Health Reform Weekly : EasyToInsureME : June 26 2009

The "bumps in the road" to health care reform were quite visible this past week.
The HELP committee mark-up began with polarizing opening statements and
a CBO price tag of $1 trillion to cover only 16 million more Americans.
And, the most controversial language (public plan, employer mandate,
biogenerics) won't be released until this coming week. The Senate
Finance Committee officially put off the beginning of its mark-up until
after July 4 because its language won't be out until then - their price
tag of $1.6 trillion was just too much for Chairman Max Baucus who
continues to want a bipartisan bill. The House "tri-caucus" bill was
finally released and contained few surprises: A "play or pay" mandate
on employers, an individual coverage mandate, a public plan with (close
to) Medicare rates for doctors and hospitals, major insurance market
reforms (e.g., age rating band of 2 to 1) and a reduction in Medicare
Advantage reimbursement down to 100 percent of fee-for-service
Medicare. House hearings will begin this coming week with House
Committee mark-up likely after the July 4 break.

The Bipartisan Policy Center
effort to produce a legislative proposal on health care has been led
for the last 18 months by former Majority Leaders Daschle, Dole and
Baker under the day-to-day guidance of Democrat Chris Jennings and
Republican Mark McClellan. Aetna collaborated in discussions, as the
paper matured. On June 17, the BPC released its paper, which includes several items Aetna supports:
an individual coverage requirement, insurance reforms, an insurance
exchange, HIT, comparative effectiveness research, payment and delivery
reforms, worksite wellness, and very few we don't. On balance, the BPC
proposal is clearly to the right of the House tri-caucus bill and the
Senate HELP bill, and it may be "spot on" with the Finance Committee.

States
KENTUCKY Health Insurance :
Representative Scott Brinkman met with health insurance representatives
to discuss potential ways to reach a consensus on an autism coverage
bill for introduction in the 2010 legislative session. He is
the father of an autistic child and has indicated a willingness to
consider what other states have done around age limits and the types of
therapy to be covered. He also offered the possibility of using tobacco
money to fund an expansion of coverage.

MICHIGAN Health Insurance :
Workgroup meetings in the House last week focused on Medicare
Supplemental Medical Loss Ratio (MLR) and the HMO state tax exemption.
The Chairman of the House Health Policy Committee advocated for a
single carrier to provide Medicare supplemental coverage with profits
strictly regulated by a MLR of 90 percent. It is clear that the
disposition of the anti-competitive House "reform package" will not be
impacted by the workgroup process or by the concerns of commercial
insurers. The House version is expected to pass in July. The Senate,
however, announced a delay on additional action on its more reasonable
reform proposal until September, to allow legislative attention to
focus on the state budget crisis and to get a better sense of how
federal reform efforts evolve. Also last week, the influential Flint
Health Care Coalition, historically funded primarily by General Motors
and Blue Cross Blue Shield of Michigan (BCBSM), released a resolution
on health care reform calling for universal access, a private,
regulated health care system, and an end to the employer-based system,
with government coverage provided through general taxation. Also,
Attorney General Mike Cox continues to receive media attention as his
efforts to challenge BCBSM's request to increase rates in the
individual, group conversion, and Medicare Supplemental markets
continues. Cox believes rate increases should be mitigated by reserves
and issued BCBSM an extensive request for data.

MINNESOTA Health Insurance :
The State of Minnesota and Mayo Clinic responded to President Obama's
speech to the American Medical Association last week by announcing that
they are already compliant with most of the reforms called for by the
President. The Minnesota Medical Association has been working
in the Minnesota Legislature toward including public health insurance
options, a switch to electronic medical records, investment in
prevention and rewarding quality instead of quantity. The Mayo Health
Policy Center also supports the need for coordinated care and a public
health insurance option.

NEW
JERSEY Health Insurance : The Department of Banking and Insurance has published proposed
regulations regarding provider network agreements between health
providers and carriers. The proposed rules, among other
things, would prohibit mandatory binding arbitration relating to
breaches of contract; require that provider-specific or
specialty-specific fee schedules be delivered to potential providers at
least 20 days prior to entering an agreement; and allow providers to
terminate multi-year agreements without cause at the end of each year;
for agreements one year or less, termination without cause can occur at
anytime with 60 days notice. The proposed rules are open for comment
until August 14, 2009. In other news, new revenue the state received
unexpectedly led the legislature postpone a vote on the state budget
until a new budget can be negotiated. Also, legislation mandating
coverage for autism treatment was passed and awaits review by the
Governor, who is expected to sign the bill.

PENNSYLVANIA Health Insurance : Last week, Governor Ed Rendell signed four health care-related bills passed by the General Assembly.
They included: The Preventable Serious Adverse Events Act, which
prohibits health care providers from seeking reimbursement for services
made necessary by preventable serious adverse events (takes effect
August 9 except for nursing homes which have a year); a state COBRA
program for employees losing their positions in businesses with fewer
than 20 employees, giving them access to federal stimulus premium
subsidies (takes effect on July 9); the Health Care Cost Containment
Council Reauthorization, which provides for a five-year
reauthorization; and a Dependent Coverage Extension bill, which
requires major medical insurers to extend coverage to unmarried
dependents through age 29 at the policyholder's option (effective Sept.
7, 2009).

TENNESSEE Health Insurance :
Bills increasing the premium tax by 3.5 percent were passed in the
legislature at the 11th hour, just prior to the end of the session on
June 19. A bill requiring claims data submission by health
plans, similar to bills in other states, also was passed by the
legislature last week. Aetna has been working with the bill's sponsor
throughout the session on language and will continue to work with the
Department of Commerce and Insurance on implementation of the bill.

VIRGINIA Health Insurance : Governor Timothy Kaine last week unveiled the Virginia Health Exchange Network (VHEN),
a secure web portal to connect health plans, health systems and state
agencies in a move toward standardizing and streamlining administrative
transactions. Using the vendor Availity, providers will be able to
determine, for example, eligibility status and level of benefits in
real time, decreasing paperwork and telephone calls that impede
efficiency.