Governor Jan Brewer has signed a state budget that includes $1.1 billion in spending cuts and the elimination of programs that Democratic legislators say will have a disproportionate impact on the poor and children of the state. The budget eliminates $385 million from the Arizona Health Insurance Cost Containment System (Medicaid), effectively rolling back the coverage expansion to childless adults that voters approved in 2000. A legal challenge is expected by some because the program changes were not put to a public vote.
A medical loss ratio (MLR) bill sponsored by the California Health Insurance Commissioner was unveiled last week. In short, the legislation would require health insurers to comply with the federal minimum MLR standards and provide an annual rebate to insureds if the amount expended by the issuer on medical-related costs is less than a certain percentage of total revenue. It appears that the author’s intent is to exceed the requirements outlined in ACA and HHS regulations in three possible ways; 1) Federal regulation sets the process and requirements for rebates to consumers, if necessary, but the new bill could permit the state to modify those requirements; 2) the legislation fails to take into account MLR waivers that have been approved by HHS; and 3) the bill continues the misconception that rates filed must meet the federally defined MLR thresholds rather than the plan’s claim experience over the previous year. The bill also would authorize the Director of the Department of Managed Health Care and the Insurance Commissioner to issue guidance and promulgate regulations to implement requirements relating to MLR.
The non-partisan Office of Fiscal Analysis (OFA) has issued the fiscal note for the SustiNet legislation, and their analysis shows that the cost of the plan will be significant. OFA concludes that SustiNet could cost the state up to $483 million annually in new expenditures. This finding comes at a time when the Malloy administration and the General Assembly are trying to balance a budget $3.3 billion or more in deficit. The governor also is concerned about SustiNet’s proposed structure, which would hand decision-making responsibility for the state’s $8 billion-dollar Connecticut health insurance care obligations to a quasi-public authority that has almost no accountability to taxpayers.
Also, the fiscal notes for the health benefit mandates show that all but one of the bills would have to go to the Appropriations Committee. The costs to the state include: $300,000 per year for a bill prohibiting copayments for preventive care services; up to $12,000 per person, per year for eliminating the age cap for health insurance coverage for specialized formula; and at least $2.38 million in FY 2012 and $4.76 million in FY 2013 for a bill concerning out-of-pocket expenses for non-preferred brand name drugs ). In addition, last year’s bill imposing the combined unitary tax was re-introduced. This proposal increases uncertainty and adds to the administrative burdens of businesses and the state by imposing mandatory unitary combined reporting of corporate taxes.
Despite a looming budget crisis in Kansas, the legislature adjourned the major part of the 2010 session on March 31 without approving a spending plan for the next fiscal year. Having used up 75 days of a 90-day session, legislative leaders decided it would be best to wait until for more up-to-date revenue projections before attempting to fashion a spending plan. Legislators will return for the wrap-up session on April 28, when they will try to write a budget with the new estimates. They face a nearly $500 million revenue shortfall despite nearly $1 billion in cuts in the past year from the $6.4 billion budget.
Current bills of interest include legislation that would prohibit Kansas health insurance plans from covering elective abortions, unless offered as a rider and applicable only when the mother’s life is at risk, Another bill would allow children to participate in the high-risk pool and would raise the lifetime limit from $2 million to $3 million. Also, House Bill 2182 has been amended to include seven different pieces of legislation, including the Health Care Freedom Act (anti-federal health reform), the Health Information Technology Act, and agreed-to language from the Pharmacy Audit Integrity Act. All of these topics remain on the table for the legislature when it returns in late April.
The 2011 legislative session concluded with Governor Susana Martinez taking action on two New Mexico health insurance reform bills. She vetoed a bill that would have established a health insurance exchange as an active purchaser and allowed the board of directors to limit the number of qualified health plans that could be offered in the exchange. While noting her support for creating a framework for an exchange, the governor expressed concern that the legislation was premature because of the litigation challenging federal health reform.
Keeping in mind negative consumer reaction to Blue Cross/Blue Shield’s 21 percent average rate request last year, Governor Martinez signed into law legislation giving the superintendent authority to approve rates. Approval will be based on five grounds: 1) compliance with federal law and the Insurance Code; 2) does not contain, or incorporate by reference, any inconsistent, ambiguous or misleading provisions that encourage misrepresentation of the policy or its benefits; 3) the rate is actuarially sound and supported by the actuarial memorandum ; 4) the proposed rate is reasonable, not excessive or inadequate and not unfairly discriminatory; and 5) the proposed rate is based on administrative expenses that are permitted by federal and state law. The Division of Insurance is required to post online plain language explanations of the basis for any rate increase and the company’s supporting financial information, and provide a 30-day public comment period. The decision of the superintendent could be appealed to the Public Regulation Commission and the state Supreme Court.
As Texas health insurance was the main issue, The House of Representatives started with a $164.5 billion budget and ended with the same total. But lawmakers spent the better part of a recent weekend making changes inside the 2012-13 budget before giving it their approval on a largely party-line vote of 98 to 49. The essentials remained the same, leaving public education and health and human services spending short of what it would take to maintain current services. The proposed budget requires none of the remaining $6 billion in the state’s Rainy Day Fund or any new taxes — though it does include $100 million in new fees. Conservatives successfully raided family planning funds in the budget, stripping money from those programs and diverting it to others that include autism, mental health services for kids and trauma care. The budget now heads to a Senate that’s on track to spend more money — about $10 billion more. If they can’t find middle ground, the legislature could go into special sessions after the regular session ends on Memorial Day.
A new report by Texas Comptroller Susan Combs examines why costs are soaring and analyzes various cost-saving proposals under consideration in the legislature. In fiscal 2009, Texas state government spent about $30.2 billion on health care, a 36.1 percent increase from fiscal 2005. “Health care accounts for more than 34 percent of all Texas government spending from state, federal and other funds,” Combs said. “The state cannot afford to let cost increases consume more and more of our budget.” The largest share of health care spending is for programs such as Medicaid for the poor, disabled and elderly; mental health services; medical benefits for state employees and retirees, and health care for prisoners. Some of the health care cost drivers identified by the report include costly new drugs; a shortage of health care professionals; an aging population; lifestyle choices such as smoking, increasing Medicaid enrollment; and uncompensated care for the uninsured. Some of the cost-saving proposals examined in the report include expanding the use of managed care in the Medicaid program; instituting a statewide smoking ban; requiring state employees who use tobacco to pay more for health insurance; and requiring state employees and retirees to pay a greater share of their health insurance benefit costs.
