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CCH® BENEFITS — 01/28/09

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. Because of the potential impact of this ongoing activity on employer-provided health insurance benefits, Spencer’s Benefits Reports provides regular updates about state health care reform.

California. Nearly 700 enrollees whose policies were canceled by Blue Shield of California will be reinstated as part of a settlement reached with the California Department of Insurance. Between Jan. 1, 2004, and May 31, 2008, Blue Shield improperly dropped 678 subscribers, and will face up to a $5 million fine if it does not take corrective action. Blue Shield has agreed to reimburse enrollees for any out-of-pocket medical expenses and create a third-party review process to review policy cancellations. For more information, visit http://www.insurance.ca.gov/http://www.insurance.ca.gov/.

Colorado. A proposal that would require Colorado hospitals to pay a per-patient fee to the state could fund health care coverage for an additional 200,000 state residents. The fee, which could generate up to $600 million annually along with federal matching funds, would be used to expand eligibility in government-sponsored health care programs, allow some residents to buy into Medicaid, and increase payments for physicians and hospitals that treat Medicaid beneficiaries. Gov. Bill Ritter and the Colorado Hospital Association (CHA) are continuing to negotiate a fee; CHA board members support the plan, according to Steven Summer, president of the CHA. For more information, visit http://www.cha.com/.

Hawaii. On January 15, the Hawaii Medical Service Association launched American Well, a Web service that will allow patients to visit physicians online via Webcam or text chat. Patients can use the service by logging onto participating health plans’ Web sites. Doctors hold ten-minute appointments that can be lengthened for an additional fee. Hawaii Medical Service Association members will pay $10 to use the service and the insurer will provide the service to uninsured patients for approximately $45. The system is well suited for Hawaii, according to Mike Stollar, vice president of marketing for the Hawaii Medical Service Association, because the islands are remote, traveling between them takes time, and recruiting physicians to rural areas is difficult. For more information, visit http://www.hmsa.com/.

Massachusetts. More than 44,000 Massachusetts seniors must pay larger prescription drug copayments as a result of an $11 million cut to the state Prescription Advantage program, which provides copayment assistance for seniors who meet an income eligibility requirement. The cut was part of Gov. Deval Patrick’s $1 billion state budget reduction, and could leave many seniors paying double or triple their copayments. As of January 1, state assistance for covered drugs is not available under Medicare until beneficiaries have spent $2,700, which will be difficult on those with fixed incomes, according to Mary Sullivan, director of the nonprofit MassMedLine. For more information, visit http://www.mass.gov/?pageID=elderssubtopic&L=3&L0=Home&L1=Health+Care&L2=Prescription+Advantage&sid=Eelders.

New York. As a step toward universal health care coverage in New York, Gov. David Paterson has proposed that private employers be required to offer health insurance to workers’ dependents who are ages 19 to 29. Currently, employers are not required to offer health insurance to dependents who are older than age 18 or, if they are enrolled in college, age 22. According to the governor, residents ages 19 to 22 account for 31% of New York’s uninsured population. The proposal would expand coverage to approximately 80,000 people age 19 to 29 who are uninsured. For more information, visit http://www.ny.gov/governor/.

North Dakota. In a recent speech, Gov. John Hoeven proposed raising the income eligibility limits for the State Children’s Health Insurance Program (SCHIP) from 150% of the federal poverty level (FPL) to 200% of the FPL to provide thousands of children with health care. In addition, Mr. Hoeven said that he plans to increase Medicaid physician reimbursement rates. For more information, visit http://www.nd.gov/dhs/services/medicalserv/chip/.

Oklahoma. On March 1, the Oklahoma Health Care Authority plans to expand eligibility for the Insure Oklahoma program to include more businesses and some college students. Under the program, the state pays a portion of the cost for businesses with 50 or fewer employees to provide health insurance to workers. This will be expanded to companies with 99 or fewer employees. Also, full-time college students between ages 19 and 22 in families with incomes of up to 200% of the FPL will be eligible. However, the program’s enrollment is capped at 25,000 individuals, which could mean limited enrollment. Currently, there are 10,700 enrollees. For more information, visit http://www.insureoklahoma.org/.

Virginia. In 2007, Virginia overhauled state statutes governing involuntary treatment for mental illness, in response to the April 2007 tragedy at Virginia Tech. The legislation passed in 2008, and the additional $42 million appropriated by the state for community mental health agencies was to be a down payment on a long-term investment. However, current economic conditions will delay the effort to fill gaps in community mental health services. Still, Gov. Tim Kaine believes that the important new legal reforms can be achieved without additional cost. According to Richard Bonnie, chair of the Commission on Mental Health Law Reform, the mental health reform commission has developed several legislative proposals that offer people more choices in their mental health care, protects the dignity of those who are subject to involuntary commitment proceedings, and reduces the need for involuntary treatment in the first place. For more information, visit http://www.dmhmrsas.virginia.gov/omh-mentalhealthcommission.htm.

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