Health Law and Policy Update
Headlines of the week
Feds allocate money for home visiting program
Families at risk of health problems and other difficulties can get help through a home-visitation program the federal government announced this week as part of the Affordable Care Act. Health and Human Services Secretary Kathleen Sebelius announced her agency has allocated $88 million to support state-run programs nationwide, including an estimated $1.8 million for Colorado.
The Maternal, Infant and Early Childhood Home Visiting Program entails nurses, social workers or other professionals meeting in family homes to offer advice and resources on subjects such as health care, developmental services for children, early education, parenting skills, child abuse prevention, and nutrition education or assistance.
The Affordable Care Act includes $1.5 billion to pay for these programs during the next five years, the Department of Health and Human Services said in a news release.
Extension of Medicaid assistance unlikely
Chances are slim Congress will pass a bill that includes an extension of the enhanced FMAP (federal Medicaid assistance), news out of Washington, D.C., suggests.
Many advocacy groups, including the Colorado Center on Law and Policy, have pushed to have increased Medicaid support to the states (part of the 2009 American Recovery and Reinvestment Act) extended six months to June 2011. Extending the aid would help states that continue to struggle under recession-driven reductions in revenue and unprecedented Medicaid caseloads.
The Senate passed an extension of Unemployment Insurance benefits Wednesday night, but it did not include FMAP. There is little momentum for passing the so-called tax extenders bill that had included an FMAP extension, and it is doubtful the Senate could pass a bill that included FMAP alone. If Congress revisits this issue during its lame-duck session, it might be too late as states will have already begun to make the additional cuts in efforts to balance their fiscal year 2011 budgets. For Colorado, that means cutting an estimated additional $212 million from vital public services.
Colorado extends investigation of Anthem rate increases
The investigation by the Colorado Division of Insurance into whether Anthem Blue Cross and Blue Shield rate increases of as much as 30 percent were justified is likely to "drag on" for another several weeks, The Denver Post reported Tuesday. According to the article: "That means thousands of Colorado consumers who've stomached the increases since January and hoped the state review would bring relief must continue to bear the higher premiums."
A similar review in California determined extraordinary rate increases were not justified and, among other errors, Anthem had double-counted the effect of aging in setting rates. As a result, the average increase was adjusted to 14 percent instead of 25 percent. For the story of how this error was discovered, see this Los Angeles Times article entitled: "A mathematical David stuns a healthcare Goliath."
The Los Angeles Times reported Tuesday the president of Anthem in California, Leslie Margolin, has resigned.
Maine insurance superintendent requests delay in implementing medical loss ratio requirements
Maine Insurance Superintendent Mila Kofman sent a letter to Health and Human Services Secretary Kathleen Sebelius asking permission to delay implementation of the medical loss ratio limits on insurers in the individual market scheduled to take effect in 2011. The requirement might result in some insurers dropping certain business lines, which might hurt health consumers, Kofman said. Maine has only three companies selling policies in the individual market, and it has stricter regulations on medical loss calculations than most states.
Insurance commissioners discuss implementing reform
The National Association of Insurance Commissioners (NAIC) will meet Thursday and Friday this week in Washington, D.C., to discuss health care reform implementation. Discussion topics will include health insurance exchanges, consumer information, health insurance and managed care, and fraud reporting.
Health insurance exchange meeting this week
The first meeting to discuss health insurance exchanges in Colorado will be held 9 to 11 a.m. Friday, July 23, at the National Jewish Health Molly Blank Conference Center, 1400 Jackson St. For more information see the governor's health reform website. The second meeting on exchanges will be 9 to 11 a.m. Aug. 12 at a location to be announced. Why are health insurance exchanges important? They are a key provision of the private health insurance reforms in the Patient Protection and Affordable Act of 2010. According to health policy experts, if exchanges function correctly they will expand and improve health insurance coverage while reducing costs. See details below.
Tax credit will benefit Colorado small businesses
An estimated 82,400 small businesses in Colorado will be eligible for some portion of the health insurance premium tax credit in 2010, according to a report Families USA released last week. Of those, 24,500 are eligible for the maximum premium credit. Families USA commissioned the Lewin Group to analyze data from the U. S. Agency for Health Care Research and Quality and the U. S. Census Bureau to calculate the number of employers who will be eligible for the tax credit.
Information about grants available for electronic health records
The Centers for Medicare and Medicaid Services released new information about incentives for implementing electronic health records.
Regulations guarantee appeal rights when claims denied
Up to 41 million people could benefit from regulations issued today guaranteeing health insurance consumers the right to appeal denials of their claims, Kaiser Health News reported.
The estimate includes 31 million people in employer-sponsored and 10 million people in individual health plans. The regulations guaranteeing appeal rights will replace a patchwork of rules that vary greatly by state. Five states - North and South Dakota, Alabama, Mississippi and Nebraska - don't have laws that require external review when a patient contests a claim denial, Kaiser reported.
The rules don't apply to health insurance plans that existed on March 23, when the Affordable Care Act became law.
Advancing the debate
Medicaid cuts not an option to close state budget shortfalls
States facing massive budget shortfalls might be tempted to close the gaps by cutting their Medicaid programs. Going that route, however, could cost a state all of its federal Medicaid matching dollars. National health reform under the Affordable Care Act includes "maintenance of effort" requirements" to ensure states do not scale back their Medicaid and Children's Health Insurance Programs in advance of health reform implementation.
To receive federal Medicaid funding, states cannot reduce the income eligibility level for the programs, cannot eliminate categories of eligibility, and cannot institute new eligibility requirements like asset tests or more stringent earnings calculations, that make it more difficult to become eligible for Medicaid or CHIP than it was on the day health reform became law, March 23. The maintenance of effort requirement remains in effect until 2014 with regard to adult eligibility, and until 2019 with regard to children and pregnant women.
For more information on the maintenance of effort requirements, see an informative piece from the Georgetown Center for Children and Families and the Center on Budget and Policy Priorities.
About health insurance exchanges
For an excellent analysis of health insurance exchanges see: "Health Insurance Exchanges and the Affordable Care Act: Key Policy Issues," by Timothy S. Jost for the Commonwealth Fund. This is the first in a series of reports on health insurance exchanges and examines 13 issues including: adverse selection, numbers of participants, market coverage and structure, choice of plans without complexity, transparency and disclosure, competition, administrative costs, competitive market with regulation, administering subsidies and mandates, state, regional or national structure, governance, relationships with employers and cost control.
Key decisions states will make include:
1. State can combine the small group and individual markets as a single pool rather than separating the risk pools.
2. State may impose additional requirements (beyond the Affordable Care Act) to discourage adverse selection. While states may still not regulate self-insured plans, states may prohibit insurers from practices that would otherwise encourage adverse selection. The concern is higher-risk people might be attracted to or "steered" to the exchange. Examples include: prohibiting insurers that participate from setting up separate plans to sell only outside the exchange. States could prohibit brokers from collecting higher commissions for selling policies outside the exchange.
3. States can participate in a state, regional or federal exchange. There are pros and cons of each type of exchange and are discussed in the Commonwealth Fund's analysis. The U.S. Department of Health and Human Services will provide grants to states to assist with implementation of exchanges.
What you can do
Schedule a presentation on health reform
Health reform can be confusing. The health staff at the Colorado Center on Law and Policy is ready to help community groups, medical professionals, lawmakers and others understand the complexities of health reform and how it will roll out during the next few years. Please contact us to schedule a presentation.
Health Care Director
Health Care Attorney
Released July 22, 2010