Affordable Care Act: State Action Newsletter
February 9, 2012
2012 Exchange Update
At least 22 states, as of Feb. 7, 2012, have legislation pending to establish a health insurance exchange. Eleven of those states introduced bills after Jan. 1, 2012, while the others were carried over from last year. HB 4574 in Illinois would amend the law passed last year, which provided the legislative intent to establish an exchange, by defining the details of the exchange. Virginia is in a similar position, with seven bills to create an exchange pending after passing intent legislation in 2011. New Mexico lawmakers have also introduced two bills to create an exchange after an attempt to do so failed last year when the governor vetoed the bill. Ten states and the District of Columbia have enacted laws to establish exchanges since the Affordable Care Act passed in March 2010.
Some proposed bills address operational details for the exchanges, while others attempt to undo or block the exchanges. For example, California’s AB 1453,AB 1580 and SB 728 address essential health benefits, eligibility criteria and the risk adjustment system. Colorado’s SB 53 attempted, but failed, to repeal the Colorado Health Insurance Exchange legislation passed in 2011. Missouri’s SB 464 would prohibit non-legislative bodies from creating an exchange, stating that the exchange can be created only by a “legislative act, initiative petition or referendum, requiring voter approval.” NCSL will continue tracking this issue in the 2012 legislative tracking database.
Medicaid Fast Facts
Did you know?
- More than 200 Medicaid-related bills have been filed this session in at least 34 states, and more than 150 of these bills are related to implementing the ACA.
- The Medicaid expansion required by the Affordable Care Act will result in an additional 16 million non-elderly enrollees by 2019.
- Medicaid enrollment grew by 4.8 percent in 2008, 8.8 percent in 2009, and 5.7 percent in 2010.
- Total Medicaid spending increased by 5.8 percent in 2008, 7.6 percent in 2009, and 6.6 percent in 2010.
- Nationally, about 70 percent of all Medicaid beneficiaries are enrolled in a managed care plan.
- Medicaid pays for about 70 percent of all nursing home costs in this country.
- Medicaid pays for more than 40 percent of all U.S. births.
- Beneficiaries with multiple chronic diseases, the elderly or people with other barriers to receiving care account for the bulk of Medicaid spend. Studies have found that only 5 percent of all beneficiaries account for over half of Medicaid spending.
Inside This Issue
California Addresses Essential Health Benefits
The California Health Benefits Review Program (CHBRP) submitted questions to the federal Center for Consumer Information and Insurance Oversight regarding the “Essential Health Benefits Bulletin” released on Dec. 16, 2011. The bulletin outlines the approach by the U.S. Department of Health and Human Services (HHS) to give states flexibility to select an existing health plan as the benchmark for the essential health benefits package. CHBRP posed 26 questions related to establishing a benchmark plan, creating qualified health plans and defraying costs of state requirements in excess of essential health benefits. For example, CHBRP wants to know: “How will a state’s fiscal responsibility for a requirement in excess of essential health benefits be calculated?”
According to CHBRP, they submitted these questions in hopes that future guidance and regulations on essential health benefits will provide the answers. CHBRP was established in 2002 to provide evidence-based, non-partisan analysis of proposed health insurance benefit mandates and repeals for the California Legislature.
The comment period for the HHS essential health benefit bulletin ended on Jan. 31, 2012. NCSL submitted comments in a memorandum to CMS.
2012 Health Insurance Reform: State Update
As of February 6, 34 state legislatures were considering more than 200 bills related to immediate insurance reforms, including some carried over from 2011. Here are a few newly filed bills:
Medical Loss Ratio
Legislation has been introduced in Illinois (HB 2977) that would require companies issuing health and accident insurance policies to disclose to each policyholder whether and to what extent that company has complied during the previous year with the medical loss ratio provisions of the federal Affordable Care Act. Medical loss ratio legislation has been introduced in at least three other states: Hawaii (HB 1896), New Mexico (SB 7) and Wisconsin (SB 343).
Out-of-State Insurance Purchase
Legislation introduced in Tennessee (HB 2497 and SB 2634) would allow state-authorized insurers to issue individual accident and sickness policies approved for issuance in another state. Out-of-state related legislation has also been introduced in New Hampshire (SB 150), Oklahoma (SB 1059), Washington (SB 6440) and West Virginia (HB 2801).
Legislation introduced in Hawaii (HB 2405) would require health insurers to provide health care coverage and benefits for autism spectrum disorders beginning after Dec. 31, 2012. So far in 2012, legislation mandating specific health benefits has been introduced in at least three other states: California (oral cancer medications; autism), Utah (autism) and Washington (tobacco cessation coverage).
ACA and Small Businesses
Small businesses are much less likely to offer their employees health benefits than large employers. Just over half (57 percent) of businesses with 50 or fewer employees offered their workers health insurance coverage in 2011, compared with 97 percent of businesses with more than 100 employees. A new report from the Kaiser Family Foundation explains how the Affordable Care Act (ACA) will affect small businesses and their employees.
Under the ACA, small businesses may keep health insurance plans in existence before the enactment of health reform in March 2010. Such “grandfathered” plans are subject to fewer requirements.
By 2014, every state must create a Small Business Health Options Program (SHOP Exchange) to make it easier for small businesses and individuals to compare and purchase health insurance plans. If a state fails to create an exchange, the federal government will do so.
The ACA does not require small businesses with 1-49 employees to offer health insurance. However, employers with more than 50 full time equivalent (FTE) employees will be penalized $2,000 per employee, excluding the first 30 employees, if they fail to offer affordable health insurance coverage. Employees not offered affordable insurance may receive tax credits to purchase their own. In this case, the employer will be required to pay $3,000 per employee receiving the tax credit.
Small businesses with fewer than 25 FTE employees with average annual wages below $50,000 may be eligible to receive tax credits that go toward health insurance costs. To be eligible, employers must contribute at least half of the cost of employee health insurance. Additionally, small businesses with fewer than 100 employees will be eligible to receive grants for workplace wellness programs if they did not have such programs in place as of March 2010.
2012 Hot Topics Webinar Series—Health Webinar, Feb. 10, 2012
Each year, NCSL develops a list of the most pressing and important concerns on state legislative agendas. This year’s Top 12 of 2012 highlights some of the crucial areas that will command the attention of policymakers. Tomorrow, Feb. 10, 2012 at 2 p.m. ET features the health webinar. It will explore several elements of Medicaid and federal health reform, including health insurance exchanges, health information technology and an update about essential benefits. Learn what’s happening in opposition to the law as well. Click here to learn more about the webinar series and to register; archives will also be available.
2012 State Legislative Tracking Database Now Available
NCSL has launched the 2012 Federal Health Reform: State Legislative Tracking Database. Updates occur every other Tuesday, so far over 200 bills have been introduced related to health reform in 2012. In 2011, the database and had over 900 bills.
Topics in the database include: Medicaid, Health Insurance Exchanges, Health Insurance Reform, Health Information Technology, Prevention and Wellness, Providers and Workforce, and Challenges and Alternatives. The last category contains bills that oppose, opt out of, or differ from elements of the federal provisions.
States are expected to address health insurance exchanges, build and upgrade health information technology systems, determine essential health benefit packages, and prepare for Medicaid expansions this legislative session. In 2011, 10 states created health benefit exchanges through legislation, and 42 states passed insurance reform laws to comply with or address requirements in the Affordable Care Act (ACA). The database will include 2011 and 2012 pending, enacted and failed bills. They can be searched by state, year, topic, keyword, status or primary sponsor. This 2012 legislative database will be online and free to all web users.