Individual Health Insurance Reform Weekly : EasyToInsureME

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.