Individual Health Insurance Reform Weekly : EasyToInsureME : 9/7/09

Week of September 7, 2009

Congress returns to Washington this week, having spent August hosting heated Town Hall meetings on health care reform. Most Republicans are openly vowing to oppose a health care reform bill, and Democrats are divided on issues related to costs and the inclusion (or omission) of a public option in the bill. There is no bipartisan deal yet. Senator Baucus's September 15 deadline seems to be off the table and the Finance Committee is supposed to keep trying. In anticipation of the President's upcoming speech on health care, Baucus is urging his Finance Committee colleagues to adopt a bipartisan proposal that he is circulating. What critics note has been missing from all the debate is President Obama's proposal for health reform, which aides promise he will articulate in his Congressional address on September 9. However, his remarks may focus more on rallying Congress to address waning support for reform and get the health care reform discussion back on track.


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Federal

With Congress in recess, there is no federal report this week.

States

CALIFORNIA: The California Legislature continues to move bills through the process that will burden the health care system with additional mandates, more regulation and less flexibility in designing benefits and pricing products for its residents. Legislation to mandate lactation consultants, mammography notices, treat oral cancer medications on par with intravenous cancer treatments and substance abuse coverage is certain to land on the Governor’s desk by mid-September. Independent analysis of the costs associated with these new benefits mandates is well over $20 million annually Additionally, the legislature is poised to pass legislation banning the use of gender as a rating factor in setting premiums, placing hard caps on out-of-pocket costs and requiring that an insurer prove "intent" prior to rescinding an insurance policy in the individual market. Aetna continues to express its opposition to most of these measures and has encouraged the legislature to either wait to see what federal health care reform will bring or enact comprehensive reform efforts of their own.

DISTRICT OF COLUMBIA: Mayor Adrian Fenty unexpectedly appointed Deputy Commissioner Gennet Purcell to the position of Commissioner of the Department of Insurance, Banking and Securities, replacing Thomas Hampton. Serving as Deputy Commissioner since December, 2008, Purcell is an attorney with limited insurance experience but a strong relationship with Mayor Fenty and several members of the City Council. While it is too soon to speculate on Purcell's agenda as commissioner, it is likely that she will place increased emphasis on pro-consumer policies that reflect the sentiment of two key Council Committee Chairmen.

FLORIDA Health Insurance : Discussions are underway with the Florida Insurance Consumer Advocate regarding possible legislation for 2010 related to balance billing and reimbursement to non-participating providers. Aetna has submitted comments through the Florida Health Plan Association and local counsel.

ILLINOIS: A wellness coverage mandate became law on August 24. Effective January 1, 2010, group or individual policies may offer a program for wellness coverage that permits a reward, health spending account contribution, reduction in premium or reduced copayments, coinsurance, or deductibles as an incentive for participation in a wellness, maintenance, or improvement program approved by the insurer. The amount of the incentive is limited to 20 percent of the total cost of coverage (employee and employer contributions).

MICHIGAN: On September 3, Speaker Dillon released a draft bill on his Public Employee Health Care Reform Package potentially consolidating 400,000 full-time employees (and as many as 600,000 employees if part-time employees obtain coverage) into a single health program. The draft language replaces the current public employee health benefit system that allows a government entity or a group of government entities to create their own health care plan and creates the Michigan Health Benefits Program, a uniform public employee health coverage option, comprised of health care plans of varying coverage levels each approved by the board of the program. The draft bill indicates that the board will develop methods to extend the options of the pool to the private sector.

MONTANA: Recently, the State Auditor's Office (SAO) issued a bulletin to provide guidance for carriers regarding the disorders that fall within the autism spectrum and the types of treatment that must be covered as a result of new autism coverage requirements passed earlier in 2009. The bulletin notes that group policies are permitted to cap annual benefits at $50,000, for children eight years old and under, and at $20,000, for children ages 9 to 18. Insurers are permitted to require a treatment plan detailing medical necessity from a physician, but may not otherwise impose special deductibles or copayments that are not applicable to physical illnesses. Individual policies of health insurance will be permitted to establish the same annual benefit limits, and will be required to provide autism coverage to adults over 18 that is no less favorable than generally provided to physical illnesses. The new autism coverage requirements are effective for contracts, policies and certificates issued or renewed after January 1, 2010. In the bulletin, the SAO notes that all changes to forms required by 2009 legislative changes must be submitted by or before October 1, 2009, in order to avoid delays in review. Further, because all policy forms must be approved before use, and filed 60 days before intended use, all health insurers must amend, endorse, or re-file all health insurance policies and certificates with the Forms Bureau of the Commissioner of Securities and Insurance no later than November 1, 2009, for a January 1, 2010, effective date.

OHIO Health Insurance : The Ohio State Bar Association is considering pursuing legislative language that would prevent subrogation (claims recovery) in certain situations. This would have negative ramifications on health insurance company subrogation rights in Ohio. The Ohio Association of Health Plans and Aetna are actively soliciting OSBA members, particularly insurance defense attorneys, to oppose the proposal so that it is not pursued in the General Assembly.

OREGON: The Division of Insurance issued a final bulletin outlining that beginning October 1, 2009, insurers shall pay an assessment of 1 percent of gross premiums earned on both (1) policies insuring Oregon residents, and (2) policies delivered or issued for delivery in Oregon. In the bulletin, they have added a note that legislative changes may occur on the application of the premium tax in the February 2010 special budget session. If necessary, the OID will issue additional guidance in October regarding any changes necessary. Oregon may be the only state that has chosen to treat the collection of premium taxes in this fashion. The bulletin is contrary to longstanding NAIC policy and will result in the imposition of a double-tax on all group policies, as well as administrative hurdles in tracking where individual resides rather than where the contract is sitused.