09/2001: State Legislative Update

Published September 1, 2001


State and federal cuts in Medicare and Medicaid reimbursements have packed a financial punch. Some doctors, especially those in rural areas, have dropped out of government assistance programs rather than risk operating their practice at a loss.

One of the largest obstetrics and gynecology groups in metro Atlanta has dropped out of the Medicare program. Medicare patients who now see one of the more than 45 doctors in Atlanta Women’s Health Group P.C. have until September 1 to find a new doctor.

Citing increasing liabilities associated with treating Medicare patients, the group announced recently it would opt out of Medicare. In a letter written to patients, the group said strict requirements established by Medicare are putting physicians who treat Medicare patients at risk. “If a physician either intentionally or unintentionally fails to meet these requirements, he or she is subject to severe financial penalties.”


The House of Representatives passed legislation that would expand the original intent of the Children’ Health Insurance Plan. The measure, called Family Care, would provide subsidized health insurance not only to children, but also to parents of uninsured children currently covered by KidCare and Medicaid.

An important reason for passing the legislation, according to Rep. Wyvetter Younge (D-114th), is to collect the entire amount of federal funds allocated for the CHIP program. According to Younge, low enrollment in the state’s KidCare insurance plan frees up $100 million of federally allocated funds—which the feds will redistribute to other states if Illinois does not find a way to spend it.


A recent dose of bad news for the Kansas health insurance market gives new impetus to such fundamental policy reforms as defined contribution.

John Knack, president of Blue Cross and Blue Shield of Kansas, described a statewide market in which strong double-digit premium increases are becoming the norm. For businesses with fewer than 50 employees, he said, the average cost increase will be 21 percent in BC/BS premiums.

“We have a lot of concern that our rates are going to get to a point where people will not be able to afford coverage on an individual or a family,” Knack said. “We do not see this trend abating next year.”


The Massachusetts Executive Office of Elder Affairs has proposed a 10 percent annual surcharge for seniors who wait more than one year after their 65th birthday to enroll in the state’s drug insurance program, Prescription Advantage.

The surcharge is intended to encourage people to join early when their prescription needs are low. Three out of four members of the program currently pay no premiums or deductibles.

In order to preserve the program, John Boesen, executive director for the Massachusetts Senior Action Council, told the Springfield Union-News, “It’s certainly understandable. Whether it’s enough of an incentive [for seniors to enroll] remains to be seen.”


A task force formed by Governor Bob Holden (D-Missouri) has met to begin deciding what the state should do about increasing prescription costs for senior citizens. The task force will hold public meetings around the state. The issue was a key element of Holden’s 2000 campaign for governor, but policymakers were unable to reach a consensus during the recently ended legislative session.

Senator Marvin Singleton (R-District 32) has introduced legislation (SB-22) that would address the prescription issue using the resources and expertise of the private insurance industry. Singleton’s plan would be similar to federal proposals to directly subsidize prescriptions for those who have no insurance. Singleton is on record as opposing an alternative legislative proposal, HB 824, that would create a state-run system.

North Carolina

Bynum R. Tuttle Jr. of Denton, North Carolina, was sworn in as the new president of the National Association of Health Underwriters (NAHU). He vowed the association’s 17,000 members would redouble their efforts to insure every American.

In an August NAHU press release, Tuttle said, “We have the best health care system in the world. . . . [NAHU is] on the front line of health care and we can make a difference. We will push for passage of refundable tax credits . . . spread the word about important coverage like long-term care insurance, and we will fight mandates and bad legislation that make health insurance more expensive for everyone.”


On the heels of the recent tax revolt in Tennessee, state officials have signaled their desire to break up the failing state-run health plan called TennCare. By separating TennCare into two insurance pools—one for citizens who qualify for Medicaid and one for residents without health insurance—officials hope to save an undisclosed amount of money and to reduce criticism from those opposed to the idea of creating a state income tax to fund TennCare.


State Sen. Bob Welch (R-Redgranite) and Rep. Steve Freese (R-Dodgeville) sent a letter to University of Wisconsin System President Katharine Lyall and University of Wisconsin-Madison Chancellor John Wiley asking them to “cease the purchase of any additional embryonic stem cells outside of the five lines that are currently being used for research.”

UW stem cell researcher James Thomson had been preparing to start all over to develop new collections of stem cells that might stand a better chance of complying with federal rules for public funding. But those plans are being re-evaluated now that President George W. Bush has said he’ll allow funding only for research on existing stem cell lines, not any created after August 9.

“We would ask that you follow President Bush’s lead on this issue” and not finance creation of additional embryonic stem cells, the lawmakers’ letter says. “We realize the importance of this research, and encourage you to continue your exciting work on the five cell lines that you are currently working on.”

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, NAHU, http://nahu.org/government, http://bizjournals.com, and http://stateline.org.