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CCH® BENEFITS — 12/03/10

State Health Care Reform Update

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 efforts.

Arizona. While health advocates are concerned about the current significant cuts to Arizona’s Medicaid program to save $27 million, officials at the Arizona Health Care Containment System (AHCCS), the state’s version of Medicaid, warn that the worst is yet to come. The AHCCS expects a $1 billion budget shortfall beginning in July 2011, when a federal matching program created by the American Recovery and Reinvestment Act expires. State officials have not determined how the state will make up this lost funding. For more information, visit http://www.azahcccs.gov/.

Connecticut. Anthem Blue Cross and Blue Shield has submitted rate increases for the state’s approval, and wants to raise health premium rates by as much as 20% for those purchasing individual coverage. According to Anthem, the mandates imposed by the Patient Protection and Affordable Care Act (ACA) are the reason for the increase. However, state attorney general and Senator-elect, Richard Blumental, has questioned this increase and believes the rate increase is not justified in the documents the company filed with state regulators. The two sides must present their case at a hearing, and the Insurance Commissioner will decide within 30 days whether to grant the increase for as many as 48,000 individual policy holders. For more information, visit http://www.ct.gov/cid/site/default.asp.

Massachusetts. In 2006, the state passed a universal health care law to extend coverage to virtually all state residents. Now, Massachusetts must develop strategies to curb rising costs, which increased by 7.5% annually over the past few years. To address costs, officials in Gov. Deval Patrick’s administration are drafting legislation on a payment overhaul for the state legislature to consider in January 2011. Mr. Patrick has supported a “global payment” plan, which would encourage physicians and hospitals to form accountable care organizations to coordinate care and distribute payments and thus moving the state away from the traditional fee-for-service provider payment system. For more information, visit http://www.mass.gov/?pageID=gov3homepage&L=1&L0=Home&sid=Agov3.

Michigan. The state has reopened through November 30 the Adult Medical Program, which provides free or nearly free medical care to adults 21 and older. The benefits could help as many as 58,000 low-income individuals, some of who could not previously get help because the Adult Medical Program had been frozen since May 31, 2009, due to state budget cuts. In addition, approximately 580,000 people who now receive Medicaid will be able to get free or low-cost dental, vision, and podiatric care. Those services have been frozen since July 1, 2009, except for emergencies such as tooth extraction, also because of budget cuts. Michigan’s legislature approved restoring the programs to help the state get $350 million in federal Medicaid matching funds. For more information, visit http://www.michigan.gov/dhs/0,1607,7-124-5453_5530-68875--,00.html.

North Carolina. Inclusive Health, the state’s high-risk health insurance pool, has received a $2.1 million federal grant to make coverage more affordable for high-risk individuals. The grant will be used to provide subsidies to help state residents who might not otherwise be able to afford health coverage. This year, Inclusive Health estimates the grant will help more than 300 people. For more information, visit http://www.inclusivehealth.org/.

Pennsylvania. Pennsylvania’s temporary high-risk pool, created by the ACA, has enrolled more than 1,650 people in just three months. The PA Fair Care Program costs participants $283 a month. To be eligible to enroll, individuals must have been without health insurance for at least six months and must be unable to obtain coverage because of preexisting conditions. Other states have not experienced enrollment as high as Pennsylvania has, but state officials believe it is the low $283 monthly premium. Other states are charging premiums as high as $972 a month. For more information, visit http://www.portal.state.pa.us/portal/server.pt/community/health_insurance/9189/pa_fair_care/666211.

Wyoming. The Wyoming Department of Health recently submitted its largest supplemental budget request, at more than $200 million. Out of this, $192 million has been requested to cover the estimated shortfall for Medicaid services. Due to the economy, more individuals are eligible for Medicaid. During fiscal year 2008, 80,500 patients were eligible. By fiscal year 2010, the total grew to 88,500 individuals. For more information, visit http://wdh.state.wy.us/.

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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