Individual Health Insurance Reform Weekly : EasyToInsureME : July 30th, 2009

The House is scheduled to leave town for summer recess on July 31, and the Senate's current schedule sends them home a week later on August 7. It will be next to impossible for the House to address individual health insurance care reform on the floor in that timeframe, and the Senate Leadership has already put off Senate floor action until September. The focal point in the Senate, the Finance Committee has three options: work out a deal and go to mark-up before the break; put out paper but no mark-up before the break; do nothing now and put it all off until fall. The last option seems to be gaining favor daily and may soon become the choice by default. In the House, the conservative Blue Dog Coalition has the numbers to keep a bill from emerging from the Energy & Commerce Committee, which while not fatal is certainly a wake-up call to Democrats that Congress may be moving too fast on health care reform with little or no real focus on health care costs. The on-again/off-again talks between Blue Dogs and E & C Chairman Waxman broke off at the end of last week with conflicting reports on whether they will resume this week. Technically, House Leadership can proceed to the House floor with approval from only two of the three Committees with jurisdiction. But this would send a very bad signal to the public and could portend even more fireworks on the House floor. The bottom line is that neither chamber of Congress is likely to do anything official before the break, but there could well be a years' worth of policy and political activity in these last two weeks.

States
CALIFORNIA: The budget plan, which requires a two-thirds vote in the state Assembly and Senate, includes about $15 billion in cuts and some gimmicks to generate revenue in the 2009-10 fiscal year. Next to education, health and welfare programs will absorb some of the largest cuts with $1.3 billion coming out of Medicaid funding and $124 million from Healthy Families, a program that provides health insurance for 930,000 low-income children. The plan borrows about $2 billion from local governments' property tax revenue, captures $1 billion in redevelopment money from local governments, and temporarily redirects to state coffers $1 billion in transportation funding. Local government groups have told legislators and the media that they will sue the state if these transfers occur. Meanwhile, hospitals are divided over a non-budget related tax proposal designed at drawing down additional federal Medicaid funds. If the proposed two-year fees help generate $2 billion in state funds, California could qualify for an additional $3.2 billion in federal funding. Facilities that either don't treat Medi-Cal patients or do so on a very limited scale are opposing the measure. Gov. Arnold Schwarzenegger has said in the past that he supports using hospital fees to boost funding for health programs but is non-committal about this bill.

CONNECTICUT: In a special "veto session" held last week, the General Assembly failed to override Governor M. Jodi Rell's veto of the controversial health care pooling bill but it did succeed in overriding her veto of the SustiNet plan. The pooling bill would have required the comptroller to offer employee and retiree coverage under the state benefit plan to: non-state public employers beginning January 1, 2010; municipal-related and nonprofit employers beginning July 1, 2010; and small employers beginning January 1, 2011. The SustiNet legislation establishes a nine-member Board of Directors to make recommendations to the Assembly by January 1, 2010 for the creation of a SustiNet universal coverage plan by January 1, 2012. The legislature and the governor will have to agree on the issue of self-insurance. SustiNet proposes to make the state liable for all insurance claims, though it is unclear how the revenue would be generated. Estimating the cost of SustiNet at $1.1 billion in 2012, the Governor and Republican legislators said the SustiNet program is simply too expensive, with a projected $8.85 billion deficit looming. Aetna will continue to work with all boards, councils and commissions for real health care reform that improves quality, reduces costs and expands access to insurance.

MARYLAND: The Insurance Administration circulated a draft regulation that would impact payments to non-participating providers under a PPO policy. The proposed regulation would require parity between a member's in-network and out-of-network cost-sharing responsibility for services provided as 1) emergency care, 2) through a referral, and 3) by a hospital-based physician in a preferred facility. The Commissioner's position is antithetical to the controlling statutory requirement and his own public statements that insureds are not protected from balance billing in a PPO environment. In addition, the Health Care Reimbursement Task Force, in which the Commissioner participated, considered this issue earlier and decided to make no recommendations regarding PPOs.

MISSOURI: A group of orthopedic surgeons in Springfield has initiated the state-required legal process to achieve an "any willing provider" statute through the 2010 general election ballot. These physicians and possibly other advocates are calling themselves Missourians United for Choice in Health and have reportedly amassed $1.5 million to start the initiative petition process. A coalition of opponents is forming. Aetna is evaluating whether it should be a member of the opposition effort.

NEW YORK: In just two days recently, the Senate passed hundreds of bills previously passed by the Assembly over several months before it adjourned. Health insurance legislation that has gone to Governor Paterson for his signature include bills expanding dependent coverage to age 29, extending COBRA eligibility to 36 months and opening the Family Health Plus program to voluntary employee benefits associations (VEBAs). The Managed Care Reform Act also passed. It would require that a provider be given notice of an adverse reimbursement change to a provider contract and an opportunity to cancel the contract; extend overpayment recovery limitations to all health care providers and permits them to challenge such recoveries; require that providers moving to New York be provisionally credentialed until the final credentialing determination is made; shorten utilization review timeframes for post-hospital home health care services; allow providers to appeal concurrent adverse determinations through the external appeal process; and establish a new external appeal standard for rare disease treatments. The bill also would authorize the Superintendent of Insurance to require that mandated submissions be filed electronically and lower the prompt-payment-of-claims threshold to 98 percent, rather than the current zero-tolerance policy. Bills that failed to pass include prior approval of claims and 85 percent medical loss ratio legislation.

NEW JERSEY: Neil Jasey has was named interim commissioner for the Department of Banking and Insurance. This was a surprising development given the indeterminate nature of the post, due to the upcoming gubernatorial election. Mr. Jasey spent more than 25 years with Prudential serving as general counsel prior to his retirement in 2004. His wife is a current assemblywoman running for reelection.

NORTH CAROLINA: The Governor has rejected a budget compromise that did not include an increased premium tax increase. So it is back to the drawing board and, in all likelihood, another extension of the legislative session. Last month, the Budget Committee of the legislature introduced a proposal to increase the premium tax across all lines of business from 1.9 percent to 2.25 percent effective January 1, 2011. Strong opposition to the tax increase helped take it off the table, but things could change as legislators search for a new budget solution.

OHIO Health Insurance : The state's budget crisis concluded with Governor Strickland signing a compromise bill that includes a provision placing the contentious and heavily partisan video lottery terminal issue on the November ballot. Bill provisions affecting health care plans include: extending coverage to dependent children up to age 28; transferring oversight of health plans' network adequacy from the Department of Health to the Department of Insurance; expanding the open enrollment program for individuals with a more gradual reduction in the rate cap; requiring a health insurer to cover a service if the Director determines it is a covered service; requiring a carrier to conduct an external review automatically upon notification by the Director that determination of coverage involves a medical issue; requiring electronic payment of electronically submitted provider claims; submission to the Director of an annual report detailing components of administrative expenses by line of business; requiring filing of small employer premium rates; and requiring employers of 10 or more to offer Section 125 plans. An autism mandate was removed.