A weekly compilation from Aetna of health care-related developments in Washington, D.C. and state legislatures across the country. EasyToInsureME has the answers.
Week of April 25, 2011
The U.S. Supreme Court announced Monday that it had rejected a request from the state of Virginia to fast-track its challenge of the Affordable Care Act (ACA), which was signed into law in March 2010. The Court did not disclose the reasons behind its decision. Since the 4th and 11th Circuits will be hearing arguments in the next two months on the constitutionality of the individual mandate, it is much more likely that once these two Circuits have spoken the Supreme Court will be more inclined to resolve the matter with some finality.
While the lawsuits filed by a number of states march on through the normal appeals process, some of the states are taking the unusual step of turning down money available to help fund implementation of the law. Oklahoma, for one , has turned down $54.6 million in demonstration grants to distance itself from the law. But Idaho Governor C.L. "Butch" Otter upped the ante last week when he issued an executive order prohibiting state agencies from implementing any aspect of the health reform law and from accepting federal funds tied to implementation of the law. While some question whether such outright defiance of the law would hold up as constitutional, the situation underscores the bitterness felt by some state leaders toward the law. In some cases, implementation can be expected to move at a snail's pace, if at all, until the U.S. Supreme Court weighs in on the issue.
Federal
With Congress on recess last week, there is no Federal report for this week.
States
ARIZONA: The legislature adjourned last week after a contentious and partisan session. Governor Jan Brewer has until May 2, to sign or veto legislation, but the final status on several bills affecting h ealth insurers and their customers is already known:
A bill that would have established the Arizona Health Exchange, governed by a board of directors that included insurer representation, was voted out of committee but did not make it out of the House. The legislation was based on the NAIC model.
A bill that would have required health insurers to provide a written claims information report within 30 days of receiving a request from a plan, plan sponsor, or plan administrator was passed in both chambers but died when a required conference committee failed to consider the matter prior to adjournment.
A bill that would have established the procedural mechanisms for an interstate compact to work with other states to avoid implementing provisions of the ACA was passed by both chambers but was vetoed by Governor Jan Brewer.
A bill that would have prohibited contracts from requiring providers to assume the cost of acquiring vaccines and would have mand ated reimbursement of providers for vaccine acquisition costs and administration was scrapped. Health insurers committed to meeting with the Arizona Academy of Pediatrics to reach a resolution without legislation.
In other matters, the Department of Insurance announced that it will hold a series of community meetings around the state to provide information about health insurance premiums in the individual and small group markets.
CALIFORNIA: Governor Jerry Brown signed a bill into law last week that eases administrative and cost burdens on employers and individuals, come tax time, by conforming to federal rules relating to the taxation of dependent coverage. As a result, employers and their employees will not have to deal with the complications of complying with differing tax rules. Aetna joined a diverse coalition of business, labor, and other groups in helping to focus attention on the need for this legislation. Also, the California Health Benefits Ex change board met for the first time last week, a step toward implementing the first reform-prompted insurance exchange in the nation. The Board spent most of it time on administrative decisions and announced the appointment of interim administrative director, Pat Powers, who is now president of the nonprofit Center for Health Improvement.
In other news, Aetna is seeking amendments to a bill that would direct state regulators to develop a single prior authorization form to be used by providers and plans in seeking authorization for prescriptions. The bill already has been amended to reflect some the industries' concerns. But other issues remain to be resolved, including the timeframe that plans would be allotted to approve prior authorization requests. Aetna and others are seeking more flexibility on that issue and want to ensure the legislation does not conflict with what CMS or other national workgroups are developing. The bill passed the Senate Health committee last week.
CONNECTICUT: The Governor and legislative leadership announced a budget deal last week that does not include a proposed premium tax increase. A premium tax increase (from 1.75 percent to 1.95 percent) was designed to raise $25 million for the state but would have triggered retaliatory taxes for Connecticut-domiciled insurers, including Aetna, sending approximately $49 million to other states. A coalition that included Aetna, the state trade association, property/casualty insurers and life insurers was able to convince state leaders that lowering tax credits (until 2013) to drive about $25 million in new revenue was a better id.
The administration and Democratic legislative leaders also announced an agreement on the proposed SustiNet state-run health plan. This agreement combines aspects of the SustiNet bill with the Connecticut Healthcare Partnership bill. The new deal calls for opening the state employee health plan to municipalities and som e non-profits but not to the public. The agreement also would establish a "SustiNet cabinet" advisory panel within the lieutenant governor's office to oversee health reform efforts in the state. The agreement does not call for the state to combine the Medicaid and state employee and retiree health plans into a large pool (as the current SustiNet proposal would). Legislative language for the new proposal is still being developed, but it is clear the bill will not include the SustiNet quasi-public authority or a public option.
In the next fiscal year, municipalities would be allowed to buy coverage through the state employee and retiree plan, under the new agreement. Non-profits that have contracts with the state could buy in beginning the following fiscal year. The agreement does not include allowing small businesses to buy coverage through the state employee plan. Whether the state health plan is ultimately expanded further will depend how the initial round of poo ling goes and whether expansion is considered necessary once federal health reform rolls out. As part of health reform, the state plans to establish an insurance exchange by 2014.
GEORGIA: America's Health Insurance Plans (AHIP) will be submitting a letter to Governor Nathan Deal urging him to veto prompt-pay legislation that would apply insurer claims-payment standards to self-funded plans. Also passed and awaiting the Governor's signature is a bill that would allow for sale of coverage across state lines.
MAINE: A revised state supplemental budget that covers a $65 million gap between revenues and spending is now law. Last week Gov. Paul LePage signed the bill, which had unanimous, bipartisan support. Most of the $65 million gap resulted from cost overruns in the state Department of Health and Human Services. The supplemental budget appropriated unspent funds from various state agencies to fill the gap. The budget addresses spending in fiscal 2011, wh ich ends June 30. A two-year budget starting July 1 is still being deliberated.
NEW YORK: Less than one week after the Cuomo administration held a meeting to gather input on a health insurance exchange, Senate Republicans will hold their own open Roundtable on Exchanges this week to gather similar input. The roundtable discussion will be chaired by Senate Insurance Committee Chair Jim Seward and Senate Health Committee Chair Kemp Hannon. Although only trade associations were invited to participate, the meeting will be open to observers. At the administration's first exchange meeting, the consumer lobby made it clear that they support an exchange that is either a government agency or public authority that is an active purchaser. The NYS Association of Health Underwriters advocated for a merger of the individual and small group markets combined with an expanded definition of small groups up to 100. Some small businesses, however, spoke against such a merger. The Bus iness Council of NYS made the point that an exchange with all of New York's mandated benefits, aggressive purchasing and extensive consumer components may not be sustainable. There was no discussion of financing. It is anticipated that future meetings and public hearings will be scheduled by the Cuomo administration to solicit public input.
Citizen Action of New York is pushing for a health insurance exchange that is exactly opposite of the market-based model advocated earlier this month by the Manhattan Institute. The consumer group said in a statement last week that some of the recommendations of the pro-business Manhattan Institute "would undermine the rights of consumers." Citizen Action's research and education affiliate, Public Policy and Education Fund of New York, recommends one statewide exchange that functions as an independent authority and coordinates its enforcement efforts with the state Insurance Department and the attorney general. Citizen Action a lso wants heavy consumer representation on the governing board and a significant increase in penalties for violations of the new federal law.
TEXAS: The House passed a bill that would allow the state to enter into a health care "compact" with like-minded states. The bill, passed on a party line 102-46 vote, is a grab for some of the control over health care currently held by the federal government. Lawmakers in several other states are considering similar initiatives. The bill would require at least one state partner and approval from Congress before it could go into effect. Proponents say the bill would help Texas stretch its health dollars further and better deal with spiraling costs. Critics say it would remove a key federal safety net and cut back on already strapped programs for the the poor and elderly. The legislation faces a final procedural vote before moving to the Senate.
WASHINGTON: The Governor is expected to sign legislation establishing a state health insurance exchange as a non-profit, public private partnership with a governing board consisting of nine members. The bipartisan legislation directs the board, in consultation with the Washington State Health Care Authority, to develop a range of recommendations for establishing/implementing the exchange using stakeholder input and recognizing the need for a private market outside of the exchange. The board's recommendations would need to be ratified by the legislature during the 2012 legislative session.
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