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CCH® BENEFITS — 04/01/10

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. Even with the passage of federal health care reform, these state initiatives will impact employer-provided health insurance benefits, Spencer’s Benefits Reports continues to provide regular updates about state health care reform.

Arizona. Arizona became the first state to eliminate its Children’s Health Insurance Program (CHIP) when Gov. Jan Brewer signed the state’s budget on March 18. The budget eliminates KidsCare, which provides health care coverage for 47,000 children, to save $18 million. It also removes 310,000 childless Arizonans from the state’s Medicaid program. Lawmakers are basing the plan on the assumption that voters will approve a temporary 1-cent-per-dollar increase in the state sales tax on May 18. According to some hospital officials, tightening the eligibility criteria for the Arizona Health Care Cost Containment System, which is expected to exclude 310,000 adults from coverage, will fill emergency rooms with the uninsured. For more information, visit http://www.azahcccs.gov/.

California. A federal appeals court has barred the state from lowering Medi-Cal payments to doctors and hospitals by 5% and from cutting in-home care workers’ wages by nearly 20%, saying the state’s budget crisis does not justify violating federal laws that protect the poor and disabled. In four rulings, the Ninth U.S. Circuit Court of Appeals rejected attempts by Gov. Arnold Schwarzenegger and the state legislature to reduce California’s deficit by paying less to the health professionals who treat 6.6 million low-income Californians, and to hundreds of thousands of workers who care for some of the neediest. The appellate court said federal law requires “states to maintain poor residents’ equal access to basic health care, and forbids cuts intended solely to save money.” State officials said that they plan to appeal the decision. For more information, visit http://www.medi-cal.ca.gov/.

Idaho. Legislation was introduced in the state to mandate that all health care plans cover replacing and repairing prosthetic limbs and devices. Idaho is the state with the nation’s fewest health insurance mandates. According to the Council for Affordable Health Insurance, the state currently only mandates coverage of six benefits: breast reconstruction, cleft palate, emergency services, mammography, maternity minimum stay, and mental health parity. For more information, visit http://www.cahi.org.

Minnesota. Lawmakers in Minnesota have revealed a plan to temporarily extend the General Assistance Medical Care plan before replacing it with a trimmed-down delivery system managed largely by hospitals. Under the plan, hospitals will form coordinating care organizations (CCOs), and will receive grants on a quarterly basis to provide care to the state’s poorest individuals. Republican Gov. Tim Pawlenty said the plan “represents a step forward in health care reform.” For more information, visit http://www.dhs.state.mn.us/GAMC.

Montana. Gov. Brian Schweitzer is seeking federal permission to import cheaper drugs from Canada to use in state insurance programs. Mr. Schweitzer claims that the move could cut 40% of the $100 million the state spends each year on prescription drugs for Medicaid, the state’s Children’s Health Insurance Plan, state employees, and inmates in prison. For more information, visit http://governor.mt.gov/.

New Mexico. Under recently-passed House Bill 12, health insurers in the state will be required to put 85% of every premium dollar toward the cost of health care services, instead of administrative costs or profits. The bill specifies what constitutes direct services, such as case and disease management, health education and promotion, preventive services, and quality incentive payments to providers. Gov. Bill Richardson is expected to sign the legislation. For more information, visit http://legis.state.nm.us/lcs/_session.aspx?Chamber=H&LegType=B&LegNo=12&year=10.

Oklahoma. Beginning April 1, the Oklahoma Health Care Authority is reducing Medicaid reimbursements to nursing homes by 3.25%. The reduction is expected to save the Medicaid agency $5 million; however, the reduction will result in a loss of $15 million in federal matching dollars. For more information, visit http://www.okhca.org/.

Wisconsin. The state has enacted a new BadgerCare Core program for adults without dependent children. Participants pay $130 per month for a basic health plan that allows for doctor visits, three medications, 30 days of hospitalization, and catastrophic coverage. In other state news, the Wisconsin legislature has passed legislation that will require hospitals to disclose average prices for the 75 most common inpatient services and the 75 most common outpatient services based on their contracts with commercial health plans. The legislation also requires price information to be disclosed for the 25 most common services provided by freestanding outpatient facilities and by doctors. For more information, visit http://dhs.wi.gov/badgercareplus/core/index.htm.

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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