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

Week of May 5, 2008

Aetna has long professed that it has an opportunity and an obligation to be part of the solution to the problem of the uninsured. Our new policy, announced last week, requiring our U.S.-based vendors or business suppliers to offer their employees access to health care benefits is an important example of how we're putting that vision into practice. Our goal is to have 80 percent of our vendors offering health benefits by 2010 and 100 percent by 2011. The new policy is meant to increase awareness of the importance of health benefits and begin a dialogue with business suppliers. Of course, many small businesses find it difficult to afford health benefits. That's why Aetna will work closely with small businesses and others to identify and develop affordable business and policy solutions. Working together, Aetna and its vendors can play a leadership role in improving the nation's health care system. This is a key part of the combined public-private approach to fixing the health care system that Aetna advocates.

Federal
As expected, the House passed the Genetic Non-discrimination bill last week by a vote of 414-1. There is a small technical correction that the House passed separately, dealing with Medigap policies, and that correction is expected to pass the Senate and be incorporated into the final bill before the President signs the measure into law later this week. Aetna issued a press release last week commending the passage of GINA and noting our strong commitment to providing members with access to optimal care, including medically appropriate genetic testing. Aetna also is committed to protecting the confidentiality of all individually identifiable health information. Aetna assumed a leadership position in the industry with its 2002 policy on the appropriate and inappropriate uses of genetic data.

America's Health Insurance Plans (AHIP) last week released its long-awaited annual study of lives covered under high-deductible health plans compatible with health savings accounts. As of January 1, 2008, 6.1 million lives are covered by these plans, a significant increase from 4.5 million in 2007. AHIP's HSA Council was in Washington, D.C. for Hill meetings on the day of the release, and Aetna was part of the Hill briefings in both House and Senate offices.

States
CALIFORNIA: Bolstered by a new statewide poll that found strong support for most elements of his health care reform plan defeated in January, Governor Arnold Schwarzenegger vowed to attempt another try at passing his $14.7 billion proposal. Since his plan was overwhelming rejected by the state Senate, talk of comprehensive reform has been virtually non-existent. The state's budget problem, one of the reasons cited by Senators in rejecting the proposal, has only gotten worse. The state's budget deficit could top out at more than $17 billion by the end of the year. Most legislators are privately predicting that the state's budget problems will not be fixed this year or anytime soon. If health care reform is reenergized it's likely to take the form of citizen ballot measures that could be voted on in late 2009 or 2010.

CONNECTICUT: The Senate last week passed legislation regulating the leasing of PPOs, with new amendments exempting workers' compensation plans. It also passed a bone marrow treatment mandate, with an amended cost-share of 80/20. The prosthetic mandate that was previously a part of the bill was removed but will likely reappear before the end of the session. In addition, the proposed mandate review commission was also removed from the bill due to a fiscal note. It is unlikely to re-emerge. Not unexpectedly, the Senate also passed the epileptic drug bill requiring physician authorization for the substitution of one generic or brand medication for another. That issue is expected to be debated in the House.

DISTRICT OF COLUMBIA: Health care reform has come to the District in the form of the Healthy D.C. Act of 2008. As proposed by Council Member David Catania, the program would provide coverage for 45,000 uninsured residents and cover all residents by 2010. Key provisions include an individual mandate (subject to certain exceptions), guaranteed issue, community rating and an employer mandate. Funding sources include a 2 percent premium tax on HMOs and insurers, fines for violations of the act, a tax on hospital revenue and annual appropriations. Two issues of concern are that the bill designates CareFirst Blue Cross as the sole source of coverage, and the reluctance of the local Chamber of Commerce to take a public position opposing provisions of the bill that would negatively impact employers.

IOWA: Before the General Assembly adjourned for the season on April 26, the session saw a number of significant reform proposals, including mandate bills, long-term care legislation, and external review bills. Health care access legislation was one of several significant proposals decided in the session's final days. Key provisions of the bill, as agreed to by both chambers, include: Expansion of SCHIP coverage to children in families earning less than 300 percent of federal poverty level; the development of a plan to provide coverage to all children by January 2010 and a plan to cover all adults by 2013; expanded regulatory authority for the Insurance Commissioner over health benefit plans; a statewide health IT program focusing on the use of electronic health records and electronic prescriptions; continuation of coverage for unmarried children; a statewide medical home system to which recipients of medical assistance programs will be required to subscribe; and tax credits for qualified small business wellness programs. Iowa also adopted a mandate that requires both individual and group policies to provide coverage of vaccines for human papilloma virus.

MAINE: Legislation passed two weeks ago to fund the state's Dirigo Health plan by raising excise taxes on beer, wine and the syrup used to make soda, has generated vehement opposition from the Maine Restaurant Association, Maine Beverage Association and soda manufacturers. The opposition is trying to get a "citizens' veto" on the November ballot. While the state calculates the impact on the soda industry at $12 million a year, the Maine Beverage Association estimates the impact would be $27 million. If the citizen's veto initiative is successful, DirigoChoice would be stuck with its current funding mechanism - a fee on paid claims called the savings offset payment, which is determined annually through hearings before the state's Bureau of Insurance.

MASSACHUSETTS: On the two-year anniversary of its start date, the Commonwealth Connector reports there are now about 340,000 newly insured in Massachusetts. About one-third are newly enrolled in private commercial insurance. The Commonwealth Care membership represents roughly three-quarters of the statewide growth in the non-group market last year. Of the 174,000 enrolled in Commonwealth Care as of March 1, approximately 50,000 make premium contributions while the remainder receive free coverage. Beginning July 1, 2008, premiums for the unsubsidized Commonwealth Choice program will rise by an average of 5 percent over July 1, 2007. A supplemental budget request of $153 million filed April 15, if approved, would bring the budget to $625 million. The Connector also says that usage of the former Uncompensated Care Pool, now known as the Health Safety Net Fund, dropped by 16 percent in the first year of health care reform.

MICHIGAN: The Senate Health Policy Committee postponed a long expected vote last week on four controversial House bills that would change the individual insurance market and permit a for-profit workers' compensation subsidiary of Blue Cross Blue Shield of Michigan to enter other insurance lines. Attorney General Mike Cox is supporting substitute bills proposed by Senator Tom George and has been making radio talk show appearances on the subject across the state. Cox has also announced an inquiry to determine if BCBSM's out-of-state acquisitions of for-profit companies violate state regulations. A second set of substitute bills have been proposed by Senator Jason Allen, a BCBSM supporter. First-ever negotiations began last week with the Blues, a small group of senators and representatives from the insurer coalition and HMO Association. Majority Leader Mike Bishop hosted the discussions and has signaled his desire to move the bills out of the Senate as soon as possible. The Republican-led Senate is believed to be evenly split at 10 for and 10 against BCBSM, with Bishop the conflicted tie-breaking vote. Democratic senators are beginning to signal their reluctance to support the Blues/Allen substitute.

MISSOURI: After one and a half days of debate, the Senate gave its first-round approval for Senator Tom Dempsey's health care bill last week. Among other things, the bill would: Establish guidelines for transparency in pricing and quality of health care services; require hospitals to report adverse health events as identified by the National Quality Forum; provide an income deduction for premium paid for high deductible health plans when used with a health savings account; mandate reimbursement for telehealth services; implement disclosure requirements for Medicare Advantage Plans; and require notification for immunosuppressive drug changes. While the exact cost to the state is not yet known, estimates place the impact at greater than $40 million for fiscal year 2009.

SOUTH DAKOTA: The Division of Insurance (DoI) held a hearing recently on the proposal to ban discretionary clauses. Aetna was represented, arguing strongly against several provisions of the proposed rule and suggesting alternate language that would limit the rule's impact, should it be adopted. Aetna also argued that the retroactivity clause should be stricken, supplemental lines should be excluded, and the DoI should consider delaying any action on the issue until current litigation challenging the legality of these prohibitions is decided. The DoI has consistently stated that it intends for the rule to apply across product lines, including supplemental products. The DoI's stance on the issue is very strong. We expect the Division to issue final language this week. Before the rules can go into effect, however, they must be reviewed and adopted by the Rules Committee, a legislative body that next meets in mid-May.

Resources
America's Health Insurance Plans
Coalition to Advance Healthcare Reform
Transforming Health Care in America