05/2002: State Legislative Update

Published May 1, 2002


Arizona’s Statewide Health Care Insurance Plan Task Force is drafting a proposal to provide health insurance to the state’s one million uninsured residents within the next three to five years. The task force, made up of three state senators, three state representatives, and three community members appointed by Gov. Jane Hull (R), worked on the proposal with a 14-member technical advisory panel of hospital, state agency, and insurance company representatives.

The proposal has been in the planning stages for the past two years and now is moving toward final planning and implementation.


The Florida House appears poised to approve measures for expanding the number of insured residents by allowing insurance companies and other groups to sell low-cost, mandate-free health plans. The plans would be exempt from state coverage mandates known to influence premium inflation. In Florida there are 51 mandated benefit areas, including mammograms, HIV-related treatment, and certain emergency care services.

The “health-flex plans,” according to insurance industry lobbyist Sam Miller, could be 30 to 40 percent less expensive than traditional health plans and would offer another option to uninsured Florida residents who earn too much to qualify for Medicaid or who opt-out of employer-based coverage because they cannot afford their share of the premium. The state House is considering two measures that would establish the health-flex plans. Gov. Jeb Bush (R) backs the plan. One of the two bills, HB 913, was “tentatively approved” by the House March 7. It would allow small businesses around the state to offer their employees the health-flex plans.


Gov. Kenny Guinn (R) has indicated a “dramatic” increase in Medicaid’s caseload may force the state to delay scheduled program expansions. While Guinn did not indicate what service enhancements would be delayed, a breast and cervical cancer screening benefit for uninsured women, as well as reimbursement increases for providers, could be among the cutbacks.

In response to the caseload increase, the Legislature’s Interim Finance Committee—which can make budget changes even though lawmakers are currently out of session—met February 5 to examine the program’s enrollment and projections.


Hoping to provide a partial solution to rising health care costs, a Hawaii business is set to launch an alternative to an employer-based plan that will provide the uninsured with access to certain discounted medical services for a monthly fee.

Under the DirectCare plan, created by the international trading and consulting firm Dawson International, families will pay $35 a month and individuals will pay $20 a month for annual check-ups and 25 percent discounts on other services if they pay by cash or credit card at participating physician offices at the time of the visit, according to Don Dawson, the company’s founder and president.

Dawson said both consumers and doctors are eager for an alternative given the state’s rising health costs. “The health care industry in Hawaii is in turmoil. Physicians are spending too much money and time on processing claims and accounts receivable and fighting ever-decreasing reimbursements,” he said.


Maine Senate President Richard Bennett (R) has proposed the Maine Consumer Choice Health Plan. If enacted, the bill (LD 2146) would create a state health insurance purchasing pool, expanding the types of health coverage available to residents and public and private employers at a broad range of price points.

Bennett’s proposal is modeled after the Federal Employees Health Benefit Plan. A five-member board of directors would negotiate health plan contracts with a number of insurance carriers. Private and public employers and individuals who have not enrolled in other health plans would be eligible for health plans offered under the program.

According to Bennett, 1.1 million residents would be eligible to participate in the program. Bennett said that “the bill, which is backed by such groups as the Maine Medical Association and the Maine Hospital Association, provides health insurance options for all Mainers, regardless of income, employment status, employer or location.”


Gov. Jesse Ventura (I) vetoed the annual budget bill sent to him by state lawmakers. The bill included a provision calling on the state’s Medicaid program to develop a list of drugs physicians would not be permitted to prescribe without prior approval from state health officials. State lawmakers are working to override Ventura’s veto. (See “Grassroots Activists Take on Rx Limits,” page 1.)


Mississippi Gov. Ronnie Musgrove (D) signed two bills covering most of the state’s $158 million Medicaid budget deficit until the end of the fiscal year on June 30, 2002. Musgrove signed the legislation just hours after it was approved by the legislature. The measures will cover all but $29.5 million of the budget shortfall. Additional cuts will need to be made over the next few months. Some lawmakers warned the legislative fixes were “not well planned” and would provide only a temporary solution.


Missouri legislators and child-advocacy groups asked the state senate’s Public Health and Welfare Committee to support a bill that would extend the state’s CHIP program through 2007. Benefits under the program are set to expire July 1, 2002.

The $62 million MC+ for Kids program is a Medicaid-expansion program that covers children in families with annual incomes up to 300 percent of the federal poverty level. Currently, about 77,000 children are enrolled in Missouri’s program, which costs the state about $17 million per year. State Sen. Ed Quick (D) presented SB 1111, which would extend the program and maintain its current eligibility standards for five more years.

Although no one testified against Quick’s bill, Missouri’s CHIP program has been criticized by some lawmakers for its high income eligibility limits. State Rep. Patrick Naeger (R) has introduced HB 1346, which would reduce CHIP program eligibility for new applicants, covering only those children in households earning up to 225 percent of the federal poverty level. In testimony, Naeger said, “Medicaid, for goodness sakes, is an entitlement for the poor and the indigent. It’s not a free way to health care for anybody willing to pay a small premium or anybody too lazy to put their kids on their plan at work.”


A federal judge ruled Tennessee is not required to use more than $100 million of its tobacco settlement funds to pay for smoking-related injuries through TennCare and was within its rights to use the additional money to balance the state budget. The decision stems from a lawsuit filed by two members of TennCare, the state’s Medicaid managed care program.

The suit claimed the program was required to compensate the members for tobacco-related medical expenses before lawmakers could appropriate tobacco settlement funds for other budgetary purposes.

Ruling on the preliminary injunction request, U.S. District Judge Aleta Trauger said, “The state and the public … would be harmed if the state is denied the use of the funds.” She added that beneficiaries with tobacco-related illnesses were free to sue tobacco companies for medical expenses.

The State Legislative Update is compiled from a wide range of news sources, including the Council for Affordable Health Care (CAHI) http://www.cahi.org; the National Association of Health Underwriters (NAHU) http://nahu.org; Bizjournals at http://bizjournals.com; Stateline at http://stateline.org and Lexis/Nexis research.