State Reform Issues More Incremental than Comprehensive

My personal belief is that comprehensive health care reform is more likely to come from federal action than anything the states do over the next couple of years. That’s certainly true in California where lawmakers are now focused on attacking specific problems rather than fixing the entire system. But the obstacles to state efforts are more than exhaustion, as I’ve written previously, states have limited resources and even more limited levers to exact change on systems as complex as the nation’s health care system.

Yet incremental reforms can make a difference, too, and several states have enacted or are considering interesting approaches. Aetna publishes a “Health Reform Weekly” it distributes to agents (among others) and their March 24th issue provided a roundup of state reform activity. I’ve taken the liberty of  reproducing much of it below. As you’ll see, with the exception of New Jersey — and to a lesser extent, Florida — these are hardly comprehensive efforts:

CONNECTICUT: Many of the health care measures approved by the Insurance Committee last week are focused on the high cost of health care. One of the committee-approved proposals would establish a wellness tax credit for small businesses; another would allow more flexibility to offer lower-cost health plans. Another proposal would allow municipalities to collaborate together to purchase health insurance. The House put forth the Healthy Steps Program, which permits the sale of reduced-mandate products, requires a cost-benefit analysis of mandates and establishes business tax credits for providing employees with health insurance. The Insurance Committee did not act on the “pay or play” health care tax bill, nor did it act on legislation that would dictate the provisions and terms included in the contracts between health insurers and physicians. Disposing of these proposals early in the session provides a boost to the business climate in Connecticut.

FLORIDA: Governor Charlie Crist’s “Cover Florida” plan for the uninsured passed out of its first committee last week and continues to move forward.Aetna has worked with the Governor’s office for several months on this proposal and has been successful in seeing a number of suggestions incorporated into this version. Health plan participation in the plan would be voluntary. Though Cover Florida still contains guaranteed issue language affecting participating plans, the plan would allow pre-existing condition exclusions as well as benefit limits.

GEORGIA: Action on the Georgia Medical Association’s prompt-pay proposal was postponed last week, but it may be acted on in committee this week.While it still contains language applying the prompt-pay requirements to self-insured plans, Aetna has been able to help reduce the bill’s impact by assuring health plans are not assessed penalties regarding prompt payment of claims unless they are below a 95 percent compliance standard. Also, the interest penalty has been reduced from 18 percent to 12 percent.

INDIANA: The Legislature adjourned the 2008 session on March 14. In recent weeks, an Assignment of Benefits bill died in the Senate.However, a “Silent PPO” bill made it through the process. After much negotiation, the industry supported the bill, which requires greater disclosure of information regarding the rental of PPO networks. The provider community attempted to include much more far-reaching, costly, and unnecessary items to the bill, but those were ultimately defeated.

MASSACHUSETTS: Commonwealth Choice health insurance premiums projected for this summer will average 5 percent more than last July’s rates.A state panel last week approved a contract to pay insurers about 10 percent more for each person enrolled in the subsidized insurance program starting July 1, making the lowest premiums in Commonwealth Care $39 a month to $116 a month. Insurers had asked for an increase of about 15 percent but agreed to less after weeks of negotiations. Under the contract, the state also would assume more of the financial risk if the enrollees were to use more medical care than expected. The Connector’s Executive Director John Kingsdale recently reported that more than 300,000 Massachusetts residents have enrolled who were previously uninsured. This large number suggests that the state’s official estimate of the number of uninsured (372,000) was low, so the cost of solving this bigger problem is going to be significantly more than originally thought (an estimated $869 million in FY ’09 instead of $725 million).

NEW JERSEY: Senators Joseph Vitale and Robert Singer and Assemblymen Neil Cohen and Lou Greenwald joined David Knowlton, President of the New Jersey Health Care Quality Institute, last week in announcing a comprehensive health care reform initiative – the Vitale Plan – with the goal of achieving universal coverage in New Jersey.Phase One would feature a Kids First mandate requiring coverage of all children under 18; expansion of New Jersey Family Care to 200 percent of the federal poverty level; and small group and individual market reforms, including prior approval by the Department of Banking and Insurance for premium increases of more than 15 percent, an increase in MLR from 75 percent to 80 percent, and a requirement that insurers selling small group market products also sell in the individual market. Phase 2 would feature an individual coverage requirement, and establishment of a state-operated health insurance plan administered (ASO) by two insurance carriers. Projected costs for the first year total $28.8 million (of which $20.5 is for the children’s component), and funding is purportedly available at present in the form of surpluses totaling $180 million in the state’s Family Care and Medicaid Programs.

SOUTH DAKOTA: The Legislature adjourned its 2008 session on March 17.Recent legislative action includes passage of a transparency bill, which requires licensed hospitals to report charges for any procedure for which the hospital had at least 10 cases. The data will be reported to the South Dakota Association of Healthcare Organizations, which is required to develop a web-based system for making the information available to the public via a link from the Department of Health’s website. In addition, the law requires the dissemination of information about physicians’ charges for certain outpatient procedures.

TENNESSEE: The Tennessee Medical Association this week announced it now officially supports the “Silent PPO” legislation originally introduced by some individual providers.The bill closely follows the AMA model on this issue and contains significant restrictions on insurers’ ability to operate rental networks. Aetna is working with the industry to defeat this legislation.

State lawmakers are not going to ignore health care issues. Nor should they. But when it comes to substantial changes to the structure of health care and health care coverage in this country, the next president and the new Congress will need to take the lead.

One thought on “State Reform Issues More Incremental than Comprehensive

  1. I have been focusing on studying the bill that has gone into action for the MI-HEART program. This is a program that focuses on providing health coverage for those that are eligible through federal, state or private insurance companies. I feel that this coverage would be greatly beneficial to those individuals that have a lack of funding and possibly also do not work full time to even be able to take advantage of that particular benefit. There are a greater number of uninsured indiviuals that the cost of healthcare for the uninsured is much greater then for those that do have some type of insurance.

    Another benefit of this healthcare coverage program, is that it will allow individuals to have coverage and access to all types of care, including mental heatlh care. Mental health care coverage is something that many insurance carriers do not provide as a coverage due to the extreme costs. The downfall to that is most indivdiuals can not afford treatment because they can not afford to pay out of pocket for those services, again, due to the high costs.

    I strongly believe that there should be a program, like the MI-HEART program, that is available for adults, children and families. This way these individuals have been given the option to have the healthcare access available to them and they are not paying very high rates for coverage. This way they can also be guaranteed to have these different services available to them that they would not have been able to even think about seeking out previously.

    –Jyothi Caverly

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