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CCH® BENEFITS — 04/17/09

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.

Same-sex marriage. Iowa and Vermont have become the third and fourth states, respectively, to legalize same-sex marriage, following Massachusetts and Connecticut. In Iowa, the state’s supreme court ruled that restricting marriage to unions of a man and a woman is unconstitutional. In Vermont, the state legislature voted to override Gov. Jim Douglas’ veto of a bill allowing same-sex marriage. Employers in Iowa and Vermont should review their benefits plans following these decisions, and might experience an increase in requests for spousal benefit coverage from employees who have legally married their same-sex partners. In order to respond to requests for spousal benefits by same-sex couples, employers should review their current benefit plans to identify those benefits that may be extended to an employee’s same-sex spouse in light of the conflicting definitions of marriage under federal and state laws. Also, employers might want to consider implementing or amending current domestic partner benefits policies in order to provide certain benefits to their employees’ same-sex spouses.

California. Approximately 500,000 working-age state residents have lost their health insurance coverage since the economic recession began in November 2007, according to the University of California-Berkeley’s Center for Labor Research and Education. The report predicts that by 2012, the number of uninsured working-age adults in California will increase 1.4%, or by 600,000 people. Also, if health care reform is not approved and employer premium costs continue to increase by 7.5% annually, the report predicts that the number of working Californians without employer-sponsored health care coverage will increase by 2.5%. For more information, visit http://laborcenter.berkeley.edu/.

Colorado. The Colorado house preliminarily approved a bill, HB 1293, that would increase fees on hospitals to fund an expansion of state health care programs. The bill would charge hospitals 2.4% of annual revenues, and would raise approximately $600 million, which would be doubled by matching federal funds. The funds raised would be used to expand Medicaid and the state’s Child Health Plan Plus program to an additional 100,000 state residents. For more information, visit http://www.colorado.gov/cs/Satellite?c=Page&cid=1197969485591&pagename=HCPF%2FHCPFLayout.

Florida. Efforts to increase enrollment in the Cover Florida program have not been very effective: only 952 state residents have signed up for the program since it began on January 5. The program allows insurers to offer several low-cost health plans, and of the residents who have signed up, 82% are covered by catastrophic plans, while 18% have enrolled in plans that emphasize preventive care. For more information, visit http://www.coverfloridahealthcare.com/.

Illinois. On April 1, a new law took effect that will reduce what hospitals charge uninsured patients and cap how much hospitals can collect from such patients. Under the law, hospitals cannot charge eligible uninsured patients more than 35% over the cost of services. Additionally, the law caps at 25% of a patient’s family income that hospitals can collect annually from eligible uninsured patients. For more information, visit http://www.ilga.gov/.

Kansas. State lawmakers have approved a $13 billion state budget that includes $1.2 million in new spending to extend coverage under the state’s HealthWave program to more uninsured children. HealthWave oversees Medicaid and Children’s Health Insurance Plan (CHIP) beneficiaries in the state. According to the Kansas Health Policy Authority, the additional funding will allow the program to enroll an additional 4,500 children beginning July 1, and as many as 8,000 children could be enrolled by the end of 2011. The bill has passed both the house and the senate and goes to Gov. Kathleen Sebelius for her signature. For more information, visit http://www.kansashealthwave.org/.

Maryland. The Maryland house has approved a bill that would guarantee uninsured patients with incomes up to 150% the federal poverty level no-cost care at state hospitals. Under the bill, Maryland hospitals would be required to develop a financial assistance policy for uninsured and underinsured patients, and would prohibit hospitals from charging interest on unpaid bills. The bill also would require hospitals to provide individuals referenced on hospital bills with information about financial assistance. For more information, visit http://www.msa.md.gov/msa/mdstatehouse/html/home.html.

New York. New York recently implemented a statewide prescription drug discount card program for state residents with disabilities, those who are too young to qualify for Medicare, and those with incomes that make them ineligible for Medicaid. The New York Prescription Saver Card program is targeted to individuals aged 50 to 64, as well as any disabled residents. To qualify, residents’ annual incomes must not exceed $35,000 if they are single and $50,000 if they are married. Approximately 35,000 state residents are eligible for the program. Depending on the quantity, type, and brand of drugs purchased, the cards will discount the prices of generic drugs by an average 30% to 40%, and cut the retail price of brand-name drugs by at least 25%. For more information, visit https://nyprescriptionsaver.fhsc.com/.

Oregon. An Oregon senate committee recently passed several bills aimed at improving care and reducing costs. The first bill, SB 451, would establish the nation’s first state registry of people’s wishes for end-of-life care. The second bill, SB 452, would establish a council to help health care providers convert to electronic patient records. SB 455 would bring together insurers and health care providers to develop and use evidence-based clinical guidelines and best practices. Finally, SB 457 would require Oregon to establish a database on the state’s health care workforce size and needs. The passage of these four bills marks Oregon’s first steps toward approving a comprehensive health care reform plan designed by the Oregon Health Fund Board. For more information, visit http://www.oregon.gov/OHPPR/HFB/index.shtml.

South Carolina. The South Carolina house has approved a measure to increase the state’s cigarette tax from seven cents per pack to 57 cents per pack to help fund health care for low-income workers. The measure is expected to generate approximately $139 million and would be used to establish a fund to cover 75% of health plan premiums for workers with annual incomes of up to $21,600. For more information, visit http://www.scstatehouse.gov/.

Utah. Approximately 10.7% of Utah state residents, or 298,200 people, were uninsured in 2008, according to the Utah Healthcare Access Survey. Since 2007, this number has increased only by 11,000 Utah residents. However, the amount of uninsured children dropped by 13% in 2008, due to legislation passed that allows year-round enrollment in the state’s CHIP program. By the end of 2008, CHIP enrollment had increased to 37,000 children. For more information, visit http://health.utah.gov/opha/OPHA_UHAS.htm.

West Virginia. If the state focuses on fighting obesity and chronic illness, West Virginia could save approximately $2.7 billion in public and private health care costs by 2018, according to Ken Thorpe, health policy professor at Emory University. However, if the state does nothing, total health spending could double from its present figure to $11.5 billion annually. Overall, Mr. Thorpe estimated that three-fourths of the state’s health care spending each year is linked to chronic disease. For more information, visit http://www.emory.edu/policysolutions/index.html.

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