Healthcare
Legislation update | OVERVIEW
A weekly compilation of
health care-related developments in Washington,
D.C. and state legislatures across the country
Week of March 22, 2010
Late in the night Sunday, the
House of Representatives helped President Obama
deliver what no other President has been able
to do -- a significant reform of the nation's
health care system. The process is complicated
by the fact that the House first had to pass the
Senate's version of health care reform, and then
pass a package of fixes that the Senate will have
to take up separately through a "reconciliation"
procedure requiring only a simple majority vote.
To help figure out what health care reform will
look like if the reconciliation bill is adopted,
a number of news organizations are offering their
own summaries or guides to the changes, including:
The
New York Times, USA
Today, and the Chicago
Tribune. Also, you can read online what
the Congressional
Budget Office had to say about the bill
it estimates will cost $940 billion over the next
decade.
Federal
On Sunday, the House approved
the previously passed Senate version (219 to 212)
of health care reform, which sends this measure
to the President for signature on Tuesday.
The House also approved (220 to 211) the House-initiated
"fix" to this Senate bill (called the
Reconciliation bill) to revise items in the Senate
bill that are repugnant to the House. This Reconciliation
measure has to be approved by the Senate (scheduled
for this week) to legally change the Senate bill.
While Republicans in the Senate have more procedural
tools at their disposal to derail the Reconciliation
bill, the very nature of a reconciliation bill
is that it only takes 51 votes, rather than the
"normal" 60 filibuster-proof votes in
the Senate on such major items as health care.
Therefore, it seems likely that the Senate will
indeed approve the changes, though perhaps not
this week. If there are any changes on the Senate
floor to the Reconciliation bill, even one word,
it would have to go back to the House for yet
another vote.
Since the beginning of the year, Congress has
extended for one month at a time two health-related
items: 1) suspension of imposition of
a 21 percent cut in doctor reimbursements under
Medicare; and 2) continuation of worker eligibility
for a 65 percent subsidy to pay for COBRA coverage.
The end of March deadline will be extended yet
again through April, once the Senate agrees with
the extenders bill passed by the House last week.
Both chambers have passed a lengthier extension
of these two items (the "doc fix" would
go through September and the COBRA item would
go to the end of 2010) as part of a separate larger
bill, but with no compromise in sight Congress
may have to extend these two items yet again at
the end of April.
States
COLORADO: The bill requiring maternity
and contraceptive coverage in individual policies
and eliminating pregnancy as a pre-existing conclusion
took a turn for the worse last week.
Originating in the House, the measure had been
amended to only require that a coverage option
be provided. The Senate, which was expected to
accept the bill as amended, passed a version requiring
that coverage for reproductive services be included
in the majority of the individual plans marketed
by a carrier. At the request of the governor,
the bill has now been referred to a conference
committee.
CONNECTICUT: The Insurance and
Real Estate Committee reported out a number of
bills of interest last week, including: An
Act Concerning Rate Approvals For Individual Health
Insurance Policies -- the committee substituted
language 1) removing the ability of AG and Health
Care Advocate (HCA) to bill the plans for consultants,
2) removing the ability of the HCA and AG to appeal
to the court, 3) narrowing the filing time frame
for the approval to 120 days, and 4) starting
to define terms and processes. The Committee's
Republicans all voted no on the bill, indicating
that they were concerned that the Committee hadn't
gotten it right yet. An Act Concerning
Appeals of Health insurance Benefits Denials
-- the bill currently requires that upon the request
of a member that a health plan provide all specific
documents and information that were NOT provided
by the enrollee or their provider that were considered
in the denial. An Act Concerning Standards
in Health Care Provider Contracts --
although a "standards in contracting"
bill was enacted into law last session, providers
continue to push for even greater limitations
on contracting, including prohibitions on down-coding
of claims. Other bills reported out include bleeding
disorder coverage bill, a bill that would require
hospitals to charge uninsured patients no more
than 110 percent of Medicare, and a bill that
would raise the medical malpractice threshold
requirements for various providers.
GEORGIA: The legislation imposing limitations
on the use of rental networks was deferred after
Aetna helped educate legislators about the need
for further amendments to the bill. Most
importantly, the bill still does not contain an
exemption for the requirements of ERISA plans
and non-ERISA self-funded plans. Aetna continues
to work with the legislators on this issue and
anticipates the bill may be heard next week. No
further action has been taken on the House bill
imposing a 1.6 percent tax on the premiums of
health plans. Indications from the Governor's
office are that it may decide not to pursue this
bill. However, we are watching the issue closely.
INDIANA: The legislature adjourned March
13 with no resolution to the major issues in Indiana.
Specifically, the Republicans were unable
to move a bill to delay imposition of new taxes
to support the unemployment compensation fund
or authorize a ballot initiative to permanently
cap property taxes, and the Democrats were unable
to move their agenda on education funding, creating
jobs and providing greater assistance to the unemployed.
With the exception of a bill dealing with emergency
medical treatment of employees covered by workers'
compensation, no insurance bills survived. Bills
defeated included a push by the Indiana State
Medical Association (ISMA) to allow providers
to pick and choose the plans offered by an insurer
that they would participate in and an initiative
that would have required health insurers to provide
extensive data to Indiana DOI regarding premiums
and loss ratios. In addition mandatory recognition
of assignment of benefits for out-of-network providers
and the Indiana Dental Association's initiative
to prohibit dental plans from imposing or negotiating
fee schedules on non-covered services were defeated.
Of note is that ethics legislation did pass both
houses, and it is expected that the Governor will
sign the bill impacting lobbying registration
and reporting; it also limits who may serve as
a lobbyist.
MISSOURI: With eight weeks to
go in the legislative session, the House
overwhelmingly approved the "Freedom of Health
Care Act," which would send voters a constitutional
amendment to prevent them being compelled to participate
in any federal health care plan. The
"yes" votes included all House Republicans
and more than a third of Democrats. The Senate
gave final approval to a bill requiring health
plans to cover the diagnosis and treatment of
autism spectrum disorders. On the budget front,
Governor Nixon cut another $126 million in state
spending, which means he has now vetoed or withheld
almost $850 million from the budget the General
Assembly approved last May. Because falling revenues
show no immediate signs of improving, further
cuts appear certain before the fiscal year ends
on June 30. Analysts are projecting a $500 million
shortfall in the budget blueprint the Governor
proposed in January, prompting serious talk about
restructuring state government and broad promises
of bone-nicking budget cuts. One large target
is the Medicaid program, and a preliminary draft
of the appropriations bill is holding $100 million
for physician services contingent upon a $300
million windfall that might come Missouri's way
if the U.S. Congress extends the federal budget
stimulus package.
NEW JERSEY: The governor recently gave
his fiscal year 2011 budget address to a joint
session of the legislature, outlining his plan
for addressing a $10.7 billion state deficit.
The proposed budget calls for drastic cuts across
all sectors of government including: schools districts,
FamilyCare (the state health program for the uninsured),
the earned income tax credit, and the elimination
property tax rebates. In contrast to past years,
there were no new proposed tax increases. However,
some cost shifting is anticipated in the form
of increased assessments on individuals and businesses.
Of note is a $2 million expenditure increase at
the Department of Banking & Insurance, which
will be borne by insurers in the state. In his
effort to stimulate the state economy, the governor
proposed discontinuing a 4 percent corporate business
tax surcharge as well as allowing the surtax on
high income earners to sunset. Further analysis
will be done in the coming months, as the legislature
begins its deliberation of the budget, to determine
what, if any, impact the budget could have on
Aetna. The budget must be signed by into law by
June 30. The Senate unanimously confirmed Tom
Considine as the next commissioner of the Department
of Banking & Insurance. During his
testimony before the senate judiciary committee,
Considine advised that Horizon Blue Cross Blue
Shield of New Jersey application to convert to
a for-profit entity has been put on indefinite
hold at the request of Horizon. In addition
to Considine, the senate confirmed Dr. Poonam
Alaigh as commissioner for the Department of Health
and Senior Services.
NEW YORK: According to data recently released
by the Department of Insurance to bolster the
Governor's demand for prior approval of insurance
rates, New York HMOs had premium increases of
17 percent on average this year, with some increases
as high as 51 percent. The data showed
that premium changes varied widely between companies
and between counties. The state continues to claim
that reinstating prior approval will save $70
million. A coalition of insurers, business groups
and providers strongly opposed the prior approval
proposal as a measure that would impose price
controls on insurance. In both press statements
and full-page ads, the coalition underscored that
reinstating prior approval ignores the real reason
for rising health insurance premiums—increases
in the underlying cost of health care services—and
does nothing to address those costs. Real reform
is needed that addresses the underlying costs
of care, reduces the hidden taxes and ensures
that health plans can continue to provide coverage
to New Yorkers. The prior approval opposition
group includes the Health Plan Association, the
Employer Alliance, the hospital associations HANYS
& GNYHA, the Business Council of New York
State, the National Federation of Independent
Business and several upstate business alliances.
OKLAHOMA: Two bills seeking to streamline
state employee health insurance benefits, in an
effort to improve choice and lower costs, passed
the House last week. The bills are based
on recommendations made in a report by Milliman
Inc. to the Oklahoma State Employee Health Insurance
Review Working Group, which met during the interim
last year. The report was requested to examine
the functions of the Employees Benefit Council
(EBC) and the Oklahoma State Education and Employees
Group Insurance Board (OSEEGIB) and to determine
if a duplication of efforts existed between the
two agencies. The report concluded that the functions
of the two groups should be integrated to form
a new organization focused not only on the payment
of health and other insurance claims but also
on the wellness of the covered individuals; one
oversight board should be created that would include
members from backgrounds that include medical
and employee benefits, as well as those from legal
and fiscal backgrounds; the new organization should
include a stronger wellness component; the state
employee benefit allowance is artificially inflated
and should be recalculated; and more choice is
needed in rural areas of the state. The bills
now move to the Senate for consideration.
WASHINGTON: Legislation authored by Democrat
Eileen Cody to allow health insurance consumers
the opportunity to purchase health insurance across
state lines failed to gain traction in the legislature,
despite support from the small business community
and an endorsement from the chair of the health
committee. Although some regional insurance
carriers had expressed concerns, the main opposition
came from chiropractors and mental health providers
who believed that provider protection laws would
be uncut by the legislation.
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