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CCH® BENEFITS — 01/21/11

State Health Care Reform Update

from Spencer’s Benefits Reports:For the last few years, states have been leading the way toward more comprehensive health care coverage to ensure that more people have or can obtain health insurance. With the passage of federal health care reform, states will have increasing responsibilities in regard to employer-provided health insurance benefits. Spencer’s Benefits Reports continues to provide regular updates about state health care reform.

California. Dave Jones, the state’s insurance commissioner, has asked Blue Shield of California to delay a rate increase for nearly 200,000 policyholders. For some, the rate increase could be as high as 59%. It would be the third hike since last fall. Mr. Jones asked Blue Shield to hold off raising the rates for 60 days. Currently, California does not have the authority to stop Blue Shield from increasing its premiums. A bill has been introduced in the state legislature that would require health insurers to receive approval from the state before raising premiums. For more information, visit http://www.insurance.ca.gov/.

Connecticut. The state department of insurance has rejected a 20% rate increase requested by Anthem Blue Cross and Blue Shield, the state’s largest health insurer. Barbara Spear, acting insurance commissioner, called the increase “excessive.” The premium increase would have affected 48,000 consumers. This is the first time that the state has flatly rejected a rate increase. For more information, visit http://www.ct.gov/cid/site/default.asp.

Iowa. The state Health Care Coverage Commission has voted 10-1 in favor of having the state form a health insurance exchange, as mandated by the Patient Protection and Affordable Care Act (ACA). The initial version of Iowa’s insurance exchange will offer basic information about prices and coverage of health insurance policies to help individuals and small businesses purchase insurance. Under the ACA, if states decline to set up their own exchanges, the federal government will do it for them. For more information, visit http://www.iid.state.ia.us/.

Maryland. The Health Reform Coordinating Council, which was created through an executive order after the ACA was signed into law, has issued a report recommending the creation of a Governor’s Office of Health Reform to guide the state’s implementation of the law. The proposed office will oversee the state’s new health insurance exchange. The Council also recommended that the health insurance exchange be established as an independent public entity, rather than as a private nonprofit entity. For more information, visit http://www.healthreform.maryland.gov/.

South Dakota. The state has developed a website to provide South Dakota residents with information about the ACA. The site is a resource for consumers, employers, and stakeholders in health care and outlines the initial steps the state government is taking to implement the federal law. For more information, visit http://healthreform.sd.gov.

Texas. State leaders have ordered agencies to decrease spending by 2.5% in the remaining nine months of the fiscal year. The state’s Medicaid program announced that it would cut another 1% from the fees paid to doctors, dentists, and hospitals, along with 2% in payments to nursing homes and home health care providers. The decreases take effect February 1, and come on top of 1% cuts that went into effect in September. For more information, visit http://www.hhsc.state.tx.us/medicaid/.

Washington. State insurance commissioner Mike Kreidler plans to ask state legislators to preserve his authority to approve health insurance rates, boost transparency and to let him consider some insurers’ surpluses when reviewing rates. Currently, the state insurance department is not allowed to review a company’s surplus, including investment income, when reviewing a rate request. His surplus proposal would apply only to nonprofit insurers, which account for most of the health insurance market in Washington. Specifically, Mr. Kreidler proposes that rate hikes not be approved when a company amasses a surplus equal to three months of claims expenses. However, he wants to be able to grant exceptions to that rule if limiting a rate increase threatens an insurer’s financial health. Mr. Kreidler also would like to add more transparency to the rate-review process, insurers’ finances, and medical trends. For more information, visit http://www.insurance.wa.gov/.

Wyoming. The state has begun working on a plan to provide health insurance to the 86,000 uninsured individuals in the state. A 17-member task force has started work on the job of recommending a plan for the state’s health insurance exchange, which will go into effect in 2014 as a part of the ACA. Health insurance exchanges will lead to lower costs and increased competition, according to supporters. For more information, visit http://insurance.state.wy.us/.

For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer's Benefits Reports.

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