As predicted in last month’s State Legislative Update, the high-risk pool legislation, formerly on a fast-track for approval, hit a brick wall in the Senate. Senator Susan Gerard strongly opposed high-risk pool legislation while serving in the House of Representatives; she now chairs the Senate Banking and Insurance Committee and remains a powerful opponent.
The plan’s funding mechanism is the major sticking point. A proposal to provide start-up funding from the General Revenue Fund did not fare well in the Senate. Insurance companies lobbied hard against the alternative: that they should be assessed to fund the pool, without getting an offsetting tax break in return.
On another matter, lawmakers voted 35 to 20 to kill a prescription drug program that would have provided discounts up to 30 percent for senior citizens whose annual incomes were at or below three times the federal poverty level. The proposal is dead until/unless it’s raised again next year.
Small group insurance reform became a significant issue late in the session as House Republicans attempted to pass legislation based on free-market principles. Many Democrats in the state refuse to acknowledge that guaranteed-issue and community-rating rules have resulted in growing problems in the small group market: 20 percent inflation in small group premiums, for example, and a growing number of uninsured. In many rural parts of the state, only two insurance carriers offer viable small group coverage.
House Bill 1319, which establishes the CoverColorado high-risk pool as the HIPAA alternative and could provide some relief to the small group/individual market, may not survive opposition by the legislature’s Democrats.
In the “there you go again” department, the Gray Panthers, a left-of-center seniors’ group, has begun the effort to bring a single-payer initiative to the ballot for 2002. The proposal, which has been sent to the Legislative Legal Services Division for review, appears to suffer from serious viability problems and constitutional concerns.
In an effort to control soaring Medicaid prescription costs, Florida is preparing to negotiate its own discounts with pharmaceutical companies. A law recently signed by Governor Jeb Bush allows the state to negotiate rebates in exchange for steering Medicaid beneficiaries in the direction of certain drugs on a preferred list—making Florida the first state to break away from a system of federally negotiated discounts from drug manufactures.
Florida officials estimate the direct negotiations will save the state $214 million a year, about 15 percent of the Medicaid drug budget. Jerry Wells, the state’s Medicaid Pharmacy Manager, told the Wall Street Journal “Our budget was getting out of control.”
Other states, also facing out-of-control Medicaid costs, may copy Florida’s approach after years of relying on the federal government to make discount deals in their behalf.
The “clean claims” provision of Senate File 500 bill, similar to mandates popping up in other states, may conflict with federal law, as well as with recommendations made by the Iowa Medical Society.
A “clean” claim is one that is complete: It provides all of the information required on the claim form. The Iowa bill, and its counterparts in other states, require an insurer to pay clean claims in a mandated number of days, typically 30. If the claim is lacking required information, it is not a clean claim and is sent back to the claimant for additional information.
Golden Rule Insurance Company, a managed indemnity insurer (as opposed to an HMO), has pointed out that clean claims legislation forces the small group insurer to deny claims when required information is not available to the claimant before the mandated timeframe has lapsed. Denial of claims is not the intent of the “clean claims” legislation.
The legislature has adjourned after a very active year of health care policy-making. All three of the bills noted below passed the state House and Senate by unanimous votes.
HB 362 requires the Insurance Commissioner to adopt regulations governing the privacy of consumer’s financial and health information according to standards set by the Gramm-Leach-Bliley Act of 1999. That act, primarily a banking bill, also set standards for how private information should be handled. Title V of the act requires development and disclosure by all financial institutions of privacy policies governing the sharing of non-public personal information with affiliates and third parties.
HB 695/SB 457 requires the state to contract with an independent consultant to study the small group market, and how Maryland’s regulation of that market compares to regulations in other states.
SB 458 requires insurance companies providing medically underwritten health insurance in the individual market to provide information regarding the availability of the Substantial, Available, and Affordable Coverage (SAAC) Program to anyone denied coverage. SAAC is an unfunded health insurance mandate allowing all comers to get guaranteed-issue insurance whenever they want it. The required notice is similar to those issued in states with high-risk insurance pools.
The Senate approved a bill allowing direct access to an obstetrician/gynecologist, requiring companies to notify enrollees of cancer screening, provide osteoporosis coverage, and require contraceptives to be included in prescription coverage written by health insurance providers. Two amendments were added to provide Medicaid coverage for persons diagnosed with breast or cervical cancer, and time limits were removed for receiving prosthetic or reconstructive surgery after a mastectomy.
Governor Kenny Guinn and Assembly Majority Leader Barbara Buckely agreed on a pharmaceutical drug program under which the state will contract with a private insurance company to operate a low-cost prescription program for senior citizens.
The measure has the state paying an annual insurance premium of $1,280 per participant to the insurance company, which in turn will provide prescription drugs to senior citizens who earn less than $21,500 a year. Participants will be responsible for a $10 co-pay for generic drugs and a $25 co-pay for name-brand drugs. The plan caps out at $5,000 a year per beneficiary and is expected to enroll almost 6,000 residents.
Active members of the National Association of Health Underwriters were successful in introducing two bills designed to entice insurers back to the state marketplace. Over the last few years, heavy regulation of the New Hampshire insurance market has forced private insurance companies to abandon the state. The result has been above-average premium inflation due to a lack of competition.
The NAHU bills would allow for the return of medical underwriting in lieu of blanket “guaranteed issue” law. The bills would also create a high-risk insurance pool, to be used for HIPAA compliance as well as covering high-risk or uninsurable medical conditions.
A new state program called AWARDS was supposed to make medication for seniors (anyone over 55) more affordable, but upon implementation it appears the program may not be worth the price of admission.
The state program, which costs $25 a year for family membership and $15 a year for singles, acts as a “buyer’s club” piggy-backed on the purchasing power of the state’s Uniform Medical Plan. Governor Gary Locke promoted the plan by saying members could save 12 to 30 percent of the retail pharmacy price.
Many of the drugs commonly used by state seniors, however, cost more through the drug program than they do on the open market. Of the 25 most common prescriptions, just seven were less expensive using the state’s discount card. In most cases, free-market discounts at chain or discount drug stores saved consumers more money. The one exception is for patients who fill their prescriptions by mail or over the Internet, an option not available to many seniors.
Sources: The Council for Affordable Health Insurance (CAHI) and its member companies provided information for this State Legislative Update. Contact CAHI at [email protected], http://www.cahi.org. Additional material was provided by the National Association of Health Underwriters, http://nahu.org/government, http://bizjournals.com, and http://stateline.org.