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Health Insurance Exchange & Reform Updates

Wednesday, May 4th, 2011

Congress returns from a two-week recess Monday, and the federal budget is again expected to quickly become the focus of attention. Just prior to recess, the House passed a budget resolution that proposes to cut the deficit with significant changes to Medicare and Medicare. The latter would essentially be transformed into a voucher program, and some members of the House have gotten an earful from constituents about the proposal during the break. President Obama has come up with his own deficit-reduction proposal, but critics say it does not go far enough. Congress can also look forward to a heated debate over raising the debt ceiling. Some are hoping the so-called “gang of six” will provide a bipartisan answer to deficit reduction, but overcoming the deep political divide within Congress remains a steep uphill climb.

Federal

With Congress on recess last week, there is no Federal report for this week.

States

ARIZONA: Governor Jan Brewer has vetoed a bill that would have authorized cross-border sales of Arizona health insurance in the state. In the weeks since the bill passed out of the legislature, her office was bombarded by both opponents and proponents of the bill, including state Senator Nancy Barto, the bill sponsor and chairman of the Banking and Insurance Committee, whose op-ed on the legislation ran in the Arizona Republic last week. While acknowledging the need for a competitive and vigorous insurance market in Arizona, the governor cited two reasons for the veto: First, a concern that the Department of Insurance would have limited jurisdiction over foreign carriers, potentially putting the state’s citizens at risk; and second, discomfort over the fact that foreign insurers would be able to sell policies free of the mandated benefits legislators had determined should be afforded to consumers.

CALIFORNIA: The Assembly’s Health Committee voted 12-7, along party lines, to approve Assembly Member Mike Feuer’s bill that would allow state officials to reject California health insurance rate hikes deemed “excessive” in the individual, small or large group business segments. The measure would allow state regulators to deny, approve or modify proposed increases in health insurance premiums, deductibles or copayments. In addition, the bill would allow any consumer to intervene in a regulator’s decision by filing a civil lawsuit.  Intervener fees would be paid by the insurer submitting the rate increase proposal. The bill secured the 12 votes it needed to move out of the health committee and will be debated by the full Assembly before the end of June. Similar legislation passed the Assembly last year but was defeated in the Senate. Hospitals, physician groups and business organizations have joined health insurers in opposing the bill.

COLORADO:  After a rocky start, the Colorado health insurance exchange bill passed the Senate by a vote along party lines. It is now in the Republican-controlled House where it has yet to be placed on the hearing calendar. House co-sponsor Amy Stephens is expected to seek non-substantive amendments aimed at reframing the legislative declaration portion of the bill. Rep. Stephens has publically stated her support of an exchange mechanism in the absence of a federal requirement. The goal of the amendments is to provide her with some political cover in the face of expected opposition by fellow Republicans, and the Tea Party in particular, who are opposed to any federal health reform implementation. Also, after circulating late-in-the-session drafts of legislation to bring state law into conformity with the ACA concerning preventive care and adverse determinations and appeals, the Division of Insurance has decided not to file the bills.

CONNECTICUT: Under a legislative agreement with Governor Dannel Malloy announced last week, the Connecticut health insurance SustiNet bill is going to be amended from a broad public option to a more limited version of the Connecticut Healthcare Partnership pooling bill. The compromise removes two pieces of the SustiNet proposal: opening the state employee pool to small businesses and individuals, and offering state-run insurance to the public (the public option). The compromise bill would allow municipalities and nonprofits to enter the state employee plan but not small business or individuals. It also would create a new SustiNet board that would serve in an advisory capacity to the governor on health reform efforts in the state. SustiNet supporters last week held a rally to try to revive their original bill. But the governor is unlikely to agree to a public option, given its very significant costs to the state. When the SustiNet concept was created, federal health reform had not yet passed.  Now that it has, the governor is looking toward ACA as a way to increase access to health care affordably.

MAINE: The Republican Chairs of the Insurance Committee have introduced sweeping health care reform legislation designed to increase consumer options by attracting more carriers to the state and allowing more flexibility in products. The bill would expand rating bands in the small group and individual markets, repeal the geographic access provision that requires plans to contract with virtually every provider in the state, repeal the rule mandating certain standardized benefit plans, return to a file-and-use rate review process, allow captive insurers in Maine, allow cross-border selling in Maine, and create an Individual market reinsurance mechanism to be known as the “Maine Guaranteed Access Plan.” The new reinsurance fund would levy an assessment on all covered lives to fund a portion of the premiums for high-cost claimants. The new assessment would be capped at $4 per covered life. The bill was voted “Ought to Pass” out of the Insurance Committee along party lines.

MONTANA:  Both legislative chambers passed a joint resolution that calls for an interim study on establishing a health insurance exchange. Citing the wide ranging potential implications of not creating an exchange, the resolution requests a legislative council to direct an interim joint committee to consider the feasibility of creating an exchange or participating in a regional exchange. Issues for study include: options being considered in other states; variations on exchange functions; the scope of services to be offered by the exchange; potential for an exchange to facilitate cross-border sales; impact of including an application for a Medicaid waiver to allow premium assistance inside the exchange; whether the exchange should define levels of contributions and plan criteria; feasibility of premium aggregation; and interactions with producers and effect on compensation.  The interim committee would also be charged with studying potential cost savings and the provisions that would be needed to neutralize the cost of state employees participating in the exchange. Following the study,    recommendations will be made to the legislature regarding whether the state should proceed with establishing its own exchange or joining a multi-state exchange.  Stakeholders, including health insurer representatives, will be included in the deliberations.

NEVADA: A bill that would create the Silver State Nevada Health Insurance Exchange has been referred to the Commerce, Labor and Energy Committee but is not yet scheduled for its first hearing. Concurrently, Commissioner Brett Barratt continues to host stakeholder informational meetings across the state. The vast majority of the attendees at the five meetings held to date have been brokers. On another ACA issue, the state was advised that its application for a one-year medical loss ratio (MLR) waiver has been deemed “complete” by HHS. In other business, the Speaker’s rate review bill has passed in the House and is now in the Senate. In its current form, the bill would require prior approval of rates and forms with a 30-day deemer; transparency with completed filings published on the DOI website and all of a carrier’s policies, certificates of coverage and medical loss ratio data published on its own website; public hearings at the request of consumers or insurers; and the establishment of a Consumer Advocate position to represent the public.

NEW YORK: Senate Insurance Chair Jim Seward and Senate Health Chair Kemp Hannon held a roundtable discussion on insurance exchanges last week. About 10 representatives of stakeholder organizations invited to participate and generally urged caution and called for maintaining consumer choice, not creating a new regulatory bureaucracy, including all state mandates, and not incurring additional regulatory burdens and duplications of authority.  The Senate is expected to introduce a fairly lean exchange bill, with the goal of creating a governance framework for 2011. This could take the form of a public benefit corporation or a quasi-public authority, but not a new agency or nonprofit corporation.

NORTH DAKOTA:  The legislature has passed an insurance exchange bill that is expected to be signed by Governor Jack Dalrymple.  This would be the first exchange bill to be passed by a Republican legislature and signed by a Republican governor. The purpose of the bill is to establish a framework for developing more specific policy positions and eventually an implementation plan for the exchange in North Dakota.

OKLAHOMA: A Senate bill that would create an Oklahoma health insurance exchange was filed last week shortly after Oklahoma’s Governor, Speaker of the House and President of the Senate announced an agreement to move forward on the issue. The bill would create the Health Insurance Private Enterprise Network, which would fulfill the stated purposes and functions of a federal exchange under ACA. The bill is short on details but would create a seven-member Board of Directors, including three   gubernatorial appointees (one representing carriers, one representing employers, and one representing providers). The board would also include a consumer representative (appointed by the Speaker of the House, an agent/broker (appointed by the Senate Pro Tem), the Insurance Commissioner (who also serves as Chair), and the Secretary of HHS. The Board will also appoint an executive director. The bill would require as-yet unspecified “public and private funding”, not to include the $54 million early innovator grant from the federal government. The stated goals of the Network are to promote/encourage portability of coverage; promote a competitive, market-based system that includes an aggregate premium system/defined-contribution insurance alternative; encourage carriers and providers to work together to provide quality, cost effective care; and establish a fair and impartial producer referral network for individuals and small employers. The Network would not have regulatory authority, discriminate against any qualified plan, or replace the outside market. Proponents of the bill will attempt passage before the legislature adjourns May 27.

TEXAS:  The Senate unanimously approved Sen. Jane Nelson’s bill to find extensive cost savings in Texas health insurance Medicaid program, the primary health care provider for children, the disabled and the very poor. The measure would expand Medicaid managed care into South Texas, where it has long been carved out. The move is expected to save the state $290 million over the biennium. Pulling prescription drug sales into the managed care program, the changes would require most Medicaid patients to use medicines on a state preferred drug list at a projected savings of $51 million a biennium. And, it would ensure people with disabilities receiving attendant care services at home are using a Medicaid contractor, saving an estimated $28 million a biennium. The measure also directs the comptroller to continue to collect a $5 per-person fee on patrons of strip clubs — a proposal that’s been tied up in court — until a final legal judgment has been reached. The projected cost savings have already been worked into the budget proposal Senate lawmakers are trying to bring to a vote.

VERMONT: The Senate voted 21-9 to approve an amended version of the single-payer legislation that previously passed the House on March 24. The bill will now go to a conference committee. As passed by the House, the bill would establish an exchange by 2014 that would eventually become the foundation for a single-payer system. The single-payer system, Green Mountain Care, would begin in 2017, the year when the ACA allows states to request waivers to opt out of certain requirements as long as an alternative approach would achieve the same coverage goals. The bill would permit earlier implementation of the system, upon receipt of federal approval. Other provisions include new rate review requirements. For rate increases that cumulatively would be 5 percent or greater during the plan year, health insurers would be required to submit a summary that includes a brief justification of requested rate increases, additional information for rate increases of over 10 percent, and any other information required by the insurance commissioner. Senate amendments, however, include a series of requirements that would have to be met before the Green Mountain System can be established, including a demonstration that the system would slow the growth of medical costs. Governor Peter Shumlin has indicated that he will sign either form of the legislation.

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Posted in arizona health insurance, california health insurance, colorado health insurance, connecticut health insurance, nevada health insurance, obama care, oklahoma health insurance, texas health insurance | No Comments »

States Resisting Health Insurance Overhaul

Wednesday, April 20th, 2011

ARIZONA:

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.

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Posted in HHS, MLR, aetna health insurance, affordable health insurance, arizona health insurance, colorado health insurance, connecticut health insurance, florida health insurance, georgia health insurance, health care overhaul, health insurance exchange, health insurance plans, individual health insurance, maryland health insurance, michigan health insurance, missouri health insurance, north carolina health insurance, oklahoma health insurance, texas health insurance | No Comments »

Health Insurance Reform State Changes April

Wednesday, April 13th, 2011

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.

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Posted in HHS, MLR, arizona health insurance, blue cross, blue shield, california health insurance, connecticut health insurance, health insurance exchange, kansas health insurance, new mexico health insurance, qualified health insurance plans, texas health insurance | No Comments »

Arizona Health Insurance Cost Reductions

Friday, March 25th, 2011

The Republican-controlled Senate passed a budget last week that features $700 million less in spending than Governor Jan Brewer’s proposed $8.8 billion budget and includes drastic reductions in health care and education. The governor has yet to weigh in on the Senate proposal, although she has unveiled her latest plan for reducing Medicaid costs for Arizona health insurance. The plan would remove 100,000 people (mostly childless adults) from the program rather than the 280,000 she originally proposed.

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Health Insurance Reform Issues Student Health Insurance

Tuesday, March 15th, 2011

With a law as complex as the Patient Protection and Affordable Care Act (PPACA), unintended consequences are always a concern. Last week The Wall Street Journal reported that the physician community is witnessing the emergence of a significant unintended consequence — since tax-advantaged flexible spending accounts can no longer be used to pay for over-the-counter medications without a prescription, under the law, many patients are now visiting their doctors expressly for the purpose of getting new prescriptions for the OTC medications. The change in the law was meant to discourage wasteful spending on some health products and raise revenue. Instead, critics say the provision is driving up health care costs. Unintended consequences of the health care reform law is an area of focus for Aetna insurance, and will continue to urge flexibility in the implementation process to help address potential unintended consequences.

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.

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Individual Health Insurance Reform Intense Debate

Tuesday, February 22nd, 2011

When House Republicans voted Friday to block funding for health care reform implementation (see below), it was with the knowledge that most Americans disapprove of the tactic. A new CBS News poll shows 55 percent of Americans disapprove of the defunding effort while just 35 percent support it. The poll also shows, however, that the Patient Protection and Affordable Care Act (PPACA) continues to be unpopular overall. Just 21 percent think the law will make the health care system better while 23 percent believe it will make things worse. Perhaps most interesting of all is that 44 percent are unsure of what the law does, and they don’t know enough to say what the impact will be. The results seem to suggest the law has gained no traction with the populace in the past year but that voters have a keen sense of fair play in how the issue is addressed.

Federal
To keep the government operating for fiscal year 2011 (September 2010 through September 2011), Congress has been passing a series of continuing resolutions (CR) that continue the funding for a set period of time. The current CR runs out the first week in March, so the House last week passed yet another CR, shipped it off to the Senate and headed out of town for a President’s Day recess. Included in the just-passed CR are provisions that would de-fund parts of the 2010 individual health insurance reform law, such as prohibiting the use of federal funds to pay government employees to work on or to implement the PPACA.  The Senate will surely reject this CR because of both the de-funding provisions and the $61 billion in spending cuts for the current fiscal year. Congress will once again confront a looming funding deadline when it returns from recess in a week.

While there is increasing health-related “action” in Congress, such as the de-funding effort and the soon-to-be successful effort to repeal the 1099 requirement, the implementation process within the agencies continues unabated. This is where the real action is, with post-regulation guidance likely to be issued on several fronts in the very near future. Sub-regulatory guidance is expected to touch on the following areas or answer certain questions: 1) Whether group plans, as of 2012, will be allowed to offer a Medicare Advantage-only plan alongside a stand-alone PDP;  2) whether and how insurers have to report PBM administrative costs for medical loss ratio (MLR) purposes;  3) FAQs on the parameters (e.g., national vs. state-by-state reporting) of an insurer’s MLR requirement for ex-pat business;  4) revised rules on already-issued claims and appeals rules; and  5) clarification of the length and breadth of the types of “new business’ that can be sold under a limited benefits plan or mini-med waiver. All of these items will have a bearing on operations at Aetna health insurance and Golden Rule insurance.

States
The Obama administration has awarded $241 million in grants to seven states to develop a health insurance exchange. Developing the technology to make such a virtual marketplace work is expected to be costly, however. Administration officials hope the grants awarded last week will allow a few states to build systems as “early innovators” that others will be able to adopt. The states receiving grants, which were appropriated by the law last year, are: Kansas ($31.5 million), Maryland ($6.2 million), Massachusetts ($35.6 million), New York ($27.4 million), Oklahoma ($54.6 million), Oregon ($48.1 million) and Wisconsin ($37.8 million). A sign of the sometimes odd nature of health care politics, Kansas, Oklahoma and Wisconsin have Republican governors who have complained bitterly about the new law and are challenging its constitutionality in federal court.

Arizona health insurance Governor Jan Brewer was advised by HHS Secretary Kathleen Sebelius that the maintenance of effort provision of the PPACA does not preclude the state from removing childless adults from the Arizona Health Care Cost Containment System (Medicaid) because the expansion was part of a demonstration project. The Governor and many legislators support this reduction as a means to help address the state’s significant budget deficit. While many view the development as a positive, a legal challenge at the state level is possible because the coverage expansion resulted from a ballot initiative. Also, the health insurance exchange bill was voted out of the House Banking and Insurance Committee by a 4-2-1 margin. Discussion was robust, with Republican members questioning the need to take any action in light of pending litigation against the PPACA. The view that the bill should continue to move to the floor for a full vote prevailed.

The Connecticut health insurance Committee held a hearing last week on a bill that would require public hearings on rate increases. The bill would compel hearings in some cases, and would give the state attorney general and health care advocate the right to argue on behalf of consumers at the hearings and call witnesses. In addition, the bill would change existing law, which states that rates can’t be “excessive”, by defining excessive as “unreasonably high.” Industry representatives said the legislation would conflict with federal reform laws, add administrative burden on the Insurance Department and, ultimately, increase costs. Keith Stover, lobbyist for the Connecticut Association of Health Plans, testified that rates already have to be actuarially sound and that medical insurance costs are, in fact, increasing. The Insurance Department said lawmakers should hold off on changes until incoming Commissioner Thomas Leonardi reviews the plan.

The Public Health and Insurance committees held a joint hearing on the SustiNet public option bill, the insurance exchange bill, the “pooling” of all public employees bill (to be known as the Connecticut Health Partnership) and a bill to allow the state to pool state employee and Medicaid pharmaceutical purchasing. The most important development of the day was the Malloy Administration’s written testimony. The state’s Budget Director Ben Barnes was not only tepid toward SustiNet as a whole, he was quite clear that the SustiNet bill gives too much budgetary power to a quasi-public agency (almost $8 billion in state health spending) and raises questions about SustiNet’s cost and savings projections. He pointed out that certain Medicaid concepts in the bill are against federal law, including allowing the agency to set Medicaid rates.. Speaker of the House Chris Donovan sat with Hartford Mayor Segarra, and they advocated strongly for the Speaker’s “pooling” bill to allow cities and towns to buy into the state’s health insurance plan. It eventually would allow small businesses and nonprofit organizations to buy in (also part of the SustiNet plan). This bill was vetoed in 2008.

Georgia health insurance John Price, an Aetna insurance local market head, Southeast Region, has been appointed to Commissioner Hudgens health insurance advisory group to help provide the Commissioner with expertise on health insurance issues. Also, the Commissioner of the Department of Community Health announced Friday that the current Managed Medicaid contracts (Wellcare, Amerigroup, Centene) will be extended for 12 months while the new Governor reviews the program.

Ohio health insurance Pooling of Ohio public school district employee health plans will be considered by the General Assembly. A study found that there is the potential for $138 million in savings if the state leverages the greater buying power of pooling 191,000 employees enrolled in 613 public school district health plans. Seventy-two percent of Ohio school districts purchase employee health insurance through consortia, but they are typically composed of 10 or fewer districts and do not result in savings, the study found. The report also calls for the state to find ways to encourage school districts to pursue lower-cost, high-deductible health insurance plans that could reduce district costs up to another 37 percent over current employee health care plans.  As Ohio struggles with the economic downturn and an $8 billion budget deficit, limiting collective bargaining rights is also front and center in the Statehouse so that the Administration ultimately may change the structure of pensions and health care benefits.

Texas health insurance Lt. Gov. David Dewhurst and Sen. Jane Nelson have reintroduced two health care-related bills that died in the House in 2009. One would bring “outcomes-based payments” to Texas’ Medicaid and the Children’s Health Insurance Programs. The other would allow private insurers, major employers and government employees’ insurance plans to experiment with new financial approaches, such as accountable care organizations (ACO). ACOs are an arrangement in which doctors and hospitals share risk, and potential savings, for bringing care costs below targeted levels. The legislation would begin rewarding the state’s health care industry for preventive care and treatments that are coordinated to prevent duplication and waste. The bills will be referred to a committee and debated by both the Senate and House during the current legislative session, ending in late May.

Senators tasked with taking a close look at the Medicaid program got a dose of the difficulties involved in trimming services in a state where services considered optional turn out to be not so optional. They heard testimony on multiple examples of how Medicaid cuts would affect people in the system. Because of the restrictions contained in the federal health care reform law, budget planners have less latitude in where to look for cuts in the Medicaid program. The Senate subcommittee will eventually pass on its recommended budget solutions to the Finance Committee charged with approving an overall budget that makes up a shortfall of more than $20 billion this session.

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The Real Deal On Health Insurance Reform

Wednesday, February 2nd, 2011

Without being too specific, President Obama signaled a willingness to consider changes to the Patient Protection and Affordable Care Act (PPACA) during his State of the Union speech last week. The only detail referenced, though, was the proposed elimination of a tax-reporting provision of the law that is unpopular with small businesses because of the new administrative burdens it creates. The provision mandates that small businesses provide a 1099 form to any entity from which they purchase more than $600 in goods and services, starting in 2012. The proposed elimination drew bipartisan applause during the speech. But if both sides of the aisle appear to like that particular revision, it is far less clear that consensus can be reached on any of the other proposals floated so far. A new survey shows that Americans remain divided on the health care law, with the percentage having an unfavorable view of the law growing. But the survey also found that a majority of Americans are opposed to using tactics such as blocking appropriations as a means to slow or undercut implementation of the law.

A pattern seems to be developing on the House side of Congress as Republicans are now flexing their majority muscles via Congressional hearings aimed at questioning the legality and practicality of the health care reform act passed in 2010. It was the Ways & Means Committee’s turn last week as the committee heard from two small business owners who expressed concern about future health insurance costs, their ability to maintain current levels of coverage, and barriers to expanding and hiring new employees. Committee Chairman Dave Camp (R-MI) noted the inherent conflict of imposing new taxes (e.g., on insurers) and expecting cost containment nonetheless. Rep. Richard Neal (D-MA) discussed the importance of the individual health insurance coverage requirement, emphasizing that the success of market reforms is closely linked to bringing everyone into the system. Austan Goolsbee, Chairman of the President’s Council of Economic Advisors, testified regarding the Administration’s expectation that the new law will succeed in holding down costs, and he highlighted the value of the small employer tax credits.  On the flip side, Douglas Holtz-Eakin, former CBO Director and President of the American Action Forum, cautioned that the law frontloads new taxes and backloads new spending, thereby creating the illusion of federal deficit reduction. Holtz-Eakin testified that the law will have a detrimental impact on employment, wages, and economic growth.

Another health care hearing last week was held by the House Budget Committee, which focused on the fiscal consequences of the health reform law. Rep. Paul Ryan (R-WI), the committee chairman, emphasized that “health care spending is driving the explosive growth in our spending and our debt.”  He criticized the new law as a “centrally planned, bureaucratically run health care system” and expressed interest in building bipartisan support for policies that create incentives to enhance quality, reduce costs, and promote patient satisfaction. Richard Foster, chief actuary of the Centers for Medicare & Medicaid Services (CMS), testified that the health reform law (from 2010 through 2019) will increase national health expenditures by an estimated $311 billion, or 0.9 percent, compared to prior law. He also discussed the impact of Medicare funding cuts and indicated that some of the savings may be “unrealistic.”  Foster expressed particular concern about productivity adjustments for hospitals, skilled nursing facilities, and home health agencies, stating that simulations by his office suggest that roughly 15 percent of Part A hospital providers would become unprofitable within 10 years as a result of the productivity adjustments.

Arizona health insurance : While the legislature is focused primarily on the budget and the governor’s request for a Medicaid waiver, bills are beginning to be introduced. Of interest are: a proposed requirement that state employees be offered a wellness program as part of their health benefits; a mental-health parity mandate; a proposed requirement that the sponsor of a benefit mandate review data evaluating the effectiveness of the treatment or service; and a proposed exemption of health-care-sharing ministries from regulatory oversight on the premise that such practices do not constitute the business of insurance.

California health insurance : As the legislature continues to introduce bills in advance of the February 18 deadline, several repeat bills have already been introduced, including mandates on mental health, acupuncture and maternity services. A new mandate has been proposed to require health plans to cover fertility preservation services for cancer patients. The legislation, sponsored by the American Society for Reproductive Medicine, would require coverage of services such as ovarian suppression, freezing of eggs and ovarian tissue, and fertility services after treatment of the cancer.

Illinois health insurance : A formal health insurance exchange bill has not yet been introduced for consideration in the General Assembly. However, the Health Insurance Rate Review Act has been introduced to create an independent, quasi-judicial Health Insurance Rates Review Board to determine whether proposed “insurance rates are reasonable and justified.”  The bill sets forth duties and prohibited activities concerning the board, and it would allow the Governor to make all of the appointments.  The bill would set requirements and procedures that health insurance carriers must follow in filing current and proposed rates and rate schedules, and it would allow the new board to review and approve/reject all rates and rate schedules filed or used by a carrier. Rate standards, public notice, and hearings are all addressed. The General Assembly is expected to consider quite a few bills and hold hearings on both exchanges and rate review during the current session.

Oklahoma health insurance : Last week the Department of Insurance held a meeting of the Oklahoma State Healthcare Exchange as a first step in the creation of a strategic road map. The Department announced the creation of Key Advisory Work Groups to develop recommendations on exchange-related issues.    Each work group and sub-group will be responsible for researching and developing recommendations on language to be used for the development of a strategic plan during the next three months. The key issues of study will include: governance and administrative structure, eligibility process and infrastructure,  enrollment, information technology, carrier and plan selection,  financial management, and education and marketing. Stakeholders attending the meeting were asked to volunteer to participate on groups for which they have knowledge and leadership experience. The Department hopes to assign volunteers to their preferred committees in the next few weeks so that workgroup meetings can get underway.

Texas health insurance : While publicly affirming his opposition to the federal health care reform bill, Rep. John Zerwas is explaining health insurance exchange legislation he drafted through an op-ed piece published in multiple major newspapers in the state. Zerwas argues that Texas could be forced to cede regulatory control of a significant chunk of its health insurance market to the federal government if it fails to create its own exchange this session. He explained that a desire to avoid such oversight has generated broad support for his bill from groups that include the Texas Association of Business, Texas Hospital Association, Texas Medical Association, Texas Restaurant Association and two Texas health insurance industry groups, as well as Republicans and Democrats in the legislature. Though supportive of efforts by Texas Attorney General Greg Abbott and others to have the health care bill ruled unconstitutional,    Zerwas said his connector proposal is about bringing down the cost of coverage by promoting competition and ensuring that Texas families and Texas employers have the right to choose their own coverage. He called passage of the bill good policy, regardless of whether PPACA is repealed, replaced or unfunded. The legislature will debate the bill during the current session, which will end June 1, 2011.

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Arizona Health Insurance Legislative Update

Friday, May 21st, 2010

The Arizona Legislature convened its regular session in January. With the state facing a deficit of more than $4 billion in fiscal years 2010 and 2011, the budget overshadowed all other issues again this year. Lawmakers faced difficult decisions, including the elimination of critical state programs, in their effort to balance the budget. State agencies have been cut drastically.
Among the most severe budget cuts were the elimination of KidsCare and the reduction of over 300,000 AHCCCS enrollees. Although lawmakers initially approved these budget reductions, they are likely to restore these cuts as a result of the new federal health care reform law. Because the law prohibits states from changing eligibility for CHIP and Medicaid, Arizona risks losing billions of dollars in federal matching funds if KidsCare and AHCCCS enrollment reductions are not reinstated.

In an effort to increase revenues and lessen additional cuts to key programs, legislators referred a temporary one-cent sales tax to the ballot. If approved, the measure will generate approximately $1 billion that will fund education, health care and public safety. A special election on the temporary tax is scheduled for May 18.

On another topic, the Legislature passed a bill giving the Governor authority to sue the federal government over the recently passed health care reform law. Stating that the federal government is overstepping its constitutional authority by mandating that individuals have insurance, Arizona is joining a suit with 18 other states against the implementation of the law.

While the budget dominated the session, below is a description of some other bills of interest.

Health Insurance-related Bills

  • HB 2296 (law enforcement officer; spouse; insurance payment) – Allows the surviving spouse of a law enforcement officer killed in the line of duty to receive payments for health insurance premiums from the officer’s former employer for one year after the officer’s death. Status: Passed House, awaiting final vote in the Senate.
  • HB 2308 (insurance information; transfer of business) – Adds “transfer of business” to the definition of insurance transaction in the statutes governing insurance information and privacy protection. Status: Signed by Governor.
  • HB 2579 (insurance; continuing education; continuation) – Continues education requirements for insurance agents indefinitely. Status: Signed by Governor.

Health Care-related Bills

  • SB 1189 (admissibility of expert opinion testimony) – Changes the standard used in civil and criminal trials relating to admissibility of expert testimony from the Frye standard to the Daubert standard. Establishes criteria for expert testimony to be admissible in court. Legal experts expect this change will be particularly helpful in defending medical malpractice suits. Status: Passed Senate and House; awaiting Senate action on House amendments.

Other Legislation

  • SB 1070 (safe neighborhoods; immigration; law enforcement) – Makes changes to laws relating to the enforcement of immigration laws, failure to carry an alien registration document, day laborers and harboring or transporting illegal aliens. Amends the employer sanctions provisions of law in the following ways:
  • Provides employers with the affirmative defense for entrapment;
  • Requires employers to keep a record of the employment verification from E-verify for the duration of an employee’s employment, or three years, whichever is longer. Status: Awaiting action by the Governor.
  • HB 2250 (Arizona’s job recovery act) – Provides income and property tax reductions and incentives. Creates a new supplemental Arizona Job Training Program, the Arizona Opportunity Fund and the Arizona Quality Jobs Program. Restructures Enterprise Zones into a statewide Arizona Enterprise Development Program. Status: Passed the House; awaiting debate in the Senate.

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This Week In Health Care Reform

Friday, April 16th, 2010

As lawmakers returned to Washington this week, Republicans affirmed their commitment to repealing the health care reform legislation, while Democrats continued to campaign on the health care reform law’s merits. Meanwhile, President Obama stepped up his efforts to energize his core supporters by capitalizing on health care reform.

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.

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Health Insurance Overhaul Sued

Thursday, April 1st, 2010

On March 23,  thirteen states (Alabama, Colorado, Florida, Idaho, Louisiana, Michigan, Nebraska, Pennsylvania, South Carolina, South Dakota, Texas, Utah, and Washington) filed one lawsuit in the U.S. Court system for the Northern District of Florida challenging the Patient Protection and Affordable Care Act. This came minutes after President Barack Obama signed the comprehensive health insurance reform legislation into law. The attorneys general’s argument is centered on two elements:

1) the Act’s individual health insurance mandate is an unconstitutional expansion of Congress’ ability to regulate interstate commerce;

2) the penalties for being non compliant within the individual health insurance mandate violates the taxation powers provided to Congress under the Constitution.

In addition, U.S. states are challenging provisions of the new law that will create dramatic Medicaid spending increases for the financial burden of the states.

Governor Jan Brewer also announced her support for a legal challenge to the federal reform law in an initiative to amend the constitution to prohibit mandatory coverage requirements. The attorney general will not contest the federal law. He also suggested to Brewer that she use any additional funds to reinstate the Arizona health insurance KidsCare program, which was cut due to the budget deficit and eliminated coverage for over 35,000 children.

Senator Tom George and Representative Marc Corriveau have introduced four bills that would completely change the individual Michigan health insurance market. The bills amend Blue Cross Blue Shield from being the insurer of last resort. Therefore, it would require all plans to be guarantee issue and will include a reinsurance pool to reimburse carriers for eligible claims.

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