State by State Analysis of Health Insurance Exchange Adoption

State By State Analysis of Public Health Service Act Requirements for Employers in the United States

The Public Health Service Act of 2010 requires most employers in the United States to provide group medical insurance for their employees. Employers who choose not to comply with this law will be fined, as authorized in Section 490-H of the Internal Revenue Code. Employers with fifty or more employees are required to offer health insurance to their employees who work, on average, thirty or more hours a week. And the insurance plan must meet certain affordability standards, the employer must pay part of the cost and the plan has to meet certain eligibility requirements for enrollment equity. The global purpose of this act is to increase the proportion of people who have access to health care in the United States.  Evidence of the ability to pay for medical treatment through insurance thus contributes to this goal. The data source for the fifty-state-analysis, came from the National Conference of State Legislatures web site.[1] Also my book, Unraveling U.S. Health Care includes 50-state surveys for health care legislation as well.

Health Insurance Exchanges

Small employers are slated to enroll in regional insurance exchanges by 2014. Large employers may elect to enroll in the exchanges by 2017. The latter is the most intriguing, because initially it is thought that large employers will not choose the insurance exchanges. However, based on my experience as a former insurance broker here are some reasons why employers may ultimately choose insurance exchanges.

1.      1. The insurance exchanges will have federal compliance components built into the design and employers will not have to worry about being fined if they go through that process.

2.      2.  Employers can finance and have their employees enroll in insurance exchange health plans and avoid group health insurance administration hassles by having their employees make individual elections.

3.    3.    The insurance industry will see a shrinking of health care providers over time, especially in some states, so the insurance exchanges will become markets of choice.

4.      4.  Insurance exchanges are slated to include strict criteria for administrative transparency and target levels for allocation of insurance premium contributions to actually pay health care claims(AKA consumers like this)

5.      5.  Applying the law of large numbers, a large association of employers can expect some purchasing power and stability. In any case this is what the insurance industry has been saying for decades.

6.     6.   The insurance exchanges are designed not to discriminate and once again, consumers like that.

States Which Have Authorized Health Insurance Exchanges

Despite the tumultuous cries of calamity about the insurance exchanges, nearly half of the states have already adopted laws to implement them including: Alabama, Arkansas, California, Colorado, Connecticut, District of Columbia, Hawaii, Illinois, Louisiana, Maryland, Massachusetts, Michigan, Nevada, Oregon, Utah, Virginia, Washington, West Virginia, Wisconsin, and Wyoming.

States Which Have Pending Legislation to Authorize Health Insurance Exchanges

Alaska is working to establish its own insurance exchange. The Georgia governor signed an executive order to authorize a Health Insurance Exchange. Mississippi has a state high risk pool for insurance and it is authorized to serve as a Health Insurance Exchange provider. North Dakota plans to create its own Health Insurance Exchange by 2013, otherwise the federal government will implement one. The Rhode Island governor signed an executive order to create a Health Insurance Exchange on September 19, 2011. The Texas Office of Insurance and the Office of Health & Human Services have partnered together to create its own Health Insurance Exchange. Vermont is working on creating its own state-wide single payer health plan. There are other states with pending legislation, but they were not cited because programs were not yet specified.

States Which Have Outlawed Health Insurance Exchanges

New Hampshire SB 148 became law on July 14, 2011 and it prohibits Health Insurance Exchanges.

It is important to note that a failure to authorize an insurance exchange is not the same as a ban and no other state had banned the exchange as of the end of 2011. Further, nearly all states have accepted money to implement the exchanges, some as much as fifty million dollars, so unless they are planning on giving the money back, they will also be creating their own exchanges.

Exceptions to the Rule

First of all, any employer who wishes to self insurance under the ERISA rules can exempt itself from all of these 2010 insurance plan design requirements. What this basically means is contracting with a third party administrator to pay claims and buying reinsurance through a broker.

Secondarily, the law seeks to provide financial subsidies for small employers who heretofore have had difficulty affording health insurance. This will mean more customers for the profitable insurance industry, which will now benefit by federal government subsidies for customers who are mandated to buy their product.

Thirdly, and perhaps most lucratively, employers who are enrolled or will enroll in “Professional Association Plans” or multiple employer trusts will be able to meet the requirements of the law.  These large employer plans are underwritten and managed by insurance brokerage firms. This is how the large brokerage firms deal with the small business sector; they fit them into their multiple employer association plans.

Though many insurance agents have been whining about the Public Health Services Act, the mandate for this act was promulgated by the insurance industry as a means to avoid obsolescence. Though the national insurance requirement will prove very lucrative for the industry, this does not necessarily mean it will benefit American health care purchasers to the same degree.

This article was written by Roberta E. Winter, MHA, MPA, the healthpolicymaven and may be reprinted with her permission.

---

[1] http://www.ncsl.org/issues-research/health/state-actions-to-implement-the-health-benefit-exch.aspx

Accountable Care Medicare Shared Savings Rules and How they Benefit Consumers

Accountable Care Organizations and Medicare Shared Savings Program
The federal Department of Health and Human Services (HHS), which includes the Centers for Medicare and Medicaid Services (CMS), announced proposed rules for the much vaunted Shared Savings Program for qualifying Accountable Care Organizations on March 31st. What struck me about the program, was how much of the risk management formula was taken directly from the private insurance sector, which is an indication of a public/private hybrid for program management. Since it is my belief that we can provide optimal public services through this model, I am keen to evaluate, follow, and measure the results for this revolutionary change in health care delivery for Americans. This article explains the risk sharing mechanisms in the new program and what it may mean for consumers.
Private Sector Influence
The Centers for Medicare & Medicaid, which administer the largest health care program in the country, have created a health care program, called Accountable Care which requires clinical results within a certain range in order to get optimal reimbursement levels. Additionally, organizations which outperform the government set standards have an opportunity to receive a gain or a share of the unused funds. In the insurance business this is called retrospective financing, where the provider reimbursements and participant insurance rates are established based on certain assumptions by actuaries at the beginning of the plan year. About three months after the close of the plan year a final report is given, which illustrates the true performance compared to the expected levels. At this time the corporate insurance client either owes money or has a credit toward the new plan year. It is this type of accounting that CMS is using to gauge the “Shared Savings” for ACO participants. But before we examine the shared savings program let’s briefly review what it takes to qualify as an Accountable Care Organization.
Eligibility Rules for Accountable Care Organizations
Who is eligible to be part of an ACO? All clinicians in group practice arrangements, networks of individual practitioners, joint venture partnerships with hospitals and other professionals, hospitals who employ ACO professionals, Critical Access Hospitals, and any health care practitioner or entity receiving Medicare reimbursements for services are eligible for ACO status.
Potential Roadblocks in Achieving ACO Status
Rural and semi-rural areas may have difficulty with the ACO status (Wenatchee Valley Medical Center for eastern Washington comes to mind) because anti-trust hurdles must be cleared with respect to market share. I imagine the way an organization will address this is to make sure the mix of employed clinicians versus contracted ones meets the 50% or less rule for Primary Service Area standards. It also looks like the non-urban exemptions and critical access rules will allow organizations like these to qualify.
All organizations who wish to participate in the ACO program must maintain a minimum level of patient volume of 5,000 patients.
The Accountable Care Agreement is binding for Three Consecutive Years
Organizations participating in the ACO Shared Savings Program have a choice of two models, either the one-sided or two-sided version. The names are humorous to me, but let me explain where they come from in terms of insurance risk management programs. The one-sided program means the organization shares only in the “up-side” or gain for performance improvements under the contract. However, CMS always likes to be a little different and this more limited risk exposure is just for the first two years, after which the organization experiences the full risk sharing. The “two sided” model means the organization is exposed to both gains and losses from the beginning of the three year contract. This seems like a no-brainer, why would a clinic want to be on the hook for losses right away in a new Medicaid program? However there is more to it than that, because the potential for gain differs.
Government Incentive for Meeting Benchmarks
Using a complicated formula of a per-enrolled-patient-risk-adjusted cost benchmark CMS has created a financial incentive of 2% to 3.9% depending on the number of patients involved in the ACO. In my previous ACO article in September, I highlighted some of the clinical outcomes the agency was seeking, to be eligible for the shared savings. CMS has identified 65(yes, it is complex) quality measures in these five areas under ACO provisions:
1. Patient/caregiver experience
2. Care Coordination
3. Patient Safety
4. Preventive Health
5. At-risk population/frail elderly health

Conversely, in terms of shared losses, the organization’s cost basis must be 2% or more over the cap to be required to pay CMS a differential based on ACO patient performance. What is important is that the participating ACO organizations report their quality metrics using the Medicare Physician Quality Reporting System (PQRS) and also using an electronic health record or HER or EMR. This incentive system will allow Medicare, the administrator for the largest health program in the United States to make assessments and extrapolate information on its population, for better program management. This is a great thing for the consumer, which is anyone who is on Medicare now and all of us who are paying for Medicare. There is also an additional incentive to use the Medicare reporting system which is the equivalent of one half percent of the total clinician’s billing to Medicare for each eligible professional’s Medicare Part B fee (out-patient doctor’s visits). This is significant and should encourage providers to participate in the program. Another ACO rule states that at least 50% of primary care physicians must be users of a certified electronic health record by the beginning of the second year of the contract. (Tremendous opportunity for EMR companies). Another aspect of the ACO rules is public reporting of some of the quality measures, which will create a nationwide standard for health care quality measures.
The Centers for Medicare and Medicaid Services has anticipated that some organizations will have difficulty meeting 100% compliance, so they have a Corrective Action Plan process. The CAP process includes noncompliance warnings, special monitoring, and a formalized corrective plan. If an organization fails to meet the ACO compliance rules and is removed from the program, it must wait three years before re-applying for participation. The review process for noncompliance is rigorous and participating organizations must submit to period audits.
Consumer Benefits
One of the positive aspects of ACO reporting is the data which will be gathered in a standard format and shared in aggregate with participating Accountable Care Organizations. There are also methods to coordinate with other Medicare Demonstration Programs, to avoid “double-dipping.” Other Medicare Demonstration Projects include: the Independence at Home Medical Practice Demonstration, Medicare Health Care Quality Demonstration, Medical Home Demonstrations, Physician Group Practice Transition Demonstration, Community Home Health Teams supporting Patient-Centered Care, and various state initiatives supporting Medicaid patients with chronic conditions.
Conclusions for Consumers
The ground breaking requirements of the Accountable Care Organization Rules enacted in 2010 are the result of a peer review process since the International Order of Medicine’s infamous report on the poor patient safety record in many United States health care facilities. Consumers will start to have access to standardized reports on participating health care facilities clinical safety measures and patient care data. This is a tremendous step forward for American consumers, as transparency in reporting is one of the hallmarks of high quality organizations. Integrated health care organizations like Virginia Mason already provide detailed patient quality information and the CMS Shared Savings Program will help others achieve similar reporting and patient quality standards. This is an example of good governance at its best, with an incentive to respond to the consumer push for greater efficacy in patient care.

State by State Analysis of Patient Rights under 2010 Reforms

State Reactions to 2010 Health Care Reforms
A virtual firestorm has ensued with state reactions to some of the federal government mandates under the health care reforms of 2010, from the Patient Protection and Affordable Care Act, the Public Health Services Act, and the Affordable Health Care Act for America. This article reviews two of these bones of contention, including the consumer protection aspects, which impact the Office of Insurance Commissioners and the reproductive rights provisions.
Consumer Protections under Federal Mandates
The federal government has awarded thirty million dollars in grants to the states to shore up their consumer protection services for health insurance policy holders. Since the insurance commissioners of each state are already charged with this duty, are staffed for it, and are funded by a tax on the insurance premiums for each insurer, I struggle with the necessity of this award. The insurance commissioner’s office for each state are very well funded and provide general revenue to each state well beyond their budget requirements. If those states aren’t able to staff appropriately for consumer protections, they should take this up with their state legislatures.
Upon reviewing the mandated consumer protections, they appear to reinforce existing protections in many states, but perhaps the standardization of the process is a good thing overall. Here are the new rules for an insured’s right to appeal a health insurer’s claim decision:
•Allows consumers to appeal when a health plan denies a claim for a covered service or rescinds coverage
•Gives consumers detailed information about the grounds for the denial of claims or coverage
•Requires plans to notify consumers about their right to appeal and instructs them on how to begin the appeals process
•Ensures a full and fair review of the denial
•Provides consumers with an expedited appeals process in urgent cases
These provisions are already spelled out in the Summary Plan Description which employers are required to distribute to medical plan participants as a federal reporting requirement under ERISA health and welfare plans. The new provisions codify what 44 states already have in operation for the outside appeal process. Still, the thirty million dollars to encourage compliance seems like overkill for the six states who are not already meeting these recommended standards, which were created by the National Association of Insurance Commissioners. Basically the new rules specify that the patient has a right to an independent review of a rejected claim. According to the Kaiser Foundation’s report on external reviews of insurance claims, the insured won 44% of the time on appeal. Certainly this is enough of an incentive for many patients to pursue a claim review, but one has to wonder, if it is a life saving treatment, the appeals process could still exhaust the patient’s treatment window for optimal efficacy.

Reproductive Rights under Federal Health Care Reforms
I reviewed legislation for all fifty states as of June 2010 and 86% of them had bills that were introduced to modify their compliance with the federal insurance exchanges and other mandates, to be rolled out in 2014. Basically here is what the fuss is about; the federal standards state that Medicaid and the insurance exchange plans will cover reproductive procedures. Of course this includes abortion and birth control. Since the Hyde Amendment restricts any federal money from paying for abortion, this means the insurance exchanges and Medicaid plans could include abortion coverage but the states or private employers would pay for it. This has raised the hackles of a lot of people, who do not want to be told what to do when they are going to pay the tab. According to a 2003 survey on contraceptive care provided by insurance programs, 87% of private employers offered coverage for abortion services, which covered approximately 46% of the U.S. population. Since the majority of private employer medical plans already cover abortion and birth control procedures for their female workers, this standard is not new. What is new is the government’s attempt to offer the same reproductive rights to low income women through Medicaid and the subsidies for eligible employers. Many of the states are objecting to the federal requirement that they must offer poor women the opportunity to receive birth control treatment. Why don’t you just keep them barefoot and pregnant? Here are my winners and losers on the reproductive rights bills:
Most female friendly regarding reproductive autonomy
Current Laws
Colorado Law 1021 requires insurers to cover contraceptives if they provide maternity coverage. Wisconsin SA458 improves sex education for youth.
Under Consideration
Illinois- Senate Bill 2482 requires insurance companies who provide prescription drug coverage to include coverage for contraceptives. House Bill 6205 codifies the right to abortion even if Roe-v-Wade is overturned. Bill 6205 also assures the right of Medicaid women to receive contraceptives and abortion as needed. House Bill 6842 blocks some access to reproductive health care under federal health reform stipulations.
Let’s give a shout out to South Dakota for proposing insurance companies cover contraceptives, but also for expanding Medicaid for pregnancy related services. Other states who seek to expand Medicaid for low income women are Alaska and Illinois.
The following states have bills stipulating improvements in sex education, emergency contraceptives upon request (morning after pill), and insurance reimbursement for contraceptives: Pennsylvania, New York, Missouri, Minnesota, California, and Hawaii.
Most paternalistic states regarding female reproductive autonomy
Current Law
Providers Can Decline to Provide Contraceptive Services
The following states have enacted laws which allow health care providers (pharmacists or clinicians) to decline to provide birth control services: Idaho S1353 enacted 3/29/2010 and Oklahoma S1891 signed 4/2/2010.
No Abortions under Private Insurance Plans Either
Under current law, the following states do not allow private insurance funding for abortion services; Kentucky, Missouri, Oklahoma, Idaho, and North Dakota. If you are unfortunate enough to live in North Dakota, now is a good time to consider moving over to the healthier and wealthier Minnesota neighbor, though I must confess I am a former Minnesotan.
No Abortions in Health Insurance Exchanges
States which have enacted laws that restrict abortion and other contraceptive services under state health insurance exchanges include Arizona and Mississippi.
Arizona- S1305 enacted 4/24/2010, prohibits insurance companies participating in the insurance exchanges from offering abortion and S1001 signed 4/1/2010, blocks portions of the federal health care reforms. If that isn’t charming enough, S1305 also prohibits insurance companies who cover state employees from offering abortion coverage.
States Seeking to Limit Birth Control specifically for Low Income Women
Virginia H30 passed 5/17/2010 limiting access to abortion for Medicaid eligible women and
Colorado L1311 prohibits the payment of abortion for Medicaid participants.
Pending Bills Restricting Reproductive Rights
North Carolina currently has a law that allows insurance companies to refuse contraceptive coverage, N.C. 1068 and also restricts access to contraceptives in school health services (let's keep those teen pregnancies coming). The coupe de tat’ Bill 890 makes an unborn child a crime victim separate and apart from the mother, legalizing the fetus status as an individual. North Carolina also introduced a bill on 3/31/2010 requiring all pregnant women to get an ultrasound, regardless of efficacy, to submit to a state lecture on fetal development, and to wait 24 hours before termination. Also a bill was introduced on 4/13/09 to prohibit state employees and teachers from having an abortion paid for by state medical plans. I wonder if the school boards can still fire teachers who become pregnant out of wedlock as well. Double winner here, ladies, cross your legs in NC. Bill 1157 would restrict funding for low income women on Medicaid, by not covering birth control services. A bill introduced on 6/17/2010 would block federal health care standards for women. Finally, Bill 431 would require parental consent in writing before getting an abortion. Let’s see, your parents may have a different religion, different sexual orientation, and you may not even be living with them, but you need their permission? How does this work for foster kids and run-a-ways?
Additional States that seek to limit access to sex education, contraceptives, fair access to birth control for low income women (Medicaid), and to criminalize abortion are:
Alabama, Louisiana, Virginia, Colorado, Nevada, New Mexico.
Does this really matter when the 1977 Hyde Amendment has continually been ratified and every federal budget limits payment for abortion procedures except in the case of rape, incest, or a life threatening situation? The tan-your-Hyde amendment has also been broadened to include no federal reimbursement for abortion for federal employees, women in the military, or for Indian Health Services. The latter is a real confounder since American Indian Tribes are considered sovereign nations, yet are conscripted to obtain health care from the occupying nation with opposing values. The 2010 reproductive rights provisions matter because the states can choose different provisions for abortion financing and service availability through the insurance exchanges and Medicaid programs. There is also specific language to protect clinicians who do not want to provide abortions, but no language protecting those who do. This is another example of unequal rights in the land of the not-so-free. The most onerous task is the mandate to attach a separate premium for abortion costs and to bill it as an addendum to the exchange plans. This seems like a lot of work for the estimated $1 additional cost per eligible woman, but that may be another way for the federal government to discourage abortions. What is next, wearing the letter A on our blouses? The shame attached to a common birth control method and often medically necessary procedure wastes a lot of resources that could be better spent on improving primary care across the board. For example, building a robust sex education program into the school system and providing contraceptive options to the sexually active population.
There will be other issues the states will argue about for health care reform implementations, but I thought we would start off with the most litigious and now the healthpolicymaven is signing off with condom in hand.

This article was written by Roberta E. Winter, MHA, MPA and may be reprinted with her permission.