Federal
Althoughthe House vote to repeal health care reform is symbolic only (given the Democratic Senate and White House), it is a necessary first step leading to committee by committee action over the coming months on discrete provisions of health care.One such item, medical malpractice liability reform, got a hearing last week before the House Judiciary Committee as Republicans paraded several witnesses before the committee to showcase the need for legislation from the physicians' perspective.Since it is very unlikely that the American Medical Association's wish list would ever become law, the best result from the committee process would be a bill that skirts the more controversial items (e.g., cap on damages) and focuses on attainable and meaningful reforms, such as health courts, stronger pre-trial evaluation and settlement pathways. This would be a path Aetna would strongly support.
States
ARIZONA: Governor Jan Brewerhas announcedthat she will request a waiver from the federal Centers for Medicare and Medicaid Services so that the state can setArizona Health Care Cost Containment System (AHCCCS) eligibility below levels mandated by thePPACA. In March 2010, GovernorBrewer signed a fiscal year 2011budgetthat stripped funding for the state's Children's Health Insuranceprogram (KidsCare) and cut $385 million from AHCCCS, effectively repealing an expansion of AHCCCS to childless adults approved by voters in 2000. However, following enactment of thePPACA, the state rescinded the scheduled cuts to comply with thelaw's "maintenance of efforts" (MOE) requirement. The MOE requirement prohibits a state from having eligibility standards, methodologies, or procedures for adults that are more restrictive than those in effect on March 23, 2010, until a health insurance exchange in the state is fully operational, and for all children in Me dicaid and CHIP through September 30, 2019. The MOE requirement provides an exception for non-pregnant, non-disabled adults earning more than 133 percent ofthe federal poverty level if a state is projected to have a budget deficit. Arizona faces a mid-year budget deficit estimated at $825 million. A $1.4 billion shortfall is projected for the 2012 fiscal year.
CALIFORNIA: The U.S. Supreme Courthas agreed to review whether health care providers and patients have the right to sue California over budget reductions made to Medi-Cal reimbursements. The high court will review three legal challenges to California'sproposed and adopted reimbursement cuts. The Supreme Court's ruling on the case could have major implications for efforts to address California's budget deficit. Last week, Gov. Jerry Brown (D) released a budget proposal that would reduce Medi-Cal payments to health care providers by 10 percentto cut program spending by about $719 million in fiscal year 2011-2012. In addition, the case could have implications for other states seeking to address budget deficits by cutting Medicaid payments.With federal courts in California blocking the cuts, 22 states have joined California in appealing the issue to the Supreme Court. The court is expected to hear oral arguments in the case next fall. A decis ion is expected in late 2011 or early 2012.
CONNECTICUT: SpeakerChris Donovan, members of the Public Health and Insurance Committees and a variety of advocates held a press conferencelast week to announce the Public Health Committeehas raised the SustiNet bill based on the recent recommendations of the SustiNet Board. Few details were provided, but the original reportrecommends that SustiNet become a licensed insurance plan."We don't need health insurance anymore, we need to move towards health assurance � health care that will be there for us, and the SustiNet plan will do that," Donovan said. Lawmakers will face a $3.7 billionbudget deficit by July 1. Rep. Betsy Ritter, D-Waterford, co-chairwoman of the Public Health Committee, said the plan will have to go before multiple legislative committees, with the actual bill some weeks away. Afinancial analysison upfront costs is not yet available. Aetna is working withthe Connecticut Associationof Health Plans (CTAHP) and AHIP to secure an objective fiscal analysis ofSustiNet's, as a public option,true cost to the state, andof thestrong, positive impact health insurers have on the state's economy.
DELAWARE: In his State of the State speech, GovernorJack Markell emphasized the need for state government to spend more efficiently. He specifically notedthat the demandsstate employee health insurance and pensionsare putting on the state budgetareunsustainable. The Governor specifically stated he is open to any and all good ideas for addressing this budgetissue.In other news, a joint meeting of the Senate Health Committee and the House Economic Development, Banking, Insurance, and Commerce Committee was convenedfor an update on the state's effort to implement health care reform.Rita Landgraf, Secretary of Health and Social Services, along with Bettina Riveros, Health Care Commission Chair, advised legislators the commission will spend the nextsix toeight weeks holding stakeholder meetings across the state seeking input on establishing a statehealth insurance exchange.
GEORGIA:The Exchange Workgroup formed by former Governor Sonny Perduehad its final meetinglast week andwill submit a list of issues for Governor Deal's administration to reviewbefore deciding how to proceed on the issue of instituting an exchange in Georgia. As the head of this workgroup for Governor Perdue is continuing under Governor Deal's administration, it is likely that there will be some enabling legislation during the 2011 session, though it is unclear what that will be.The legislative session began January 11, 2011 and continues for 40 legislative days.
IOWA: The General Assembly convened in Des Moines on January 10 and is expected to adjourn on April 29, 2011In the November elections, Republicans took control of the House and gained a few seats in the Senate, narrowing the Democrats' majority there.Republican Terry Branstad was sworn in as governor for the second time. Having served in the post from 1983 to 1999, Branstad is the longest-serving governor in Iowa's history.The state's budget deficit is projected to bemore than$785 million for fiscal year 2012 and will dominate legislative discussions.House Speaker Kraig Paulsen has vowed to remedy the deficit through spending cuts rather than tax increases.The Governor's proposal to revise the state's annual budget to a two-year cycle will also be debated. Bills of interest so far include several challenging PPACA's individual mandate,a prohibition on abortion coverage, creation of mandate-lite policies, a mandate for cov erageof smoking cessation programs, aratereview billthat would requirea public hearing for any increase over10 percent in the individual market, and a bill establishing $100 as the minimum required payment for state employees.
INDIANA: Governor Mitch Danielshas issued anexecutiveorder establishing the Indiana Health Benefit Exchange.In his order he directs the Indiana Family and Social Services Administration (IFSSA) to cooperate with appropriate state agencies, including the Department of Insurance (IDOI), to establish and operate theexchange.The IFSSA Secretary or the secretary's designee will serve as the incorporator of the Exchange. If, after careful analysis, the state deems it appropriate to proceed with creation of theexchange,a board of directors will be selected.The board will include representatives of state agencies and the Indiana General Assembly.Standing Committees will be appointedthat have stakeholder representation. In addition,Governor Danielssubmitted aletterto HHS SecretaryKathleen Sebelius requesting approval of a state plan amendment to extend theHealthy Indiana Program (HIP) beyond its expiration date. HIP, the state's consumer-directed program for covering the uninsured population, is scheduled to expire in 2012.Daniels notes he has received communication from HHS staff indicating the state plan amendment will be rejected due to HIP's required level ofcontribution from participants.The Governorsaid the stateintends to utilize the program for the newly eligible Medicaid population pursuant toPPACA. Daniels cautionedthat Indiana does not have the time and financial resources necessary to complete new rigorous requirements for applying for a waiver extension if the amendment is rejected. The current 45,000 enrollees in the program would have to be transitioned into traditional Medicaid.
MISSOURI: The 96th General Assembly convened on January 5 and is expected to adjourn on May 30, 2011.With 106 members to the Democrats' 57, the GOP has the largest number of seats it has ever held in the House andis just three members short of being veto-proof. Given the large Republican majorities in the General Assembly and 70 percent voter support for Proposition C-- an effort to turnback healthcare reform, the legislaturewill be under pressure to do nothing to move Missouri closer to enactment of federal health reform.
Significant health care bills filed this session include aresolution calling on the Attorney General to file a lawsuit challenging the constitutionality of thePPACA, a bill requiring statutory authorization by the General Assembly to implement PPACA, a bill expanding the autism mandate,an MLR bill for largecarriers requiring a 90 percent MLR for Missouri-associated revenues and 85 percent for smaller carriers,a bill requiring the state employeehealth plan tooffer a minimum of three high-deductibleoptions with differing annual deductibles and annual out-of-pocket expenses, a bill prohibiting "Most Favored Nation" clauses, legislation creating transparency and publication of carriers'fee schedules andrequiringcarriersto contract with providers willing to meet certain provider participation terms and conditions,and creation of a uniform group application for insurance.
NEBRASKA: The 102nd unicameral legislature has convened in Lincoln where it is expected to spend much of the session grappling with a budget deficit approaching $985 million for the 2011-2013 biennium. Implementation of thePPACA is expected to receive serious attention as well, with six bills relating to implementation or rejection ofPPACA introduced to date.Bills of interest include legislation creating an Exchange Task Force, aninterimcommittee for PPACAstudy,and severalbills challenging the individual mandate, prohibition of abortion coverage, and a cochlear implant mandate.In addition, abill banning discretionary clauses in health and disability income insurance contracts has been introduced. The legislature began its work on January 6 and is tentatively scheduled to adjourn on May 26, 2011.
NEW HAMPSHIRE: The legislature convened on January 5, 2011, andis scheduled toadjourn on June 30, 2011.Governor John Lynch willcontinue as the state Executive; however,Republicanshave gainedcontrol of both chambers in the legislature.In addition to the state's budget deficit, implementation of federal health care reform will continue to be a priority for the governor and the legislature.Given the Republican majority and anticipated revenue shortfalls, there will be limited, if any, activity on health insurance issues. The legislature will, however, be paying close attention to federal health reform implementation issues and activities.In addition, there have been discussionsabout eliminating certain state mandates ifthey are not included in the essential benefits required under thePPACA. In 2010, the state enacted legislationgranting certain powers to the commissioner with respect to implementation ofPPAC A. This legislation also created a legislative oversight committee, to which the Department of Insurance (DOI) must report monthly.This month the DOI submitted a request for a waiver of the 80 percent minimum loss ratio (MLR) requirement for individual health insurance market policies until 2014.
NEW YORK: In a new report, the United Hospital Fund (UHF) looks at how New York might set up health insurance exchanges. One option is to letHHS runthe state's exchange, While that could save money, it wouldalso mean ceding key operational and regulatory issues to the feds. It might also jeopardize existing consumer protections in Medicaid that are unique to New York. If the state sets up its own exchange, it must decide whether to join a multi-state exchange, a statewide entity, or small local ones. UHF noted that New York might consider following the leads of Massachusetts and Californiaby creating an independent public authority to run an exchange. Former GovernorDavid Paterson created a 35-member Exchange Committee that met only twice anddid not make any recommendations. GovernorAndrew Cuomo has not indicatedhis plansfor establishing aninsurance exchange in New York.< /p>
PENNSYLVANIA: Governor Tom Corbetthas announced his intention to nominate Michael Consedine as the next Insurance Commissioner. Consedine is a partner at the law firm of Saul Ewing, where he serves as Vice Chair of its Insurance Practice Group. Prior to joining Saul Ewing12 years ago, Consedine served asstate Insurance Department Counsel.
The Corbett transition teamhas announcedthat adultBasic, Pennsylvania's health insurance program for low-income adults, is expected to expire on February 28 due to lack of funding. The announcement, unusualin thatit comes from an incoming administration, was necessitated by the need to provide advance notice to enrollees and to inform them of alternative coverage options. Originally started by former Governor Tom Ridge and funded through the state's allocation of Tobacco Settlement dollars, the program was later funded through the 2005 Community Health Reinvestment Agreement (CHRA). While that agreement between the Rendell Administration and the state's four Blue Cross plans expired on Dec. 31, 2010, additional funding was later provided by the plans pursuant to the CHRA's formula. It now appears those additional funds will be exhausted by the end of next month.
TENNESSEE: A new Commissioner of Insurance appointed by Governor Bill Haslam took officelast week.Julie McPeak is an attorney at the Nashville firm of Burr and Forman and the former Commissioner of Insurance in Kentucky.Aetna is scheduling a meeting with the new Commissioner within the nextseveral weeks.
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