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CCH® BENEFITS — 05/25/11

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.

Illinois. Beginning July 1, the state will tighten its eligibility requirements for its AIDS Drug Assistance Program. The program’s current income limit for eligibility is 500% of the federal poverty level (FPL), or $54,450 for a single individual. After July 1, only HIV-positive individuals whose incomes are at or below 300% of FPL ($32,670) will be eligible to apply, according to the Illinois Department of Public Health. For more information, visit http://www.idph.state.il.us/health/aids/adap.htm.

Iowa. The state senate has approved a bill that calls for the Iowa Department of Human Services to come up with a plan by December 15 to redesign Iowa’s mental health system. The bill would require that the Iowa legislature take action on the recommendations during its 2012 session, with the new system implemented by July 1, 2013. The plan calls for the state to divide into eight mental health regions, and each region would be required to encompass at least one community mental health center or federally-qualified health center able to deliver psychiatric services. For more information, visit http://www.dhs.state.ia.us/mhdd/index.html.

Louisiana. Governor Bobby Jindal plans to sell the state health insurance plan to a private company. Critics of this approach said that it would result in higher premiums and lower benefits for state workers and retirees. However, Mr. Jindal’s budget advisor, Paul Rainwater, noted that Louisiana is currently the only state besides Utah that operates its own health insurance plan. For more information, visit http://new.dhh.louisiana.gov/.

Maine. The state is considering a proposal aimed at promoting the purchase of health insurance across state lines. Maine’s health insurance rates are among the highest in the country, and the proposal would allow Maine residents to purchase policies sold in other states where regulations are less burdensome and rates are lower. Opponents of the proposal argue that Maine residents who purchase insurance from other states would forfeit the consumer protections provided by the Maine, and would encourage young, healthy individuals to purchase coverage out-of-state, leaving older, sicker people behind to deal with even higher monthly premiums. For more information, visit http://www.maine.gov/legis/.

Maryland. The state has passed legislation that sets up the state’s health insurance exchange, as mandated by the Patient Protection and Affordable Care Act (ACA). Maryland’s exchange will be an Internet portal that will provide individuals and small businesses the opportunity to compare rates, benefits, and quality ratings between health insurance plans. Maryland also passed several other laws to align Maryland law with provisions in the ACA, such as barring insurers from denying coverage to children with preexisting conditions, eliminating lifetime limits on essential benefits, requiring insurance companies to cover certain preventive services like mammograms and flu shots, and allowing young adults to stay on their parents’ insurance policies until age 26. For more information, visit http://mlis.state.md.us/.

Minnesota. The Minnesota house has approved cuts to state health and welfare programs, in an attempt to erase a $5 billion deficit without increasing state taxes. The bill would eliminate a Medicaid expansion for 100,000 adults, coverage would expire for 7,200 adults under MinnesotaCare, and give other MinnesotaCare enrollees subsidies to buy private health insurance. In addition, the state legislature is considering a plan to provide vouchers to low-income state residents to buy health care coverage in the private marketplace. State Republicans said that the voucher program would cap the state’s liability and provide low-income individuals with responsibility for their own care. For more information, visit http://www.leg.state.mn.us/.

Missouri. The Missouri Rx Plan will expire on August 28, unless lawmakers renew it. For the past 12 years, the plan has helped pay the medicine costs of 212,000 low-income seniors and disabled residents. A state senate budget plan is banking on the program’s demise, redirecting millions of dollars that normally would fund the prescription program to other government purposes. For more information, visit http://www.morx.mo.gov/.

Oklahoma. Governor Mary Fallin has turned down a $54 million early innovator grant from the Department of Health of Human Services (HHS) to help the state develop a health insurance exchange. Earlier this year, the HHS allocated $241 million in early innovator grants to help build the infrastructure needed to support health insurance exchanges under the ACA. Oklahoma was one of seven states who received a portion of those funds. Local Republicans criticized Ms. Fallin for accepting the funds, but are now commending her rejection of the funding. Ms. Fallin still plans to implement the health insurance exchange. For more information, visit http://www.ok.gov/governor/.

Vermont. The legislature has passed legsilation that would lead to a single payer system in the state.

Wisconsin. The Wisconsin Court of Appeals has upheld an ordinance passed by the City of Milwaukee requiring employers to provide paid sick leave to their workers, reversing a state circuit court ruling declaring the measure unconstitutional and lifting a two-year injunction barring the city from enacting its provisions. On Nov. 4, 2008, Milwaukee became the third U.S. city to adopt paid sick leave, overwhelmingly passing a binding referendum requiring that all employers in the city provide employees with up to nine paid sick days per year. For more information, visit http://city.milwaukee.gov/der/PSLO.

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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