EasyToInsureME Individual Health Insurance Reform Weekly

Week of November 2, 2009

That the bill going to the floor of the House contains a government plan option is no surprise. But Senate leadership's decision to pursue a government plan option in defiance of the Senate Finance Committee's preference is something of a surprise (see below), given it was perhaps the most bitterly argued reform issue of the summer's town hall meetings. The path ahead in the Senate will not be an easy one, as Connecticut Senator Joseph Lieberman's opposition makes clear. Lieberman is a former Democrat who still caucuses with Senate Democrats and had been counted among a potential 60 filibuster-proof majority. As the issue heats up, expect more debate and media attention on the real ramifications of this controversial provision.

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Federal

Several discrete events occurred this past week that have bearing on the health care reform (HCR) debate. First, Majority Leader Harry Reid boldly moved where he was not expected to go: He announced that a relatively strong form of the public plan, the "opt-out" version, would be in the bill he brings to the Senate floor. Most observers thought Reid would pick a "lighter" form of public plan. However, he clearly wants to keep the Democratic left on board while he works to secure votes on the right, rather than the other way around. Second, within 24 hours, Senator Joseph Lieberman (I-CT) broke ranks publicly and stated flat-out that he would filibuster against Reid's bill because of the government plan option. The Senate is expected to take a week longer to merge its two Committee bills and secure a score from the Congressional Budget Office, which is likely fine with Reid who probably does not have the 60 votes needed to bring the bill to the floor or end a filibuster. The Senate Floor debate is likely to begin around Veteran's Day. On the House side, Speaker Nancy Pelosi has unveiled the merged House bill (1990 pages, $894 billion in costs and rising), setting the stage for an expected vote -- with no real debate and no amendments allowed -- on the House floor late this week. The Speaker likely would not let the bill come to the floor unless she knows she has the votes or she believes can get them.

On related fronts, in order to get the HCR bill below the $1 trillion mark, the Speaker purged it of a $200+ billion item by deleting the Medicare physician reimbursement fix provision and introducing this as a freestanding bill, which has no "pay fors," i.e., it would add to the federal deficit. The Senate has already rejected this freestanding bill approach, which means Congress still has no solution for the impending slashing of 21 percent in doctor Medicare fees in 2010. Separately, Congressman McDermott (D-WA) has introduced a bill to neutralize ERISA's preemption protection by allowing state law causes of action for claims disputes to be processed under state liability law. Aetna would oppose either measure should it gain traction.


States

COLORADO: Governor Bill Ritter has unveiled another plan to shore up the state’s ever-widening budget shortfall by using federal stimulus dollars as a short-term stop gap. Although $1 billion has been trimmed from the budget since last year, a deficit of $271 million remains. Additional revenue through tax increases is being discussed, but health insurers have not been a part of the discussion.

FLORIDA: The Senate Health Committee and Senator Gaetz have asked the health insurance industry to sign a voluntary compact regarding coverage for cancer clinical trials. The compact would be similar to those signed in Georgia and New Jersey, to which Aetna was a signatory. A preliminary meeting was held last week at which concerns were raised. Aetna will continue to be engaged in these discussions.

KANSAS: Four state lawmakers announced last week that they are co-sponsoring a "Health Care Freedom Amendment" in the form of a Senate concurrent resolution that would add a new article to the Kansas Constitution to "preserve the right and freedom of Kansans to provide for their health care." Essentially the resolution is the first step toward trying to opt out of any potential federal health care legislation. The co-sponsors expressed opposition to a federal health care plan, stating that Washington is ill suited to manage health care. If passed, the resolution will be on the ballot in the fall of 2010. The legislators expressed confidence that they have the votes to pass the measure, but they conceded that many members had yet to be contacted.

MICHIGAN: As the state's budget crisis continues, legislators and engaged groups at the capitol are actively looking for ways to find revenue. Legislators and the Michigan Hospital Association have raised the issue of a 1.8 percent tax on all insurance claims paid, including disability and workers' compensation. There have also been discussions about taking the life, health, and property & casualty guarantee fund(s) reserves, but no concrete proposal has been floated to date. In addition, Public Employee Health Care Reform Committee hearings continue regarding the consolidation of purchasing benefits for public employees in Michigan. To date, over 30 organizations have asked to make public comments. The Speaker said that the proposal is still evolving but that he expects it to expand to include vision, dental and disability/workers' compensation benefits. Approximately $900 million in savings have been projected from administrative savings, economies of scale, "better benefits" and lower costs.

MISSOURI: The Missouri Speaker of the House, Ron Richards, has appointed an Interim Committee on autism spectrum disorders. The Committee will evaluate the impact autism spectrum disorders are having on families in the state. The committee's goal is to identify a solution that considers medical, educational and insurance changes to improve the lives of families dealing with autism. Aetna was very involved with last session's debate over an autism mandate and will continue to have a voice in this interim committee's work. The next Missouri legislative session begins in January 2010.

OHIO: Two bills concerning physician/insurer relationships are moving in the Ohio legislature. A bill that passed out of the House on October 21 specifies that a material amendment to a health care contract does not become part of the contract unless agreed upon by both parties. A different bill passed the House Health Committee on October 14, and its companion bill had sponsor testimony on October 27 in the Senate Insurance, Commerce & Labor Committee. The bill would place various requirements on health insurers that operate a system for physician designations to assign a grade or rating for certain physicians. This bill includes what must be considered in the evaluations, disclosure requirements, appeal rights and legal remedies against an insurer if a provider is adversely affected by a violation of the requirements. It is sponsored by the Ohio State Medical Association. Aetna opposes both measures and continues to discuss what may be agreeable language for physician designation programs.

WISCONSIN: The Office of the Insurance Commissioner (OCI) is working on several regulations and bulletins regarding recently passed laws. The OCI has issued a revised bulletin summarizing the provisions of the 2009-2011 state budget that impact insurance, including: establishing a uniform application for individual major medical policies; expanding independent review rights to adverse findings regarding coverage denial determinations, including preexisting condition exclusion denials and rescissions; requiring an insurer to provide coverage for an unmarried child dependent who is not eligible for other group coverage and is under age 27 or a full-time student regardless of age; and requiring coverage for autism spectrum disorders and contraceptives. Related to implementation of the budget bill, OCI published an emergency rule on September 30, 2009 related to the coverage of treatment for autism spectrum disorders that is effective on Nov. 1, 2009.On issues unrelated to the budget bill, OCI has issued two regulations. First, OCI issued emergency rules providing for eligibility for continuation of coverage under the American Recovery and Reinvestment Act of 2009 (ARRA) for individuals whose group coverage is terminated. Second, the OCI recently issued a proposed rule intended to expand the eligibility requirements for guarantee issue of Medicare supplemental policies and bring Wisconsin rules more closely in line with the NAIC Medicare Supplement Model Regulation. The proposed regulations establish two new categories of eligible individuals for Medigap guaranteed issue; modify current regulations pertaining to Wisconsin's "Plan M and N" look-alike plans to more closely follow corresponding NAIC model regulations; and reintroduce a high-deductible Medigap option.