Health Care Weekly : EasyToInsureME : July 3rd 2009

Federal
Congress left town late last week for the July 4th break with all the key issues still on the table and hard decisions yet to be made. The Senate Finance Committee announced that it had trimmed over a half-trillion dollars from its plan (to get the proposal down to $1 trillion) and is expected to begin its mark-up sometime the week of July 6. The Finance Committee effort so far continues on a bipartisan basis. The HELP Committee spent four days addressing quality, efficiency, prevention and workforce issues with no time spent on more controversial items, such as an employer mandate or a public plan. These will wait for the Committee's return on July 7. The three House Committees with jurisdiction over health care all held hearings this past week; they too will begin their actual mark-up of reform legislation the week of July 6. All of this activity is designed to produce a bill approved by the Senate and House by the end of July/first week of August, before Congress takes its 5-week summer recess.

States
CALIFORNIA health insurance : The legislature failed to pass the Democrats' version of a budget adjustment bill geared at closing the state's $24.5 billion deficit. The first effort to reach an agreement failed when majority Democrats in both houses were unable to get the necessary two-thirds vote for the spending cuts bill, one of 20 measures in the budget-balancing package. The Governor and Republican leaders continued to say that more cuts are needed and rejected the bill's higher taxes on oil extraction, cigarettes and alcohol. Both continue to express opposition to any new taxes or fees after raising taxes by $12.5 billion in February. Despite these statements, the legislature continues to press for a new tax on health insurance companies and self-funded employers to finance the state's high-risk pool.

MAINE health insurance : Superintendent of Insurance Mila Kofman released last week an extensive emergency regulation addressing disaster and pandemic preparedness. The emergency regulation is in effect for 90 days while health plans review it and meet with Kofman to propose amendments. This emergency regulation requires that an insurer's business continuity plan meets the objectives set forth in the NAIC handbook, including: minimizing financial loss; continuing to serve policyholders and financial market participants; and mitigating the negative effects that disruptions can have on a carrier's strategic plans, reputation, operations, liquidity, credit ratings, market position and legal compliance.

MASSACHUSETTS health insurance : The Commonwealth Health Insurance Connector Authority board voted on June 24 to cut $115 million, or 12 percent, from Commonwealth Care, the state's subsidized insurance plan for low-income residents. According to the Boston Globe, the Connector Authority board made the cuts in response to the state budget deficit and rising enrollment by the newly unemployed. The largest share of savings will result from no longer automatically enrolling low-income residents who qualify for full subsidies but forget to designate a health plan. Additionally, dental coverage will be eliminated for approximately 92,000 enrollees, and payments to managed care health insurers will be slowed.

NEW YORK health insurance : Prior to adjourning last week, the Assembly passed numerous health care bills, but none of these issues were taken up by the Senate prior to its ongoing leadership controversy. Governor Paterson ordered the Senate to hold an "extraordinary session" to address a 42-bill agenda of his choosing. Only two health insurance bills made it on to the Governor's list: legislation making the state's mental-health parity law permanent and legislation extending dependent coverage to age 29. However, a debate is raging over whether the Governor must call the Assembly back into extraordinary session, if the bills are passed in the Senate, to re-pass them. Prior approval of rate adjustments, the 85 percent medical loss ratio and the "Managed Care Reform Act" appear to be off the table for the moment. In other news, the Department of Insurance released its draft regulation on reimbursements for non-participating providers. The new regulation would require health insurers to use an independent source that has yet to be designated for establishing usual and customary reimbursement rates.

NORTH CAROLINA health insurance : The Budget Committee of the legislature included a last-minute budget proposal that would increase the premium tax across all lines of insurance from 1.9 percent to 2.25 percent, effective January 1, 2011. Several interest groups, including property and casualty insurance companies, are writing letters to key legislators in opposition to the increased tax.

OHIO health insurance : Budget negotiations remain at a fever pitch as a joint conference committee tries to reach agreement on a biennial budget. A key health care issue is the expansion of the existing open enrollment program, requiring plans to offer coverage to medically uninsurable individuals. The Administration is supporting an expansion of the program to cover 52,000 Ohioans by requiring carriers to increase enrollment up to 4 percent of their individual segment market share while capping the premium at 2 percent of the base rate for two years then decreasing it to 1.5 percent in years three and four. Although the Senate stripped this provision from the House bill, it could be used as a bargaining chip with Governor Strickland who is committed to broadening access to health care by 2010. The deadline for the budget was June 30.

TEXAS health insurance : Days prior to his June 21 deadline, Governor Rick Perry vetoed two bills that Aetna had strongly supported. One bill would have required all public universities to sponsor a health plan for their students and offer it to them at enrollment. The other would have allowed hospitals to directly employ physicians in rural counties. Aetna supported this language as it had potential to help the company address the balance billing problem. Consequently, both the student health requirement and the balance billing issue will be revisited in 2011. Also, Governor Perry called a Special Session scheduled to begin July 1. The session will address the continuation of five agencies, including the Texas Department of Insurance, which are currently in "wind-down" mode because the legislation enabling them to continue was not achieved during the regular legislative session. A simple bill continuing those agencies for 18 months is expected to pass, and their status will be reviewed again during the next legislative session in 2011.