Texas Today

Sept. 25, 2009

This Week in Health Care Reform

This week’s health care reform debate focused on the long-awaited health care reform legislation proposed by Finance Committee Chairman Sen. Max Baucus (D-MT).

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Senate Negotiations

Introduced last week, Sen. Baucus’s Finance Committee bill has faced criticisms from both sides of the aisle, resulting in 564 proposed amendments to the legislation. On Tuesday, to address some of the concerns outlined in those amendments, Sen. Baucus suggested changes to the bill that would further increase regulation of insurance companies, expand consumer protections and increase subsidies to help people buy insurance. In an effort to appease Republicans, he also exempted consumer items of $100 or less – items ranging from Q-tips to contact lenses – from a proposed tax on medical device manufacturers. As the week progressed, clear partisan battle lines emerged as Senate Democrats and Republicans debated controversial proposals, such as changes to Medicare .

As the Finance Committee continues the mark-up process and votes on amendments, Sen. Baucus will attempt to keep the 13 Finance Committee Democrats on board. He will have to achieve this without moving so far left politically that he loses the support of key Republicans, including Sen. Olympia Snowe (R-ME), the only Republican of the 10 who sit on the Finance Committee seen as likely to vote for the bill.

Outside of the committee, Sen. Snowe has become a pivotal figure in bipartisan negotiations for reform as Democrats seek the 60 votes in the Senate required to pass the legislation. Other reports suggest that the Finance Committee bill also has the backing of Sen. Blanche Lincoln (D-AR), another key swing senator.

Public Plan

President Obama Conducts Media Blitz: On Sunday, President Obama advocated for health care form legislation in back-to-back broadcasts of taped interviews on five morning news shows (ABC’s “This Week,” NBC’s “Meet the Press,” CBS’s “Face the Nation,” CNN’s “State of the Union” and Spanish-language Univision’s “Al Punto”). While admitting to being “humbled” by the challenge of reform, he called for a more civil tone in the debate.

Going into the Sunday interviews, a Siegel+Gale poll showed that, following President Obama’s televised address to a joint session of Congress earlier this month, only 36.9% of Americans said they understood the President’s reform plan. Of those who actually watched the President’s address to Congress, 57.9% claimed to understand his platform.

Democrats Woo Seniors: White House officials and Democrats have focused on convincing skeptical seniors to support the administration’s reform legislation. On Wednesday, Vice President Joe Biden visited a retirement community in Maryland to deliver the Democratic health care reform message and to reassure seniors that they will not see cuts in their Medicare coverage.

Additional Activities

First Lady Enters Health Care Debate: Working to galvanize women around health care reform, First Lady Michelle Obama jumped into the debate last week at a meeting of the newly formed White House Council on Women and Girls. Michelle Obama urged women to mobilize behind the President’s plan. Meeting attendees included members of the Business and Professional Women, the YWCA, the Women’s Chamber of Commerce and the National Council of Negro Women.

President Obama Speeds Up Tort Reform: Last Thursday, President Obama sought to ease tensions this week among physicians whose concerns over malpractice costs and Medicare reimbursement were modestly addressed in the Finance Committee bill. The President moved to accelerate a $25 million grant program aimed at addressing medical malpractice lawsuits.

Looking Ahead

Sen. Baucus plans to steer his health care reform bill through the Finance Committee by the end of the week. Once the Finance Committee votes and approves the bill, Senate leaders will then combine it with another bill approved by the Health, Education, Labor and Pensions Committee in July.

A similar process is also occurring in the House with bills passed by three committees: Energy and Commerce; Education and Labor, and Ways and Means. House Speaker Nancy Pelosi (D-CA) has indicated that she hopes to have a single, final version of the House bill by the end of next week.

White House Budget Director Peter Orszag anticipates completion of health care legislation by mid-November. He also believes that the final version will be largely based on the Senate Finance Committee bill.

Week of September 21, 2009

While the proposals being considered by Congress to help reform the health care system could make significant strides in addressing health care access problems, many remain concerned that the proposals made to date do not do enough to take on the overarching problem of rapidly rising health care costs. To help draw more attention to this daunting problem, Aetna and the Aetna Foundation recently were the major sponsors of the September/October edition of the journal Health Affairs, which is devoted to “bending the cost curve.” The current issue and the launch event highlighted innovative solutions that could have a significant impact on the future cost of health care. Bending the cost curve is the key — if we don’t make health care more affordable, other reforms will have little value.

Federal

Senate Finance Committee Chairman Max Baucus released his “mark,” which is the Senator’s offering to the full Committee of the legislative pathway he thinks the Committee should follow to pass health care reform. While those on both the left (Senator Rockefeller) and on the right (Senator Grassley) expressed negative views on the mark, all the headline posturing ceases when the committee officially begins to review and amend the mark this week. The key for Chairman Baucus is to garner sufficient support to pass the bill out of committee in a fashion that bodes well for floor passage. Right now the prospects are far from certain.

States

ARIZONA Health Insurance : The Department of Insurance has issued a bulletin summarizing several insurance-related bills enacted during the 2009 legislative session. The bulletin expressly notes: the revision of the acceptable medical references an insurer may use in its determination of whether a drug has been found to be safe and effective for treatment of a specific type of cancer and the amended definition of “network plan” to include a plan under which the financing and delivery of health care services are provided through a defined set of providers under contract with a hospital, medical, dental or optometric service corporation; the ability of service corporations to issue subscription contracts free of many state-mandated benefits and also reduce the allowable uninsured period for small groups to qualify for state vouchers for free coverage; and the permissibility of issuing coverage to uninsured individuals without being subjected to many of the state’s mandated benefits.

CALIFORNIA Health Insurance : Proponents of a new statewide initiative to return the legislature back to a part-time status are attempting to collect the 700,000 signatures necessary to qualify for the ballot in 2010. The measure would cut the current legislative calendar to 90 days. Supporters of the initiative say that the full-time legislature, authorized by voters in 1966, has failed to produce the results promised. After another rocky legislative year marked by a soaring budget deficit and a failure to address education spending and health reform issues, broad support for the measure seems likely. However, a bipartisan group of three former state lawmakers have formed an alliance to fight the effort, arguing that it would not allow the legislature sufficient time to address the state’s serious problems.

CONNECTICUT Health Insurance : The General Assembly is holding September 23 and 24 to take up several bills needed to implement the new, two-year budget that took effect September 8. The “implementer bills” are required to put in statute the policy changes necessitated by passage of the budget. The session bears watching because of a trend of late to attempt to include non-budget-related proposals in these implementer bills. In the past, ideas that died in the regular session came back to life during an implementer session, only to expire again once they were publicized.

FLORIDA Health Insurance : The Agency for Healthcare Administration has asked carriers to participate in a workgroup regarding Explanation of Benefits (EOB) sent to members. The goal of the workgroup is to develop best practices for information contained on an EOB and assure the EOB is clear to consumers. Aetna is participating along with other carriers.

ILLINOIS: The Department of Insurance’s (DOI) proposed rules for preferred provider programs and networks were heard last week by a legislative panel. These rules would affect both insurers and network administrators that offer incentives to insureds to utilize the services of contracted providers. At the hearing DOI agreed to remove objectionable language to business and insurance groups that would have limited a consumer’s exposure to 50 percent of out-of-network billed costs by a provider. The DOI Director was given discretion on the rest of the proposed rule and agreed to hold it for 30 days and meet with the industry to discuss other objections. The two major issues that remain for business and insurance groups are: a provision stating that a provider’s written approval must be obtained whenever an insurer or administrator buys another network, if it represents a material change to the contract; and the effect of language that would require insurers and administrators to hold beneficiaries harmless for out-of-network physician costs. The industry is preparing for meetings with DOI.

MASSACHUSETTS: The Division of Health Care Finance and Policy (DHFP) has introduced amendments to the Employer Fair Share Contribution regulation. The proposed amendments clarify that to be considered a contributing employer, an employer must maintain a written plan document for its group health plan. In addition, the employer must be able to document in writing its offer to employees to make a percentage premium contribution and the minimum number of hours that the employees are required to work to be eligible for full-time benefits. The amendments also clarify that a Premium Reimbursement Arrangement (in which an employee enrolls in an individual plan and is reimbursed by the employer for a portion of the premium expense) may qualify as a group health plan, provided there is written plan documentation that designates a particular plan for use by employees.

NEW JERSEY: Legislation requiring disclosure of certain serious reportable events was recently enacted by Governor Jon Corzine. Under the new law, the Department of Health and Senior Services will annually issue a report of specific hospital Patient Safety Indicators (PSI) as enumerated under federal guidelines by CMS. Additionally the law prohibits hospitals from charging for certain “never events.” These events, for which reimbursement cannot be sought, include: transfusion reaction; air embolism; foreign body left in during a procedure; surgery on wrong side, body part, or person; and performing the wrong procedure on a patient. Also, the Department of Banking & Insurance adopted regulations establishing minimum benefits standards for health benefits plans, dental plans, and prescription drug plans. The regulations, among other things, set maximum cost-sharing and network copayment limits.

SOUTH DAKOTA: The Division of Insurance has issued a three-sentence, proposed regulation addressing the relationship between Centers of Excellence and access plans. The proposed regulation currently states that each contracted Center of Excellence and each contracted network of a Center of Excellence must be included in a health carrier’s access plan. For purposes of network adequacy, the health carrier’s entire Center of Excellence network, including both direct–contracted Centers of Excellence and contracted networks, shall be considered. A health carrier may not contract with a Center of Excellence network or any other network that is not registered pursuant to South Dakota law. When originally circulated, this regulation also contained a definition of Centers of Excellence, placed restrictions on carriers with Centers of Excellence for transplant services, and required “closed plans” to have certificates of authority to operate as HMOs. The new language is strongly preferable. A hearing regarding these proposed regulations is scheduled for October 21, 2009. Aetna will attend the hearing to discuss any proposed changes.

UTAH: The Utah Insurance Department (UID) has issued amendments to the state’s requirements for the Basic Health Care Plan to bring the rules into compliance with new statutory requirements that were enacted in 2008 and 2009. Individual and small group health insurers are required to offer the Plan until January 1, 2010. The Plan includes the following maximum benefit limitations: 1) a lifetime maximum of no less than $1 million per person, 2) a minimum $250,000 annual maximum per person, and 3) out-of-pocket maximums on various cost-sharing obligations. After January 1, 2010, the Plan will be replaced with a new basic health care plan that is defined as: 1) a federally qualified, high-deductible health plan (HDHP), 2) has the lowest deductible that qualifies as an HDHP, and 3) has an out-of-pocket maximum no greater than three times the annual deductible.

Sept. 18, 2009

This Week in Health Care Reform
Lawmakers continued to negotiate health care reform legislation this week. On Wednesday, Sen. Max Baucus (D-MT), chairman of the Senate Finance Committee, revealed his proposed reform legislation despite ongoing concerns from both Republicans and Democrats.

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Senate Negotiations

Sen. Baucus Unveils Proposed Legislation: On Wednesday, after months of negotiations to develop a bipartisan reform proposal, Sen. Baucus unveiled a major health care reform bill. The GOP, to date, has withheld its support of the bill.

With an expected price tag of $856 billion , the bill proposes insurance cooperatives, individual mandates, taxes on high-end insurance plans, fees on industry players, Medicaid expansions and government subsidies for qualifying families. It would also prohibit insurance companies from dropping or denying coverage based on preexisting conditions. The bill is deficit-neutral and less costly than prior proposed bills. In addition, the Congressional Budget Office (CBO) reports that the bill will trim federal deficits by $49 billion over 10 years.

Sen. Baucus has indicated he will continue to work to forge bipartisan consensus, saying that the bipartisan talks could continue even as the Finance Committee begins its formal bill drafting and voting session next week. With concerns voiced from both sides of the aisle, however, it is not clear whether the bill will receive enough support.

Republicans question the states’ role in paying for Medicaid expansion, an individual requirement to purchase coverage, and fees on health insurance companies, clinical laboratories and medical device manufacturers. In addition, they want to include specific language restricting the use of federal dollars for abortion.

Democrats believe there are excessive cost burdens placed on some families and have concerns about the financing of the plan. Interested parties, from consumers to employers to industry groups, are still digesting what Sen. Baucus’s reform bill will mean for them.

Public Plan

American Opposition Drops if Public Option Dropped: A recent Washington Post-ABC News poll, conducted in the days following President Obama’s televised address to a joint session of Congress, found that 46 percent of those polled favor proposed changes to the nation’s health care system, while 48 percent are opposed. Public opinion appears to shift if the public option is dropped from the reform package, though, with opposition dropping 6 percent. About 55 percent of those polled like the idea of a public option.

Additional Activities

Industry Groups Give Support Following President Obama’s Speech: Following the President’s presentation of a health care reform blueprint to a joint session of Congress, industry groups expressed support for the proposed reform plans . The Americas Health Insurance Plans (AHIP), the American Medical Association (AMA), the Pharmaceutical Research and Manufacturers Association (PhRMA) and the American Association of Retired Persons (AARP), endorsed President Obama’s calls for change, saying they remain open to major reform for availability, financing and regulation of health care.

Debate Swirls Around Illegal Immigrants and Health Care: House Democrats asked White House officials to clarify statements made by Press Secretary Robert Gibbs last week indicating that President Obama would bar illegal immigrants from directly buying health insurance from a government-created insurance exchange. Democrats believe that the health care proposals were developed to prevent illegal immigrants from getting tax-supported subsidies to buy health insurance, but not to prevent them from using their own money for private insurance.

White House officials clarified that illegal immigrants could use their own money to buy coverage from the few private insurance companies that will be permitted to sell insurance outside the exchange. Rep. Lamar Smith (R-TX) accused the Administration of providing coverage to illegal immigrants with this arrangement.

Looking Ahead

The Senate Finance Committee is expected to begin mark-up on Tuesday, preparing the bill for debate in the full Senate next month. The full committee will meet on Thursday to discuss the proposal, with any amendments due by end of the day Friday.

Week of September 14, 2009

Congress returned to Washington last week, immediately gathering for President Obama’s Wednesday night address on health care reform. For the first time, the President outlined his plans for reform, including support for a government option. He also addressed some of the most incendiary points of the August Town Hall reform debates and promised to call out those who “have made the calculation that it’s better politics to kill this plan than to improve it.” He tried to reach across the aisle to show where there is agreement, citing previous and proposed legislation by key Republicans in an effort to salvage some semblance of bipartisanship. Though the speech was successful in demonstrating the President’s unwavering dedication to getting reform passed this year, many watching came away feeling that costs and affordability still seem to be taking a back seat to access issues.

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Federal

Congress returned to town amid a flurry of activity designed to inspire Congress to move quickly on passage of health care reform. The mere announcement of a prime-time Presidential speech on reform was enough to force the hand of Senator Baucus (Chair of the Senate Finance Committee and a member of the “Gang of Six”) in two ways. First, over the weekend he cobbled together an 18-page outline of a bill and offered it up (as his vision of reform) to the other five members of the Gang of Six and to the rest of the Finance Committee. Second, Baucus announced that the Committee would indeed “mark-up” a bill next week and that the Gang of Six was still forging ahead. The President’s speech itself actually did not really expand on any policy specifics; it was more a rallying cry to the troops (the Congress and to the American public) to pass health care reform despite the Town Hall backlash or the absence of some of the details. The key takeaway from the speech is probably that the President has officially stamped the bills moving through Congress as “my plan,” which certainly puts him much more in the driver’s seat for the Fall debate.

States

ARIZONA: The Arizona Health Care Cost Containment System (AHCCCS) is abolishing KidsCare Parents, effective October 1, due to funding cuts mandated by the recently enacted budget bill. KidsCare Parents, an extension of the state’s Children’s Health Insurance Program (CHIP), provides health coverage to nearly 10,000 parents earning up to 200 percent of the federal poverty level. Children covered by the state’s CHIP, known as KidsCare, will keep their coverage. Other health-related provisions include: freezing hospital inpatient and outpatient reimbursement rates; rolling over one month’s capitation payment to AHCCCS health plans to the next fiscal year; requiring AHCCCS to comply with the Federal False Claims Act; requiring AHCCCS to prepare a report on provider assessment to increase federal matching funds; maintaining a 5 percent reduction in reimbursement rates to noninstitutional providers; and implementing total cuts of $29.4 million to AHCCCS, $26.1 million to the Department of Health Services, and $737,000 to the Department of Insurance.

CALIFORNIA: As expected, the legislature approved a measure designed to restrict an insurer’s ability to rescind an individual’s health insurance policy unless the insurer can demonstrate that the member intentionally misrepresented facts on the original medical questionnaire. The legislation would also require development of regulations to standardize applications and use of health questions, require extensive medical background checks and create an independent third-party review of any potential policy rescission. Governor Schwarzenegger vetoed a similar bill last year but has not indicated his stance on this year’s legislation.

CONNECTICUT: The General Assembly passed a new, two-year state budget that relies heavily on one-time revenue sources including the Rainy Day Fund, federal stimulus dollars, tax changes and many state fee increases. Governor Rell let the bill become law without her signature. Premium taxes on health insurance were not increased; however, the new budget contains a very significant reduction of 6 percent in Medicaid Managed Care Organization reimbursements. This cut will negatively impact the ability of Connecticut to maintain a competitive, sustainable Medicaid Managed Care market. Retaliatory taxes are also a possibility as state licensing, certification and registration fees to most agencies are increased to at least $15; doubled if under $150; hiked by 25 percent if between $150 and $1,000; and increased by $250 if over $1,000. Legislators plan to return on Sept 23 and 24 to pass the necessary budget implementer bills.

GEORGIA Health Insurance: The hearing took place on September 9th to finalize regulations that would allow health plans to include health status as a factor in the rating of small groups on their renewal date. Previously, this was only permitted for new business and is very important to the small group segment. The Georgia Association of Health Plans and AHIP have been working with the Georgia Department of Insurance on this issue for some time and appeared at the hearing along with many carriers. No opposition was stated at the hearing so we expect the regulations to be promulgated permanently very shortly.

KANSAS: Efforts to get more uninsured Kansans enrolled in Medicaid and the State Children’s Health Insurance Program (SCHIP) got a big boost this week with the announcement of a five-year, $40.3 million grant from the U.S. Department of Health and Human Services. The grant from HHS’s Health Resources and Services Administration (HRSA) will be used to fund a new technology for the state’s enrollment system, replacing a computer system that’s more than 20 years old, as well as outreach efforts aimed at getting more people who are eligible for Medicaid and SCHIP to sign up for benefits. The timing is beneficial since the state is gearing up to implement an expansion of SCHIP that the legislature authorized this year. Beginning in January, the income limit for SCHIP eligibility in Kansas will increase from 200 percent to 250 percent of the 2008 federal poverty level, or $44,000 per year for a family of three. The grant and the enrollment efforts it will fund were made possible through the support of the Kansas Health Foundation, the Kansas Association for the Medically Underserved, Kansas Action for Children, the Kansas Health Institute and the Department of Social and Rehabilitation Services.

OHIO Health Insurance : Implementation of Open Enrollment Health Care Reform Provisions in HB1. Insurers recently met with the Ohio Department of Insurance (ODI) regarding the health care reform provisions of HB1 that made significant changes to laws affecting insurance. As a result of the meeting and questions with respect to implementation, ODI put out further guidance last week to insurers and health insuring corporations (HICs) as well as the variable effective dates of different portions of the bill. The new guidance document is intended to answer questions about open enrollment changes, rate filing questions, data reporting and miscellaneous topics from the budget bill. Recall, Ohio law requires carriers to accept applicants for individual coverage during an annual open enrollment period. Ohio HB1 amended the existing individual open enrollment requirements. In addition to the new guidance document, the ODI published draft regulations last week regarding open enrollment, advertisement and data collection rules under the new law. Aetna is evaluating and commenting upon the draft regulations and expects that a number of other guidance materials and rules will be put forth as other sections of the law are implemented.

TEXAS Health Insurance : The Department of Insurance held a stakeholder meeting last week to discuss proposed rules implementing a mediation process for balance billing disputes. The new law putting this option in place went into effect September 1 and has not yet been tested. Once triggered by the member for any balance bill over $1,000, the process would require the health plan and facility-based providers to attend mediation in an attempt to resolve the disputed amount. A physician may avoid the terms of the bill by disclosing in advance that he is an out-of-network provider, providing an estimated amount the patient may owe for services, and the circumstances under which the enrollee would be responsible for those amounts. No mediation can be required as long as the actual costs of the services are less than the estimated amount in the disclosure. Stakeholders also discussed a section of the legislation requiring Texas Department of Insurance to adopt network adequacy standards. Those standards must adapt to local markets in which a health plan operates, ensure availability of, and accessibility to, a full range of health care practitioners to provide health care services to patients, and consider situations in which no provider in a field of practice in a local market agree to contract with a plan at a reasonable rate of reimbursement. Aetna is participating in these stakeholder discussions and will continue to do so as the rulemaking process continues.

UTAH: Industry comments have been submitted to the Office of Health Care Statistics and the Department of Health regarding a proposed regulation requiring all carriers in Utah, including third-party administrators, dental plans and self-insured plans, to submit data on enrollment and medical and pharmacy claims. The initial submission covers claims from January 1, 2007, through December 31, 2008, which are paid through September 30, 2009. Subsequent submissions are to be done monthly. Among the problems identified are the need for uniformity in data collection criteria across states; privacy concerns arising from the member specific data requested; the need for additional time to implement the collection and reporting process; the value of a pilot period to determine the need for any adjustments; the financial burden of monthly reporting and an excessive penalty of $10,000 per day for failure to timely submit a report.

This Week in Health Care Reform

Lawmakers returned to Washington this week after a heated August recess to continue to negotiate health care reform. Americans remain sharply divided on legislation: In a Gallup Poll released Tuesday, 39% of those polled say they would direct their member of Congress to vote against a health care reform bill this fall, while 37% want their member to vote in favor of a health care reform bill.

Joint Session

President Barack Obama Holds Joint Session on Health Care Reform: On Wednesday, in a televised primetime speech before a joint session of Congress, President Obama sought to build momentum for the health care overhaul by outlining a specific blueprint of what he intends reform legislation to deliver. He made the case for a government-run insurance option, citing it as the best way to foster greater competition in the insurance market. However, he also indicated that a public option is a means to an end and encouraged consideration of other options. He said that his plan would cost around $900 billion over 10 years, but would be deficit neutral.

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Public Plan

House Majority Leader Would Support Reform Legislation Without Public Option: On Tuesday, House Majority Leader Steny Hoyer (D-MD) said that he would support health reform legislation without a public option . “If the public option weren’t in there, I could still support a bill, because I think there’s a lot in there that’s good,” he said. Just hours after Rep. Hoyer’s comment, House Speaker Nancy Pelosi (D-CA) insisted that a public option is essential to reform legislation. In addition, Rep. Mike Ross (D-AR), a Blue Dog congressman, said Tuesday that he could no longer back the government-insurance option.

Senate Negotiations

Senate Finance Committee Chair Unveils Compromise Plan: The “Gang of Six,” a subset of the Senate Finance Committee, met Tuesday to discuss a new proposal from Committee Chairman Max Baucus (D-MT) that reflects the group’s negotiations. The plan calls for non-profit cooperatives and an individual mandate, but does not contain an employer mandate. A new tax on insurance companies would raise about $6 billion a year to help pay for health reform. The plan would also impose annual fees of $4 billion on medical device manufacturers, $2.3 billion on pharmaceutical manufacturers and $750 million on clinical laboratories. On Wednesday, Sen. Baucus indicated that he plans to introduce a bill next week, with or without Republican support.

Additional Activities

President Obama Meets with Leading Democrats: In a private meeting Tuesday, President Obama met with Democratic Congressional leaders to discuss their health care reform strategy. Coming out of the meeting, Speaker Pelosi and Senate Majority Leader Harry Reid (D-NV) commented that they were re-energized and ready to press forward with reform legislation. Speaker Pelosi reiterated that the House would not pass legislation without a public option.

Iowa Senator Will Replace Late HELP Committee Chairman: On Wednesday, a Democrat aide announced that Sen. Tom Harkin (D-IA) will replace the late Sen. Edward Kennedy (D-MA) as chairman of the Health, Education, Labor and Pensions (HELP) Committee, one of two Senate panels focused on health reform. A Senate aide confirmed Tuesday that Sen. Christopher Dodd (D-CT) will not take on the role, and will continue to instead lead the Senate Banking, Housing and Urban Affairs Committee.

Medical Association Endorses Obama-style Health Care Reform: In an open letter to President Obama and members of Congress, the American Medical Association gave its support to presidential health care reform efforts, stating, “On behalf of America’s physicians and their patients, we strongly urge you to reach agreement this year on health system reforms.” The letter, signed by AMA President J. James Rohback, M.D, was posted on the AMA website just before Wednesday’s presidential address to serve as “a shot in the arm” for President Obama as he attempts to salvage health care reform.

Looking Ahead

Sen. Baucus indicated that he plans to “mark up” a bill the week of September 21.

Week of September 7, 2009

Congress returns to Washington this week, having spent August  hosting heated Town Hall meetings on health care reform. Most Republicans are openly vowing to oppose a health care reform bill, and Democrats are divided on issues related to costs and the inclusion (or omission) of a public option in the bill. There is no bipartisan deal yet. Senator Baucus’s September 15 deadline seems to be off the table and the Finance Committee is supposed to keep trying. In anticipation of the President’s upcoming speech on health care, Baucus is urging his Finance Committee colleagues to adopt a bipartisan proposal that he is circulating. What critics note has been missing from all the debate is President Obama’s proposal for health reform, which aides promise he will articulate in his Congressional address on September 9. However, his remarks may focus more on rallying Congress to address waning support for reform and get the health care reform discussion back on track.

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Federal

With Congress in recess, there is no federal report this week.

States

CALIFORNIA: The California Legislature continues to move bills through the process that will burden the health care system with additional mandates, more regulation and less flexibility in designing benefits and pricing products for its residents. Legislation to mandate lactation consultants, mammography notices, treat oral cancer medications on par with intravenous cancer treatments and substance abuse coverage is certain to land on the Governor’s desk by mid-September. Independent analysis of the costs associated with these new benefits mandates is well over $20 million annually Additionally, the legislature is poised to pass legislation banning the use of gender as a rating factor in setting premiums, placing hard caps on out-of-pocket costs and requiring that an insurer prove “intent” prior to rescinding an insurance policy in the individual market. Aetna continues to express its opposition to most of these measures and has encouraged the legislature to either wait to see what federal health care reform will bring or enact comprehensive reform efforts of their own.

DISTRICT OF COLUMBIA: Mayor Adrian Fenty unexpectedly appointed Deputy Commissioner Gennet Purcell to the position of Commissioner of the Department of Insurance, Banking and Securities, replacing Thomas Hampton. Serving as Deputy Commissioner since December, 2008, Purcell is an attorney with limited insurance experience but a strong relationship with Mayor Fenty and several members of the City Council. While it is too soon to speculate on Purcell’s agenda as commissioner, it is likely that she will place increased emphasis on pro-consumer policies that reflect the sentiment of two key Council Committee Chairmen.

FLORIDA Health Insurance : Discussions are underway with the Florida Insurance Consumer Advocate regarding possible legislation for 2010 related to balance billing and reimbursement to non-participating providers. Aetna has submitted comments through the Florida Health Plan Association and local counsel.

ILLINOIS: A wellness coverage mandate became law on August 24. Effective January 1, 2010, group or individual policies may offer a program for wellness coverage that permits a reward, health spending account contribution, reduction in premium or reduced copayments, coinsurance, or deductibles as an incentive for participation in a wellness, maintenance, or improvement program approved by the insurer. The amount of the incentive is limited to 20 percent of the total cost of coverage (employee and employer contributions).

MICHIGAN: On September 3, Speaker Dillon released a draft bill on his Public Employee Health Care Reform Package potentially consolidating 400,000 full-time employees (and as many as 600,000 employees if part-time employees obtain coverage) into a single health program. The draft language replaces the current public employee health benefit system that allows a government entity or a group of government entities to create their own health care plan and creates the Michigan Health Benefits Program, a uniform public employee health coverage option, comprised of health care plans of varying coverage levels each approved by the board of the program. The draft bill indicates that the board will develop methods to extend the options of the pool to the private sector.

MONTANA: Recently, the State Auditor’s Office (SAO) issued a bulletin to provide guidance for carriers regarding the disorders that fall within the autism spectrum and the types of treatment that must be covered as a result of new autism coverage requirements passed earlier in 2009. The bulletin notes that group policies are permitted to cap annual benefits at $50,000, for children eight years old and under, and at $20,000, for children ages 9 to 18. Insurers are permitted to require a treatment plan detailing medical necessity from a physician, but may not otherwise impose special deductibles or copayments that are not applicable to physical illnesses. Individual policies of health insurance will be permitted to establish the same annual benefit limits, and will be required to provide autism coverage to adults over 18 that is no less favorable than generally provided to physical illnesses. The new autism coverage requirements are effective for contracts, policies and certificates issued or renewed after January 1, 2010. In the bulletin, the SAO notes that all changes to forms required by 2009 legislative changes must be submitted by or before October 1, 2009, in order to avoid delays in review. Further, because all policy forms must be approved before use, and filed 60 days before intended use, all health insurers must amend, endorse, or re-file all health insurance policies and certificates with the Forms Bureau of the Commissioner of Securities and Insurance no later than November 1, 2009, for a January 1, 2010, effective date.

OHIO Health Insurance : The Ohio State Bar Association is considering pursuing legislative language that would prevent subrogation (claims recovery) in certain situations. This would have negative ramifications on health insurance company subrogation rights in Ohio. The Ohio Association of Health Plans and Aetna are actively soliciting OSBA members, particularly insurance defense attorneys, to oppose the proposal so that it is not pursued in the General Assembly.

OREGON: The Division of Insurance issued a final bulletin outlining that beginning October 1, 2009, insurers shall pay an assessment of 1 percent of gross premiums earned on both (1) policies insuring Oregon residents, and (2) policies delivered or issued for delivery in Oregon. In the bulletin, they have added a note that legislative changes may occur on the application of the premium tax in the February 2010 special budget session. If necessary, the OID will issue additional guidance in October regarding any changes necessary. Oregon may be the only state that has chosen to treat the collection of premium taxes in this fashion. The bulletin is contrary to longstanding NAIC policy and will result in the imposition of a double-tax on all group policies, as well as administrative hurdles in tracking where individual resides rather than where the contract is sitused.

This Week in Health Care Reform

In an effort to regain control of the health care reform debate after a contentious August recess and a significant drop in his poll numbers, President Obama announced plans to address a joint session of Congress on Wednesday, September 9th . In his remarks, the President is expected to present a clear blueprint for the health care reform legislation he expects Congress to pass.

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Senate Negotiations

Grassley Says Public Option Is No Longer an Option: On Monday, Sen. Charles Grassley (R-IA), the GOP’s top health reform negotiator, indicated that a public option is off the table and not something being discussed by the core group of Senate negotiators, also known as the “Gang of Six.” The group is slated to reconvene on Friday via conference call but do not expect to make any real decisions until lawmakers return from Congressional recess.

Baucus Predicts Health Reform Will Happen This Year: In an interview on Monday, Senate Finance Committee Chairman Max Baucus (D-MT) firmly stated that a health care overhaul will happen this year, with or without GOP support. Baucus expects to know by mid-September if a bipartisan deal can be worked out.

Enzi’s Opposition Puts a Snag in Hopes for Bipartisan Deal: In the GOP’s weekly radio address on Saturday, Sen. Mike Enzi (R-WY), a core member of the Senate’s Gang of Six, sharply criticized the Democrats’ reform plan. He indicated that a bipartisan deal will be difficult to achieve, saying the proposed legislation “will actually make our nation’s finances sicker without saving you money.” On Thursday, Enzi reiterated his commitment to achieving bipartisan agreement by working with the Gang of Six.

Additional Activities

Democrats and Republicans Push Reform on the Road: Lawmakers from both sides of the aisle hit the road this week, hosting campaign-style events across the country in a last-ditch effort to promote their messages before returning to Washington. Senators from the GOP, including Senate Republican Leader Mitch McConnell (R-TN) and Sens. John McCain (R-AZ), Kit Bond (R-MO), Mel Martinez (R-FL) and Richard Burr (R-NC), hosted events that emphasized the importance of a go-slow approach to President Obama’s health care reform push. Meanwhile, the Democratic National Committee’s Organizing for America grassroots organization continued its aggressive initiatives, which included an 11-city bus tour advocating the President’s health reform messages.

CBO Prevention Projections Questioned: A study published in Tuesday’s Health Affairs journal highlighted the shortcomings of the Congressional Budget Office’s scoring of prevention programs. Arguing that true savings cannot be achieved within 10 years, the study – conducted by researchers at the University of Chicago’s National Opinion Research Center – suggested measuring cost savings of prevention on a 25-year time horizon. Researchers said new longer-term forecasts would also help legislators and others estimate how having healthier, longer-living patients would affect costs.

Looking Ahead

President Obama will travel to Cincinnati on Monday to speak at the AFL-CIO’s annual Labor Day picnic.

Lawmakers are scheduled to return to Washington on September 8th. Both the House and Senate will gather for President Obama’s joint session on September 9th.

Week of August 31, 2009

With the death of Senator Edward Kennedy last week, many are bemoaning the lack of compromise in the legislative process these days — a tough hurdle for any health care reform bill to overcome. The Senate Finance Committee pledged to continue seeking a bipartisan compromise on health care reform, but it appears no new agreements on major issues have been reached. In the House, much work remains to be done as the three committees that passed health care reform bills in July still have to merge these bills into one. And, the Energy and Commerce Committee first is planning to consider several dozen amendments not addressed during the committee’s mark-up. As a result, the timing of real progress on health care reform legislation this fall is very hard to predict.

Federal
With Congress in recess, there is no federal report this week.

EasyToInsureME offers clients the easiest way to buy individual health insurance. Free services include instant online health insurance quotes, custom proposals for each client, free phone consultations, and 10-minute application by phone. Nobody does what we do for our clients!

States
CALIFORNIA: Two new health care taxes are under consideration in the legislature. The first proposal would impose a tax on all general acute care hospitals, but these hospitals would receive new funds to supplement current reimbursement under the state’s Medi-Cal program. The amount of the tax has not been determined yet. The second tax proposal would impose the state’s gross premium tax on all Medi-Cal managed care plans. This tax is expected to raise $150 million annually. Medi-Cal managed care plans previously have been assessed a Quality Assurance Fee by the state. Federal law prohibits this fee from being collected after Oct. 1, 2009, though there is a bill in Congress to extend the fee for another year.  Both tax proposals have broad support and neither is expected to impact Aetna’s current lines of business.

GEORGIA Health Insurance :  A hearing has been scheduled for September 9 to finalize regulations that would allow health plans to include health status as a factor in the rating of small groups on their renewal date. Previously, this was only permitted for new business. The Georgia Association of Health Plans and America’s Health Insurance Plans (AHIP) have been working on this issue for some time with the Georgia Department of Insurance.
ILLINOIS: Senate President Cullerton indicated that he expects an external review bill to pass during the fall veto session.  Agreed to by the insurance industry and provider/consumer groups, the bill would create external review requirements for all commercial insurance products, rather than just HMOs, effective July 1, 2010.  The bill also establishes committees to create a uniform small employer group health status questionnaire and an individual health statement for use on January 1, 2011. Lastly, the bill would require insurers to semi-annually prepare and provide the Department of Insurance a statement on aggregate administrative expense and other information. This last point was agreed to as an alternative to a medical loss ratio requirement.

KENTUCKY: The legislature held hearings last week on an autism mandate that broadly defines the condition without coverage limits,  except co-payments and deductibles. In addition, the bill would allow an “autism services provider”, meaning any person or entity that provides treatment of autism spectrum disorders, to treat. Aetna and the Kentucky Association of Health Plans are working with the bill sponsor to include age limits and licensure of providers provisions, particularly for applied behavioral analysis.

MARYLAND: The Maryland Health Care Commission (MHCC) has invited Aetna to participate in a workgroup consisting of payer representatives and other health care stakeholders, which will draft proposed regulations for the monetary incentives/disincentives in response to Electronic Health Records – Regulation and Reimbursement.  This legislation lists many essential activities; one of the requirements calls for state-regulated private payers to provide monetary incentives to health care providers to promote the adoption and meaningful use of electronic health records (EHRs).  Included in the statute is a requirement for establishing disincentives after 2015 for providers seeking payment from a state-regulated payer who uses an EHR that is neither certified nor capable of connecting to a health information exchange.

MICHIGAN: House leadership and an appointed committee continue to move forward with fleshing out Speaker Andy Dillon’s health insurance pooling proposal. The Dillon proposal would consolidate public sector active and retiree health care benefits for up to 400,000 individuals in order to help the state address its budget deficit. Several large unions have come out in opposition to the pooling option, saying it strips collective bargaining rights. On Friday, the Speaker released draft legislation on the proposal.

OHIO Health Insurance :  The legislature is considering a joint resolution calling for a constitutional amendment to exempt Ohio from a potential  mandate requiring individuals to have insurance. It is similar to an issue that was taken up in Arizona in 2008. Arizona’s legislature passed a resolution this year that will put the question on the ballot for 2010. If federal reform passes with an individual mandate, such a constitutional amendment would likely be challenged in court. In other business,  Representative Boyd indicated that her legislation  regarding regulation of ”physician designation programs” will be moving forward in the House. Physician designation programs are those programs that provide a grade or any other rating to characterize an insurer’s assessment or measurement of a physician’s cost efficiency, quality of care or clinical performance.  The medical society wants state standards for physician designation programs operating in the state. Aetna has actively been reviewing this bill and how it  would affect Aexcel, and is providing comment.

OKLAHOMA:  The “Insure Oklahoma” program has grown at such a significant rate it is expected to reach funding capacity before year’s end, potentially leading to a freeze in enrollment and a loss of momentum in providing health insurance coverage for all Oklahomans. The program subsidizes health insurance premiums for small businesses and individuals who qualify. Under the program, employers contribute 25 percent of premiums, employees 15 percent, and the state pays the remainder. Its current funding stream has capacity for up to 35,000 people. With a projected growth rate of 9.8 percent, enrollment could top 40,000 by January 2010.  To avoid freezing enrollment in the program, the authority is looking for additional funding streams. It has embraced a recommendation by the State Coverage Initiative that would assess a fee on all insurance companies that are part of the program. Those fees would be placed in a dedicated account and would generate federal matching dollars to fund Insure Oklahoma. The problem is the fee assessment would need to be approved by the state legislature, which will not reconvene until February, 2010. A special session would be needed to consider the fee assessment. A half-percent fee would double Insure Oklahoma’s capacity to 80,000 lives and reduce cost shifting by $39 million.

PENNSYLVANIA Health Insurance : The Department of Insurance has been relatively silent since its July 17 press release announcing separate examinations of the Blues plans on possible anti-competitive and unfair trade practices. The Department has retained the same law firm and economist that coordinated the review of the Highmark/IBC merger.  It is set on concluding the examination in early 2010, if only to give it time to implement any recommendations in the last months of this administration. Aetna has again raised its recommendations for improving competition as submitted in the merger review:  Review the territorial restrictions in the Blues’ licensing agreements as well as any other agreements among the Blues that impede competition; the Blues’ use of market power in provider contracting and product tying; and any practices that impede transparency.

VIRGINIA:  An escalating conflict of interest scandal involving delegate Phillip Hamilton (R), vice chairman of the House Appropriations Committee, could have a significant impact on the governance of the state over the next four years, particularly if front runner Republican Robert McDonnell wins in November. Currently, the House has a Republican majority and the Senate a Democratic majority; resulting in divided control of the General Assembly for the first time in modern history. This split has hampered Democratic Governor Timothy Kaine’s ability to move much of his agenda since coming to office. Delegate Hamilton’s situation and his refusal to step down have invigorated Democrats who only need to win six seats in the House to gain control of the legislature. Such a result would present increased challenges for the business community, including health plans.

Interviewer : Why is health insurance so affordable at EasyToInsureME?

Chad Levin : We at EasyToInsureME take proactive steps to ensure that our clients receive the most affordable health insurance by searching all carriers in the area and picking the plans with the best benefits at the lowest cost. No other health insurance company does this for their clients. After the plans have been selected, a four plan custom proposal is sent to the clients’ email labeled your requested health insurance quote. We only send four plans to make the decision super easy. However, we are actually shopping almost 200-300 plans per client.

Interviewer : So how does EasyToInsureME help clients pick affordable health insurance?

Chad Levin : After the proposal is sent with the plans with the best benefits at the most affordable cost available in the clients area, they will be able to view a side by side comparison of all four plans that are the best available. Therefore, each client can sit down with their family and make an easy and educated choice about their health insurance. Then a free phone consultation will take place to answer any questions that clients may have.

Interviewer : So how do I get this affordable health insurance?

Chad Levin : Simply log on to EasyToInsureME click on view health insurance quote, type in your name and email and the process has already begun. You the consumer will be able to see all the quotes available in your area online once you do this and within two hours your custom proposal will be in your email for you to make an easy, educated, and quick decision about your health insurance. Once the client has made a decision a simple ten-minute phone application will take place and then your approval will take about a week and that decision comes from the health insurance carrier.

Interviewer : How can EasyToInsureME make sure I am approved?

Chad Levin : About 90% of our clients get approved for individual health insurance. This is one of the highest rates we have ever seen in the industry. It is our job to make sure our clients get approved. Therefore, we do our best on the first try because nobody likes shopping for health insurance. Just in case the first company doesn’t accept you does not mean the next company won’t either. EasyToInsureME works with every health insurance carrier in the United States. We have unlimited options for our clients. The ten percent that do not get approved will have to choose a guaranteed issue state plan. EasyToInsureME agents will be more than happy to help with these plans as well as our mission is to get everyone insured.

Interviewer : So all I have to do is log on to EasyToInsureME.com, click on health insurance quote, put in my name and email, and you will send me a custom proposal to my email picking the best four plans for me? Then you will call me for a free phone consultation and sign me up in ten minutes?

Chad Levin : Yes. That is correct.

Interviewer : That sounds to good to be true. I am going to have to try this out!

Chad Levin : Well we are happy to help you!