United Health Policy Update - March 2009
News From The States
Budget deficits are hampering state health reform efforts, but policymakers are facing pressure to do something about public health care concerns
Most states are currently facing significant budget deficits and have limited funds for health reform efforts. States are proposing various solutions to address budget shortfalls including spending cuts, borrowing, use of federal stimulus funds, and tax increases for individuals, businesses, health care providers, and health insurers. Although many states do not have the money to enact significant health reform legislation, policymakers are proposing low cost health care legislation to try to deal with public concerns. In an effort to address public concerns about health care access and affordability, policymakers across the country are proposing legislation to mandate coverage benefits like autism and prosthetic devices, restrict administrative spending by health insurers, limit or eliminate the rating practices of insurers, guarantee issue individual products, and facilitate the purchase of coverage through exchange or connector type mechanisms.
States are starting to adjourn for the 2009 legislative session, expect a rush of activity in the next few months
Most states are in the middle of the legislative session and still considering numerous proposals. However, seven states are scheduled to conclude the 2009 legislative session in March, and twelve more states are set to finish in April. Watch for future United Health Policy Updates to learn what has passed and failed during the 2009 state legislative sessions.
| | March | April | May | June | July |
| States in Adjournment/Recess | 7 | 12 | 11 | 11 | 2 |
Alabama
Bill would extend dependent age to 27
House bill 56 under committee consideration would require health insurance plans to include coverage in certain cases for dependents until age 27.
For more information on state legislative activity contact: jeffery_a_drozda@uhc.com
Arizona
Arizona Legislature considering "mandate light" plans and emergency room tort reform
Legislation that would allow health plans to offer individual policies without some state mandated benefits, similar to small group policies that now exist in the market, is moving through the Legislature as a way to provide individuals with a choice of lower cost products. The Legislature is also considering emergency room tort reform, which would change the burden of proof required in a malpractice suit for an emergency room physician.
For more information on state legislative activity contact: jake_logan@uhc.com
California
Governor Schwarzenegger signs state budget
On February 20, 2009, Governor Schwarzenegger signed a budget agreement that closes a projected $42 billion budget gap through a combination of tax increases, spending cuts, borrowing, and federal stimulus money. While this plan addresses the current projected deficit, the Governor is required to release a revised budget in May, and many anticipate an additional budget shortfall due to lower than projected tax receipts. Highlights of the budget plan signed by the Governor include $12.5 billion in temporary income and sales tax increases for the next two years, $14.9 billion in spending cuts, $5.4 billion in borrowing, and $7.2 billion in federal stimulus funds. In May 2009, California voters will decide six ballot measures required to implement key budget provisions, including a proposed spending cap and privatization of the state lottery.
For more information on state legislative activity contact: Joy.Higa@uhc.com
Colorado
Governor Ritter proposes hospital provider fees
Governor Ritter's hospital provider fee bill was introduced in early March. The bill will require hospitals to pay approximately $600 million to the state, which will be used to draw down federal matching funds, producing a $1.2 billion fund that will be used to increase reimbursement rates to providers and provide coverage to more than 100,000 Coloradans who are currently uninsured. The Colorado Hospital Association, the Colorado Association of Health Plans, health insurers including UnitedHealthcare, and a variety of business organizations support the legislation.
Numerous health care bills are still under consideration at the mid point of the legislative session, including a broad autism mandate
A number of health care bills are still being considered at the mid point of the legislative session, including bills requiring the disclosure of intermediary relationships, requiring Colorado-licensed physicians to perform utilization and claims reviews, increasing the dependent age to 30, mandating coverage of prevention services, and allowing health plans to offer incentives for participation in wellness programs. On March 4, 2009, a broad autism mandate bill was proposed that has no age limit, no benefit maximum, does not allow the utilization of medical management, and makes not covering autism a deceptive trade practice.
For more information on state legislative activity contact: bill_f_myers@uhc.com
Connecticut
House Speaker is again championing his Connecticut Healthcare Partnership bill
The House Speaker has proposed his Connecticut Healthcare Partnership bill that passed the Legislature last year but was vetoed by the Governor. The bill would pool small employers, municipalities, and non-profits under the state employee health care plan. This session the Speaker is advocating that the state employee health benefit plan become self-funded to achieve further savings for the state. The bill has strong support and both chambers of the Legislature have the ability to override the Governor's veto.
Legislature approves plan to address current year budget deficit
The Legislature approved more than $800 million in spending cuts and revenue increases to help close a $1.2 billion current year budget deficit. The state faces an approximately $8 billion deficit in the upcoming two year budget.
For more information on state legislative activity contact: jason_martiesian@uhc.com
Georgia
Prompt pay bill passes Senate unanimously
The Senate unanimously passed legislation requiring ERISA third party administrators (TPAs) to adhere to Georgia's prompt pay statute. The bill has been referred to House Appropriations for consideration.
Modifications to autism mandate are moving through the Legislature
The House and Senate have filed companion autism bills to expand the current mandate to cover applied behavioral analysis. The Senate Insurance committee adopted the bill and it is currently in the Senate Rules committee and is likely to be sent to the Senate floor. The House Insurance sub-committee moved the bill to the full Insurance committee, which started hearings on March 6, 2009.
Health care tax is on hold
The Governor's proposal to tax hospitals and health insurance plans an additional 1.6% is on hold for now as the Governor and the Legislature have indicated that federal stimulus funds will cover a portion of the deficit the proposed tax was to fill, however, the proposal may resurface if the budget deficit grows.
For more information on state legislative activity contact: jennifer_mcmullen@uhc.com
Illinois
Department of Insurance releases proposed regulations for preferred provider organizations (PPOs)
The Department of Insurance has proposed regulations that would replace existing regulations for administrators of PPOs (50 Ill. Admin. Code 2051). The proposed regulations continue to regulate administrators of PPOs, but amend the criteria and fees for registration and amend the authority of an administrator to operate PPOs. Specifically the regulations:
- expand the applicability to insurers with provider networks and health care service discount plans,
- include registration renewal and appeals processes
- clarify network filing requirements for insurance companies
The regulations would not apply to self-insured employers, employee benefit trust funds, other ERISA exempt organizations, state self-funded plans, Medicare, or state prescription drug programs.
Fact sheets on COBRA and autism coverage provided by the Department of Insurance
The Department of Insurance has released fact sheets regarding the COBRA subsidy under the federal stimulus bill and autism coverage.
Read the COBRA subsidy fact sheet from the Illinois Department of Insurance
Read the autism coverage fact sheet from the Illinois Department of Insurance
Governor Quinn to release budget in late March
Governor Quinn is set to release his budget to legislators later this month and in the interim he has begun work on the budget deficit by ordering agencies to reduce expenditures, cut travel expenses, defer major purchases, restrict hiring, and not enter in to new contracts.
For more information on state legislative activity contact: cynthia_j_groene@uhc.com
Indiana
Bills impacting small employer groups and out-of-network provider payments fail to progress during legislative session
The Indiana Department of Insurance has withdrawn its support for legislation to expand the definition of small group to employers with 2 to 100 employees due to input from carriers, including UnitedHealthcare. Three bills pertaining to assignment of benefits that would have required insurers to pay out-of-network providers directly did not pass by the legislative deadline.
For more information on state legislative activity contact: dawn_m_koehler@uhc.com
Iowa
House passes bill that would mandate coverage for prosthetic devices and prevent insurers from offering high deductible health plans
Despite efforts from the business community and insurers, the Iowa House of Representatives voted to mandate coverage for prosthetic devices at the same level as Medicare (HF 311). As written, this bill would also eliminate the ability of insurers to offer high deductible health plans in the state. The Senate companion bill is still in subcommittee and it is anticipated that amendments will be offered to modify the bill language and allow employers the continued ability to offer high deductible health plans.
For more information on state legislative activity contact: cynthia_j_groene@uhc.com
Kansas
Kansas Health Policy Authority (KHPA) asked to reduce budget by ten percent to help address budget deficit
The Senate Ways and Means Committee has asked the KHPA to trim its 2010 budget by ten percent to address part of the $1 billion state budget deficit. In response, the KHPA stated that it could impose a 12.7% reduction in provider rates, but urged the Committee to consider the new funding provided for Medicaid in the federal American Recovery and Reinvestment Act. The KHPA estimates that it will receive $110 million in federal Medicaid assistance in fiscal year 2010, which would eliminate the need for reductions in provider reimbursement.
Senate Public Health Committee considering recommendations to address medical debt
The Senate Public Health Committee held a hearing on medical debt. The Committee heard from several conferees about the hardship medical debt has caused upon individuals and families. Conferees stated that 70% of medical debtors had health insurance when their health condition developed and that 41% of bankruptcies are due to medical debt. Testimony concluded on March 4, 2009 and the Committee is considering recommendations to address the issue.
For more information on state legislative activity contact: jim_watson@uhc.com
Kentucky
Chiropractor reimbursement bill under consideration
A bill currently under consideration by the Legislature would require certain levels of reimbursement for chiropractors.
For more information on state legislative activity contact: joseph_r_stevens@uhc.com
Maryland
Maryland Insurance Administration proposes reform measures
The Maryland Insurance Administration has introduced reform measures that would reduce underwriting look back times, increase minimum medical loss ratios, require additional disclosures for association health plans, and clarify factors to be reviewed for rescissions.
For more information on state legislative activity contact: scott_e_henderson@uhc.com
Massachusetts
Division of Health Care Finance and Policy holds a hearing on proposed assessment
On February 19, 2009, the Division of Health Care Finance and Policy held a hearing on the proposed health insurer net worth surplus assessment. The assessment would be applied to a certain level of insurer surplus attributable to Massachusetts residents. The assessment would raise $33 million to help fund portions of the state's health care reform law.
For more information on state legislative activity contact: jason_martiesian@uhc.com
Michigan
Senate working group travels the state to discuss health care accessibility and affordability
A Senate working group led by Senator George that includes representation from various groups including the AFL-CIO, AARP, Unions, Chamber of Commerce, MAHP, the health care industry, hospital association, physicians and various disability and advocacy groups recently visited Grand Rapids, Muskegon, and Saginaw to learn about how these cities are uniquely providing accessible and affordable coverage. The Senate will consider these programs as it looks to develop coverage legislation by the end of April.
For more information on state legislative activity contact: dawn_m_koehler@uhc.com
Missouri
Restrictions on the sale and marketing of Medicare Advantage plans being considered by the Legislature
The Legislature is considering restrictions on the sale and marketing of Medicare Advantage plans (SB 169), which may include provisions preempted by federal law. America's Health Insurance Plans (AHIP) submitted a letter to the Legislature stating that the bill does not take into account existing federal safeguards and would delay enrollment in Medicare Advantage plans. The bill would also require the applicant and agent to sign and date a disclosure form on the day of the initial personal solicitation. The disclosure form would warn that Medicare Advantage plans are not Medicare supplement policies, advise the applicant to confirm that his or her health care provider is contracted with the Medicare Advantage plan to provide medical services, and encourage the applicant to contact either a trusted family member, friend, or the state health insurance assistance program to review the plan with the applicant.
Legislature considers autism bills
The Missouri Legislature is currently reviewing eight autism bills with similar provisions including mandated coverage for applied behavioral analysis.
For more information on state legislative activity contact: jim_watson@uhc.com
Montana
Montana Legislature considering numerous health care issues
Health care issues have been prominent at the State Capitol this session. To date, a number of bills have died or have been put on hold, including medical loss ratio requirements, mandated colon cancer screenings and chemotherapy benefits, single-payer, and limited benefits plans. Other health care bills are still moving through the process with less than a month to go in the session. Bills increasing legal exposure for unfair claims practices, mandating breast reconstructive benefits, allowing for a Medicaid buy-in for disabled individuals, allowing gender to be used as a rating factor, and reforming producer licensing requirements have all passed one legislative body and are seeing committee action in the other. An autism mandate is also moving quickly through the Senate.
For more information on state legislative activity contact: bill_f_myers@uhc.com
Nebraska
Legislature hears testimony on mandated coverage bills
On February 17, 2009, the Nebraska Insurance Federation and the Nebraska Health Underwriters testified in opposition to three bills mandating coverage for prosthetics to the extent covered by Medicare (LB 149), coverage for routine expenses of clinical trials (LB 378), and coverage of cochlear implants (LB 493) being heard by the Unicameral Legislature's Banking, Commerce, and Insurance Committee.
For more information on state legislative activity contact: jim_watson@uhc.com
Nevada
Legislature considers bills on mandated coverage and emergency out-of-network provider charges
On March 9, 2009, the Assembly heard bills mandating coverage of autism and acupuncture. A bill has been introduced in the Senate that would cap hospital and provider charges at out-of-network hospitals when a member is taken by ambulance to an out-of-network hospital. This cap would apply only if the member was taken to the hospital because of an emergency.
For more information on state legislative activity contact: jack.kim@uhc.com
New Jersey
Technical corrections proposed by Senator Vitale to health reform legislation passed last year move out of committee
Senate bill 2351 by Senator Vitale, which makes technical changes to health reform legislation passed last year, was reported out of the Senate Health, Human Services and Senior Citizens Committee. This bill narrows the scope of producer compensation disclosure to health benefit plans and includes an amendment requested by the health insurance industry requiring Department of Human Services to send a NJ FamilyCare application to anyone who reports that they are uninsured on their tax return and whose income may make them eligible for NJ FamilyCare.
Governor Corzine set to release budget
Governor Corzine has announced $3.6 billion in budget cuts to balance the budget through fiscal year 2009 and is set to release his fiscal year 2010 budget on March 10, 2009.
For more information on state legislative activity contact: bpeppard@americhoice.com
New Mexico
Health care issues are popular at the Legislature
With nearly 200 health care related bills introduced in the 2009 session, health issues have been prominent. Two bills died in early March, a bill requiring insurers to disclose broker compensation upon request and legislation lowering index rate bands in the small group market. Other bills still being considered by the Legislature include minimum loss ratio requirements, guaranteed issue and business groups of one, single payer, electronic medical records, autism mandates and a bill creating the "New Mexico Health Care Partnership" that would be tasked with making recommendations on how to increase access to and affordability of health care.
For more information on state legislative activity contact: bill_f_myers@uhc.com
New York
Legislature enacts Deficit Reduction Plan (DRP) to cover $1.7 billion current year deficit and negotiates actions to address $14 billion 2009-10 budget deficit
The DRP contains $300 million in increased health insurance taxes to be paid by insurers in early 2009, including an increase of $120 million under the Covered Lives Assessment which impacts fully insured and self funded plans and an increase of $180 million under the Section 332 Assessment which impacts fully insured plans and is used to fund operations of the Department of Insurance. To address the $14 billion 2009-10 budget deficit, policymakers are considering an increase in personal income taxes, additional health insurance taxes impacting fully insured and self funded plans, and ways to use $11 billion in temporary Medicaid matching funds from the federal stimulus bill. Hospitals and health care worker unions are asking the state to use the stimulus money to restore proposed payment cuts, but health insurers are arguing that the stimulus money should be used to offset proposed increases in health insurance taxes that would increase the cost of insurance for employers and individuals in an economy where people are struggling to maintain coverage.
For more information on state legislative activity contact: carolyn_b_kerr@uhc.com
Ohio
Legislature considering individual market reforms and autism mandate
Individual market reforms are currently being considered as part of the budget bill. Provisions in the bill include guaranteed issue to high risk individuals with a premium cap and enrollment requirements. The bill would also require medical loss ratio reporting by insurers. A bill to mandate coverage of autism is also under consideration.
For more information on state legislative activity contact: joseph_r_stevens@uhc.com
Oregon
Budget bill to address current year deficit passes Senate
The 2007-2009 budget balancing plan passed the Senate and reduces agency budgets by $311 million, uses $401 million in federal stimulus funds, and captures $150 million from other state funds. The bill now moves to the House where a vote is expected this week. In the coming weeks, the Legislature will address the $3.3 billion funding shortfall for the 2009-2011 biennium.
Bills proposed to fund coverage under the Oregon Health Plan Standard program and SCHIP
Proposals to fund coverage for additional low income individuals under the Oregon Health Plan Standard program and additional children under SCHIP based on recommendations from the Oregon Health Fund Board continue to be discussed. The proposals (HB 2009 and HB 2116) would renew and restructure the provider tax on hospitals and health plans.
For more information on state legislative activity contact: debra_a_oberman@uhc.com
Pennsylvania
State budget gap estimated to be $5.5 billion
The budget deficit for the next two year budget cycle is estimated to be $5.5 billion. Governor Rendell's budget proposal includes a two percent assessment on all lines of health coverage and potentially an additional two percent assessment on commercial health insurance premiums.
Discussions on rating in the small group market continue
Discussions by the Governor's administration and Insurance Commissioner Ario over rating changes in the small group market are ongoing. The administration has expressed an interest in modified community rating, but Commissioner Ario is also considering measures such as capping premium increases at renewal based on medical underwriting and capping medical underwriting at issuance.
Senate confirms James as Secretary of Health
On February 4, the Senate confirmed Everett James as Secretary of Health. Governor Rendell nominated Mr. James to the post in September after he had served the Governor as a health advisor. He replaces Calvin Johnson who resigned in September. Secretary James has practiced health and regulatory law and served in the U.S. Commerce Department.
For more information on state legislative activity contact: bpeppard@americhoice.com
Rhode Island
HMO tax considered to address part of budget deficit
The state faces a current year $350 million budget deficit and a $450 million projected deficit for the upcoming fiscal year. An increase in the HMO premium tax to two percent is being considered as a way to generate additional revenue.
Lt. Governor submits Health Hub proposal
The Lt. Governor submitted her Health Hub proposal. The legislation would create a public board to oversee health insurance products and reform similar to the Connector in Massachusetts. The Hub would also determine the types of products that can be offered in the market.
For more information on state legislative activity contact: jason_martiesian@uhc.com
South Carolina
Mental health parity bill requiring coverage of substance abuse
Senate bill 390 requires Mental Health Parity to cover substance abuse and the language is broader than that under federal law.
For more information on state legislative activity contact: jeffery_a_drozda@uhc.com
Tennessee
Governor to release budget by end of March
A resolution was passed last week requiring the Governor to release his budget by March 31, 2009, but he is expected to release his budget by the third week of March. It is unclear whether his budget proposal will include a premium tax increase that was included in the TennCare budget savings statements released prior to the legislative session.
Bill introduced that would impact insurer payment under pre-certification
A bill was heard in the House Commerce subcommittee of Industrial Impact that would limit an insurer's right to recoup payment for an enrollee who was no longer enrolled on the date of service, but who had been enrolled on the date of pre-certification.
Autism mandates proposed
Several bills mandating coverage for Autism have been filed and are expected to receive full hearings. The majority of the bills require full coverage of applied behavioral analysis up to a specified age.
For more information on state legislative activity contact: jennifer_mcmullen@uhc.com
Utah
Governor Huntsman and Speaker Clark in support of "mandate light" plans and a web portal
Two pieces of legislation championed by Governor Huntsman and Speaker Clark are moving through the legislative process and will likely be signed into law, including a bill that would allow health plans to sell individual policies without some state mandated benefits and a proposal for a state sponsored web portal with features similar to the Massachusetts Connector.
For more information on state legislative activity contact: jake_logan@uhc.com
Virginia
Benefit mandate legislation passes
Legislation that passed 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.
State Legislature goes into recess
The Legislature recessed on February 28, 2009 and is expected to reconvene in mid-April to address the budget deficit, use of federal stimulus funds, and bills vetoed by the Governor. Virginia is estimated to have a deficit up to $1.5 billion for fiscal year 2010.
For more information on state legislative activity contact: scott_e_henderson@uhc.com
Washington
Budget deficits likely to delay health reform efforts
February's interim state revenue forecast shows an additional $731 million shortfall for the current budget period that ends June 30, 2009. The forecast also projected an additional $1.6 billion drop in revenue resulting in an approximate $6.8 billion budget deficit for the next biennium. The Governor and Legislature are working to address the budget shortfall through a number of spending cuts. With the lack of funding, it is unlikely that health reform measures will be considered this session.
For more information on state legislative activity contact: debra_a_oberman@uhc.com
Wisconsin
Governor Doyle unveils biennial budget proposal
Wisconsin is facing a nearly $6 billion deficit that the Governor intends to fill by cutting state spending, raising taxes, and utilizing federal stimulus money. Governor Doyle has stated that it is not a time for big new programs and he removed BadgerChoice, a connector or exchange type program to facilitate the purchase of health insurance coverage for small employer groups, from his budget. Included in the budget are health insurance changes proposed by Senator Vinehout that would:
- expand the dependent age to 26
- limit pre-existing condition exclusions in the individual market
- allow independent review of rescissions and pre-existing condition denials
- expand from 63 days to 90 days the time period allowed to apply creditable coverage to the pre-existing exclusion period for group health plans
- ease eligibility rules for the state's high risk pool
Autism bill moves forward
A bill mandating coverage for autism has been referred to the joint finance committee.
For more information on state legislative activity contact: debra_a_oberman@uhc.com
Wyoming
Wyoming Legislature focused on many health care issues
The Wyoming Legislature has considered various health care issues this session. A number of bills have died in committee or are indefinitely postponed, including legislation allowing parents to buy-in to the State Children's Health Insurance Program and a bill creating waivers for uninsured small groups. A bill still under consideration would establish requirements for utilization reviews, internal grievances and appeals, and an external medical review process for health insurance products. Another bill scheduled for floor action in the final days of the session would prohibit discretionary clauses for health insurance and disability income insurance policies.
For more information on state legislative activity contact: bill_f_myers@uhc.com
