Anticipating Federal Reform, States Move on Reining in Insurance Abuses and Implementation

Highlighting the outrage at insurance industry abuses pushing Congress towards a final decision on federal health care reform, state legislators continue to advance their own insurance reforms, even as they lay the groundwork for implementing the policies that will emerge in a federal bill. 

Here is a summary of just some of the developments taking place across the country where states are enacting and proposing legislation that will complement some of the anticipated federal reforms.  Other bills include establishing a state universal coverage program and creating commissions to examine how to best implement the many provisions within a federal reform bill.

Stopping Insurance Abuses:  Addressing consumer anger over continued discrimination and abuses leading to bankruptcy in many cases due to medical bills, state chambers continue to enact new reforms on insurance companies:

  • The Maine House recently voted to pass a first in the country law that  would eliminate lifetime and annual caps from health insurance plans in the state.  LD 1620, "An Act to Protect Health Care Consumers from Catastrophic Medical Debt” passed by a 99-38 vote.
  • New Mexico’s Governor signed SB 148 into law on March 9th.  The new law prohibits gender rating in insurance policies by phasing out the allowed differential between men and women. New Mexico joins eleven other states that currently prohibit or restrict gender rating in the individual market, including Maine, Massachusetts, Minnesota, Montana, New Hampshire, New Jersey, New York, North Dakota, Oregon, Vermont, and Washington.
  • Colorado stands on the verge of joining its southern neighbor by enacting House Bill 1008, which passed the House in February and was approved by the Senate this week, which will prohibit carriers from using gender as a basis for varying individual premium rates and declaring premium rates based on gender to be unfairly discriminatory.

Implementing Federal Reforms:  While a few conservative state leaders are promoting symbolic opposition to federal reform, most states are preparing to take action to implement federal reforms in anticipation of increasing consumer choice, reducing abuses by providers and expanding coverage:

  • In California, Assembly bill 1595 and Senate bill 890 establish the intent of the Legislature to enact legislation that would implement federal health care reform in this state.  The Senate bill specifies that the Legislature shall enact and enforce health insurance market reform, expand Medi-Cal coverage to adults and modifying the Major Risk Medical Insurance Program in order to make the state eligible for federal funding.
  • 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 and 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 stands on the verge of being approved by the full Senate.  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.
  • Two bills introduced in Minnesota in 2009, HB 1564 and SB 1473 establish the Minnesota Health Insurance Exchange that will provide individuals with greater access, choice, portability, and affordability of health insurance products.
  • A Missouri bill, HB 2295, establishes the "KidCare Co-op Program" that will provide affordable health insurance coverage for all children up to nineteen years of age.  The KidCare Co-op will operate as a public option nonprofit health insurance cooperative.
  • While in Nebraska, LR 372, is a resolution that would set up a study committee to study the potential effect of national health care reform proposals on Nebraska and analyze policy options for responding to and implementing health care reform measures.

Universal Health Care:  A number of states are already anticipating building on the frame of federal reform to move towards a more universal health care for all system:

  • Rhode Island introduced companion bills in February, HB 7560 and SB 2552, that would establish a state-sponsored system of universal health care which also creates the “HealthRight Authority” insurance exchange.
  • The Vermont Legislature is considering several bills that address aspects of health care reform.  This week, SB 88 passed in the Health and Welfare Committee and now sits in the Appropriations Committee.  SB 88 and HB 100 are companion state single payer bills that establish VermontCare to provide universal access to essential care for all residents, financed through state taxes and other sources, including a potential waiver for using Medicaid funds, while maintaining other federal public health programs.  Other pending legislation includes SB 181 (hospital global-budgeting bill), HB 491(single payer) and HB 510 (public option).
  • California's Universal Health Care Act (S.810) -- which passed the Senate in January - would enact a single-payer health care system for the state and create a commission to decide how to pay for the plan and then submit the funding plan to voters through a ballot initiative.
  • Pennsylvania:  Single payer bills are also making significant progress in Pennsylvania.  SB 400 and HB 1660, the "Family and Business Healthcare Security Act," also have the promised signature of the Governor and, most notably, the active support of Republican leaders in both chambers.

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 - 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.
State Coverage Initiatives - Webinar held on March 11, 2010 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.