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States Move Forward on Health Care Reforms

As Congress debates the last steps needed to pass historic comprehensive health care reform, state legislators continue to press forward their efforts to enact state reforms as well as lay the groundwork for implementing reforms in a federal bill.  Here is a summary of some of the most recent developments taking place across the country.

Medical Loss Ratios (MLR):  Despite New Mexico’s short session this year, their legislature has passed House Bill 12 that requires at least 85 percent of premiums for HMOs and nonprofit policies in the small group market.  The Superintendent of Insurance will establish an MLR for the individual market that cannot be under 75 percent.  These requirements become some of the strongest in the country and makes New Mexico the 14th state to impose a medical loss ratio baseline.

Prior Rate Approval:  In New York, Gov. Paterson has included a provision in his proposed 2010-11 budget to restore a prior approval process, whereby the State Insurance Department will review any increases in health insurance premiums before they take effect and triggering public hearings when annual rate increases are greater than 10%.  Senate Insurance Committee chair Neil Breslin (D-Albany) and Assembly Insurance Committee chair Joe Morelle (D-Rochester) are working to craft joint legislation in support of the Governor's proposal.  In addition, Gov. Paterson is proposing to raise medical loss ratios to 85% for small group and individual policies.

Across the border in Connecticut, Senate Bill 194 will require the state’s insurance department to hold a public hearing prior to rate hikes taking effect.  Insurance companies are to notify all policyholders of requests for rate increases as well as the date, place, and time of the public hearing.  Other provisions require insurers to disclose documentation in support of rate increases for public scrutiny, limits the allowable reasons for a rate increase, and puts the burden of proving that an increase is “reasonable” on the insurer.  It empowers the Attorney General and the state Healthcare Advocate to intervene in rate cases and appeal rate decisions to the Superior Court.

Two bills under consideration in Connecticut’s House are HB 5303 that would require managed care organizations to report claims denial data, require the Insurance Department to include such data in the consumer report card and to post such data on its web site.  A public hearing on HB 5303 is scheduled for today.  HB 5235 moves to protect consumer rights by requiring insurance companies to notify consumers in writing that a claim has testified in support of SB 194 and HB 5235.

Implementing Federal Reforms:  An Iowa bill, Senate File 2356 received Senate approval by a bipartisan vote of 45 to 5 on March 1st.  This health care reform bill sets the groundwork for how potential federal health care funding may be used to benefit Iowans.  The bill includes an insurance exchange, an information clearinghouse that makes it easier for individuals and small business employees to compare insurance plans using transparent, standardized information that includes data on quality.  It also expands the state’s unofficial public option program for adults below 200% FPL.  The legislation is based on recommendations approved unanimously by the bipartisan Legislative Health Care Coverage Commission that included Democratic and Republican legislators as well as representatives of insurers, health care providers and consumers.

In Illinois, SB 3047 passed the Public Health Committee yesterday.  The bill establishes the bipartisan Health Care Justice Implementation Task Force whose mission goals are: 1) to monitor the implementation of the federal health care reforms and make recommendations per state implementation; 2) assess current state programs and how they interface with the federal reform and 3) develop a plan regarding additional reforms needed to ensure affordable health care.  The bill provides for four public hearings a year and by January 1, 2011, the Department of Public Health shall contract with an independent research entity that will assess the implementation of health care reforms, health care financing, and health care delivery models. The President of the Senate has expressed his belief that it will pass the full Senate.

Gender Discrimination:  The Senate in New Mexico has passed SB 148 leads the way to the prohibition of gender rating in New Mexico, phasing out the allowed differential between policies for men and women.  Currently individual rates in the state can be up to 20 percent more for women.  New Mexico joins eleven other states that currently prohibit or restrict gender rating in the individual market.  These include Maine, Massachusetts, Minnesota, Montana, New Hampshire, New Jersey, New York, North Dakota, Oregon, Vermont, and Washington.

Resources:
Health Care for America Now - Health Insurers Falsely Claim Rising Costs Justify Soaring Premiums
Families USA - February 2010 Issue Brief, Medical Loss Ratios: Making Sure Premium Dollars Go to Health Care—Not Profits
Progressive States Network - Letter to President Obama urging the passage of comprehensive health care reform
Progressive States Network - Health Care Reform Resources

State Coverage Initiatives - Webinar on March 11, 2010 from 2— 3:30 p.m. EDT on the potential roles of a health insurance exchange.  This follows their recent brief, Preparing for Health Reform: The Role of the Health Insurance Exchange, that discusses state-specific issues to be considered before establishing an exchange and the different ways in which an exchange might be structured and operated.

State Coverage Initiatives - The Impact of Health Care Reform on State Operations, a February 2010 issue brief that examines a wide range of health care reform initiatives implemented over the past few years in five states - Massachusetts, New Mexico,Tennessee, Vermont and Wisconsin - and offers recommendations that are applicable to all states.