Most insurers claim they continue to focus on important health care reform issues, but also claim that some members of Congress and The White House appear unwilling to stop or even slow the political attacks against insurers.

Even as yet another analysis released last week showed real concerns persist that current proposals will worsen, rather than alleviate, rising health care costs, the House Judiciary Committee used its powers last week to try to punish the industry for speaking out (see below). Actually, the industry remains committed to seeing meaningful health care reform passed this year, a view made clear in a Washington Post op-ed authored by the President of America’s Health Insurance Plans (AHIP).

Senate Finance Committee Resumes Mark Up Of Health Care Reform BillThe reactions on the Hill continue to largely side-step the specific cost concerns raised in the past two weeks. But Insurers remains hopeful that the dialogue may yet return to substantive issues before bills are brought to the floor of the House and Senate in the next several weeks.

Federal

To ease the burden of a scheduled 21percent pay cut for Medicare doctors in 2010, Senate Democrats tried to pass a stand-alone bill that would have wiped out both next year’s cut and all future cuts. Eliminating the cut for one year would cost $10.9 billion — such a provision is in the Finance Committee version of health care reform and would be fully funded. To totally wipe out the fee cuts for all years would cost $245 billion. Without a “pay for” such a bill would add close to a quarter-trillion dollars to the deficit. This is precisely the bill Majority Leader Harry Reid brought forth. Senator Reid needed 60 votes; he got 47 as all Republicans and 13 Democrats voted against cutting off debate. Senate Democrats had hoped to gain physician support for health care reform by providing relief from the cuts. But the results should serve as a “wake-up” call to the Democratic leadership that health reform will not be a walk in the park.  The strong vote could also embolden moderate Democrats to band together and make “hard votes” on health care reform as well.

In the House, legislative activity for the week came down to passage in the Judiciary Committee of a bill that Democratic sponsors describe as repeal of the health insurer antitrust immunity known as the McCarran-Ferguson Act. The bill more accurately can be described as codifying various court interpretations of the Act, all of which the industry lives with day in and day out. The bill specifically says health insurers (and MedMal insurers) can’t hide behind McCarran-Ferguson to price-fix, bid-rig or engage in market allocations with competitors.  Insurers can’t do that now. Thus, the bill is much more of a vehicle for some in Congress to further demonize a well thought-out piece of legislation with positive policy underpinnings. Whether this item gets added to a health care reform bill or progresses on its own remains to be seen.

The timing for floor debate on health care reform will likely ebb and flow for several weeks, but the current thinking is that this process may take all of 2009 and possibly into 2010 to complete. The House merging process is all but done along with the CBO review of the House bill. The House bill could be released this week, go to the Rules Committee on Thursday/Friday and on to the House floor the first week of November. This schedule requires that everything fall into place and that the Speaker be willing to begin floor debate before the Senate, which seems to be the case. On the Senate side, merging the HELP and Finance Committee bills seems to be picking up speed, particularly with reports of an emerging public plan compromise. But the process will not be finished until later this week, which would bring the bill to the floor the week of November 2 at the earliest. There is a real chance that too many variables will get in the way and neither Chamber will get to the floor until December, which, if true, would translate into a January Conference.

States

COLORADO: The Colorado Health Care Task Force has voted several bills out of committee, including: a prohibition on the use of gender in developing rates for individual policies; a maternity coverage requirement in individual policies; and a requirement that the Department of Insurance develop standardized formats for such things as policy forms and explanations of benefits. Insurers will provide comments.

GEORGIA: Commissioner Oxendine signed the regulation allowing health insurers to utilize health status at renewal when underwriting small groups (2-50). Insurers has worked with the Georgia Association of Health Plans for some time to help enact this regulation.  The Commissioner has also scheduled a meeting with health plan representatives to discuss his 2010 legislative agenda, which will include a bill similar to one defeated this year that would have regulated rates for individual policies.

ILLINOIS: The legislature last week completed the first week of a two-week veto session and took on two insurance-related issues. One bill would create external review requirements for all commercial insurance products, rather than just HMOs, effective July 1, 2010. The bill also would establish committees to create a uniform small-employer, group-health status questionnaire and an individual health statement for use beginning January 1, 2011.  Lastly, the bill would require insurers to semi-annually prepare and provide the Department of Insurance a statement on aggregate administrative expenses and other information. Surprisingly, Chairman of the Executive Committee Mary Flowers stated that she was not going to allow the bill to be called for a vote until she had an opportunity to question the sponsor. Thus, no vote was taken, even though there was no opposition. It appears the bill will be moved for a vote this week in a different committee. Also, negotiations have begun on an insurance mandate bill for prosthetics and orthotics. The General Assembly has indicated that when they adjourn late this week, they will not return again until January.

PENNSYLVANIA: Governor Ed Rendell signed spending, revenue and fiscal code bills earlier this month, ending the 101-day budget standoff. But negotiations continue over the unresolved issue of expanding legalized gambling to include table games. Of primary interest, one bill signed into law embraces an extension of the 5.9 percent gross receipts tax on Medicaid MCOs as an alternative to the Administration’s proposed 2 percent health insurance tax as the basis for federal matching Medicaid funds. The final bill also dropped the proposed “trigger provision,” which would have authorized the Department of Public Welfare to abrogate its Medicaid MCO contracts if the Centers for Medicare & Medicaid Services were to disapprove the GRT approach for fund matching.

UTAH: The Health Reform Task Force has drafted two proposals to recommend to the 2010 legislature. The first, under the guise of administrative simplification, would establish procedures to be followed for coordination of benefits for dependents subsequent to a divorce, superseding the provisions in the applicable insurance contract. The second proposal would require the DOI to develop standards for the use and electronic exchange of uniform claim forms, billing and claim codes, eligibility and coverage information and coordination of benefits.

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