the grant received from HHS for rate review and would no longer be seeking a waiver of the medical loss ratio requirements.

Georgia health insurance Aetna health insurance is awaiting direction from the Governor’s office regarding possible legislation related to health insurance exchanges.  We have been informed the health underwriters will be asking legislators to file a bill closely following the NAIC model legislation, but nothing has been filed yet. We are continuing a dialogue with the new Commissioner of the Department of Community Health regarding the Managed Medicaid Program, a potential RFP and expansion of the program.

Michigan health insurance The Republican-controlled 95th General Assembly convened for its two-year legislative session in mid-January. The assembly is scheduled to recess on December 31, 2011, but remaining legislation at that time carries forward to 2012. Newly elected Governor Rick Snyder gave his first state-of-the-state address, identifying his top priority as the state’s $1.6 billion budget deficit for fiscal year 2012.  Cuts to state programs are likely, and the governor and legislature will consider swapping the Michigan Business Tax with a flat corporate tax. Industry-related issues include granting the insurance commissioner the statutory authority to implement PPACA, development of an insurance exchange, rate review requirements, individual market reforms, and benefit pooling of public employees.

Texas health insurance The Speaker of the House is expected to appoint committee members this week, and they can look forward to consideration of a number of bills of interest to Aetna health insurance and its customers. These bills include a mandate for emergency or other medical, hospital, or surgical expenses incurred as a result of intoxication or influence of any narcotic; expansion of the autism mandate to all state employees and individual plans; a requirement that health care providers make good faith efforts to collect copayments or deductibles unless the enrollee demonstrates special financial need or hardship; creation of a state-based health insurance exchange; a requirement to elect the Commissioner of Insurance; an HIV-testing mandate, prohibition of abortion through an exchange; and a mammography mandate that also provides for supplemental breast cancer screening if a physician finds the enrollee has dense breast tissue and additional risk factors.

Additionally, the Senate State Affairs Committee released its official interim report this week. Outlining steps already taken by the Employee Retirement System, Teachers Retirement System and Medicaid, the interim report recommends that state-funded health plans continue to pursue evidence-based payment reform as well as monitor developments on accountable care organizations. The report discusses the new Healthy Texas program and reports there are now 17 groups with 31 total enrollees. On the topic of value-based insurance design, the report cautions that the savings achieved accrue over time and short-term pressures may make VBID less feasible than originally hoped. Finally, the report reviews the current landscape for hospital billing and collection practices. The Committee encourages the DOI’s current efforts to collect reimbursement data on this topic and provide consumers with rate information on an aggregated basis.

Wisconsin health insurance Newly elected Governor Scott Walker signed his first bill into law that was part of the “Wisconsin is Open for Business Special Session.” The special session was called to take up a package of pro-business legislation.  As part of Walker’s pro-business legislative package, Act 1 eliminates state taxes on Health Savings Accounts (HSAs).  Under the new law individuals may claim a nonrefundable income tax credit for 6.5 percent of the allowable amount that they claim as federal tax deductions for their HSA contributions, or claim 6.5 percent of the federal tax−exempt earnings relating to an HSA, or both.

Governor Dave Heineman has announced that Bruce Ramge has been appointed Director of the Department of Nebraska Health Insurance, effective immediately.

Governor Steve Beshear has announced changes  designed to save more than $142 million in the Kentucky health insurance Medicaid program over the next two years.

Illinois Health Insurance Reform Implementation Council is requesting public comments on a proposed health insurance  exchange.

Florida Health Insurance,  Now in special session, a significant Republican majority is emphasizing a message of fewer taxes, more discretion in spending, and greater accountability in state government.

While Governor-elect Jerry Brown has not yet announced his priorities for California health insurance, his website does state that he supports requiring health care cost transparency.

• PPACA authority: This language would adopt PPACA and future changes in their entirety. Once rules are finalized, specific provisions can be drafted in the future.

• AAC payment/assessment methodology by insurers: Revises the methodology governing the assessment of payments made by domestic insurers. This revision would eliminate an existing inequity in assessments for insurers vs health care centers. The DOI would take the premium data directly from the Annual National Association of Insurance Commissioners (NAIC) statutory blanks which would be retrieved electronically.

• An Act Concerning Third Party Administrators: The DOI would adopt the National Association of Insurance Commissioners model third party administrator statute. They state that over 100 third party administrators operate in the state without any licensing/registration requirements and absent any statutory oversight.

• NAIC Model Standard Valuation Law: This proposal makes changes to the Standard Valuation Law, to enable Principles Based Reserving (PBR) of life insurance companies’ actuarial liabilities. PBR uses risk analysis techniques, such as modeling and simulation, to better capture various risks inherent in establishing adequate reserves. Use of a Valuation Manual, which is currently being drafted by the NAIC is intended to be dynamic to consider rapid changes in the marketplace.

Florida health insurance : Florida Insurance Commissioner Kevin McCarty co-signed a letter to National Association of Insurance Commissioners (NAIC) President Jane Cline urging the organization to adopt an amendment to the proposed Regulation for Uniform Definitions and Standardized Methodologies for Calculation of Medical Loss Ratio for Plan Years 2011, 2012 and 2013. The amendment would have excluded producer compensation from the MLR calculations by changing the definition of earned premium. The proposed amendment specifically stated: “For purposes of this regulation only, the term ‘earned premium’ shall not include fees or commissions included in premiums that are collected solely for the purpose of passing such fees or commissions on to an unaffiliated third party insurance producer to the extent such fees or commissions are actually paid.” The NAIC voted down the amendment but also voted in favor of a resolution to continue to work on this issue with HHS as it develops MLR regulations.

Kansas health insurance : Kansas DOI staff recently held a meeting to discuss upcoming legislative proposals that include a health insurance exchange bill and other legislation needed to implement PPACA. Various industry stakeholders were invited. The DOI is also considering a health care database bill that would transfer authority for the administration and collection of health care data required by law from the Kansas Health Policy Authority to the DOI. The staff invited feedback on these topics and promised to provide details about the legislation as soon as they are available.

Missouri health insurance : The Department of Insurance recently issued a bulletinto notify carriers in the individual market of two options regarding issuing policies for children under age 19. The two options listed are: 1) Guaranteed issue for all children under age 19 without limitations or riders based on health status provided throughout the year (while the bulletin states that the Department “expects” carrier to provide coverage throughout the year, the DOI has since clarified that it would prefer that carriers choose this option); or 2) new coverage limited to an open enrollment period — a transitional open enrollment period from September 23 to December 31, 2010, and an annual March open enrollment period beginning in 2011. Under this option, all children under the age of 19 shall be offered coverage on a guaranteed basis, without pre-existing condition exclusions or riders based on health status. If a carrier chooses this option, the carrier may sell child-only policies only during the open enrollment period, with the exception of enrollment of children experiencing a qualifying event. Missouri previously approved Aetna’s removal of the child-only addendum in July, and the company currently does not sell child-only policies in the state.

Texas health insurance : The Texas Department of Insurance has been awarded $2,792,180, the second highest grant in the country, to establish the PPACA consumer assistance program. HHS recently announced the new Consumer Assistance Grants program awards to help states and territories put patients in charge of their health care. These grants will support states’ efforts to establish or strengthen consumer assistance programs that provide direct services to consumers who have questions or concerns regarding their health insurance. These new grants will allow states, that in some cases are partnering with local non-profits, to help strengthen and enhance ongoing efforts to protect consumers.

Illinois health insurance: Last week Governor Pat Quinn signed the package of budget proposals passed by lawmakers in May, leaving Illinois with one of the largest budget deficits in the country.

Michigan health insurance: Priority Health and the Physicians Health Plan of Mid-Michigan, both non-profit insurers and subsidiaries of large hospital systems, have applied to sell coverage to new Patient Protection and Affordable Choices Act (PPACA) high-risk pool enrollees.

Missouri health insurance: Lt. Gov. Peter Kinder has filed a legal challenge against the recently enacted federal health care reform law.

Pennsylvania health insurance: The Insurance Department is planning to file an application with HHS for a $1 million grant to buttress its rate review efforts.

The following states will operate their own pools:
Alaska, Arkansas, California, Colorado, Connecticut, Illinois, Iowa, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, Missouri, Montana, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Dakota, Vermont, Washington, West Virginia, Wisconsin, and District of Columbia.

The following states will allow the federal government to create and manage the pools:
Alabama, Delaware, Georgia, Hawaii, Idaho, Indiana, Louisiana, Minnesota, Mississippi, Nebraska, Nevada, North Dakota, South Carolina, Tennessee, Texas, Virginia, and Wyoming.

The Senate passed the legislation by a vote of 59-38, on April 15. Three Republicans supported the bill, Sen. George Voinovich (OH) and Maine Senators Olympia Snowe and Susan Collins and three Democrats did not vote – Evan Bayh (Indiana health insurance), Bill Nelson (Florida health insurance) and Mark Warner (Virginia health insurance).  An amendment to the legislation offered by Senator Max Baucus (D – MT), which was passed by a voice vote, would extend most of the benefits for another month – until the end of May – so as to avoid a repeat battle over this legislation two weeks from now.  President Obama signed the bill into law Thursday night, April 15th.

Under previous law, these legislative provisions expired on March 31, so this bill offers the retroactive benefits to those people laid off between April 1, and when the bill becomes law. It would guarantee that people who enroll for the subsidy by the end of April will get the entire 15 months of federally subsidized health premiums.

It should be noted that Congressional leaders are also focused on passing a longer-term benefit extensions bill, H.R. 4213.  The longer-term options being considered include a Senate bill that would extend the subsidy through the end of the year. A House bill also offers a longer extension, but the two bills would have to be reconciled, prior to becoming law.

Consideration of the annual budget resolution will be another high priority during the next several weeks, beginning with markups in the Senate and House Budget Committees.  One of the key issues the committees will consider is whether to adopt language allowing the budget reconciliation process to be used to advance any major legislative priorities later this year.

The next stretch of the 2010 legislative session will run for seven weeks before Congress recesses again around Memorial Day.

Health Care Reform

New Health Care Reform Law Means Tax Increase for Middle Class: According to a report recently received by congressional staffers, the new health care reform law will result in higher taxes for approximately 14.7 million middle class Americans. Taxpayers can currently deduct medical expenses in excess of 7.5 percent of their adjusted gross income (AGI). Starting in 2013, most taxpayers will only be able to deduct expenses greater than 10 percent of AGI. By limiting the medical expense deduction – a provision widely used by taxpayers who either have a serious illness or are older – the new law is expected to save billions of dollars. However, according to the Joint Committee on Taxation, those taxpayers earning less than $200,000 a year will pay roughly $3.9 billion more in taxes in 2019 alone because of the new limits for this deduction.

Members of Congress Baffled by Health Care Reform Provisions: According to the Congressional Research Service, the new health care reform law may have serious unintended consequences for members of Congress and their employees. Due to ambiguous and confusing language, members of Congress and their staff members may lose access to the Federal Employees Health Benefits Program, effective immediately. Rep. Jason Chaffetz (R-UT) said lawmakers were in the same boat as many Americans, trying to figure out what the new law meant for them. Congressman Chaffetz asked, “If members of Congress cannot explain how it’s going to work for them and their staff, how will they explain it to the rest of America?”

Additional Activities
Massachusetts Court Rejects Bid to Increase Premiums: Last month, insurance executives in Massachusetts attempted to increase their companies’ premiums by as much as 32 percent, citing the expected rise in medical costs associated with insuring individuals and small group customers in Massachusetts. Insurance Commissioner Joseph Murphy rejected the proposals, citing the increases as “excessive.” As a result, representatives from six of the insurance companies sued, claiming the state does not have the authority to cap premiums. On Monday, a Superior Court Judge in Suffolk County ruled against the insurance providers on procedural grounds for not exhausting all administrative remedies within the Department of Insurance before seeking legal intervention.

Unemployment Benefits Extended Again: On Monday, Senate Democrats advanced a measure temporarily extending the unemployment benefits that expired during the recent two-week congressional recess. Democrats achieved cloture (the only formal procedure that Senate rules provide for breaking a filibuster) with 4 key Republican votes in the Senate. The $9.2 billion bill would extend long-term unemployment benefits along with COBRA health care subsidies for unemployed Americans. It would also extend an annual increase in payments to doctors who treat Medicare patients. The unemployment benefits and health care subsidies will continue until May 5, while the other changes will expire on April 30.

The Senate’s action late Monday set the stage for a final vote on the legislation. On Thursday evening, the bill passed 59-38 , and the measure was sent back to the House, which was expected to vote and send it to President Obama for his signature.

Another State Joins Lawsuit Against Health Care Reform Bill: This week, Georgia Governor Sonny Perdue appointed a special assistant attorney general to lead the state’s challenge against the health care reform law. Georgia joins 18 other states in alleging that the new law infringes on Americans’ Constitutional rights by mandating that individuals  purchase health care coverage or pay a penalty. Frank Jones, the state’s pro bono special assistant attorney general, will represent the State of Georgia and join the multiparty lawsuit filed on March 23 in a federal court in Florida. Other states in the suit include Alabama, Arizona, Colorado, Florida, Idaho, Indiana, Louisiana, Michigan, Mississippi, Nebraska, Nevada, North Dakota, Pennsylvania, South Carolina, South Dakota, Texas, Utah and Washington.

Insurance Commissioner Won’t Comply with Law: Also in Georgia, Insurance Commissioner John Oxendine refused a request from the U.S. Department of Health and Human Services to create a pool for high risk insurance plans. His decision to opt out of creating a high risk pool will not affect the cost of insurance for any patients. However, the federal government, instead of the state, will oversee the distribution of certain federal health care funds in Georgia health insurance to ensure that high risk patients receive subsidized premiums on health insurance.

Chairman Waxman Cancels Hearing: House Energy and Commerce Committee Chairman Henry Waxman (D-CA) issued a statement on Wednesday cancelling a hearing called to listen to concerns from major corporations about how they will be impacted by the health care reform bill. Over the past few weeks, several company executives contacted Chairman Waxman and expressed their feelings that the new law may ease their costs if it is implemented properly. Companies like AT&T, Verizon and Caterpillar made news last month when they informed investors they would need to take billions of dollars in write-downs because of changes in how health care subsidies will be taxed.

Public Opinion
Polls this week show that the number of Americans favoring repeal of the health care reform law continues to rise following the law’s enactment. At the same time, President Obama’s job approval ratings have slipped since passage of health care reform.

More Americans Strongly Favor Repeal: In a recent Rasmussen report, 58 percent of Americans – up 4 points from last week – support repealing the new health care reform law. Further, 52 percent of likely voters continue to feel the legislation is bad for the country.

Similar results were found in a new study conducted by Indiana University. Researchers at the Center for Health Policy and Professionalism Research found that 58 percent of Americans are in favor of repealing the health care legislation.

Obama’s Approval Ratings Slip: In a recent AP/Gfk poll, 52 percent of Americans said they disapprove of the way President Obama is handling health care reform, up 6 points since last month. At the same time, 50 percent disapprove of his performance overall, which is up from 46 percent just a month ago.

Looking Ahead
As lawmakers shift their attention to debating financial reform and climate change legislation, President Obama continues to travel the country to discuss with Americans the details of the new health care reform legislation.