Health Care Reform News Around the Nation for the Week of May 27

Last week, Connecticut Gov. M. Jodi Rell (R) released letters from two insurance companies that raised concerns about the cost of legislation that would allow workers at small businesses, municipalities and not-for-profit groups to join the state employee health insurance pool, the Hartford Courant reports.

In one of the letters, Anthem Blue Cross and Blue Shield officials wrote that if the pool is expanded, the insurer would be forced to increase premium rates for state employees by 4% -- more than $24 million -- in the fiscal year that begins July 1. Anthem officials wrote that the bill would expand health care coverage to a larger group of people, which represents "a material change to the underlying assumptions of the bid" that would allow the company to recalculate its bid.

In a separate letter, ConnectiCare called on Rell to veto the bill. Stephen Jewett, a spokesperson for ConnectiCare, said, "We believe the bill could damage competition in the current private market, put an unfunded burden upon the state and prevent municipalities from having the flexibility to control their employees' health costs."

Rell did not say she would veto the bill, but she said, "I have major concerns" about the measure (Keating, Hartford Courant, 5/20).

On Wednesday, Florida Gov. Charlie Crist (R) signed into law a bill that will allow the sale of low-cost, bare-bones health insurance policies, the New York Times reports (Sack, New York Times, 5/22).

Under the "Cover Florida" plan, residents ages 19 to 64 will be able to purchase limited health coverage for as little as $150 per month. Insurers offering such plans will be exempt from state mandates requiring coverage for a range of items and procedures (California Healthline, 5/12).

However, the plans will be required to include coverage for some conditions, such as diabetes (Caputo/Wyss, Miami Herald, 5/22). The policies will cover preventive care and office visits but not care from specialists or long-term hospitalizations (California Healthline, 5/12).

Insurance companies also will be required to offer two plans: a catastrophic health plan and one that does not include catastrophic coverage. The scope of the benefits offered under the plans has not yet been finalized.

The Cover Florida plans could be available by January 2009 (Miami Herald, 5/22).

The law also will allocate $1.5 million to establish a corporation to help businesses with fewer than 50 employees negotiate health insurance rates, as well as handle premiums and claims (California Healthline, 5/12). In addition, the law sets a minimum number of days for a hospital stay after childbirth, includes some types of transplants and extends the age a child can remain on a parent's coverage to age 30 (Royse, AP/Miami Herald, 5/21).

On Thursday, American Public Media's "Marketplace Morning Report" reported on the law. The segment includes comments from Uwe Reinhardt, a health policy expert at Princeton University (Grech, "Marketplace Morning Report," American Public Media, 5/22).

Last week, Gov. Kathleen Sebelius (D) signed into law a bill that implements nine of 21 policy reforms sought by the Kansas Health Policy Authority, the AP/Kansas City Star reports. The bill:

• Creates a standardized insurance card for Medicaid beneficiaries;
• Provides dental coverage and tobacco cessation counseling for pregnant women enrolled in Medicaid;
• Expands outreach services to children eligible for HealthWave, the state's version of SCHIP; and
• Will expand eligibility for HealthWave if Congress approves additional funding.

Last week, the administration of Louisiana Gov. Bobby Jindal (R) called on state senators to restore millions of dollars in health care program cuts that were approved last week by the House, the New Orleans Times-Picayune reports. The House approved a $30 billion state budget for fiscal year 2009 that includes $240 million less than Jindal's proposed budget.

State general fund spending next year is expected to increase by nearly $900 million, or by 11%, with the largest portion of growth in Medicaid. Jindal's original budget called for a $600 million increase in Medicaid funding, including about $21 million for new initiatives.

The House Appropriations Committee cut the spending increase by $183 million but did not specify where the reductions would come from (Moller, New Orleans Times-Picayune, 5/20). The cuts include state and federal matching funds (Millhollon, Baton Rouge Advocate, 5/19).

However, state Health and Hospitals Secretary Alan Levine in a letter to House and Senate leaders wrote that the cuts would affect a wide range of health care providers and that the biggest reductions would be for hospitals, nursing homes and pharmacies (New Orleans Times-Picayune, 5/20).

On Wednesday, the Massachusetts Medical Society filed a lawsuit against the state's Group Insurance Commission, which purchases health insurance for most state employees and retirees, over its physician ranking system, the AP/Boston Herald reports (AP/Boston Herald, 5/21).

The lawsuit seeks to end the ranking system or to require the commission to use transparent ranking standards, the Herald reports.

The ranking system has three tiers to categorize doctors based on cost and quality measures, and insurers charge patients more to see physicians in the lower tiers (McConville, Boston Herald, 5/22).

The suit alleges that some physicians in the lower tiers have been defamed and that patients who contribute higher copayments to see those doctors have been defrauded (Krasner, Boston Globe, 5/22).

Last week, Gov. John Lynch (D) signed into law the HealthFirst initiative, which will require large insurers to offer a standard "wellness plan" to businesses with up to 50 employees, the AP/Foster's Daily Democrat reports.

Under the bill, the state Insurance Department will establish a committee to design a plan with a target premium of 10% of the previous year's median wage, which currently would be about $262 per month. Before insurers are asked to offer the plan, an actuary will assess whether it can meet its target premium price.

According to the AP/Daily Democrat, premium costs will be controlled by focusing on preventive care, promoting best practices and managing chronic conditions.

The law, which takes effect in 60 days, calls for the plan to be offered beginning October 2009 (AP/Foster's Daily Democrat, 5/19).

The administration of Pennsylvania Gov. Ed Rendell (D) has proposed shifting control of the prescription drug component of Medicaid managed care plans to the state Department of Public Welfare, the Pittsburgh Post-Gazette reports. According to department officials, the change would enhance services, simplify requirements for medical providers and save the state an estimated $95 million annually.

The state already administers pharmacy benefits for about 800,000 other Medicaid beneficiaries.

State Medicaid agencies can negotiate larger rebates from drug manufacturers than managed care plans. The rebates would make up the bulk of the estimated $95 million in savings.

Under the proposal, the managed care plans would have "real-time" access to the state's pharmacy claims data and could use the data to ensure patients receive the most appropriate medications for their conditions, according to Mike Nardone, the department's deputy secretary for medical assistance programs.

Estelle Richman, secretary of the agency, said the program would be simplified by establishing a single statewide list of preferred drugs and a list of procedures to submit claims and request prior authorization of certain medications. The formularies would not be as restrictive as those used by managed care plans, she said.

Managed care officials oppose the idea, saying that shifting oversight of the benefits to the welfare department would reduce options for beneficiaries (Fahy, Pittsburgh Post-Gazette, 5/21).

On Wednesday, the South Carolina House approved legislation that would increase the state cigarette tax by 50 cents per pack to fund health care programs for low-income state residents, the AP/Winston-Salem Journal reports. The state Senate approved the bill earlier this month.

The tax increase is expected to generate an estimated $159 million in additional revenue.

House Minority Leader Harry Ott (D) said that the bill would fund health coverage for about 80,000 parents of child Medicaid beneficiaries and that it would help make coverage affordable for at least 30,000 workers through three years under premium assistance.

Gov. Mark Sanford (R) has threatened to veto any legislation that includes a tax increase but that does not cut taxes equally elsewhere (AP/Winston-Salem Journal, 5/22).