Health Reform Weekly

A weekly compilation from Aetna of health care-related developments in Washington, D.C. and state legislatures across the country

Week of May 21, 2012

The annual Milliman Medical Index was released last week with the troubling news that workplace health care coverage for a family of four exceeds, on average, $20,000 a year for the first time. The new high-water mark of $20,728 represents an increase of 6.9 percent over 2011. The employee’s share of the costs rose to $8,584. The index also shows that of 14 cities profiled, Miami was the most expensive ($24,965) while Phoenix was the least expensive ($18,365).

In other health care-related news, the Obama administration forged ahead with the implementation of health care reform in announcing a November 16 deadline for state governments to submit proposals showing how they intend to operate health insurance exchanges in 2014. The Centers for Medicare and Medicaid Services also released general guidance on federally facilitated exchanges.

States

CALIFORNIA: The Health Benefit Exchange Board voted unanimously last week not to pursue a federal health insurance exchange partnership path. One option under the partnership model would maintain California’s responsibilities for plan management, consumer assistance (e.g. Navigators), and outreach efforts. The federal government would/could be responsible for website management and call center options. Numerous concerns, however, were raised by stakeholders concerning the federal government’s ability to meet its IT requirements by early 2013.  As a result, the board decided that California will continue on the state-specific path it has pursued since the exchange was created last year.

ILLINOIS: Substantial progress has been made on an effort to reach consensus on $2.7 billion in Medicaid cuts and savings. The House is poised to vote on what is expected to be three related bills. The first measure would include a $1 per pack increase in the cigarette tax, coupled with new language on charity care for hospitals.  The second measure would include $1.36 billion in cuts and savings based on the governor's original proposal, which includes base cuts, eligibility reforms, care coordination requirements, strengthening waste/fraud/abuse mechanisms, rate reductions to providers, and a hospital Medicaid assessment designed to garner extra Medicaid match money. The insurance and business communities continue to work toward removal of a $250 million tax/coverage mandate for children with specialized needs and chronic conditions from the second measure.  The third measure would add 100,000 people to the Medicaid rolls by increasing eligibility in Cook County.  DHFS Director Julie Hamos has already taken the first step by filing for a U.S. Department of Health and Human Services waiver allowing the change.  New enrollees would be directed to Cook County Hospital, which could draw in $250 million in federal funding.  The Cook County provisions are separated from the rest of the proposals so that the state not be held responsible for paying the costs if the Affordable Care Act (ACA) is deemed unconstitutional.

MASSACHUSETTS: The state Senate last week passed a health care payment reform bill designed to reduce medical spending. As reported last week, leadership in the House and Senate have introduced separate health care payment reform bills to help slow the rate of medical spending by improving quality of care and switching to alternate payment methodologies, such as accountable care organizations, global payments and bundled payments for chronic diseases. After considering 265 amendments, the Senate passed its bill with only two dissenting votes. One of the amendments would have created a single-payer system, which was extensively debated and then defeated by a 15 to 22 vote. In other business, the Senate voted to preserve a proposed $40 million annual assessment on surcharge payers (fully insured and self funded) to help pay for electronic medical records, and prevention and wellness programs. The House will likely act on its bill in early to mid-June.  The two chambers will then conference over their differences in the hopes of passing a final bill before the summer recess at the end of July.

OKLAHOMA: Governor Mary Fallin has signed an employer association bill that should help many of the state’s small businesses save money on health care coverage. The measure allows small employers to purchase group insurance through an employer association that pools resources with other like businesses. Insurance Commissioner John D. Doak said the legislation, "will greatly strengthen Oklahoma's business environment by allowing industry associations to offer large group policies to small employers.” The bill requires associations to meet the federal guidelines for a 'bona fide' association: 1) the association must have been in existence for five years, 2) it must have been formed and maintained in good faith for purposes other than obtaining insurance, 3) it cannot condition membership on any health-status-related factor relating to any individual, and 4) the association must make insurance available to all members regardless of health status.

TEXAS: Two House committees held rare Interim hearings outside the state capitol last week, at the University of Texas Health Science Center in Houston. With increasing enrollment in medical and nursing schools, educators urged legislators to create more residency programs. Young doctors are more likely to stay in the states where they complete their medical training. Telemedicine, using video equipment to allow doctors in one location to examine and treat patients with the help of a trained assistant in another location, can help increase access to medical care. So can the increased use of advanced practice nurses and physicians' assistants.

With 205 doctors per 100,000 residents statewide, compared with a national average of 259, the state faces significant health care access issues. The chief medical officer of Texas Tech medical school said improving public health programs could help by reducing the demand for clinical care. He noted that the problem is most prevalent along the border, where there are just 51 doctors for every 100,000 residents, and in rural areas, where there are 91 doctors for every 100,000 residents. Suggestions for increasing access included new programs to repay the student loans of doctors who agree to work in underserved areas. Additionally, Project Medicaid 1115 Waiver would allow Texas to obtain more federal money in exchange for finding better ways to provide care. The waiver program could bring the state as much as $29 million over the next five years, and some of that money could be used to pay for additional residency slots for new medical school graduates.

Resources

Health Reform Connection
America's Health Insurance Plans
Aetna 2011 Annual Report 

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