A weekly compilation from Aetna of health care-related developments in Washington, D.C. and state legislatures across the country

Week of October 3, 2011

Appeals filed last week by the U.S. Department of Justice, a number of states and a business group make it all but certain that the U.S. Supreme Court will decide constitutional questions related to the Affordable Care Act (ACA) next year before the presidential elections. Last week the Justice Department filed a petition formally asking the Supreme Court to promptly consider the constitutionality of the ACA by reviewing the 11th Circuit Court of Appeals’ prior ruling.  The Department is appealing a decision by a three-judge panel of the U.S. Court of Appeals in Atlanta holding that the ACA’s requirement that all Americans purchase health insurance is unconstitutional.  Lawyers for 26 states challenging the ACA also pressed the court to hear the case speedily, as did the National Federation of Independent Businesses (NFIB). While the Justice Department wants the high court to uphold the constitutionality of the health care law, the states and NFIB want the court to strike down the entire law, not just the individual mandate. Federal court decisions on the constitutionality of the law so far have been split.

Federal

Congress was scheduled to be on recess last week, but the Senate cancelled the first few days of its break in order to vote on a continuing resolution to fund the government past September 30th. Congress was able to reach agreement and pass legislation that provides temporary appropriations through October 4. When Congress returns early this week, the House is expected to vote on another continuing resolution that would extend temporary appropriations through November 18. This second measure has already passed in the Senate. Enactment of these bills is intended to give Congress time to develop an omnibus appropriations bill for the remainder of fiscal year 2012.

States  
 

ALASKA: The Division of Insurance has issued a regulatory bulletin providing health care insurers with guidance on how the state plans to define the term "small employer" for medical loss ratio (MLR) calculations. The DOI is informing insurers that it will use the federal definitions of small employer (1 to 100 employees in the preceding year) and large employer (101 or more) for the purposes of MLR calculations, reporting, and rebate requirements contained in federal regulations. For all other purposes, however, the DOI will continue to apply the Alaska definition of small employer for compliance with state law and regulations. Alaska defines small employer as an employer with 2 to 50 employees.  The federal rules define a small employer as an employer with at least one but no more than 100 employees during the preceding calendar year. But the federal rule permits states to define small employer size as 50 or fewer employees until 2016.

In other news, the state Department of Health and Social Services has issued a request for proposals soliciting entities to conduct research and recommend options for developing a viable health insurance exchange in Alaska. The firm chosen will be required to produce a planning document containing best practices models and recommendations for implementation, along with cost and expense estimates and annual budgets for the exchange through 2019. Also expected is a study on the existing public and private insurance markets in Alaska, including projected take-up rates and anticipated employer and individual behavior once the exchange is operational.

GEORGIA: The Governor’s Health Insurance Advisory Board issued its interim report to the governor last week. The report is essentially a summary of its past meetings as well as a statement that the board has voted to move forward with a state-based exchange. Final recommendations are due to the governor by December 15th of this year per an executive order issued by the governor earlier this year.

KANSAS: Kansas joined 25 other states in filing an appeal to the U.S. Supreme Court seeking resolution of constitutional questions surrounding the ACA. A key point of contention is a provision mandating that all Americans obtain health care coverage or face a financial penalty in 2014. Derek Schmidt, the attorney general in Kansas, said the Supreme Court should take up the case during its 2011-2012 term and deliver a ruling striking down the entire health care reform law. Schmidt, a Republican, won election as attorney general in November on a platform that included a call for a legal challenge to the federal health care overhaul law.

UTAH: Patty Connor, director of the Utah Health Exchange, recently provided the Risk Adjustor Board with an exchange update that shows 182 employer groups are participating in the exchange, covering 4,243 lives. Thirty-five groups are presently finalizing their rates to determine whether they'll participate in the exchange. The exchange lost two groups recently due to the 75 percent participation requirement. One of the participating carriers, Humana, has informed the committee that it is leaving the exchange. It was also reported that the second phase of the exchange, providing the capacity for individuals to enroll, is out for bid.

WYOMING: The Health Insurance Exchange Steering Committee recently held its third meeting of the 2011 interim session at which members agreed that the state, rather than the federal government, should operate both the individual and small group exchanges in the state. The committee has been studying whether to create a Wyoming Health Insurance Exchange or participate in a regional exchange. The group has begun developing recommendations that will be submitted to both the legislature and the governor for consideration.  Following discussion as to the benefits and drawbacks of maintaining separate or combined exchanges for the individual and small group markets, the committee voted in agreement that the state should operate both an individual and a small group exchange in Wyoming.  There was additional discussion on whether the individual and small group markets in the exchange should be merged into one combined risk pool and governance structure, but no decision was made.

The committee did, however, agree that the governing body for the exchange should be a public non-profit entity. The remainder of the meeting featured discussion of costs, actuarial reports, and the proposed federal "partnership" model for a state-based exchange.  While few specific recommendations were agreed to, it was noted that the exchange has contracted with an outside consultant (PCG of Boston) to develop options and cost figures for the exchange. Finally, the committee discussed the importance of crafting its recommendations in light of the overwhelming opposition to federal health care reform maintained by the group’s four legislative members.