Individual Health Insurance Reform Weekly : EasyToInsureME

Week of September 14, 2009

Congress returned to Washington last week, immediately gathering for President Obama's Wednesday night address on health care reform. For the first time, the President outlined his plans for reform, including support for a government option. He also addressed some of the most incendiary points of the August Town Hall reform debates and promised to call out those who "have made the calculation that it's better politics to kill this plan than to improve it." He tried to reach across the aisle to show where there is agreement, citing previous and proposed legislation by key Republicans in an effort to salvage some semblance of bipartisanship. Though the speech was successful in demonstrating the President's unwavering dedication to getting reform passed this year, many watching came away feeling that costs and affordability still seem to be taking a back seat to access issues.

EasyToInsureME offers clients the easiest way to buy individual health insurance. Nobody does what we do for our clients!

Federal

Congress returned to town amid a flurry of activity designed to inspire Congress to move quickly on passage of health care reform. The mere announcement of a prime-time Presidential speech on reform was enough to force the hand of Senator Baucus (Chair of the Senate Finance Committee and a member of the "Gang of Six") in two ways. First, over the weekend he cobbled together an 18-page outline of a bill and offered it up (as his vision of reform) to the other five members of the Gang of Six and to the rest of the Finance Committee. Second, Baucus announced that the Committee would indeed "mark-up" a bill next week and that the Gang of Six was still forging ahead. The President's speech itself actually did not really expand on any policy specifics; it was more a rallying cry to the troops (the Congress and to the American public) to pass health care reform despite the Town Hall backlash or the absence of some of the details. The key takeaway from the speech is probably that the President has officially stamped the bills moving through Congress as "my plan," which certainly puts him much more in the driver's seat for the Fall debate.

States

ARIZONA: The Arizona Health Care Cost Containment System (AHCCCS) is abolishing KidsCare Parents, effective October 1, due to funding cuts mandated by the recently enacted budget bill. KidsCare Parents, an extension of the state's Children's Health Insurance Program (CHIP), provides health coverage to nearly 10,000 parents earning up to 200 percent of the federal poverty level. Children covered by the state's CHIP, known as KidsCare, will keep their coverage. Other health-related provisions include: freezing hospital inpatient and outpatient reimbursement rates; rolling over one month's capitation payment to AHCCCS health plans to the next fiscal year; requiring AHCCCS to comply with the Federal False Claims Act; requiring AHCCCS to prepare a report on provider assessment to increase federal matching funds; maintaining a 5 percent reduction in reimbursement rates to noninstitutional providers; and implementing total cuts of $29.4 million to AHCCCS, $26.1 million to the Department of Health Services, and $737,000 to the Department of Insurance.

CALIFORNIA: As expected, the legislature approved a measure designed to restrict an insurer's ability to rescind an individual’s health insurance policy unless the insurer can demonstrate that the member intentionally misrepresented facts on the original medical questionnaire. The legislation would also require development of regulations to standardize applications and use of health questions, require extensive medical background checks and create an independent third-party review of any potential policy rescission. Governor Schwarzenegger vetoed a similar bill last year but has not indicated his stance on this year’s legislation.

CONNECTICUT: The General Assembly passed a new, two-year state budget that relies heavily on one-time revenue sources including the Rainy Day Fund, federal stimulus dollars, tax changes and many state fee increases. Governor Rell let the bill become law without her signature. Premium taxes on health insurance were not increased; however, the new budget contains a very significant reduction of 6 percent in Medicaid Managed Care Organization reimbursements. This cut will negatively impact the ability of Connecticut to maintain a competitive, sustainable Medicaid Managed Care market. Retaliatory taxes are also a possibility as state licensing, certification and registration fees to most agencies are increased to at least $15; doubled if under $150; hiked by 25 percent if between $150 and $1,000; and increased by $250 if over $1,000. Legislators plan to return on Sept 23 and 24 to pass the necessary budget implementer bills.

GEORGIA Health Insurance: The hearing took place on September 9th to finalize regulations that would allow health plans to include health status as a factor in the rating of small groups on their renewal date. Previously, this was only permitted for new business and is very important to the small group segment. The Georgia Association of Health Plans and AHIP have been working with the Georgia Department of Insurance on this issue for some time and appeared at the hearing along with many carriers. No opposition was stated at the hearing so we expect the regulations to be promulgated permanently very shortly.

KANSAS: Efforts to get more uninsured Kansans enrolled in Medicaid and the State Children’s Health Insurance Program (SCHIP) got a big boost this week with the announcement of a five-year, $40.3 million grant from the U.S. Department of Health and Human Services. The grant from HHS’s Health Resources and Services Administration (HRSA) will be used to fund a new technology for the state’s enrollment system, replacing a computer system that’s more than 20 years old, as well as outreach efforts aimed at getting more people who are eligible for Medicaid and SCHIP to sign up for benefits. The timing is beneficial since the state is gearing up to implement an expansion of SCHIP that the legislature authorized this year. Beginning in January, the income limit for SCHIP eligibility in Kansas will increase from 200 percent to 250 percent of the 2008 federal poverty level, or $44,000 per year for a family of three. The grant and the enrollment efforts it will fund were made possible through the support of the Kansas Health Foundation, the Kansas Association for the Medically Underserved, Kansas Action for Children, the Kansas Health Institute and the Department of Social and Rehabilitation Services.

OHIO Health Insurance : Implementation of Open Enrollment Health Care Reform Provisions in HB1. Insurers recently met with the Ohio Department of Insurance (ODI) regarding the health care reform provisions of HB1 that made significant changes to laws affecting insurance. As a result of the meeting and questions with respect to implementation, ODI put out further guidance last week to insurers and health insuring corporations (HICs) as well as the variable effective dates of different portions of the bill. The new guidance document is intended to answer questions about open enrollment changes, rate filing questions, data reporting and miscellaneous topics from the budget bill. Recall, Ohio law requires carriers to accept applicants for individual coverage during an annual open enrollment period. Ohio HB1 amended the existing individual open enrollment requirements. In addition to the new guidance document, the ODI published draft regulations last week regarding open enrollment, advertisement and data collection rules under the new law. Aetna is evaluating and commenting upon the draft regulations and expects that a number of other guidance materials and rules will be put forth as other sections of the law are implemented.

TEXAS Health Insurance : The Department of Insurance held a stakeholder meeting last week to discuss proposed rules implementing a mediation process for balance billing disputes. The new law putting this option in place went into effect September 1 and has not yet been tested. Once triggered by the member for any balance bill over $1,000, the process would require the health plan and facility-based providers to attend mediation in an attempt to resolve the disputed amount. A physician may avoid the terms of the bill by disclosing in advance that he is an out-of-network provider, providing an estimated amount the patient may owe for services, and the circumstances under which the enrollee would be responsible for those amounts. No mediation can be required as long as the actual costs of the services are less than the estimated amount in the disclosure. Stakeholders also discussed a section of the legislation requiring Texas Department of Insurance to adopt network adequacy standards. Those standards must adapt to local markets in which a health plan operates, ensure availability of, and accessibility to, a full range of health care practitioners to provide health care services to patients, and consider situations in which no provider in a field of practice in a local market agree to contract with a plan at a reasonable rate of reimbursement. Aetna is participating in these stakeholder discussions and will continue to do so as the rulemaking process continues.

UTAH: Industry comments have been submitted to the Office of Health Care Statistics and the Department of Health regarding a proposed regulation requiring all carriers in Utah, including third-party administrators, dental plans and self-insured plans, to submit data on enrollment and medical and pharmacy claims. The initial submission covers claims from January 1, 2007, through December 31, 2008, which are paid through September 30, 2009. Subsequent submissions are to be done monthly. Among the problems identified are the need for uniformity in data collection criteria across states; privacy concerns arising from the member specific data requested; the need for additional time to implement the collection and reporting process; the value of a pilot period to determine the need for any adjustments; the financial burden of monthly reporting and an excessive penalty of $10,000 per day for failure to timely submit a report.