Individual Health Insurance Reform Weekly : EasyToInsureME : 9/06/09

Federal
As mightily as it has tried over the last week, Congress has
only marginally moved the needle on health care reform. The Finance
Committee will go home for the recess without a deal but with a promise
to continue negotiating during the break, and with a target date of
September 15 for Committee action. In the House, the Blue Dog Coalition
of 52 conservative Democrats put a halt to the Energy & Commerce
Committee's process for 10 days when seven coalition members refused to
proceed without concessions and compromises on the House health reform
bill: a public plan that is optional to providers and that negotiates
rates; preservation of the role of agents/brokers; keeping the bill
under $1 trillion; and allowing state-based exchanges. The compromise
reached allowed the committee to continue its mark-up and ultimately
approve the bill. There are 50 additional amendments that the Committee
intends to address prior to floor debate in the Fall. The House will
try to meld all three Committee versions into one bill in anticipation
of a full House debate and vote in September, at the earliest. The Blue
Dogs have made it clear that the larger coalition of 52 has not signed
off on anything and that the compromise was chiefly designed to allow
the Committee process to proceed. No sooner was the Energy &
Commerce Committee/Blue Dog compromise struck when opposition came from
both the House progressive caucus and the Congressional Black Caucus.
The bottom-line is that neither the House nor the Senate will be voting
as a Chamber on health care reform until the Fall, when there will be a
major confrontation of all competing interests.

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States
ILLINOIS:
The Illinois Department of Insurance (DOI) published second notice of
proposed rulemaking regarding regulation of Preferred Provider Programs
that will be considered for adoption by the Illinois Joint Committee on
Administrative Rules (JCAR) on August 18. These rules affect both
insurers and network administrators that offer incentives to insureds
to utilize the services of contracted providers. For example, new
network adequacy language would require that when a beneficiary has
made a good faith effort to utilize network providers for a covered
service but the appropriate preferred specialty providers are not under
contract, then the administrator shall ensure that the beneficiary is
provided the covered service at no greater cost than if the service had
been provided by a preferred provider. Aetna is currently evaluating
the proposed rules.

NEW YORK: The Departments of Health and
Insurance released their report by the Urban Institute that examines
several proposals to reform the state's health insurance system. The
study analyzes the cost and coverage implications of: 1) the
Public-Private Partnership proposal that would simplify and expand
existing public programs and reform private health insurance; 2) New
York Health Plus, which would give all New Yorkers an option to enroll
in Family Health Plus; 3) Public Health Insurance for All, a
single-payer public health insurance option; and 4) the Freedom Plan,
an option that relies on regulatory flexibility and tax credits. Due to
the growing state deficit and interest in federal reform, no immediate
action is expected on these proposals. However, legislation based on
one or more of the models is likely to be introduced, or reintroduced
in 2010.

The report's key findings include: Three of the four
proposals would cover all New Yorkers. The Freedom Plan would leave
13.3 percent of New Yorkers uninsured, down from the current 15.8
percent. There would be minimal change in employer-based coverage under
the Public-Private Partnership and the Freedom Plan proposals. However,
employer coverage would drop significantly under New York Health Plus
and end altogether under Public Health Insurance for All. The
individual insurance market would cease to exist under Public Health
Insurance for All and New York Health Plus. Individual coverage would
increase under the Public-Private Partnership and the Freedom Plan.
Post-reform expenditures by employers and individuals would also vary
widely. Under Public Health Insurance for All, employer and individual
spending would be eliminated. New York Health Plus would reduce both
individual and small employer spending. Individual spending would
remain constant under the Public-Private Partnership proposal while
small employer spending would drop slightly. The Freedom Plan would
increase individual spending but somewhat reduce small employer
spending.

OREGON: Oregon's health care reform efforts this year
included passage of a 1 percent premium tax on health insurers.
Recently, the Division of Insurance offered a draft opinion that the
tax should be collected on group policies issued in Oregon and polices
issued in other states that cover Oregon residents. The Division
opinion is contrary to longstanding NAIC guidance and would result in
the imposition of a double-tax on all group policies, as well as
administrative hurdles in tracking where individuals reside. Aetna is
working with the Division in the hopes of modifying this opinion.