A weekly compilation from Aetna of health care-related developments in Washington, D.C. and state legislatures across the country.
Week of July 22, 2013
It’s been more than three years since the adoption of the Affordable Care Act (ACA), but the public relations battle over the law continues. President Obama last week kicked off a campaign to educate Americans and build enthusiasm for the law with a White House event that touted costs savings under the law. The event, however, came on the heels of two Republican-led House votes that propose delays in implementing both the ACA’s employer mandate and individual mandate. The House has voted 37 times to repeal all or part of the President’s signature health care law. Supporters of the law last week cited newly approved health insurance rates in New York as evidence that the ACA is helping to drive down costs – average approved rates will be 50 percent lower than what’s currently available in the state. But a Society of Actuaries report clarifies the ACA’s impact on rates will vary significantly across state borders, with many states likely to see significantly higher rates. The lower rates for New York reflect the fact that the state has among the highest premium costs in the nation because of health reforms passed in the 1990s without a coverage mandate.
The House passed two bills last week that would delay key provisions of the ACA. By a vote of 251 to 174, the House approved legislation proposing a one-year delay in implementation of the ACA’s individual mandate. Twenty-two Democrats joined a majority of Republicans in voting for the legislation. The House also approved legislation proposing a one-year delay in implementation of the ACA’s employer mandate. Thirty-five Democrats joined all but one Republican in voting for the legislation. Both bills fell short of the two-thirds majority needed to override a presidential veto. The bills are not expected to be considered on the Senate floor.
CALIFORNIA: As expected, Medicaid expansion and several other ACA-related matters were passed by the legislature in a special session. Special session legislation is effective 91 days after adjournment. The regular legislative session has adjourned for summer recess and will reconvene on August 12. The crossover deadline – the date by which legislation passed by the House or Senate must be forwarded to the other chamber – for 2013 legislation was May 31. Bills that did not meet the deadline cannot advance this year and instead will carry over to the 2014 session. More than 2,200 bills have been introduced this year. In other news, Anthem Blue Cross announced that it will not be participating in California’s small-business exchange. Anthem is the state’s largest small group insurer. It will still participate off the exchange and in the state’s individual exchange in 2014.
MASSACHUSSETTS: The 2014 budget signed into law by Governor Deval Patrick contains several significant health care-related changes. Effective July 1, 2013, the budget eliminates the $295 per employee Fair Share assessment that employers have been paying under state health reform since 2006. In addition, the newly created Center for Health Information and Analysis (CHIA) was funded at $26.7 million. This amount is financed by an assessment of 50 percent on surcharge payers and 50 percent on hospitals. The Department of Mental Health (DMH) is required to expend not less than $3.1 million on the Massachusetts Child Psychiatry Access Project and DMH may assess surcharge payers for the services rendered to commercial members. The budget moves the administrative cost for operating Health Safety Net Funding outside of the annual appropriations of the fund, and the administrative costs will be split 50/50 between the acute hospitals and surcharge payers. Finally the budget requires the Division of Insurance and MassHealth (Medicaid) to implement regulations by October 1, 2013 to create a process for carriers and MassHealth’s programs to certify and specify their compliance with the federal and state mental health parity laws.
NEW HAMPSHIRE: The Medicaid Expansion Study Commission met last week and will continue meeting through much of the summer to explore the possible impact of proposed Medicaid expansion in the state. This week, the commission will hear from representatives of Health and Human Services regarding the Medicaid program and managed care, Medicaid changes under the ACA regardless of expansion, fiscal impacts and new revenues under various expansion options, and changes to uncompensated care. The Insurance Department will also provide information about the state’s health insurance exchange as it relates to Medicaid. An August 30 meeting will be dedicated to taking public comments. Materials can be found on the Commission’s website. Legislative leaders could call a special session to vote on Medicaid expansion after the commission files its report.
NEW JERSEY: The Department of Banking & Insurance has issued a bulletin amending the Individual Health Coverage Program (IHC) and Small Employer Health Benefits Program (SEH) rating rules under the ACA, while also significantly changing how medical loss ratio (MLR) under the ACA is calculated in the state. This bulletin clarified rating requirements beginning January 1, 2014 with respect to rate bands and separate rating pools. Additionally, it noted the new taxes and fees effectively imposed under the ACA were never anticipated under current New Jersey law and therefore should be excluded by carriers when calculating MLR. New Jersey’s MLR criteria differs significantly from that of the federal government in that previously taxes have essentially been counted as an administrative expense.
NEW MEXICO: State officials announced last week that the Centers for Medicare & Medicaid Services (CMS) has approved the state’s plan to reform Medicaid. Under the new Centennial Care program, Medicaid recipients will be responsible for new copays for some services, including a $3 fee for brand name drugs. Medicaid managed-care organizations will hire care coordinators to monitor the use of health and behavioral services. The state plans to implement these and several other program reforms in 2014, at the same time it expands Medicaid eligibility. The program currently serves 550,000 New Mexicans. An estimated 170,000 additional residents will become eligible for coverage under the expansion.
NEW YORK: The Cuomo administration announced that it has approved health insurance plan rates for 17 insurers seeking to offer coverage through New York’s health exchange. Four Medicaid-only plans have filed to offer individual coverage on the exchange; additionally several new players to the state’s insurance market have filed products largely to serve the metro-New York City area. While the rates published by the administration are lower than current direct-pay market rates, the cost of coverage may still be out of reach for many of the 600,000 estimated to become eligible to purchase coverage through the exchange. Fewer plans submitted products for New York’s SHOP.