Posted by: reddiva | October 19, 2009

What? States Have Rights?


The Baucus bill that Harry Reid gets to make piecemeal of, part two.

At least they paid a little bit of respect for Article Ten.  Before we start, I think a reminder or two may be in order.

We are looking at the final form of the Baucus plan to overtake America’s health insurance providers and consumers.

Baucus narrowed down to 41 the amendments and changes he accepted to HIS bill from the original 500+.  The original will be shown in red and strike through used where appropriate; updates will be in bold blue.  For purposes of clarification, once I have begun with the text of the bill, if I want to add anything of my own [my additions will be in a different color].

What it originally said:

National Plans

Current Law.

No provision.

Chairman’s Mark

The Chairman‘s Mark would allow national plans, with uniform benefit packages that are offered across state lines. These national plans must be licensed in every state that they choose to operate and would be regulated by the states in terms of solvency and other key consumer protections and would offer coverage through the state exchanges.

Such national plans must be compliant with the benefit levels and categories detailed in the Mark, but would preempt state benefit mandates– thereby allowing these national plans to offer a single, uniform benefit package. The National Association of Insurance Commissioners (NAIC), in consultation with consumer groups, business interests, including small businesses, the insurance industry, federal regulators, and benefit experts, will develop standards as to how benefit categories should be implemented (e.g., what constitute prescription drug coverage) taking into consideration how each benefit is offered in a majority (26) of the states. After NAIC publishes these standards, the state insurance commissioners will ensure that insurance companies offering national plans are providing plans that are compliant.

Premiums for national plans will be determined based on rating rules in each state and will reflect geographic variation among rating areas. National plans would be subject to the requirement to offer silver and gold benefit levels. If an insurer offers a national plan(s) in one state, it must offer the same plan(s) in any other state in which it chooses to participate. For national plans, the NAIC will also develop harmonization standards for processes of state insurance regulation that pertain to form filing and rate filing.

[How does it look now?  I’m leaving off much of the original text this second time but I left enough so you can see the context and compare the two.]

National Plans

Current Law.

No provision.

Chairman’s Mark

The Chairman‘s Mark would allow national plans, with uniform benefit packages that are offered across state lines. These national plans must be licensed in every state that they choose to operate and would be regulated by the states in terms of solvency and other key consumer protections and would offer coverage through the state exchanges. States are permitted to opt-out of the national plan. Legislative action must be taken at the state level in order for a state to opt-out. A state that has opted-out can also take legislative action to opt back into the national plan.

[…]

Premiums for national plans will be determined based on rating rules in each state and will reflect geographic variation among rating areas. National plans would be subject to the requirement to offer silver and gold benefit levels. If an insurer offers a national plan(s) in one state, it must offer the same plan(s) in any other state in which it chooses to participate. For national plans, the NAIC will also develop harmonization standards for processes of state insurance regulation that pertain to form filing and rate filing.

State Opt-Out

Beginning in 2015, the Chairman‘s Mark provides an opportunity for states to apply for a waiver to opt out of certain aspects of this Act through a waiver process. States may be granted a waiver if the state applies to the Secretary to provide health care coverage that is at least as comprehensive as required under the Chairman‘s Mark. States may seek a waiver through a process similar to Medicaid and CHIP. If the State submits a waiver to the Secretary, the Secretary must respond no later than 180 days and if the Secretary refuses to grant a waiver, the Secretary must notify the State and Congress about why the waiver was not granted.

The Mark requires states to meet the requirements of this Act such that all residents have affordable, quality insurance coverage shall be eligible for a waiver of applicable Federal health-related program requirements.

In order to be eligible to receive a waiver under this section, states must demonstrate that:

(1) the state plan provides health care coverage to its residents that is at least as comprehensive as the coverage required under an exchange plan and with citizen input through a referenda or similar means;

(2) the state plan will ensure that all residents have coverage;

(3) the state submits an application to the Secretary at such time, in such manner,and containing such information as the Secretary may require, including a comprehensive description of the State legislation or plan for implementing the State-based health plan;

and

(4) the state submits a ten-year budget for the plan that is budget neutral to the Federal government.

[…]

[What follows are the restrictions on what the States must do to qualify for the opt-out and how they can appeal to opt-back-in.  At this point, we lose the Article Ten protections and return to a federally-funded plan for Medicaid:]

State Option for a Basic Health Plan

Overview. The Mark provides an opportunity for states to establish a federally-funded, non-Medicaid state plan for people with incomes above Medicaid eligibility but below 200 percent of the federal poverty level (FPL). Under this provision, the federal government would provide funds to participating states in order to allow such states to provide affordable health care coverage through private health care systems under contract.

States would use their share of federal funding to negotiate with health care systems for high-quality, cost-effective coverage options to provide better value to individuals and families in their states. Eligible individuals and families would have access to several affordable pre-negotiated coverage options through the Basic Health Plans rather than being limited to independent negotiating through the Exchange with individual tax-credit subsidies. By using negotiated purchasing, Basic Health Plans could provide improved benefits and reduced costs.

[…]

States would be encouraged to include innovative features in their health plan contracting, including but not limited to: care coordination and care management for enrollees, especially for those with chronic health conditions, incentives for use of preventive services, and establishment of a patient/doctor relationships that maximize patient involvement in health care decision-making, including awareness of the incentives and disincentives in using the health care plan.

Health care plan contracting: States would negotiate contracts with health care systems to ensure that coverage is available to all eligible persons in the state. The state Basic Health Plan administrators would be responsible for conducting a competitive procurement, with negotiation of payment rates and benefit packages that may exceed the minimum requirements outlined above. The Secretary of HHS would be required to verify that state Basic Health Plans are operating within federal cost and eligibility verification guidelines.

The state administrators are to consider and make suitable allowance for differences in health care needs of enrollees, and differences in local availability of health care provider resources. The state administrators would be encouraged to find ways to integrate their Basic Health Plan negotiations with any Medicaid or other state administered health care programs to maximize efficiency and improve the continuity of care between all state administered health programs. State administrators would seek to contract with managed care systems, or with systems that offer as many of the attributes of managed care as are feasible in the local health care market. A minimum medical loss ratio of 85 percent would be required of all participating plans.

[…]

[Is all that a help to the States and the citizens?  Not really, but it sure looks good, don’t you think?]

[The next part added to the bill is under Subtitle B – State Exchanges and Consumer Assistance which begins near the bottom of page 17 of the new bill with the current law.  At the top of page 18 is the beginning of the…]

Chairman’s Mark

Plan Participation. Beginning in 2013, all private insurers in the individual and small group markets that operate nationally, regionally, statewide, or locally must be available in a newly established state exchanges, if the insurers are licensed by a state (that is, a state has determined that the plans meet all the market-reform requirements).

Added in the Modification or by Amendment at Markup

Internal Appeals Process. Plans and health insurance carriers offering coverage in the exchange would be required to have an internal claims appeal process.

Child-only and Dental Plans. The Mark provides for the availability of child-only health insurance coverage through the exchange and would direct the Secretary to determine whether alternative means – such as direct subsidies, and refinements to tax credit eligibility determinations, are necessary to provide support for the purchase of such coverage for children. Stand-alone dental plans also would be permitted to offer pediatric dental benefits directly and to offer coverage through the exchange. These plans must comply with all consumer protection requirements in order to participate in the exchange.

Emergency Room Protections. The Mark would require that health plans and health insurers offering coverage in the exchange would be required to provide enrolled individuals coverage for emergency room services without regard to prior authorization or the emergency care provider‘s contractual relationship with the health plan. Further, enrollees may not be charged co-payments or cost-sharing for emergency room services furnished out-of-network that are higher than in-network rates.

Establishment of State Exchanges. States would be required to establish an exchange for the individual market and a Small Business Health Options Program (SHOP) exchange for the small group market, with technical assistance from the Secretary, in 2010. This requirement may encompass a single exchange with separate resources for individual and small-group customers. The Secretary would be required to establish and maintain a database of plan offerings for use by state exchanges. The database would enable the review of state-specific information. The Secretary could contract out to a private entity for the operation of the plan database and can also enter into an agreement with a Sub-Exchange in carrying out its functions.

In 2010, 2011 and 2012, plans with annual and lifetime limits and so-called ―”mini-medical” plans with limited benefits and low annual caps would be prohibited from being offered in the state exchanges. All other policies would be offered in the state exchange. Beginning January 1, 2013 July 1, 2013, all plans offered in the individual and small group market, whether through the exchange or outside of the exchange, would have to comply with the rating reforms and benefit options detailed in the Chairman‘s Mark.

Agents and brokers are permitted to enroll individuals and employers in any health insurance option available in the state exchanges.

[Another added “benefit” falls under the paragraph titled “Functions Performed by Secretary and/or States.”  It adds a new numbered item (4) and says:]

4. Develop a rating system for plans entering the state exchange based on relative quality and price compared to other plans offering products in the same benefit level, which would be displayed on the state exchange website;

[Numbered item (8) contains a deletion.]

8. Conduct eligibility determinations for tax credits and subsidies (as performed by a Federal agency that also reports the information to the Internal Revenue Service (IRS) for end of year reconciliation) and enable enrollment of individuals and small businesses;

State Exchange Related Functions Performed by State Insurance Commissioners. State insurance commissioners would establish procedures for reviewing plans to be offered through the state exchanges and would develop criteria for determining whether certain health benefit plans can be available for sale in the market.

Multiple Exchanges. After states adopt Federal rating rules and the exchange is functional for at least three years, states could permit other entities to operate an exchange — but only if it met specified requirements, and subject to approval by the Secretary.

[…]

Large Employers. Beginning in 2015, states must allow small businesses up to 100 employees purchase coverage through the SHOP health insurance exchange and states may allow employers with more than 100 employees into the state exchange beginning in 2017. Businesses that grow beyond the upper employee limit in the SHOP exchange may continue to purchase health insurance through the SHOP exchange. In 2017, states must develop and submit to the Secretary a phase-in schedule (not to exceed five years), including applicable rating rules, for incorporating firms with 50 or more (or 100 or more for those states that already included firms with 51-100 employees) into the state exchanges. The Secretary must develop regulations to address the potential for any risk selection issues associated with allowing larger employers into the state exchanges. Initial phase in for these firms would begin in plan years in 2018 and beyond.

[Well, well….why do I feel like I’m missing something?]

Enrollment by Members of Congress and Federal Congressional Employees. Notwithstanding any other provision of law, beginning July 1, 2013, Members of Congress and congressional employees would be required to use their employer contribution (adjusted for age rating) to purchase coverage through a state-based exchange, rather than using the traditional Federal Employees Health Benefits Plan (FEHBP).

Study on Use of Electronic Health Records. The Secretary or his/her designate is instructed to conduct a study on methods that entities offering insurance plans through the exchange can use to encourage increased meaningful use of electronic health records by health care providers.

This is getting really interesting.  So many changes already and we are only on page 21?    Even so, I’m still not impressed with the whole thing.  I still see too many restrictions on the States – not to mention the loss to the private insurance providers and the tax hikes we will have to live with to pay for this whole thing.  How sad.  And these are the people who work for us!

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