Health Insurance Quotes Reform EasyToInsureME

Week of December 7, 2009

The Senate began to slog its way
through amendments (see below) last week in a process that promises to
get harder, not easier. In the meantime, the debate continues as to
whether the Senate bill would do anything significant to slow rising
health care costs, and a Bloomberg story points out that a number of
economists and analysts are doubtful that it will. The White House
defends the bill's ability to slow costs, but some analysts predict
that Congress will need to make many more tough decisions to have a
real impact. According to Bloomberg, a group of Senators that includes
Joe Lieberman (I-CT) and Susan Collins (R-ME) is taking aim at rising
costs with an amendment that would include new requirements on
providers to try to wring more costs out of the system. Anyone
concerned about the rising cost of health care should be engaged in the
process by reaching out to their Senators to urge a greater focus on
bending the cost curve.

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Federal
The
Senate debate on health care reform actually consists of three
simultaneous debates. The first is public on C-SPAN, and it's going
slowly as Republicans are pressing for 60 votes as often as they can
while Democrats try to speed things up. Nothing of any great moment has
been passed or decided. The second debate is the one Majority Leader
Harry Reid is conducting behind closed doors as he tries to garner 60
Democratic votes for some acceptable form of a public option. Once this
is accomplished, most observers believe Reid will immediately file
cloture to cut off debate on the bill itself. If successful at getting
60 votes, he will go straight to final passage, which would require 51
votes. This could happen before Christmas. The third debate is the one
Reid is having with House Speaker Nancy Pelosi over whether to have a
conference at all. If the Senate can pass a bill the House can accept
"as is," then there will be no need for a time-consuming conference
that could unravel the bill. Thus, Reid is checking in with Pelosi
frequently to see what he needs to be able to pass a bill and avoid a
conference.

Since returning from its Thanksgiving break last
week, the Senate has slowly been making its way through a number of
amendments. Key votes so far include: approved an amendment that would
require first-dollar coverage (no cost sharing) for certain preventive
services; approved an amendment stating that nothing in the bill reduce
guaranteed benefits under Medicare; defeated a motion that would have
sent the bill back to the Finance Committee for the purpose of removing
proposed cuts to Medicare; defeated an amendment that would have
removed the CLASS Act provisions from the bill; defeated a motion that
would have sent the bill back to the Finance Committee to eliminate the
proposed Medicare Advantage funding cuts; approved an amendment
requiring that nothing in the bill shall eliminate benefits “guaranteed
by law” to Medicare Advantage enrollees (protects only benefits also
covered by traditional Medicare and does not protect extra benefits and
services provided by MA plans); and defeated an amendment that would
have placed limits on how much attorneys can earn from medical
malpractice lawsuits.

States
ALL STATES: The National
Governors Association (NGA) has announced an initiative outlining
preparations for federal health care reform. Titled "Rx for Health
Reform - Affordable, Accessible, Accountable," the 2009-2010 initiative
is led by Vermont Governor and NGA Chair James Douglas. It will focus
on: providing governors with the information needed to transition to a
new health care system; developing state-based system improvements and
cost containment measures, including tools necessary to develop
delivery system enhancements, looking at what is required under federal
legislation, and highlighting other reforms the states could undertake
to create a more efficient and effective health care system; and
preparing states for implementing insurance market reforms, state-based
exchanges, new mechanisms to support delivery system reform, and other
national health reforms. The NGA's Health Care Task Force includes
Governor Douglas and West Virginia Governor Joe Manchin, both serving
as co-chairs, as well as Indiana Governor Mitch Daniels, Mississippi
Governor Haley Barbour, New Hampshire Governor John Lynch, and Oregon
Governor Ted Kulongoski.

CALIFORNIA: The California Medical
Association (CMA), the second largest medical association after Texas,
has announced its opposition to the “Patient Protection and Affordable
Care Act,” the health care reform bill being debated in the Senate. The
CMA also opposed Governor Arnold Schwarzenegger’s comprehensive health
care reform proposal in 2007. In other news, Republican Governor
Schwarzenegger has appointed State Senator Abel Maldonado to serve as
Lieutenant Governor, but Democrats in the legislature have vowed not to
confirm the Republican Senator because they view him as a viable
state-wide candidate who could be elected easily to the position.
Maldonado still must be confirmed by the legislature, which has 90 days
to act.

COLORADO: The Colorado Medical Society (CMS) continues
to seek support for a bill that would define the practice of medicine
as including medical necessity determinations and utilization reviews
performed by health plan medical directors. As currently drafted, the
proposal would potentially expose medical directors to disciplinary
action by the state Board of Medicine when medical necessity or
utilization review decisions are challenged. Several discussions have
been held with the executive director of CMS to ascertain the nature of
the problem the association is trying to address, particularly since
the organization as a whole may not be supporting the bill.

ILLINOIS:
Illinois' fiscal situation is "grim and getting worse." Illinois has a
reported $12 billion structural budget deficit. Comptroller Hynes said
Illinois had nearly $4.6 billion in unpaid bills at the end of
September, a record development for the first quarter of any fiscal
year. This, despite the state having borrowed $2.25 billion in
short-term loans, which must be repaid before the end of FY2010. Hynes
identified two factors that have had a major impact on the
deteriorating fiscal position: the steep decline in economy-driven
revenues, such as personal and corporate income taxes and sales taxes,
and record lapse-period spending. Hynes predicted fiscal pressures
would continue well into FY2011 and warned of record and prolonged
payment delays for most categories of state programs and operations,
including health care and social services. There will be increasing
pressure on health care programs as the economic stimulus funds expire
and the amount of money demanded by utilization increases continue to
be realized. There are already significant payment cycle delays on
portions of the State employee health plan. The budget situation will
dominate discussions in the General Assembly, which reconvenes in
January.

KANSAS: At the request of Kansas Congresswoman Lynn
Jenkins, the Kansas Health Policy Authority recently announced that it
estimates the health reform bill passed by the U.S. House would provide
health insurance for 240,000 Kansans without coverage and possibly save
the state treasury up to $25 million a year. It estimated the U.S.
Senate Finance Committee bill would insure an estimated 190,000 Kansans
and reduce state costs by $25 million to $50 million a year. The
Authority also concluded that the House bill would provide more federal
matching dollars for Medicaid and likely would allow a reduced package
of benefits for Medicaid beneficiaries added to the state rolls as a
result of health reform. Current Kansas Medicaid eligibility is among
the strictest in the nation, with benefits generally available only to
the oldest and youngest of the state’s poor. Childless adults of
working age are not eligible and parents are enrolled only if they earn
less than about 27 percent of poverty guidelines. Exceptions are made
for pregnant women.

MICHIGAN: State House Democrats announced a
plan last week to cut auto insurance rates through tighter restrictions
on auto insurance companies and the medical portion of those claims,
affecting subrogation and coordination of benefits for Aetna and
Cofinity®. Generally, the proposal requires auto insurance companies to
offer low-cost auto insurance to low-income drivers with good driving
records. The bill also would: allow the state insurance commissioner to
deny rate changes by auto insurance companies before they take effect;
prohibit auto insurance rate increases for those with good driving
records; prohibit auto insurers from using certain types of rating
factors; and limit fees paid to doctors and hospitals for treating auto
accident injuries. Michigan is the only state that requires all auto
insurance policies to give unlimited medical coverage for injuries
suffered in auto accidents. The proposal would change that requirement
and allow motorists to buy maximum medical coverage as low as $50,000.
This means that rate-regulated provider groups would likely have group
policies pay auto claims rather than wait for adjudication of the claim
in court, as they would not want their fees limited. In addition, the
allowance of low medical coverage on auto claims would affect Aetna's
subrogation and coordination of benefit activities with both auto
carriers and Aetna enrollees.

MISSOURI: The Department of
Insurance recently released its 2008 HMO Annual Report showing that the
entire managed care market is declining. The report shows that the
number of people enrolled in either an HMO or a major medical health
insurance plan decreased 15 percent since 2006. PPO plans are gaining
the most enrollment, and POS plans remain more popular in certain areas
than HMO plans. Total premiums for managed care coverage continue to
rise with the industry reporting a 7.5 percent increase from 2004 to
2008. The medical cost ratio for all HMOs operating in Missouri,
covering only Missouri business, was 82 percent in 2008, compared to
the nationwide industry number of 83.6 percent.

NEW JERSEY: The
legislature returned from its extended recess and took action on
legislation to establish a medical home demonstration project for the
Medicaid population. Upon federal approval, the state Medicaid program
would set out a three-year demonstration project with an annual
evaluation and reporting requirement by the Division of Medicaid
Assistance Services to the Governor and legislature. On the Senate
side, Aetna offered support for legislation requiring chain restaurants
to provide nutritional information for food and beverages on their
menus. Similar legislation is currently making its way through the
Assembly and will likely receive a full vote in both chambers prior to
the end of the session.

NEW YORK: The legislature passed
another deficit reduction plan, trimming spending and using unspent
funds to plug a $2.7 billion dollar budget deficit. A large percentage
of the revenue used to fill the gap came from federal stimulus money
that was originally designated for the 2010 budget and cuts to the
Medicaid trend factor. After intense lobbying and coalition efforts,
the legislature did not pass the Governor's proposed 0.25 percent
increase to the patient services assessment or "sick tax". In addition,
the Senate did not pass the Marriage Equality Act, effectively
defeating the bill for the year. The legislature will return to face a
multi-billion dollar deficit again in January, and it is likely that
increases to health insurance taxes will be back on the table.

UTAH:
The Department of Insurance remains committed to pursuing legislation
to expand the Utah Health Exchange Network Portal to include a master
patient index that providers could access to obtain coverage
eligibility information. The bill contains a number of troubling
provisions, including a monthly batch reporting requirement on health
plans. The proposal also includes a July 1, 2010 effective date
allowing no time to update and test affected internal systems.