News From The States
Health care continues to be a top priority for state legislatures this year; but final action has been limited
Eight states have adjourned for 2009. Kentucky, South Dakota, Utah, and Wyoming have completed their legislative sessions and Georgia, Kansas, New Mexico, and Virginia have adjourned but are awaiting Gubernatorial action and veto sessions. The majority of states will conclude their legislative sessions by the end of May. As state legislative sessions progress and adjourn, many health care bills are not seeing final action. State legislatures have considered numerous health care bills this year on issues ranging from physician reimbursement practices to benefit mandates to health plan operations to premium taxes, among other issues. Budget deficits have overshadowed state legislative sessions, hampering significant legislative action. In fact, some states are imposing new or increasing existing health care taxes to address these budget deficits. The bills that are seeing the most action include those that have limited state funding implications such as autism and other mandates, extending the dependent age, and various requirements and restrictions for health plan operations. Other popular bills include those pertaining to state mini-Cobra laws and the American Recovery and Reinvestment Act (ARRA), and bills to address provisions under the Children’s Health Insurance Program (CHIP). While many states have postponed health reform legislation pending national action, some states, interestingly, are seriously considering health reform legislation. For example, Utah passed a health reform bill that establishes a web portal or connector mechanism. Watch for future United Health Policy Updates to follow trends from the 2009 state legislative sessions.
Arkansas
Senate passes autism mandate
On April 1, 2009, the Senate unanimously passed SB 913 that requires health insurers to provide up to $50,000 of coverage annually for autism spectrum disorders (ASD). Treatment for ASD is defined as applied behavioral analysis, pharmacy care, psychiatric care, psychological care, and therapeutic care deemed medically necessary by a physician or psychologist. The bill has been referred to the House Insurance and Commerce Committee.
Governor signs ARKids First expansion
On March 18, 2009, Governor Beebe signed HB 1700 which expands income eligibility for children from 200% to 250% of the federal poverty level for the ARKids First program. The expansion is funded by an increase in the state tobacco tax.
For more information on state legislative activity contact: jennifer_mcmullen@uhc.com
California
Legislature considering bills to implement changes to conform with recently enacted federal ARRA law
Two bills are currently under consideration by the Legislature to conform with the American Recovery and Reinvestment Act (ARRA). Assembly bill 23 would ensure that people working for an employer with less than 20 employees are notified that they may be eligible for premium assistance through the ARRA to help them pay for coverage through Cal-COBRA. The bill allows individuals who lost their jobs after September 2008 to be given a second chance to elect coverage under Cal-COBRA and extends the notification requirement of insurers to notification of this new benefit with the assistance of information from employers. Senate bill X3 24 reinstates the 12 month continuous eligibility provisions for Medi-Cal for children during the time that increased federal Medicaid matching funds are available under the ARRA so that the state is in compliance with provisions of the ARRA, allowing it to draw down $10 billion in federal funds.
For more information on state legislative activity contact: Joy.Higa@uhc.com
Colorado
House passes Governor’s Medicaid expansion
On March 25, 2009, the House passed Governor Ritter’s proposal to fund a Medicaid expansion through a new hospital fee. The proposal expands eligibility to parents and childless adults to 100% of the federal poverty level, to disabled individuals in the Medicaid buy-in program to 450% of the federal poverty level, and to children and pregnant women under the CHP+ program to 250% of the federal poverty level. The legislation prohibits hospitals from passing the fee on to patients as a separate charge on a bill.
House committee passes single-payer legislation
The House Business Affairs and Labor Committee has passed legislation (HB 1273) that would establish the Colorado Health Care Authority to develop a plan for a single-payer health care system in the state. The bill has now been referred to the Appropriations Committee. Governor Ritter opposes the legislation.
For more information on state legislative activity contact: bill_f_myers@uhc.com
Connecticut: House passes bill on open enrollment period for state continuation
The House has passed legislation to allow for an open enrollment period for eligible persons under the state's continuation law for employers with fewer than 20 employees. Notice of the special open enrollment must be provided to eligible individuals prior to April 18, 2009. The notice must be provided by the insurer in conjunction with the employer. The legislation is now under consideration by the Senate.
House and Senate considering modifications to autism mandate
The House and Senate are considering different pieces of legislation that would make modifications to the autism mandate that was passed last year. Modifications that have been discussed include an annual cap on benefits, medical necessity, and ensuring that providers treating children are licensed and certified.
For more information on state legislative activity contact: jason_martiesian@uhc.com
Florida
House Committee passes autism legislation
The House Health Care Services Policy Committee has passed HB 89 which contains some coverage mandates for autism spectrum disorders (ASD). The legislation requires health insurance plans to coverage the evaluation and diagnosis of ASD. It also requires HMOs to provide direct access to specialists for the evaluation and diagnosis of ASD.
For more information on state legislative activity contact: chanta_g_combs@uhc.com
Georgia
Prompt Pay legislation fails to pass
Legislation that would require third party administrators (TPAs) to adhere to Georgia’s prompt pay statute and require electronic claims to be paid within 15 days and paper claims to be paid within 30 days (HB 342) failed to pass out of the House Rules Committee before the legislative deadline. Prompt pay legislation that the Senate passed (SB 62) failed in the House Appropriations Committee. In the last days of the legislative session, the Senate Committee on Insurance and Labor amended HB 321 and adopted a committee substitute to include the provisions of HB 342 and SB 62. The committee substitute to HB 321 was adopted by the Senate on April 3, 2009. The House failed to agree to the Senate amendments killing the bill for the 2009 session.
Legislature adjourns and enters veto period
The Georgia Legislature adjourned on April 3, 2009 and legislation now awaits the Governor’s signature or veto. Watch for the next United Health Policy Update for a full recap of the 2009 Georgia legislative session.
For more information on state legislative activity contact: jennifer_mcmullen@uhc.com
Illinois
House passes legislation that sets medical loss ratios and establishes standardized application forms in the small group and individual markets
A bill that passed the House (HB 3923) on April 3, 2009 would require a minimum medical loss ratio of 75% for the individual and small group markets. The bill would also establish a standard application for small group coverage and a standard health assessment questions in the individual market.
Governor Quinn releases budget proposal
Governor Quinn has released a budget proposal to address an $11 billion dollar deficit for the next fiscal year. The Governor has proposed a 50% increase in the state income tax with an increase in the personal tax exemption, increases in the corporate income tax to the maximum level allowed in the state constitution, and the elimination of corporate tax loopholes. In his budget address, the Governor stated that there would be no cuts to health care for the most vulnerable citizens.
For more information on state legislative activity contact: cynthia_j_groene@uhc.com
Indiana
Bill passes House that would ban medical tourism
Legislation has passed the House (HB 1084) that would ban all medical tourism and would prohibit any personal health information from being sent oversees without written consent of the patient. The Senate is unsure if they will hear the bill.
Benefit mandate bills pass
A bill that requires coverage for certain routine services related to cancer clinical trials has passed the House and will be heard on the Senate floor. The bill specifies that individuals do not have a right to take action against an insurer for any harm resulting from a clinical trial. A bill requiring coverage for oral cancer chemotherapy drugs has passed both the Senate and the House. The House version of the bill that passed on March 31, 2009 with amendments has been sent to the Senate for concurrence.
Pharmacy audit bill passes with nearly unanimous vote
A bill has passed the House unanimously and the Senate by 48-1 that specifies requirements for the conduct of a pharmacy audit by a third party payer. The bill also provides appeal guidelines for the results of a pharmacy audit.
For more information on state legislative activity contact: dawn_m_koehler@uhc.com
Iowa
Legislature passes bill that would mandate coverage for prosthetic devices and allow high deductible health plans
The House and Senate have passes a bill that would mandate coverage for prosthetic devices. The coverage requirements in the bill as passed by the House were amended in the Senate to allow insurers to continue to offer high deductible health plans in the state. The bill has now been sent to the Governor for signature.
House committee removes Health Insurance Exchange from health reform bill passed by the Senate
On March 25, 2009, the House Human Resources Committee removed provisions from SF 389 sponsored by Senator Jack Hatch that passed the Senate on March 19, 2009 that would establish a Health Insurance Exchange. As passed by the Senate, the Exchange would design ways for low and middle income adults to obtain insurance and would allow small businesses and non-profit organizations to buy in to the state employee health insurance plan. The House committee retained proposals in the bill to cover an additional 30,000 kids by extending income eligibility to 300% of the federal poverty level and increasing efforts to enroll children already eligible for the Hawk-I program. The bill has been sent to the full House for consideration, but House Majority Leader McCarthy is holding the bill from floor consideration until bi-partisan agreement is reached.
For more information on state legislative activity contact: cynthia_j_groene@uhc.com
Kansas
State COBRA bill to conform with the American Recovery and Reinvestment Act (ARRA) passes
A bill has passed that would give individuals a second chance to elect benefits under state COBRA and be eligible for premium assistance through the American Recovery and Reinvestment Act (ARRA). Under the bill, the notification requirements rest with the employer and the requirements for billing rest with the insurer. It is anticipated that issues surrounding continuation of benefits will be addressed during the veto session. Kansas entered its first adjournment on April 3, 2009. The Legislature will reconvene on April 29, 2009 for the veto session and are expected to conclude the session in the middle of May.
For more information on state legislative activity contact: jim_watson@uhc.com
Kentucky
Legislature adjourns
The Kentucky Legislature adjourned on March 26, 2009. It is anticipated that the Governor will call a special session in June to address the budget.
Read the 2009 adjournment report for Kentucky
For more information on state legislative activity contact: joseph_r_stevens@uhc.com
Maine
Insurance Commissioner submits legislation
Legislation has been submitted by the Insurance Commissioner that would revise the information that must be provided in the Explanation of Benefits (EOB). The legislation would also require insurers to post information on their website regarding their top five individual and small group benefit plans.
Tax proposed to fund Dirigo health reform
The Legislature is considering a proposal to fund Dirigo health reform through a 2.14% tax on paid claims. The legislation would not allow the tax to be passed on in premium rates.
For more information on state legislative activity contact: jason_martiesian@uhc.com
Maryland
Bill would set out-of-network payments
The Legislature is considering a bill that would set out-of-network payment rates for HMOs at 140% of the rate that Medicare pays to providers. The bill is expected to pass both houses.
Healthy Maryland proposal introduced
Legislation is being considered that would rename MHIP as the Healthy Maryland Program, change the responsibilities of the board, include the individual market in the program, and make changes to the individual insurance market. The legislation would:
- require coverage offered through the program to be approved by the board,
- prohibit pre-existing condition limitations and medical underwriting
- require guarantee issue,
- require the board to establish a standard benefit package,
- require insurers that offer health plans to small employers to participate in the program,
- establish an individual mandate, and
- require the use fees collected from individuals not complying with the mandate and from employers with nine or more employees that do not offer coverage to provide subsidies for low-income individuals to purchase coverage through the program.
For more information on state legislative activity contact: scott_e_henderson@uhc.com
Michigan
Federal court affirms Michigan court ruling dismissing challenge to rules prohibiting discretionary clauses
The U.S. Court of Appeals for the Sixth Circuit has affirmed the decision of a lower court in Michigan to permit the Office of Financial and Insurance Services to ban the use of discretionary clauses in health insurance contracts that provide insurers with discretion to interpret contract provisions. America’s Health Insurance Plans (AHIP), the American Council of Life Insurers (ACLI) and the Life Insurance Association of Michigan (LIAM) challenged that the rules from the insurance department on this issue were pre-empted under ERISA.
For more information on state legislative activity contact: dawn_m_koehler@uhc.com
Missouri
Various bills still under consideration as bill filing deadline passes
The bill filing deadline has passed in both the House and Senate meaning that no new bills may be introduced for consideration this session. There are a variety of bills still under consideration including:
- a provider transparency bill which is expected to be a close vote on the House floor,
- prompt pay legislation including interest and penalties for claims not paid within a specified time period,
- a prosthetic mandate that has passed House and Senate committees,
- a bill in the House that creates a premium subsidy for uninsurable individuals through the state high risk pool,
- a bill that has passed the Senate that would create a program similar to Insure Missouri that was proposed last year,
- a bill that would place restrictions on the sale and marketing of Medicare Advantage plans,
- House bills that would require disclosure by health plans of any financial interest in switching from a prescribed medication to an alternative, and
- a House bill that would standardize applications for group health plans.
For more information on state legislative activity contact: jim_watson@uhc.com
Montana
House passes funding for Insure Montana On March 25, 2009, the House passed a bill to give an additional $6 million in funding for Insure Montana. This program subsidizes employee health insurance for small businesses. The bill has been sent to the Senate for consideration.
Senate passes reconstructive breast surgery mandate
On March 11, 2009, the Senate passed a reconstructive breast surgery mandate. The bill requires insurers to provide coverage for reconstruction of the breast when a mastectomy has been performed, reconstruction of the other breast to produce a symmetrical appearance, and prostheses and physical complications of a mastectomy. The bill was sent to the governor for consideration.
For more information on state legislative activity contact: bill_f_myers@uhc.com
Nebraska
Legislature considering dependent age extension
A bill has been moving through the Legislature (LB 551) that would extend the dependent age for group and individual policies through age 29. It is anticipated that an amendment may be offered to permit full time students to qualify for extended coverage, even though they do not reside in Nebraska.
For more information on state legislative activity contact: jim_watson@uhc.com
Nevada
Legislature considering drug formulary bills
Two bills are currently under consideration that would impact drug formularies. The first bill (AB 268) would require health plans to cover certain oral chemotherapy drugs under the medical policy instead of under the pharmacy benefit. The second bill (SB 192) would prohibit health plans from changing their formularies for certain drugs.
For more information on state legislative activity contact: jack.kim@uhc.com
New Jersey
Governor Corzine signs law regarding ambulatory surgery facilities
The Governor has signed a bill that would permit providers to refer patients to ambulatory surgery facilities in which they have a financial interest under certain circumstances. The bill would also require single operating room facilities to register with the state.
Senate passes health reform clean up bill
The Senate has passed a bill by a vote of 34-1 to make technical corrections to health reform legislation passed last year. The bill makes corrections to individual health coverage, small employer health benefits, and to NJ FamilyCare. The bill also requires all insurance producers who sell health insurance policies to disclose any compensation received from the sale of such policies. The Assembly is considering a similar bill, but it has not yet been heard in committee. The Assembly bill also includes provisions that would allow affiliated small group carriers to combine minimum loss ratio reports and treat the 2% HMO assessment as a claim for the purposes of those reports.
For more information on state legislative activity contact: bpeppard@americhoice.com
New Mexico
New Mexico legislative session ends, veto period starts
The legislative session ended on March 21, 2009 and legislation now awaits signature or veto by the Governor. Two coverage mandates passed this year for autism and clinical trials. Various bills did not pass this year including those that would require employers to offer Section 125 plans to employees, create a connector, establish guarantee issue in the individual market, set a minimum loss ratio at 85%, require insurers to disclose medical loss ratios and producer compensation to consumers, modify small group premium rating, and allow any willing provider contracts. Watch for the next United Health Policy Update for a full recap of the 2009 New Mexico legislative session.
For more information on state legislative activity contact: bill_f_myers@uhc.com
New York
State budget signed
The fiscal year 2009-10 state budget was signed into law on April 7, 2009. However, The Governor has indicated that the deficit could grow by an additional $3 billion in the coming months, which would require the Legislature to return to take additional action to address the shortfall before the end of the current fiscal year. The budget includes over $350 million in health care taxes above what was approved in the Deficit Reduction Plan (DRP) in February, resulting in over $700 million in new health care taxes this session. The health care taxes that were included in the DRP and the final budget include:
- Covered Lives Assessment (CLA): The DRP increased the CLA by $120 million retroactively from October 2008 to March 2009 and increased the CLA by $120 million from April 2009 to March 2010. This tax applies to both self insured and fully insured plans.
- 332 Tax: This tax is borne by all licensed insurers in the state, but health insurers are responsible for 60% of the tax. The DRP increased the 332 tax by $180 million ($108 million for health insurers) for fiscal year 2008-9 and the final budget increased the 332 tax by an additional $200 million ($120 million for health insurers). This tax would impact fully insured plans.
- Patient Services Assessment (PSA): This is a tax on hospital inpatient care and ambulatory surgery. The final budget increased the PSA from 8.95% to 9.63%, with expected revenue estimated at $126 million. This tax would impact both fully insured and self-insured plans.
- Premium Tax on For-Profit HMOs: The Legislature included language in the final budget to make the 1.75% premium tax applicable to for-profit HMOs, with anticipated revenue of $107 million.
- Application of HCRA Taxes to Out of State Insurers: Finally, the Legislature approved a proposal to extend HCRA taxes (Covered Lives Assessment and the Patient Services Assessment) to out of state insurers. The proposal would generate $5 million, and applies to fully insured and self-insured plans. Groups located out of New York will now be impacted by the CLA.
Some proposed taxes were rejected including a new tax on third party administrators (TPAs), an expansion of the Patient Services Assessment to office-based surgery and radiology, and an increase in the premium tax from 1.75% to 2%.
For more information on state legislative activity contact: carolyn_b_kerr@uhc.com
North Carolina
House considering health insurance demonstration projects
A bill to allow a demonstration project for pooling employers is again being heard this year in the House. This bill would allow demonstration projects from 2010 through 2014 that pool employers and guarantee issue and community rate employees within the pool. Premium variation for employees in the pool would be allowed to vary by family composition, age, and gender.
Benefit mandates being considered by the Legislature
Two benefit mandate bills are currently under consideration in the North Carolina Legislature. The first bill would require health insurers to provide coverage for the diagnosis and treatment of lymphedema. The second bill would require health plans to cover the full cost of one hearing aid, up to $2,500, every 36 months for the hearing impaired under the age of 22.
For more information on state legislative activity contact: jeffery_a_drozda@uhc.com
Ohio
House passes autism mandate
The House has passed an autism mandate that requires health insurers to cover the diagnosis of autism spectrum disorders (ASD) and the medically necessary habilitative or rehabilitative care, pharmacy, psychiatric, psychological, therapeutic, and counseling services prescribed by a provider licensed and certified by the state for such services. The coverage must not be subject to any limits on the number or duration of visits, but insurers may impose cost sharing to the extent of other covered medical services. Health insurers may opt out of the mandate if aggregated costs increase by more than one percent.
For more information on state legislative activity contact: joseph_r_stevens@uhc.com
Oregon
House Consumer Protection Committee passes bill amending state COBRA requirements
On March 25, 2009, the House Consumer Protection Committee passed HB 2433 after removing provisions related to health plan rate review and adding state mini-COBRA provisions. As amended, the bill:
- extends state mini-COBRA continuation coverage requirements to nine months and allows the time period to be extended if Congress renews the subsidy in the American Recovery and Reinvestment Act,
- allows already laid-off workers to sign up for the subsidized insurance if they did not sign up when they were laid off, and
- requires notice be given to workers laid off between October 1, 2008 and December 31, 2009 and provides these workers 31 days to decide whether to sign up.
For more information on state legislative activity contact: debra_a_oberman@uhc.com
Pennsylvania
House passes bill mandating coverage for routine costs of clinical cancer trials
The House has unanimously passed a bill (HB 85) that would require health insurers to coverage the routine health care costs of clinical cancer trials. The bill now goes to the Senate for consideration.
Senate bill would establish mini-COBRA laws in Pennsylvania
A bill authored by Senator White is being considered in the Senate that would establish a mini-COBRA plan for small employers with 2 to 19 employees. It is unclear at this point how the law would interact with the COBRA provisions in the federal stimulus bill.
Senate considering extending the dependent age
Senator Corman has authored a bill that is being considered in the Senate that would extend dependent coverage under a parent’s policy for adult children up to the age of 30.
Insurance Commissioner Ario testifies on small group rating bill
The House Insurance Committee held a hearing on a bill (HB 746) that would restrict rating in the small group market. This bill would prohibit medical underwriting and pre-existing condition exclusions, set rate bands for demographic factors, require prior approval of small group rates, set a minimum medical loss ratio of 85%, and establish standard benefits for insurers. Commissioner Ario testified that the rating restrictions in the bill are needed to promote pricing equities and reduce volatility in the small group market.
For more information on state legislative activity contact: bpeppard@americhoice.com
Rhode Island
Health Insurance Commissioner seeking changes to rate filing process
A public comment period was recently held on changes to the rate filing process sought by the Health Insurance Commissioner. The Commissioner has proposed to mandate that a certain percentage of medical spending go to primary care, establish levels of emergency medical records (EMR) incentives, and require a primary care medical home model of reimbursement. All of these issues would become part of the rate filing process. The Health Insurance Advisory Council is scheduled to vote on these issues at their April meeting.
For more information on state legislative activity contact: jason_martiesian@uhc.com
South Carolina
House considers cigarette tax to fund new health insurance program
The House is considering a bill (HB 3584) that would increase the state cigarette tax by 50 cents. The legislation seeks to use the tax revenue to get federal matching funds under Medicaid to fund a new health insurance program. The new program would provide premium credits for individuals and employees with incomes up to 200% of the federal poverty level. Individuals would be reimbursed 75% of the premium cost and small businesses paying 75% of the cost of employee coverage would be eligible for a tax credit of 67% of the total cost of the plan. The bill also establishes a plan to provide coverage for high-risk individuals. The bill has been sent to the House floor for consideration.
Bill introduced in House to establish HealthNet Program
On April 2, 2009, House Speaker Cato and Representative Rice introduced a bill (HB 3875) to create the HealthNet Program. This program would provide mandate-free and guarantee issue basic health benefit plan to employees of small businesses who have been uninsured for a year. Similar legislation is also being considered in the Senate.
For more information on state legislative activity contact: jeffery_a_drozda@uhc.com
South Dakota
Legislative session adjourns
South Dakota’s legislative session ended on March 30, 2009. With the assistance of federal stimulus funds, South Dakota was able to avoid steep budget cuts; however, state employees received no increase and Medicaid reimbursements were left at current levels with no inflationary increase. Legislation was enacted (HB 1050) that amends state laws governing annual financial reporting requirements for insurance companies and codifies the latest NAIC Model Audit Rule.
For more information on state legislative activity contact: jim_watson@uhc.com
Tennessee
Governor releases budget and proposes HMO premium tax increase
Governor Bredesen released his budget proposal for fiscal year 2009-10 on March 23, 2009. His budget includes an increase in the HMO premium tax from 2% to 5.5% and this increase is estimated to generate $139 million in revenue for the state.
For more information on state legislative activity contact: jennifer_mcmullen@uhc.com
Texas
Legislature considering health insurance product labeling legislation
Legislation that would require health insurers to label their health insurance products using standardized reporting measures is being considered by the House (HB 1932) and the Senate (SB 815). The legislation would require insurers to report benefit levels, complaints, percent of premium spent for patient care, profit margin, estimated out-of-pocket expenses, and estimated total annual cost of each product. Insurers are working with the authors of the bills to provide annual reporting of health plan options for individual products in a comparable format to be posted by Texas Department of Insurance on their website.
For more information on state legislative activity contact: chris_cronn@uhc.com or leah_c_rummel@uhc.com
Utah: Legislature adjourns
The Utah Legislature adjourned on March 12, 2009. A special session may be called in May or June.
Read the 2009 adjournment report for Utah
For more information on state legislative activity contact: jake_logan@uhc.com
Virginia: Virginia Legislature entering veto session, will conclude session in April
The Virginia Legislature recessed on February 28, 2009 and will address legislation that the Governor has vetoed or changed in April. Legislation that passed the Legislature this session requires coverage for prosthetics, allows health insurers to offer coverage without state mandated benefits to groups with 50 or fewer employees who have not offered coverage in the past six months, and requires that coverage mandates passed after July 1, 2009 apply to health insurance plans for state employees. We do not expect the Governor to veto any of the above mentioned legislation. Watch for the next United Health Policy Update for a full recap of the 2009 Virginia legislative session.
For more information on state legislative activity contact: scott_e_henderson@uhc.com
Wyoming: Legislature adjourns
The Wyoming Legislature adjourned on March 5, 2009.
Read the 2009 adjournment report for Wyoming
For more information on state legislative activity contact: bill_f_myers@uhc.com
