A weekly compilation from Aetna of health care-related developments in Washington, D.C. and state legislatures across the country

Week of September 7, 2010
The 2010 Employer Health Benefits Survey released last week by the Kaiser Family Foundation presents more evidence of the strain consumers are feeling as a result of rapidly rising health care costs. The survey shows workers on average are paying nearly $4,000 this year toward the cost of family coverage, an increase of 14 percent over the previous year. With employers struggling to keep up with rising health care costs, many more are now sharing the financial pain with their workers. As a result, many households could face tougher health care choices in the future. That is why Aetna continues to urge lawmakers to finish the job of health care reform by doing more to tackle rising costs and quality across the health care system. To learn more about the forces driving rising costs, read Aetna’s The Facts About Rising Health Care Premiums.

Federal

Encouraged by an Aetna-led coalition of employers, agents and insurers, late last week Health and Human Services (HHS) provided much-anticipated guidance on just how limited benefit business can obtain a waiver from the dollar-limit caps authorized by PPACA and published June 28, 2010. Without a waiver, no limited benefit business could survive without an impossible-to-accomplish face-lift. Aetna’s position on the parameters of the waiver and its process is consistent with the actual guidance issued by HHS in all key areas: Insurers can apply for the waiver on behalf of their customers; when granted, the waiver covers the product/policy issued to any/all employers and all enrollees; it is available to any product/plan in existence on/before September 23, 2010; and the insurer must describe and certify why there would be either a significant increase in premiums or a significant decrease in access to benefits if the waiver is not granted. Any waivers issued by HHS are effective for one year, after which new applications must be submitted.

State

CALIFORNIA: The legislature failed to advance a bill that would have required insurers to obtain state approval before increasing premiums. Stalled by a 17-17 Senate vote, the bill failed to receive the four additional votes needed for the bill to pass. It would have required health insurers to get approval from the Department of Insurance or the Department of Managed Health Care before raising health plan rates or making changes to copayments, co-insurance or deductibles. Instead, the legislature passed a bill that would require health insurers to provide consumers with 60 days notice before increasing premiums and submit additional actuarial justification and information for the rate increases. Insurers’ also would be required to post on their websites a statement that explains the reasons for the increase. The governor is expected to sign the bill. In other matters, the legislature adjourned for the year but must return to vote on a state budget plan that is 65 days late. Prior to adjourning, the legislature passed a series of bills aimed at conforming with PPACA, as well as a number of new coverage mandates that include maternity services, mental health parity, higher child immunization reimbursement and cost parity for oral chemo drugs. In the past, the Governor has vetoed similar legislation.

MICHIGAN: Michigan recently released its Health Insurance Exchange planning grant for almost $1 million, outlining the process the Michigan Department of Community Health, the appointed authority for the exchange, will use for planning and implementation activities related to the exchange. During the 12-month planning period, the state will: conduct research to determine who is potentially eligible for the exchange and how it will likely impact Medicaid and other public and private programs; determine how best to establish the American Health Benefits Exchange and Small Business Health Options Program (SHOP Exchange) in Michigan; consider the needs of and options available to individuals and small groups; implement a plan for stakeholder involvement; develop an initial plan for integration of applicable state and federal programs; develop a plan for managing reporting, accounting, and auditing functions while maintaining transparency; determine the necessary State statutory and regulatory changes needed to establish the exchange options; and decide on the establishment of a state-run or private nonprofit-run exchange.  The State believes that at the end of the planning period it will have the information necessary to determine how to best implement an exchange.

One, rather than two, health plans will now manage Michigan’s high-risk PPACA pool. Specifically, Physician’s Health Plan of Mid-Michigan (PHP) will manage the pool offering health coverage to individuals with pre-existing conditions who have been uninsured for at least six months. Initially the state had selected both PHP and Priority Health to jointly administer the high-risk pool. However, because the General Assembly did not take action authorizing the state to spend the federal money allocated for the pools, the state worked with PHP to directly contract with HHS to set up the high-risk pool.   Commissioner Ken Ross has been quoted as saying that Priority Health “graciously” stepped back to allow PHP to handle the high-risk pool because the federal government would only work with one company. The high-risk pool in Michigan will be financed through a combination of premiums and $141 million in federal subsidies.

NEBRASKA: Ann Frohman, Director of the Nebraska Department of Insurance, will step down from the post she has held for nearly three years to pursue opportunities in the private sector. Her resignation is effective October 29. Frohman became director of the department in November 2007 after serving briefly as acting director. She has been with the DOI for 20 years, having served as Deputy Director, General Counsel, and a staff attorney. Frohman was appointed Director of Insurance by Governor Dave Heineman, who will similarly choose her successor.

NEW YORK: More than 150 health care and social services groups signed a letter urging New York lawmakers to repeal the Federal Medical Assistance Percentages contingency fund law, which mandates 1 percent budget cuts on Sept. 16. Medicaid funding will be cut by nearly $140 million. The contingency law was passed under the assumption that no FMAP relief would be approved by Congress, but New York recently received $1.4 billion. Crain’s reports that Senate Majority Leader John Sampson has indicated that he is supportive of repeal. However, given the state’s dire fiscal situation, getting Gov. David Paterson to approve a repeal bill is another matter. It seems unlikely that lawmakers could amass enough votes for a veto override in the Senate.

Also, with only four months left in his term, Gov. David Paterson has finally put together an external advisory group to assist his new Health Care Reform Cabinet. The administration unveiled a list of 37 groups that will form the Health Care Reform Advisory Committee to help the state implement federal reform. The advisers include 1199 SEIU, the Business Council of New York State, the Community Health Care Association of New York State, the Community Service Society, GNYHA, HANYS, the Medical Society of the State of New York, the Medicare Rights Center, the New York Health Plan Association and the United Hospital Fund.