Health Insurance Quotes Reform Final Vote Upcoming

Week of December 21, 2009

In the past week, the Senate’s health care reform legislation has run the political gauntlet, with Republicans trying to filibuster other legislation to create a roadblock, liberal Democrats complaining loudly about the loss of some favorite provisions, and independent-minded Democrats forcing some significant changes. But the holiday break and the President’s stated goals have given Senate Democrats powerful motivation to get health care reform to a vote this week. Regardless of what happens in the Senate this week, the House has adjourned, which means that the health reform debate will certainly carry over into 2010. Conference committee deliberations between House and Senate leaders are expected to be difficult.

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Federal

By a 60 to 40 party-line vote, the U.S. Senate voted early Monday to limit debate on health care reform legislation, putting the bill on track for a final vote later this week. Late Friday night Majority Leader Harry Reid secured the 60th vote needed to move forward with health care when holdout Senator Ben Nelson (D-NE) was brought on board with some significant incentives, including 100 percent federal funding of Nebraska Medicaid, exemption for certain Nebraska insurers from a new insurer fee, and a compromise on abortion language. With Nelson’s vote, Reid finally felt politically comfortable to formally start the floor procedural process in order to pass the bill by Christmas. This process will be tested with three cloture votes (60 votes required to cut off debate) and a final vote on the bill later in the week. All signs indicate that the bill will be passed by the Senate by Christmas Eve, but there will be no more changes since Senator Reid has already used the rules to preclude any amendments.

Key new items in the bill include: the 10-year $6.7 billion-a-year insurance tax set to start in 2010 would now start in 2011, and it has been dramatically reduced in the early years; both the public plan option and the Medicare buy-in have been dropped and replaced with a multi-state plan option authority; some insurance rules (medical cost ratio and lifetime/annual limits) have been tightened; and the so-called repeal of McCarran-Ferguson provision has been dropped. If this bill passes the Senate as expected, there will have to be a conference with the House to resolve major differences between the two bills. Whether this conference amounts to much depends on many variables, but the chances are probably better than even that the President will get a bill to sign in the next month or two.

As a warm-up to the health care reform drama that would come later in the day, the Senate on Saturday morning agreed (88 to 10) with the House to pass the Defense Appropriations funding bill. It contains two health measures of some importance. First, the bill extends until February 28 the federal subsidy of 65 percent to pay for COBRA coverage for certain individuals who have lost their jobs. A longer extension of the subsidy (until June 30) will be debated in January. Second, the bill staves off (until February 28) the 21 percent reimbursement cut that doctors in Medicare would have faced on January 1. Doctors continue to bargain for a permanent fix to eliminate the year-to-year game of dropping scheduled cuts at the last minute.

States

ARIZONA health insurance : Governor Jan Brewer called a fifth special session of the legislature in her quest to address the state’s $1.65 billion budget deficit through the generation of additional revenue rather than continuing to cut services and government staffing. She has revived the idea that increasing taxes is the best option, although legislative support is weak. The focus remains on the state sales tax as the most viable vehicle. The proposed one-cent increase would have to be approved by voters in a statewide referendum.

CALIFORNIA health insurance : In November, CMS officials took issue with recent legislation designed to restore funding for the state’s Healthy Families Program and keep nearly 700,000 children enrolled in the program. They have suggested the plan may fail to meet certain regulatory requirements and are questioning the taxing of insurers that administer benefits for Medi-Cal, California’s Medicaid program. Rejection of this Medicaid tax could cause the legislature to seek a broader insurance-based tax to fund Healthy Families. However, CMS informed the state last week that it will not be formally reviewing the gross premiums tax. Instead, the tax arrangement can stay in place until the federal government promulgates regulations on the issue, which won’t occur until June 2011 at the earliest. With this news, the gross premiums tax on Medicaid plans can continue to draw down federal funding and support the Healthy Families Program through the next year.

COLORADO health insurance : The Division of Insurance is backing a “plain language” bill applicable to health, dental, long-term care and auto insurance policies that would become part of the unfair competition or deceptive acts statute. The bill would require carriers to report the readability scores prior to the issuance or renewal of a policy. The requirements would include a readability score not to exceed a 10th-grade level, as measured by the Flesch-Kincaid scale; a minimum font size of 12-point type for written policies; and an index or table of contents if the policy is more than three pages in length or greater than 3,000 words.

MARYLAND health insurance : Maryland Insurance Commissioner Ralph S. Tyler has announced that he will be resigning effective January 8, 2010, to accept an appointment as Chief Counsel to the Food and Drug Administration. It is not yet known who will replace Tyler, who has served as the Commissioner since 2007.

OHIO health insurance : Governor Ted Strickland last week unveiled his strategic growth plan for Ohio’s insurance industry. The plan was developed under the direction of the Ohio Department of Development’s Office of Insurance and Financial Development. Key initiatives include strengthening collaboration between the state, insurance businesses, and the university system; and creating a one-stop shop approach for workforce development issues, site selection as well as a link to state resources. The plan notes that Ohio is home to more than 250 insurance companies and 81,000 agents, and ranks seventh in the nation in insurance industry employment with 15,000 health insurance industry jobs and an additional 35,888 supporting jobs. In addition, Ohio’s health insurance plans also pay more than $200 million in taxes.

OKLAHOMA health insurance : The legislature’s State Employee Health Insurance Review Working Group has unanimously adopted recommendations from Milliman, Inc. that call for combining two state agencies into one. The recently published study recommends: combining the two current agencies (Employee Benefits Council and Oklahoma State and Education Employees Group Insurance Board) into one agency with common oversight, confidential rate information, lower overhead, and an expanded wellness program with medical management; maximizing the benefits of competitive bidding by HMOs by using a “winner takes all” approach, limiting the number of HMOs being offered (currently four), expanding coverage, requiring actuarial certifications of premiums, DOI review of all plan premiums, and a definition/clarification of “excessive” HMO pricing; modifying the current benefit allowance to match the expected impact of HMO bidding process changes; and establishing a minimum benefit allowance of HealthChoice premium plus other core benefit premiums for state employees. This approach represents a significant change over the two-agency system, in which one agency offers a choice of multiple HMO plans that compete against the other agency’s home-grown state plan. Legislation is expected to be filed to implement these recommendations, some of which Aetna supports and some of which it does not.

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