Individual Health Insurance Reform Weekly EasyToInsureME

Week of October 12 , 2009

A new report from PricewaterhouseCoopers made headlines this week in pointing out that the Senate Finance Committee's health care reform proposal, as currently outlined (approved by a 14-9 margin on October 13), would increase the cost of private insurance coverage for individuals, families and businesses above what these costs would be in the absence of reform. Specifically, the report says that four provisions could significantly increase costs: a weak coverage requirement coupled with insurance market reforms, a new tax on high-cost health plans, cost shifting as a result of Medicare cuts and new taxes on several health care sectors. While the Committee is scheduled to vote on its reform package this week, the new report demonstrates much work remains to be done before any bill can appease growing cost concerns and claim broad consensus.

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Federal

The Senate Finance Committee's health care reform efforts were buoyed last week by news from the Congressional Budget Office, in the form of a preliminary analysis that found the Committee's health reform mark-up would reduce the number of uninsured nationally by about 29 million while reducing the federal budget deficit by about $81 billion over the 2010-2019 period. The projected budget impact made many Democrats jubilant, since the President has made it a condition that no reform bill add to the deficit if it is to get his signature. But the initial euphoria over the score started to evaporate within 24 hours as Republicans and some Democrats have questioned the numbers. Aside from the numerous political issues still in play, the CBO identified some significant caveats to its analysis that were not widely reported. The CBO analysis points out that once the reform proposal is converted into actual legislative language, significant changes could be necessary to its estimates. Also, federal spending that would be funded by future appropriations, such as implementation costs for Medicare operations, is not reflected in the estimates. The Senate Finance Committee approved the bill this week, but the legislative path ahead will not be easy.

A glimpse into one of hundreds of subordinate issues connected to health care reform points out how difficult it will be to actually enact legislation. Late last week, Aetna participated (as the only invited insurer) in a discussion among a cross-section of key players in the health care debate: the trial bar, employers, unions, and an insurer. The convening authority was the senior staff from all three key House Committees. The issue is whether the House bill should include a trial bar-supported provision to deny insurers (and union plans) the right to recover, from the insured, health care payments when the insured member has already received payment for the very same expense from a court award or settlement. The staff and the trial bar want this provision, while insurers, employers and the unions strongly oppose any change. The discussion pointed out (a) how a bill this big will surface myriad subordinate issues that will cut numerous ways and force strange bedfellow allies while pushing traditional friends far apart, and (b) how difficult it will be for Congressional leadership to cobble together a passable piece of legislation.


States

CALIFORNIA: Governor Arnold SchwarzeneggerArnold Schwarzenegger has signed legislation prohibiting the use of gender as a rating factor in the individual market but vetoed all new mandated coverage requirements, including a measure that would have required all individual policies to include full maternity coverage. The governor has not yet released his decision on the two rescission bills that were on his desk, although he vetoed similar legislation last year.

KENTUCKY: The Interim Joint Committee on Banking and Insurance is reviewing continuity of care issues related to a contract dispute between Anthem and Norton Healthcare that resulted in the filing of new legislation. The bill would require contracting agreements between a managed care plan and a hospital to be for a term of not less than three years, with at least six months notice by the acute-care hospital to the managed care plan and the Insurance Department when terminating or not renewing a contractual agreement. The managed care plan and the hospital must develop procedures for a covered person's access to care under continuity of care requirements established by law. The bill also would require mediation or binding arbitration in any dispute between the managed care plan and the hospital regarding a covered person's access to care under the continuity of care provisions.

MINNESOTA: The Neighborhood Health Care Network has received $832,768 federal funding in to expand and upgrade electronic health records systems in community health clinics that serve economically and ethnically diverse populations in the Minneapolis-St. Paul metropolitan area. The award will support the implementation of a shared Electronic Health Records (EHR) system with three member clinics: Freemont, Indian Health Board and West Side. Prior funding for this project from the Minnesota Department of Health and the Healthier Minnesota Community Clinic Fund enabled the early phases. The new funding will help support clinic-specific costs associated with “going live” in the months ahead. Network membership includes 14 independent, non-profit community health centers with clinic locations in Minneapolis, St. Paul and Stillwater.