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 January 20, 2015

A Commonwealth Fund survey found that the Affordable Care Act (ACA) is reducing the ranks of the uninsured and, for the first time, reducing the number of Americans who report cost-related access problems and medical-related financial difficulties. The number of adults who reported not getting needed health care because of costs declined from 80 million people in 2012 to 66 million in 2014. The number of adults who reported problems paying their medical bills declined from an estimated 75 million people in 2012 to 64 million people in 2014.

Another new survey, however, shows the ACA continues to face significant hurdles in getting the uninsured signed up for health care coverage. Transamerica Center for Health Studies research found that 52 percent of uninsured Americans are not at all or not very informed about the ACA, and 38 percent have not heard about the new health insurance exchanges. Roughly one in five uninsured Americans say they do not know how to apply for coverage, a surprising increase of 10 percentage points over July 2014 results. Also, 24 percent say they won’t seek exchange coverage because they do not support the ACA on principle.


Reps. Charles Boustany (R-LA) and Kyrsten Sinema (D-AZ) have circulated a letter in the House of Representatives asking for cosponsors to their bipartisan bill to repeal the ACA’s health insurance tax. So far, 97 House members have signed on as cosponsors. A bill to repeal the ACA’s medical device tax was introduced by a bipartisan group of senators. The group includes Republican Senators Orrin Hatch, Pat Toomey, Richard Burr, Rob Portman and Dan Coats, and Democrats Amy Klobuchar, Joe Donnelly, Al Franken, Bob Casey and Jeanne Shaheen.

On a similar note, newly elected Louisiana Republican Senator Bill Cassidy introduced two ACA-related bills last week aimed at repealing the medical device tax, as well as the employer and individual mandate. The bill also would allow current health plans in the group market to be offered through 2018. The measure also would relieve small business employees from the prospect of facing an individual mandate penalty if they purchase plans outside of the exchanges.

Centers for Medicare and Medicaid Services (CMS) Administrator Marilyn Tavenner announced last week that she will leave her position at the end of February. HHS Secretary Sylvia Mathews Burwell said in a separate announcement that Principal Deputy Administrator Andy Slavitt will be the new acting administrator.


ARIZONA: Governor Doug Ducey gave his first state-of-the-state address last week focusing broadly on fiscal responsibility, regulatory reform and the creation of a more business friendly economic climate. Consistent with his inaugural speech, the new governor did not outline a clear strategy for attaining his objectives. Of note is the fact that he did not mention Medicaid expansion, which was enacted in 2014 but is now the subject of litigation.

CALIFORNIA: Approximately 95,000 Californians have been notified that they no longer qualify for subsidized health insurance through Covered California and instead qualify for the state’s Medicaid program, called Medi-Cal, based on their income. Californians estimated their 2015 incomes on their applications, but the state-based exchange uses the last available federal tax returns from 2013 to confirm their income information. It is not known yet if Covered California will allow members with private subsidized plans to remain on their current insurance or if they must be switched to Medi-Cal until any clerical errors can be addressed concerning income.

COLORADO: The Division of Insurance has released the second of a two-part network adequacy report that found networks are robust, albeit variable, across the major population centers in Colorado, including the front range. However, numerous strains were found on most networks in rural areas. The report looks at networks for both individual and small group products. The DOI will be convening stakeholders to discuss the reports and determine next steps. No drastic changes are anticipated, but the DOI is expected to require carriers to submit more robust geographical and statistical information about their networks.

DELAWARE: The General Assembly convened its 2015 legislative session last week with Democrats retaining strong majorities in both houses. Health-care-related issues likely to be considered during the new session include: compassionate-use drugs for terminally ill patients; consumer protection personal/identifiable information; as well as further updates to the previously adopted NAIC Model Holding Company Act. Governor Jack Markell is scheduled to deliver his state-of-the-state address on January 22.

IDAHO: In his state-of-the-state message, Governor Butch Otter urged lawmakers to further consider expansion of Medicaid. He urged lawmakers to hold a hearing on the recent findings of the Medicaid Redesign work group, which has proposed allowing adults earning between 100 percent and 138 percent of the federal poverty level (FPL) to purchase exchange coverage using federal dollars. The governor said he agrees with most of the panel’s findings. Despite this signal of support, Governor Otter declined to articulate what action he expected the legislature to take or whether he would sign a bill if one was to be presented. Some 104,000 state residents get caught short because they fail to qualify for tax credits under the state health insurance exchange or meet the state's Medicaid eligibility requirements.

MAINE: Governor Paul LePage has released a proposed state budget that includes a sweeping tax reform package. Key elements of the proposed overhaul include an increase in the state’s sales tax rate to 6.5 percent from a current level of 5 percent. The expansion would affect services as well as goods. This increase is intended to help “better balance” Mainers’ income tax burden, which the proposal would reduce by $300 million over the next two years through a proposed 2.2 percent cut to the top income tax rate and elimination of the estate tax and military pension taxes. Other proposed cuts target methadone funds, in an effort to transition recovering opiate addicts to Suboxone, and the state’s tobacco program.

MARYLAND: The 2015 legislative session convened last week, and many health care policy bills are expected to follow. Importantly, we expect pharmacy bills to once again be prominent in 2015, including bills focused on pharmacy tiers, generics and bio-similar drugs. Also expected is an effort to expand the in vitro fertilization (IVF) mandate to ensure equal insurance coverage for same-sex married couples. The 2015 legislative agenda for MedChi, the state’s Medical society, includes removing the sunset provision for the Assignment of Benefit law, making it a permanent requirement for insurance carriers. MedChi is also focusing attention on medical liability reform and Medicaid payments to providers. However, the state’s primary concern is the budget. Governor-elect Larry Hogan, a Republican, will have to work with the Democrat-controlled legislature on a $750 million revenue gap for the next fiscal year.

MINNESOTA: The federal Center for Consumer Information and Insurance Oversight (CCIIO) has awarded MNsure, the Minnesota state-based exchange, a federal grant adjustment of $34 million for IT development and enhanced consumer assistance. The state plans to use the grant money to improve the usability of the website, streamline the MinnesotaCare premium invoice process (premium assistance program), create a navigator/broker portal, and support critical functions such as data transmission to carriers and federal partners. To date, MNsure had enrolled 83,865 Minnesotans.

NORTH CAROLINA: The General Assembly held an organizational session last week in preparation for the 2015 legislative long-session. Business in both chambers included swearing in of members, adopting temporary rules and electing leadership. The House formally elected Rep. Tim Moore (R) to serve as Speaker of the House. Rep. Paul Stam (R) was named Speaker Pro Tempore. In the Senate, Sen. Phil Berger (R) was elected by members to serve his third term as President Pro Tempore of the Senate. Sen. Louis Pate (R) was appointed once again to serve as Deputy Pro Tempore of the Senate. As a formality, both chambers adopted an adjournment resolution. The resolution states the General Assembly will stand adjourned until noon on January 28, 2015. That date will officially be the first day of the 2015 long session and the first day that bills may be filed.

NEW HAMPSHIRE: The Legislative Budget Office advised that the state budget is facing a shortfall of $30 million, a number that could grow or shrink between now and the end of the fiscal year. One cause of the budget gap is a growth in Medicaid spending. As of mid-September 2014, the state had spent $47 million dollars above estimates. The LBO noted that some of the Medicaid deficit is due to changes in federal eligibility guidelines. But about $13 million is due to the state’s failure to meet savings targets because of delays in implementing Medicaid managed care.

NEW JERSEY: Governor Chris Christie delivered his state-of-the state address to a joint session of the legislature last week, touching on some health care-related issues. The governor noted the state’s focus on drug addiction programs and called for a continuation of the mandatory drug court program and drug addiction services. The state’s unfunded $60 billion pension and health benefits liability was absent from the address but is expected to be a central focus of his budget proposal scheduled for next month. As anticipated, the governor used this speech to highlight his extensive travel around the country last year and his perspective on issues of greatest concern to Americans. In doing so, he further fueled speculation about his intent to seek national office.

TENNESSEE: The legislature convened its 2015 session with Republicans retaining control of the executive branch and increasing their majority in the legislature. Governor Bill Haslam has proposed a pilot program, Insure Tennessee, to expand Medicaid up to 138 percent of FPL. He called for a special session of the legislature on February 2 for consideration of the issue. A number of notable issues are expected to surface this session, including: provider contracting requirements; network adequacy standards, and pharmacy.

TEXAS: Governor Rick Perry has appointed David Mattax to serve as interim Commissioner of Insurance. Previously, Mattax was deputy attorney general for defense litigation, director of defense litigation, and chief of the financial litigation division for the Texas Attorney General’s Office. In a somewhat unusual development, it is expected that Julia Rathgerber, the current Commissioner, will return to the post in the summer of 2015 after helping Governor-elect Abbot transition into office as his Deputy Chief of Staff.

VIRGINIA: The 2015 session of the General Assembly kicked off last week with Governor Terry McAuliffe’s state-of-the-Commonwealth address. The governor cited a need for investment and progress in workforce training, transportation and green technology. He also cited the need for tighter ethics laws, a call likely to resonate with the House and Senate in light of former Governor McDonnell’s sentencing to two years in prison for his conviction on corruption charges. Other areas of bipartisan support include balancing the budget, college campus safety, veterans-hiring programs, and protecting public education funding. All 140 seats (40 Senate seats and 100 seats in the House of Delegates) are up for reelection this fall in Virginia. This election dynamic will likely result in a cautious session, as legislators seek to preserve their re-election chances. The governor remains strongly supportive of expanding Medicaid eligibility, but he will continue to face significant opposition from the House of Delegates. Prospects for Medicaid expansion remain low.

WASHINGTON: The Office of the Insurance Commissioner (OIC) has retained its accreditation with the National Association of Insurance Commissioners (NAIC). Every five years, the NAIC conducts a rigorous, in-depth review with an outside team of experts to ensure the OIC meets or exceeds nationwide financial solvency policies and standards in its regulatory oversight of insurance companies that do business in Washington State. The OIC's most recent review resulted in no findings and a recommendation for full reaccreditation for another five years.


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