Health reform update: Transparency hot, state mandates not

Several states also adopted laws to increase insurance access through public programs and premium subsidies.

By Doug Trapp — Posted March 10, 2008

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Many states enacted modest health coverage expansions in 2007, but gloomy budget forecasts will continue to make it tough for them to adopt more expensive, comprehensive health reforms.

Three major state reform trends continued or developed in 2007, said Susan Laudicina, one of the authors of a recent BlueCross BlueShield Assn. report on health legislation. States continue to adopt bills expanding access to public health programs and legislation making private insurance more affordable or flexible. Ten states also adopted transparency bills, most of which required hospitals to disclose medical errors and infection rates.

"States are maneuvering to improve the quality of care and the access to care and the affordability of care," Laudicina said.

Although 18 states already have said they face budget shortfalls in 2008, Laudicina said she expects to see states work within their means to expand access to health insurance and care further. "It all comes down to fiscal impact -- stable funding sources."

Laudicina also predicted that many states will debate some of the same reforms this year that they did in 2007. These include individual or employer insurance mandates, proposals requiring clearer health care price and coverage information, and measures to make the individual and small-group insurance markets more accessible or affordable by eliminating health plan exclusions for preexisting conditions, for example.

Texas' transparency for all

Most transparency laws passed last year focused on hospitals disclosing error and infection rates, but the Texas Medical Assn. championed successful bills that will require physicians, hospitals and health plans to give patients timely price estimates.

Many physicians haven't been supportive of transparency measures because of the administrative burden these efforts could place on their practices. But doctors in Texas were frustrated with the time they or their staffs have to spend helping patients navigate their insurance plans.

There has been a lack of clarity about health plans' co-payments, deductibles, coverage, physician networks and other issues, so physicians backed measures to reduce this confusion, said Susan Strate, MD, immediate past chair of the TMA council on socioeconomics and a surgical pathologist in Wichita Falls, Texas.

One bill adopted last summer requires Texas hospitals and physicians to disclose prices or anticipated charges, generally within 10 days of the patient's request. Hospitals also must report their infection rates. The pricing information is to be published on a state health department Web site.

Another measure is expected to lead to widespread use of "smart cards," which contain details about patients' health plans. The law calls for a recently assembled state committee to begin a smart-card pilot project and report the results to the Texas Legislature in 2009, Dr. Strate said.

The laws should help physicians better care for patients, she added. "This whole effort is to try to open up the system so that there is a level playing field, an across-the-board transparency. It will [take] some additional effort on the physician's part, but this idea is that this is a big-picture solution."

Insurance mandates a tough sell

Last year many governors and state lawmakers talked boldly about covering all of their residents through comprehensive reforms, but their efforts didn't lead to new laws.

Although about a dozen states debated Massachusetts-style legislation that would have required people to have health insurance or employers to contribute toward its cost, none of these efforts succeeded. California, Pennsylvania and Illinois ran into financial and political roadblocks that prevented all or most of their reform ideas, including individual or employer mandates, from being adopted.

Still other states debated these insurance requirements in state commissions or panels that ultimately didn't propose legislation with mandates. For example, Virginia Gov. Tim Kaine's Health Reform Commission mostly focused on more incremental ways to make health care more affordable or accessible, said Sheldon Retchin, MD, who chaired the commission's access committee.

"Employer mandates were dead on arrival," said Dr. Retchin, CEO of the Virginia Commonwealth University Health System. "As a matter of policy ... it just wasn't something that would sell." Commission members were concerned that such a business mandate would put the state at a competitive disadvantage. There was more discussion about individual mandates, Dr. Retchin said, but again members had significant concerns about Virginia being at a disadvantage.

The Medical Society of Virginia applauded the commission's efforts but didn't offer a position on employer or individual mandates.

Nine states passed bills in 2007 giving premium subsidies to individuals and families for purchasing private health insurance, Laudicina said.

Washington state lawmakers, for example, created the Health Insurance Partnership, a state-funded program that will give employees sliding-scale subsidies to buy one of a variety of existing private health plans selected by the partnership. To qualify, workers must earn no more than 200% of the federal poverty level and work at a firm with between two and 50 employees.

The measure also will create an unsubsidized purchasing pool for small business employees earning more than 200% of poverty, according to Beth Walter, the partnership's program manager. "Our target ... is to reach low-income uninsured," Walter said. The two efforts are expected to cover about 9,000 of the state's 90,000 uninsured people who work for small employers. Coverage is expected to begin in March 2009. The Washington State Medical Assn. did not take a position on the bill, according to spokeswoman Jennifer Hanscom.

Expanding children's insurance access also was a state priority last year, the BCBSA report showed. Eleven states increased eligibility for Medicaid or the State Children's Health Insurance Program. Their efforts have been hampered by a federal limit issued in August 2007 that generally caps eligibility at 250% of the federal poverty level. But Wisconsin and New York are using state funds to cover kids in families earning more than 250% of poverty.

States also are increasingly interested in motivating health plan enrollees to take better care of themselves. Six states passed laws allowing insurers to offer premium rebates or incentives for enrollees who join wellness programs, Laudicina said.

"This is really coming on now, so we expect to see more of that this year."

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States help with health coverage

Reforms aimed at insuring children and at helping people get private coverage through premium subsidies had the most success last year.

States adopting premium subsidy programs: Kansas, Maryland, Texas

States adopting bills to cover more children: Hawaii, Missouri, North Carolina, Ohio, Wisconsin

States adopting both: Connecticut, Indiana, Louisiana, New York, Oklahoma, Washington

Source: Blue Cross Blue Shield Assn., February

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