Rhode Island Business Group on Health: Legislative Affairs

March 15 , 2010 - Issue Brief
Rhode Island News: Health Reform Legislation Under Review in the General Assembly

Over the last few weeks, several health care reform legislative proposals have been introduced in the General Assembly and are under review in committee hearings. RIBGH is in the process of prioritizing the issues involved and determining how we should respond to the proposed legislation in priority areas. The main areas being address by these proposals include:

Health Hub/Health Insurance Exchange Model:
H. 7707 – (Lt. Governor’s bill) - would create the health insurance access hub, an entity separate and distinct from the state, but which would operate as a government agency, whose members would serve without pay, to monitor and make available to individuals, private health insurance choices. This bill is scheduled for hearing and/or consideration on 4/6/10 by House Corporations.

H. 7560 - The Rhode Island Health Reform Act of 2010 – (a bill developed by HealthRIght) would establish a state-sponsored system of universal health care. By January 31, 2012, the “HealthRIght Authority,” a quasi-public, non-profit organization shall be established through which all public and private purchases of insurance or health care services would be transacted for all RI employers and individuals. The Authority’s responsibilities shall include, but not be limited to, establishing a health insurance entity from which RI residents can purchase insurance from a range of insurers; establishing a comprehensive insurance product which shall serve as the basic plan for all Rhode Islanders (including setting and limiting the amount of co-pays and deductibles for the plan); ensuring that health coverage is extended to all uninsured Rhode Islanders by January 31, 2012; determining the set amount paid to each insurer per insured life (equal for all insurers); implementing the recommendations of the Coordinated Health Planning and Accountability Advisory Council (CHP), the Health Services Council (HSC), and the Certificate of Need (CON) program; establishing the parameters and implementing a sliding scale income-based subsidy for the uninsured; establishing and administering efficiencies among the insurers and health practitioner offices, and providing access to a public insurance plan modeled on RIte Care. This Act would also establish the appointment of a HealthRIght Commissioner (Commissioner). Other components of this bill are incorporated in the issue areas below.

Small/Larger Group Insurance Rates:
H. 7101, which has been referred to House Corporations, would permit a large group or small employer, when purchasing more than one product offered by the carrier, to receive a discount of up to two percent (2%) of the premium or fees.
H. 7592 (developed by SBANE), would amend the Small Employer Health Insurance Availability Act and would require certain disclosures regarding broker fees assessed with respect to small employer health insurance plans.

Primary Care/Patient-Centered Medical Homes:
H. 7544 - The Rhode Island All-Payer Patient Centered Medical Home Act of 2010 - Would require the Health Insurance Commissioner (OHIC) to develop and implement standards of certification for patient-centered medical home facilities as well as a per-patient care coordination payment system, and would be required to provide to the legislature comprehensive evaluations 3 and 5 years after implementation. By 1/1/2011 the OHIC shall establish a patient-centered medical home collaborative for exchanging information related to quality improvement and best practices, and by 1/1/ 2012 the OHIC would also consider additional payment reforms to be implemented for patient-centered medical homes. This bill was heard by House Corporations on 3/3/10 and is being held for further study.
H. 7560 - The Rhode Island Health Reform Act of 2010 – would establish the HealthRIght Authority, whose responsibilities would include introducing incentives for the advancement of primary care, outcome-based treatment of chronic disease, promotion of wellness and preventative services, and the use of electronic medical records. This bill would also require all residents in RI to select a primary care provider (or be assigned one).
H. 7599 – (Lt. Governor’s bill), would require an insured to designate his or her primary care physician (the insurer shall collect the designation from the insured and place the primary care physician or practice name on the card issued to the insured as evidence of insurance. “Primary care physician or practice” would be considered to be the usual source of medical care. This bill is scheduled for hearing and/or consideration on 3/23/10 by House Corporations.

Mandated Benefits/Mandated Benefits Review:
H. 7260 - would require coverage for the diagnosis and treatment of autism spectrum disorders. This bill is scheduled for hearing on 3/31/10 by the House Health, Education & Welfare Committee.
H. 7560 - The Rhode Island Health Reform Act of 2010 – would establish the HealthRIght Authority, whose responsibilities would include reviewing and recommending to the General Assembly the advisability of any new mandated insurance benefit.
H. 7604 - would require a mandated benefit review by the health insurance commissioner of any mandated benefit introduced after January 1, 2011, contingent on the review being paid for by health care providers authorized to do business in this state. This bill is scheduled for hearing on 3/23/10 by House Corporations.

S. 2202 - would increase hearing aid medical insurance coverage for those insured under age 19 from $1,500 to full cost and for those age 19 and older from $700 to $1,500. This bill was heard on 3/3/10 by the Senate Health & Human Services Committee and is being held for further study.
S. 2492 - would require insurance coverage for surgery and services for implantation of Federal Drug Administration (FDA) approved implantable hearing device per year. This bill was heard on 3/3/10 by the Senate Health & Human Services (HHS) Committee and is being held for further study.

Insurance Coverage Mandates:
H. 7560 - The Rhode Island Health Reform Act of 2010 – would require individuals over 400% of the federal poverty level to purchase health insurance coverage, and all employers with 10 or more employees shall be required to demonstrate that they are contributing to the health of their employees. Employers with 10 – 99 employees shall spend at least $1.20 per employee, per hour worked and employers with 100 or more employees shall spend at least $1.93 on employee health (can be utilized for their own employee health programs or contributed to the HealthRIght Authority fund for the uninsured. The Authority shall be authorized to charge up to 1% of insurance premiums for administration of its functions.
H. 7603/S. 2629 - (Lt. Governor’s bills) would provide that dental and vision benefits be included for individuals eligible for extended medical benefits. H. 7603 is scheduled for hearing and/or consideration on 3/23 by House Corporations, and S. 2629 is scheduled for hearing on 3/17/10 by the Senate HHS Committee.
H. 7703 - would extend health insurance coverage to an unmarried child who is a resident of this state, under the age of 25 years, has no dependents, and is unemployed and financially dependent. This bill is scheduled for hearing on 4/6/10 by House Corporations.
S. 2416 - would make all unmarried children under the age of 29, who are living with their parents, eligible for family health insurance coverage. This bill was heard on 3/10/10 by the Senate Health & Human Services Committee and is being held for further study.

Currentcare – Long-term Funding Proposal

Despite the strong support for the proposed long-term funding model for Currentcare from the RIBGH and a wide range of other highly engaged stakeholders, the Rhode Island Quality Institute (RIQI) cannot ignore the fact that the current state of the Rhode Island economy has created a very difficult and tenuous environment for introducing any new legislative proposals in the FY2011 budget. In addition, the process of advancing the long-term funding model from concept to legislative proposal will be strengthened if some issues around execution of the model that its supporters pointed out during this year’s process are addressed. As a result, the RIQI Board of Directors has approved a recommendation that the long-term funding proposal will not be advanced in the current legislative session. This is simply not the right time to move this proposal forward. RIQI is currently reevaluating the timeline, process and plan for advancing the long-term funding proposal next year and will provide RIBGH with an update in the coming months.

RIQI Awarded $11.2 Million in ARRA Federal Stimulus Funding

On February 12, 2010, RIQI received a federal Notice of Award for $5.2M in statewide health information exchange funding and $6M for RI’s Regional Extension Center funding to promote the successful adoption of electronic health records by RI physicians. The awards will further RIQI efforts to improve the quality, safety and value of health care in RI. This was a significant achievement for Rhode Island. RIQI will have more detail on the objectives and activities related to these grants in the coming weeks.

Federal News:
COBRA Subsidy Extension Signed Into Law
On March 2, 2010, President Obama signed into law legislation that provides a stopgap, 31-day extension of federal subsidies of COBRA health care premiums. The legislation (H.R. 4691) extends the 65% 15-month premium subsidy for laid-off workers involuntarily terminated from employment from March1 through March 31, 2010. Without the extension workers laid off after February 28, 2010, would have been ineligible for the subsidy. It will also allow employees to receive the subsidy if they first lost group health insurance coverage due to a reduction in hours and then were terminated, after enactment of the legislation, if certain conditions are met (i.e., an employee who had a reduction in hours between September 1, 2008, and March 31, 2010, followed by an involuntary termination of employment on or after March 2, 2010).

The U.S. Senate is continuing their consideration of additional legislation (H.R. 4213) that would extend the premium subsidy (and unemployment benefits) to employees laid off through December 31, 2010.

Employers administering group health plans must provide an additional notification to affected employees that includes information on the provisions of the new law during the 60-day period beginning on the date of the individual’s involuntary termination of employment. Affected employees must pay the subsidized premium rate by the latest of (a) 60 days after March 2, 2010, (b) 30 days after the date of provision of the revised notification, or (c) the end of the COBRA period.

For .pdf version of this issue brief, click here.

February 23, 2010 - Issue Brief
Group Rate Increase Filings by Insurers – RIBGH Responds

On February 8, 2010, the Office of the Health Insurance Commissioner (OHIC) opened a two-week public comment period on proposed changes in the rate factors used by Blue Cross and Blue Shield of Rhode Island, UnitedHealthcare of New England and Tufts Health Plan for calculating small and large group premium rates. Blue Cross has cited the rising cost of medical claims and other cost drivers as the reason for increasing rates an average of 11.4% for small groups and 14.6% for large groups. United has proposed increases averaging 10.6% for small groups and 4% for large groups, while Tufts has proposed an average increase of 9.5% for small groups and 9.3% for large groups. The new rates would be effective in May 2010 for small groups (expiring September 30, 2010) and in July 2010 for large groups (expiring December 31, 2010).

A public hearing was held with the Health Care Advisory Council on February 16 to review the proposed rates. RIBGH has submitted a letter to the OHIC sharing our concerns with the proposed rate increases. A copy of the letter can be found on the RIBGH website.

Blue Cross Accepts OHIC Decision Issued on Direct Pay Rates

On November 20, 2009, Blue Cross and Blue Shield of Rhode Island filed proposed rates with the OHIC for its direct pay products, seeking average rate increases of 10.2% for the estimated 13,900 direct pay subscribers effective April 1, 2010. After hearings in January, a stipulation of settlement between Blue Cross and the Attorney General set the rate increase at 9.5%. The RI Health Insurance Commissioner issued his decision on the rate filing on February 8, 2010, indicating that while the stipulation agreement had reduced the average expected increase from 10.2% to 9.5%, it inadequately addressed Blue Cross’s obligations and disallowed certain costs allocated to the direct pay product. The OHIC directed Blue Cross to make the reductions agreed upon in the stipulation agreement and to eliminate allocations to the direct pay product for certain state-administered medical services and for the state premium tax (effectively reducing the average rate increases to approximately 7%). While Blue Cross had the right to an appeal in court of the OHIC’s decision, it notified the OHIC on February 19, 2010 that it would recalculate the rate increases, excluding state-administered medical service factors and eliminating the state’s premium tax assessment. The result is that direct pay plans will see an average premium increase of 6.1%, down from the 10.2% originally proposed.

Further information on the rate filings can be found on the OHIC website.

Employers Must Notify Employees of State Premium Assistance Opportunities for Group Health Coverage

The Children’s Health Insurance Program Reauthorization Act of 2009 (“CHIPRA”), enacted by President Obama last year, included a requirement that employers maintaining group health plans must notify their employees of potential opportunities for group health plan premium assistance through Medicaid and the Children’s Health Insurance Program (“CHIP”) in the States in which the employees reside. On February 4, 2010, the U.S. Department of Labor (DOL) issued a model Employer CHIP Notice that may be used for that purpose. The Employer CHIP Notice must be provided by employers that maintain group health plans in states (like RI) that provide medical assistance under a State Medicaid plan or children’s health insurance program. In addition, the notice requirement applies regardless of whether the employer provides group health coverage directly or through insurance, reimbursement or otherwise.

Employers must provide the initial annual notice to its employees by the date that is the later of (1) the first day of the first plan year after February 4, 2010 (by January 1, 2011 for calendar year plans) or (2) by May 1, 2010. Further information on the notice requirements can be found on the DOL website, along with the link to the model notice.

For .pdf version of this issue brief, click here.

December 31 , 2009 - Issue Brief
Health Reform Bill Passed in the Senate

On December 24, 2009, the U.S. Senate passed their version of a health reform bill by a vote of 60-39. A conference committee will be working after Congress reconvenes in early January to resolve differences between the Senate and the House versions, with a compromise bill expected to face another vote in each chamber in early 2010. The Senate bill would require employers with more than 50 employees to provide health insurance coverage to their employees. Employers that fail to offer affordable health insurance coverage would pay a penalty of up to $750 per employee, depending upon the size of the employer’s payroll (most businesses with 50 or fewer employees would be exempt from such penalties). To encourage small employers to offer health coverage, a 25% tax credit would be available to qualifying small employers starting next year. The Senate bill would allow small businesses to form “buying pools” to negotiate with health insurers and purchase lower cost health insurance plans.

The Senate’s health reform legislation would also impose a 40% tax on what has been referred to as “Cadillac” health plans valued at more than $8,500 for individuals and $23,000 for families. Under the Senate’s bill, individuals who don’t receive health care benefits from their employers would be required to purchase health insurance coverage or face a fine (starting at $95 a year in 2014 and rising up to $750 or 2% of their income, whichever is higher, by 2016, with a cap at the value of a basic insurance plan). A hardship exemption would be available for certain individuals and Medicaid would be available to families with incomes up to 133% of the poverty level (e.g., for a family of four earning about $29,000 per year).

The legislation would create a health insurance exchange designed to make it easier for small businesses, self-employed individuals, and unemployed workers to pool resources and purchase affordable health insurance plans. Low- and middle-income families purchasing health insurance through the exchange would qualify to receive a federal health care subsidy to help pay their premiums. The penalties that are paid by employers that don’t provide health coverage to their employees and by individuals who do not purchase health coverage, along with a proposed spending cut of nearly $500 billion over the next 10 years for Medicare and Medicaid, would fund the health care exchange and subsidy program.

In addition, the Senate bill would limit total annual out-of-pocket expenses and would prevent insurance companies from denying coverage for pre-existing conditions (to be phased in through 2014) or charge higher premium rates based on a person’s gender or medical history. While the Senate bill allows families a choice in terms of dental coverage, the House bill would require families to purchase their children’s dental coverage through a medical insurance company.

A link to a more detailed summary of the bill and to a comparison with the House bill can be found on the RIBGH website.

COBRA Subsidy Law Extended and Expanded
An extension and expansion of a COBRA subsidy law that was set to expire on December 31, 2009, was signed by President Obama on December 21, 2009, and includes new compliance obligations for employers. The key provisions of the COBRA subsidy extension include:

An eligible individual who was entitled to receive a 65-percent subsidy for continuation coverage premiums for a period of up to nine months (under the original law) can now receive a subsidy for up to 15 months.
The subsidy eligibility period has been expanded to include the period that begins with Sept. 1, 2008, and ends with Feb. 28, 2010 (formerly Dec. 31, 2009). Another change is that the new rule does not require that COBRA coverage begin by the end of the period (February 28). Instead, an individual is considered eligible for the subsidy as long as the COBRA qualifying event (involuntary termination of employment) occurs by Feb. 28, 2010, and is entitled to COBRA coverage as a result of that event.
A retroactive period of 60 days from the enactment date, or up to February 17, 2010, is provided for payment of premiums by an eligible individual whose subsidy period expired on November 30, 2009.
A special notice outlining these changes must be provided by employers by February 17, 2010, to all eligible individuals on COBRA on or after October 31, 2009, or those who have been terminated after that date. A model notice should become available through the U.S. Department of Labor within the next couple of weeks.

For further information on health care news and reform issues, please visit the RIBGH website and review our “Breaking News” and “Health Reform Resources” information.

For .pdf version of this issue brief, click here.

November 11, 2009 - Issue Brief
Health Reform Bill Passes in the House

On November 7, 2009, the U.S. House of Representative passed “The Affordable Health Care for America Act” (H.R. 3962) by a vote of 220-215. The House bill creates a new public health insurance option as part of a health insurance exchange and requires individuals to have health coverage or pay a penalty. It also requires employers (small employers with an annual payroll of less than $500,000 are exempt) to offer insurance and pay 72.5% of the premium for individuals and 65% of the premium for families. The employer penalty for not offering coverage would be equal to 8% of average total wages paid annually. Salary reduction contributions to health flexible spending accounts (FSAs) would be limited to $2,500 per year and reimbursements for over-the-counter medications would be prohibited. The bill also creates a grant program to help small and mid-sized employers create or enhance worksite wellness programs and includes reforms in Medicare that would reward the quality of care delivered. Tax credits to help small employers or individuals buy health coverage would also be available. A link to a more detailed summary of the bill and to a comparison with the Senate health reform bills can be found on the RIBGH website.

Emergency Paid Leave Bill Under Consideration
As a result of the growing number of cases of H1N1 flu virus, the “Emergency Influenza Containment Act” (H.R. 3991) was recently introduced and is scheduled for hearing by the House Education and Labor Committee on November 16, 2009. The bill would provide five paid sick days per 12-month period to employees with contagious diseases when their employers “instruct or advise” them to stay home. The bill applies to employers with 15 or more employees, and the leave protection would apply to part-time employees. If the bill is enacted, it would become effective 15 days after being signed into law but would sunset after two years. Given the government’s efforts to quell the flu outbreak, this bill might get approved quickly by the House. A similar bill is expected to be introduced in the Senate this week. Please watch for further RIBGH Issue Briefs on this and any other legislative proposals with paid leave provisions.

Employer Obligations Under the Genetic Information Nondiscrimination Act (GINA)

Final interim regulations that apply to the Genetic Information Nondiscrimination Act (GINA) go into effect for plan years starting on or after December 7, 2009, and prohibit health insurance plans and insurers from increasing group premiums and contributions based on genetic information, requesting or requiring genetic testing, and prohibits employers from collecting “genetic information” (family medical history) either “prior to or in connection with enrollment” or for “underwriting” purposes. As a result, the prohibition on collecting genetic information for underwriting is not only limited to insurance rating and pricing activities, but also includes changes to deductibles and other cost-sharing plus discounts, rebates, in-kind payments and other methods of altering premiums as a reward (or punishment) for completing a health risk assessment or participating in a wellness program where “genetic information” is collected. The regulations clarify that offering reduced premiums or other rewards for providing genetic information (such as family medical history that often is a routine part of health risk assessments) would be impermissible “underwriting.” Collecting family medical history but not offering any reward would be allowed if the information is not collected prior to or in connection with enrollment in the wellness program. Employers may need to review the language in any health risk assessments that are part of their open enrollment materials for changes to comply with GINA and will also be required to update workplace posters to reflect changes required by the employment provisions of GINA, which become effective November 21, 2009. The new Equal Employment Opportunity Commission (EEOC) poster can be found at http://www.eeoc.gov/employers/upload/eeoc_self_print_poster.pdf.

National Defense Authorization Act Makes Changes to FMLA

On October 28, 2009, President Obama signed the National Defense Authorization Act for Fiscal Year 2010, which makes important changes to the Family and Medical Leave Act (FMLA). The changes include expansion of military caregiver leave, which may be used to care for veterans undergoing treatment or for recuperation or therapy for an injury as long as the veteran was a member of the Armed Forces, National Guard or Reserves within five years of requiring care. The amendments also expand military caregiver leave so that employees may use it to care for a covered service member’s serious injury or illness incurred because service on active duty aggravated an existing or preexisting injuries. Previously, law only allowed caregiver leave for serious illnesses or injuries incurred on active duty. Employers should review their FMLA leave policies and make modifications to reflect these new changes.
The legislation also expands the use of qualifying exigency leave. Under the new law, qualifying exigency leave will now cover family members of the regular Armed Forces deployed to a foreign country, in addition to current coverage of family members of the Guard or Reserves. Finally, qualifying exigency leave is also extended to federal employees covered by Title II of the FMLA.

Results of RIBGH’s Health Reform Survey
Aggregate results from the RIBGH Health Reform Survey that was conducted in September, in collaboration with the RI Society for Human Resource Management (RISHRM) and the Small Business Association of New England (SBANE), were provided to members who attended the November 9 RIBGH/RISHRM breakfast meeting with Senator Sheldon Whitehouse, Lt. Governor Elizabeth Roberts, and RI Health Insurance Commissioner Christopher Koller. Key components of health care reform important to members included the provision of portability of coverage, inclusion of an incentive for employers who provide wellness programs, an individual mandate requirement, and a focus on individual/small group market reform. About 53% of the RIBGH members who responded favored a continuation of our current public-private balance in health care while 92% responded that cost containment was more important than ever as a goal in health care reform. A summary of the survey results can be found on the RIBGH website.

For further information on health care news and reform issues, please visit the RIBGH website and review our “Breaking News” and “Health Reform Resources” information.

For .pdf version of this issue brief, click here.

During the month of August and recently in President Obama’s September 9th address to Congress on health care reform, many voices have been heard with respect to the health care reform debate. Key reform issues include universal access to health care coverage, the concept of a “public plan” and most important, how to pay for health care reform have drawn the attention of many Americans. President Obama has indicated that his two basic requirements for a health care bill are expansion of health care coverage for the uninsured and making medical care more affordable.

RIBGH would like to provide you with a brief summary of the core issues currently under consideration:

Covering the uninsured and the “public plan” option – While President Obama has indicated he believes a government health plan for the uninsured is an “option,” and necessary to insure adequate choice and competition in the insurance marketplace, other reform bills pending in the House and Senate propose various methods for providing a “public option.” The Senate Finance Committee bill, introduced today, proposes substituting a not-for-profit “co-op” concept for the public option contained in other bills, along with health care affordability tax credits beginning in 2013, premium subsidies and out-of-pocket cost-sharing assistance to individuals and families with incomes between 100-200% of the federal poverty leve (FPL), and the creation of web-based insurance exchanges that would standardize health plan premiums and coverage information. The Senate HELP Committee (now being chaired by Senator Tom Harkin) proposal would create state-based American Health Benefit Gateways through which individuals and small businesses can purchase health coverage with subsidies available to individuals/families with incomes up to 400% of the FPL ($73,240 for a family of three in 2009). The House of Representatives plan would create a Health Insurance Exchange for purchase of health coverage by individuals/small employers, with similar credits to those in the Senate HELP Committee as well as an employer mandate to provide coverage or pay into an Insurance Exchange Trust Fund (again with exceptions for certain small employers). Employers would be required to provide coverage to their employees or pay an “annual fee” (with exceptions for small business) under several reform proposals or what has also been termed a “free rider” surcharge against employers who don’t offer coverage and whose employees receive taxpayer subsidies to buy it on their own.

The House of Representatives “public plan” approach would use the Medicare infrastructure and would pay providers Medicare plus five percent. A second approach would have the public plan act like an insurer but would not have access to Medicare rates for providers. A third public plan, which has been referred to as a “trigger plan” would only commence if certain criteria are met (would kick in after several years if health care access and costs don’t improve while a pilot test is conducted in several states).

The House plan and the Senate HELP plan each include very substantial public options; the Senate Finance Committee plan does not include a government-run insurance plan that would compete with private payers.

A federal plan for covering the uninsured is expected to include some type of mandate for individuals to buy insurance and for employers to offer it to their employees, although the Senate Finance Committee bill, while not requiring employers to offer health cover, does require employers with 50 or more employees to reimburse the government for each full-time employee (one who works 30 or more hours/week) receiving a health care affordability tax credit equal to 100 percent of the average subsidy up to a cap. In addition to the subsidies for individuals/families that are described above, expanding and standardizing the threshold for Medicaid eligibility is under consideration as well as rules preventing payers from denying coverage for pre-existing conditions, canceling coverage due to high claims, and imposing annual or lifetime benefit limits. It is expected that employers above a certain size will most likely be required to provide coverage to their employees, at least a basic benefit level of coverage, and be expected to pay half of the cost for full-time employees in any final compromise bill.

Paying the Cost for Health Care Reform – Various proposals are under consideration including reductions in reimbursements, taxing health care benefits or taxing benefits above a certain amount (i.e. if you receive more than $17,000 a year or $25,000 a year in health care benefits, you would be taxed on benefits in excess of such amount). Another core method for paying for health care benefits being considered is increasing the tax rate for high income earners (part of the House and Senate HELP plans). Other considerations are a new tax on health insurers, drug companies and medical device makers, a $2,000 annual cap on health flexible spending account benefits, an increase in the excise tax for taxable withdrawals from a Health Savings Account, and a requirement that employers who receive Medicare Part D subsidies would pay tax on the payments.

Other Key Reform Considerations: Other key issues are part of health care reform proposals under consideration, including small group market reform (to make it easier for small business groups to obtain coverage), health information technology, including a uniform place on the Web to obtain information on and compare health benefits and costs, minimum benefit standards and categorization of benefit package levels, creating a Medicare coverage option for people between 55 and 65 years of age, and possible incentives for preventative and healthy lifestyle choices.

The Senate Finance Committee expects to begin the debate on its proposal by September 21 and reconcile their bill with the Senate HELP proposal by early October.

Over the next few weeks, RIBGH will keep you updated as a potential health care reform bill shapes up in Congress.

Rhode Island News:
Health Insurer Rate Factor Filings - RIBGH has recently submitted to the Office of the Health Insurance Commissioner (OHIC) a position statement on the Tufts Health Plan rate factor filing, a copy of which can be found on the RIBGH website.

Potential Legislative Initiatives in 2009-2010 – The OHIC is considering other legislative initiatives for the coming General Assembly session such as:

For further information on health care news and reform issues, please visit the RIBGH website and review our “Breaking News” and “Health Reform Resources” information.

Health Care Reform Proposals Moving Forward in Congress – Public Plan Option Under Debate

Over the last few weeks health care reform has become a priority issue for President Obama and Congress, with differing versions of the “Affordable Health Choices Act” emerging from the Senate Health, Education, Labor and Pensions (HELP) Committee on July 15th and H.R. 3200 – America’s Affordable Health Choices Act of 2009 – introduced by the House Tri-Committee (the three key House committees with responsibilities for health care reform) on July 14th.

The Senate version builds on the existing employer-based system and seeks to expand choice -
if you like the coverage you have now you can keep it; if you don’t, new more affordable options would be available through state-based American Health Benefit Gateways. In addition, individuals would be required to have qualifying health coverage or pay a tax penalty. Employers would be required to provide coverage to their employees or pay an annual fee (with exceptions for small employers with 25 or less employees and a potential credit to offset their costs of providing coverage). Medicaid would expand to cover individuals with incomes up to 150% of the federal poverty level. Other provisions are focused on reducing health care costs through stronger prevention/wellness programs, improving quality of care and health system performance and use of information technology, and prohibiting denial of coverage because of pre-existing conditions

The House version seeks to expand health care coverage to the 40 plus million Americans who are currently uninsured by lowering the cost of health care and making the system more efficient. This proposal would seek creation of a Health Insurance Exchange for purchase of health coverage by individuals and employers and includes the creation of a new government-run health insurance option (also referred to as a “public plan”) that would need to meet the same requirements as private plans regarding benefit levels, provider networks, etc., and would compete with private health plans. It requires individuals to have “acceptable” health insurance coverage, employers to provide coverage to employees or pay into a Health Insurance Exchange Trust Fund (with exceptions for certain small employers), would expand Medicaid to 133% of the federal poverty level, would prohibit denial of coverage because of pre-existing conditions, and, to pay for it all, a surtax on households with an income above $350,000.

Over the next few weeks, RIBGH will be providing our members with updates as these proposals develop and will also be surveying members on their perspectives with respect to a “public plan”.

Further information on the health care reform proposals under consideration and their impact on the business community can be found under “Health Reform Resources” on the RIBGH website.

On the floor of the House today, Finance Committee Chairman Steven Costantino announced that the Office of the Health Insurance Commissioner will be restored in the budget today with all of the powers and responsibilities included.

We would like to thank all RIBGH members for your phone calls and emails. We all came together quickly and were able to achieve a positive outcome through our efforts.

Immediate action is needed as the House will be voting on the budget Wednesday, June 24. Legislators need to hear from as many RIBGH members as possible. Please urge your state representative, both in the Rhode Island House and the Senate, to share your concerns about the impact of the Office of the Health Insurance Commissioner (OHIC) elimination and to ask them to oppose Sections 13 and 14 of Article 5 of the Proposed State Budget. For further information, please see RIBGH’s position statement and our Issue Brief below on this important issue.

Urgent Call to Action - Please Contact State Legislators Opposing the Elimination of the OHIC!

Late Wednesday, June 17, 2009, the House Finance Committee voted to eliminate the Office of the Health Insurance Commissioner (OHIC) in the state’s budget under Sections 13 and 14 of Budget Article 5. This “cost cutting measure” would virtually eliminate the oversight authority and functions of the OHIC, which not only include the rate factor review process for commercial health insurers operating in Rhode Island, but other key initiatives and OHIC functions that are critical for continued health care reform efforts in the state. Representatives from the Office of Lt. Governor Elizabeth Roberts and other key stakeholder groups, including RIBGH, met today to develop a “Call to Action” plan to oppose the elimination of the OHIC.

We urge RIBGH members to contact your elected officials today – both in the House and Senate - to share your concerns about the impact of the OHIC elimination and to ask them to oppose Sections 13 and 14 of Article 5 of the Proposed State Budget. Immediate action is needed as the House will be voting on the budget next Wednesday. Legislators need to hear from as many voices from the business community as possible, so please share your concerns as soon as you can! If you have a personal relationship with key leadership in the House or Senate or with the Governor, we ask that you also make contact with those leaders who will play an important role in the state budget process. The House Speaker’s Office can be reached at 222-2466; the Senate President’s office at 222-6655, and the Governor’s office at 222-2080. For further information on how to contact your elected officials, please visit http://www.state.ri.us/govtracker/index.php?page=IdxGenAss.

“I urge you to oppose Sections 13 and 14 of Article 5 of the Proposed State Budget because they would eliminate the Office of the Health Insurance Commissioner. This would effectively

Given the economic situation in Rhode Island and the major need for control of health care costs for businesses to survive, retaining the Office of the Health Insurance Commissioner, with the protections, innovations, and system reforms it has made possible is more important than ever.”

The Health Insurance Commissioner has indicated that unless health insurers Blue Cross & Blue Shield of RI and UnitedHealthcare of New England, Inc. retract their rate increase requests, public hearings will commence by July 14. We would like to thank RIBGH members who participated in the opposition to the insurers’ rate factor filings.

OHIC Announces Public Forum on Proposed Commercial Health Insurance Rate Factors!!

RIBGH has learned that the Office of the Health Insurance Commissioner (OHIC) issued a notice late last week that an open forum will be held tonight at 6:00 p.m. at the Rhode Island Public Utilities Commission at 89 Jefferson Boulevard, Warwick, RI to hear public comment on the proposed commercial health insurance rate factors. As we advised in May, the OHIC received the inflation and rate factor filings from the major health insurers operating in Rhode Island, which the insurers propose to use to calculate premium rate increases for large groups (over 50 employees) and small groups (under 50 employees) for the coming year. RIBGH has developed a position statement in opposition to the proposed inflation and rate factors which can be found on the RIBGH website. We would urge you to share your comments/concerns about the proposed commercial rate increases at the open forum tonight. Further details on the forum can be found on the OHIC website.

6/4/2009 - Proposed Commercial Health Insurance Rate Increases - Public Comment Response

Proposed Commercial Health Insurance Rate Increases Under Review by the OHIC – Seeking Public Comments!

On May 18, 2009, the Office of the Health Insurance Commissioner (OHIC) issued a notice that they had received the inflation and rate factor filings from the major health insurers operating in Rhode Island, which the insurers propose to use to calculate premium rate increases for large groups (over 50 employees) and small groups (under 50 employees) for the coming year. RIBGH has developed a position statement in opposition to the proposed inflation and rate factors which will be submitted to the OHIC in the next few days. We would urge you to share your comments/concerns about the proposed commercial rate increases directly to the OHIC. The deadline for public comment is June 5, 2009. Details on how to submit your comments is included in the email from the OHIC that has been copied below.

Christopher Koller
Rhode Island Health Insurance Commissioner OHIC
1511 Pontiac Avenue, Building 69-1
Cranston, RI 02920

RE: Proposed Rate Factors Filed by the Major Commercial Health Insurers Operating in RI

On behalf of the Rhode Island Business Group on Health, a coalition of over 75 small and large employers in Rhode Island, we are notifying you of our opposition to the filings by the major commercial health insurers operating in Rhode Island that reflect rate factors to be used to calculate the health insurance premium rates for small and large groups in 2010. The majority of organizations in Rhode Island are already struggling to survive and sustain their businesses in this economy. Projecting trends that reflect the likelihood of health insurance premium increases in 2010 in the range of 11.6% - 16.3% for large groups and 13.2 – 13.9% for small groups is untenable on the part of United Health Care (“United”) and Blue Cross/Blue Shield of RI (“Blue Cross”). The national trend in the growth in total health benefit costs, as reported by Mercer, Towers Perrin, and Hewitt, is 6.4%

We have summarized below our specific concerns with the rate factors proposed and the impact of the proposed rate increases for businesses in RI.

We question the need for Blue Cross to more than double its projected portion of premium for reserves and profit – from 1.4% to 3.3% in this economy. Other organizations, including many large non-profits in RI, are having to find ways to reduce expenses to cover the value loss in their endowments/reserves and certainly are not in a position to recoup that loss through increased costs to users of their services. Employers are also not willing to replenish the depletion of Blue Cross’s reserves that were a direct result of their settlement with the U.S. Attorney last year. Why should Blue Cross be allowed to recoup their settlement cost or their investment loss likely incurred in their reserves through a substantial premium increase that large and small groups in RI are not in a position to absorb?

There appears to be no justification for an increase in the projected portion of premium for administrative costs by Blue Cross from 11.5% to 15.1%, which reflects a 32% increase. There is also no reasonable justification for the increase in the composite inflation rate proposed for hospital inpatient services, especially when inpatient services are being reported to have been decreasing over the past year due to factors such as families cutting back on care or are facing serious financial problems. A recent Kaiser Health survey reflected more than half of Americans say their family cut back on medical care in the past 12 months because of cost concerns and local hospitals have publicly reported that inpatient stays have substantially decreased in the past year.

While the Kaiser Family Foundation and the National Health Expenditure Accounts (NHEA) have reported that national health expenditures for prescription drugs accounts for about 10.1% of total health expenditures, Mercer has reported in their results of their 2008 Health Benefits Survey that prescription drug cost growth is slowing - from 9% in 2007 to 7.8% in 2008 for employer groups with 500 – 4,999 employees, and from 6.3% in 2007 to 5.6% in 2008 for employer groups with 50 – 499 employees. Some of our RIBGH members who are self-insured are reporting projected trends for prescription drug costs in the range of 9 – 10%, while Blue Cross is projected a percentage rate of 10.8% and United has proposed 11.9% - above the reported national and local trends. Given the trend of decrease in the Consumer Price Index and rate of inflation (.7% decrease in the last twelve months), why is Blue Cross proposing an increase from 10.5% to 10.8% when United is reflecting a decrease from 12.5% to 11.9%?

RIBGH members are astounded that Blue Cross and United have indicated they are invested in improving the health of their members and reducing the growth rate of their health care costs and yet have filed proposed rate factors that will generate the aforementioned premium rate increases for large and small groups in Rhode Island. With Rhode Island unemployment at an all-time high of 11.1%, many of those same large and small insured groups are struggling to retain workers and keep employees insured. Numerous businesses are cutting back their work weeks or furloughing employees as a way to deal with the economic issues that they are going to continue to face in 2010.

RIBGH members have reported that health insurance is one of the top five expenses their businesses incur. If the cost of health care for employers with coverage through Blue Cross increases by 13.9-16.3% or 11.6 – 13.2% if covered by United, many employers will be forced to either reduce their workforce or the availability of health coverage for their employees, which will only exacerbate the growing number of uninsured in Rhode Island and ultimately the cost of health care overall. Many of our members will not be able to absorb the proposed premium cost increase in the middle of an economic recession.

Isn’t it time for Blue Cross and United to reconsider trends and reflect their purported interest in reducing the growth rate of health care costs by recognizing that the current state of the economy in Rhode Island cannot sustain 11.6 – 16.3% health care premium rate increases? RIBGH members are not willing to pay for the cost of Blue Cross’s new building and computer system or United’s primary care spend requirement.

We appreciate your consideration of our concerns and urge you to oppose the rate factors that have been proposed by Blue Cross and United for 2010. We also would urge that additional public hearings be held so that interested parties can testify and provide their concerns directly.

Linda S. Lulli
Director and Chair of the Legislative Affairs and Public Policy Committee

Rhode Island News: Rhode Island Extended Medical Benefits Law Passed (“Mini COBRA”)

On April 9, 2009, Governor Carcieri signed into law H. 6099/S. 843, which would provide availability of “Rhode Island Extended Benefits” (referred to as “Mini COBRA”) to individuals who became unemployed on or after September 1, 2008, giving access to COBRA subsidies under the American Recovery & Reinvestment Act (ARRA) to unemployed workers of small businesses. ARRA provides for a subsidy for COBRA participants of 65 percent of the insurance premium. Rhode Island Extended Benefits is an extension of the Federal COBRA subsidy that would apply to companies with fewer than 20 employees and companies that have closed.

The new law would now allow involuntarily terminated employees who did not opt to take extended benefits coverage, or took it and the coverage lapsed, to opt back into the program retroactive to March 1, 2009. The program would be more affordable as a result of the increased federal subsidy. The enrollment window for those who would like to opt back into the program will close May 1, 2009.

The Center for Medicare and Medicaid Services (CMS), which oversees the premium reduction program for state-based continuation of coverage programs, has stated that if a state acts to re-open its election period window, any individual who elects the new coverage and meets the criteria for the premium reduction program will receive the subsidy.

Individuals must contact their previous health insurance provider to enroll or can visit the Office of the Health Commissioner for more information.

Changes Impacting the Consolidated Omnibus Budget Reconciliation Act (COBRA) Continuation of Coverage:

COBRA Subsidy Included in the American Recovery and Reinvestment Act of 2009

The American Recovery and Reinvestment Act of 2009 includes a temporary federal subsidy to cover 65% of the cost of COBRA coverage for eligible individuals. The subsidy is scheduled to become effective for coverage beginning March 1, 2009.

On September 25, 2008, President Bush signed into law the Americans with Disability Act Amendments Act (ADAAA), which takes effect January 1, 2009. The ADAAA clarifies and strengthens employees’ protections under the Americans with Disabilities Act (ADA). The U.S. House of Representatives, by a voice vote, approved the Senate’s version (S. 3406) of the ADAAA on September 17. Employers with 15 or more employees working for 20 or more weeks (includes part-time employees) are covered by the ADA and the ADAAA.

The ADAAA seeks to legislatively “fix” the interpretation of several court rulings that narrowed the definition of “disability” within the ADA that had limited the scope of employee protection under the statute.


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