Health Reform Around the Nation: November, 26, 2007

Last Monday, the Colorado Blue Ribbon Commission for Health Care Reform voted 20-2 to approve a set of recommendations that includes requiring state residents to obtain health insurance or pay a tax penalty, the Denver Post reports.

The panel also will recommend expanding eligibility for state health programs. The panel's recommendations will be presented to state lawmakers on Jan. 31, 2008.

The package would cost an estimated $1.1 billion and would expand coverage to 696,000 of the state's 792,000 uninsured residents. Residents would be required to obtain private insurance, unless they qualify for public programs, such as Medicare and Medicaid.

The state also would provide subsidies to help some residents purchase private insurance, according to the recommendations. The proposal would bar insurers from denying coverage to sick applicants and would require employers to offer pretax plans for employee health coverage.

Gov. Bill Ritter (D) and state Democrats have discussed a tax increase to pay for a health system overhaul (Brown, Denver Post, 11/20).

Illinois Gov. Rod Blagojevich (D) is moving forward with a proposed expansion of a state program that subsidizes health care for families, despite a vote earlier this month by a legislative oversight panel to block the plan, the Chicago Tribune reports.

The Blagojevich administration has told state agencies that the program, called FamilyCare, is being expanded, and they already have begun signing up new beneficiaries. The expansion could reach 147,000 people.

Under the expansion, eligibility would be extended to families of four with annual incomes up to $82,600. Currently, families with annual incomes up to $38,202 are eligible for the program.

In voting against the plan, the panel questioned how the state would pay for an expansion.

Blagojevich spokesperson Abby Ottenhoff said that the panel does not have the legal authority to block the plan (Long/Mendell, Chicago Tribune, 11/18).

Last Monday, Maryland Gov. Martin O'Malley (D) signed into law legislation that will increase taxes by $1.4 billion and expand Medicaid eligibility, the Washington Post reports (Wagner, Washington Post, 11/20).

Earlier in the day, the Maryland General Assembly approved the legislation, which will expand Medicaid coverage to more than 100,000 residents in five years and offer subsidies to as many as 37,000 small businesses to offset the cost of providing coverage to employees, according to the Baltimore Sun. The legislation increases the state's Medicaid income eligibility threshold for adults from 40% of the federal poverty level to 116%.

The measure also provides $30 million in annual subsidies for small businesses with fewer than 10 workers and their employees. The subsidies will be contingent on the company offering a wellness benefit.

The expansion eventually will cost more than $600 million annually, including $250 million in state funds and federal matching money. Legislators agreed to add language to the bill stating that the expansion would occur only if voters approve a constitutional amendment on the November 2008 ballot that would legalize slot machines, which likely would help fund the expansion. The bill includes language that caps enrollment for childless adults if the program lacks funding (Smitherman, Baltimore Sun, 11/19).

The bill also includes a $1 per pack increase in the cigarette tax, as well as increases to personal and corporate income taxes (Washington Post, 11/20). In addition, $77 million will be transferred from the employee-sponsored health insurance fund to cover operating costs (AP/Washington Times graphic, 11/20). The changes will take effect Jan. 1, 2008 (Washington Post, 11/20).

Massachusetts could face a $147 million funding shortfall by the end of this fiscal year if enrollment in the state-subsidized Commonwealth Care health insurance program continues at a higher-than-expected rate, the Boston Globe reports.

Commonwealth Care provides comprehensive health coverage to people who do not have access to insurance through their employers and who have incomes less than 300% of the federal poverty level. The state fully or partially subsidizes premiums for Commonwealth Care beneficiaries based on income, and beneficiaries are required to contribute copayments for services.

The state had set a goal of enrolling 136,000 people in the program by June 30, 2008, but 133,000 people have enrolled in Commonwealth Care since October 2006. If the current pace continues, enrollment could reach 178,280 by June 30, 2008, and cost the state $619 million. The state budgeted $472 million for the subsidized program this fiscal year based on previous enrollment estimates.

If the state faces a shortfall, state budget chief Leslie Kirwan -- who also oversees the program -- has the authority to shift funds from the $448 million Health Care Safety Net Trust Fund to close the gap. However, some health care providers question whether the safety net has been adequately funded. Kirwan indicated that the state would not seek enrollment caps (Dembner, Boston Globe, 11/18).

Rhode Island Lt. Gov. Elizabeth Roberts (D) announced the "Mission: Healthy Rhode Island" initiative, which consists of a series of meetings to consider health care proposals and make recommendations to the 2008 General Assembly, the Providence Journal reports.

At a meeting with various health policy stakeholders, Roberts said the state's expected $450 million budget shortfall should not hinder discussions about ways to stabilize health care costs and provide low-cost coverage to uninsured residents.

Roberts said that the state will study other states' efforts to overhaul health care but that she would not seek to change the employer-sponsored health care system. She noted that budget limitations could limit efforts to expand coverage because one-third of the state's expenses are allocated for health care programs.

Roberts will hold seven more similar meetings in the next few months (MacKay, Providence Journal, 11/17).