Health Reform Weekly : EasyToInsureME : June 26 2009

The "bumps in the road" to health care reform were quite visible this past week. The HELP committee mark-up began with polarizing opening statements and a CBO price tag of $1 trillion to cover only 16 million more Americans. And, the most controversial language (public plan, employer mandate, biogenerics) won't be released until this coming week. The Senate Finance Committee officially put off the beginning of its mark-up until after July 4 because its language won't be out until then - their price tag of $1.6 trillion was just too much for Chairman Max Baucus who continues to want a bipartisan bill. The House "tri-caucus" bill was finally released and contained few surprises: A "play or pay" mandate on employers, an individual coverage mandate, a public plan with (close to) Medicare rates for doctors and hospitals, major insurance market reforms (e.g., age rating band of 2 to 1) and a reduction in Medicare Advantage reimbursement down to 100 percent of fee-for-service Medicare. House hearings will begin this coming week with House Committee mark-up likely after the July 4 break.

The Bipartisan Policy Center effort to produce a legislative proposal on health care has been led for the last 18 months by former Majority Leaders Daschle, Dole and Baker under the day-to-day guidance of Democrat Chris Jennings and Republican Mark McClellan. Aetna collaborated in discussions, as the paper matured. On June 17, the BPC released its paper, which includes several items Aetna supports: an individual coverage requirement, insurance reforms, an insurance exchange, HIT, comparative effectiveness research, payment and delivery reforms, worksite wellness, and very few we don't. On balance, the BPC proposal is clearly to the right of the House tri-caucus bill and the Senate HELP bill, and it may be "spot on" with the Finance Committee.

States
KENTUCKY Health Insurance : Representative Scott Brinkman met with health insurance representatives to discuss potential ways to reach a consensus on an autism coverage bill for introduction in the 2010 legislative session. He is the father of an autistic child and has indicated a willingness to consider what other states have done around age limits and the types of therapy to be covered. He also offered the possibility of using tobacco money to fund an expansion of coverage.

MICHIGAN Health Insurance : Workgroup meetings in the House last week focused on Medicare Supplemental Medical Loss Ratio (MLR) and the HMO state tax exemption. The Chairman of the House Health Policy Committee advocated for a single carrier to provide Medicare supplemental coverage with profits strictly regulated by a MLR of 90 percent. It is clear that the disposition of the anti-competitive House "reform package" will not be impacted by the workgroup process or by the concerns of commercial insurers. The House version is expected to pass in July. The Senate, however, announced a delay on additional action on its more reasonable reform proposal until September, to allow legislative attention to focus on the state budget crisis and to get a better sense of how federal reform efforts evolve. Also last week, the influential Flint Health Care Coalition, historically funded primarily by General Motors and Blue Cross Blue Shield of Michigan (BCBSM), released a resolution on health care reform calling for universal access, a private, regulated health care system, and an end to the employer-based system, with government coverage provided through general taxation. Also, Attorney General Mike Cox continues to receive media attention as his efforts to challenge BCBSM's request to increase rates in the individual, group conversion, and Medicare Supplemental markets continues. Cox believes rate increases should be mitigated by reserves and issued BCBSM an extensive request for data.

MINNESOTA Health Insurance : The State of Minnesota and Mayo Clinic responded to President Obama's speech to the American Medical Association last week by announcing that they are already compliant with most of the reforms called for by the President. The Minnesota Medical Association has been working in the Minnesota Legislature toward including public health insurance options, a switch to electronic medical records, investment in prevention and rewarding quality instead of quantity. The Mayo Health Policy Center also supports the need for coordinated care and a public health insurance option.

NEW JERSEY Health Insurance : The Department of Banking and Insurance has published proposed regulations regarding provider network agreements between health providers and carriers. The proposed rules, among other things, would prohibit mandatory binding arbitration relating to breaches of contract; require that provider-specific or specialty-specific fee schedules be delivered to potential providers at least 20 days prior to entering an agreement; and allow providers to terminate multi-year agreements without cause at the end of each year; for agreements one year or less, termination without cause can occur at anytime with 60 days notice. The proposed rules are open for comment until August 14, 2009. In other news, new revenue the state received unexpectedly led the legislature postpone a vote on the state budget until a new budget can be negotiated. Also, legislation mandating coverage for autism treatment was passed and awaits review by the Governor, who is expected to sign the bill.

PENNSYLVANIA Health Insurance : Last week, Governor Ed Rendell signed four health care-related bills passed by the General Assembly. They included: The Preventable Serious Adverse Events Act, which prohibits health care providers from seeking reimbursement for services made necessary by preventable serious adverse events (takes effect August 9 except for nursing homes which have a year); a state COBRA program for employees losing their positions in businesses with fewer than 20 employees, giving them access to federal stimulus premium subsidies (takes effect on July 9); the Health Care Cost Containment Council Reauthorization, which provides for a five-year reauthorization; and a Dependent Coverage Extension bill, which requires major medical insurers to extend coverage to unmarried dependents through age 29 at the policyholder's option (effective Sept. 7, 2009).

TENNESSEE Health Insurance : Bills increasing the premium tax by 3.5 percent were passed in the legislature at the 11th hour, just prior to the end of the session on June 19. A bill requiring claims data submission by health plans, similar to bills in other states, also was passed by the legislature last week. Aetna has been working with the bill's sponsor throughout the session on language and will continue to work with the Department of Commerce and Insurance on implementation of the bill.

VIRGINIA Health Insurance : Governor Timothy Kaine last week unveiled the Virginia Health Exchange Network (VHEN), a secure web portal to connect health plans, health systems and state agencies in a move toward standardizing and streamlining administrative transactions. Using the vendor Availity, providers will be able to determine, for example, eligibility status and level of benefits in real time, decreasing paperwork and telephone calls that impede efficiency.