States Take Steps to Improve Oversight and Consumer Engagement

In the past few months, several states have taken dramatic steps to strengthen their rate review authority, protect consumers, and call out insurers on excessive rate increases. For example, earlier this year, California health insurers announced planned rate increases that would have driven premium costs up as much as 87 percent for some individuals. But in the face of increasing insurer profits, Insurance Commissioner Dave Jones elicited promises from California’s major health insurers that they would decrease and delay implementing proposed rate increases until the state had a chance to evaluate the accuracy of the insurers’ filing. This week, Consumer Watchdog released a report indicating state reviews of insurer rate increases found erroneous math and unsupported actuarial assumptions in rate filings submitted by health insurers. California legislators are moving legislation to give the insurance commissioner explicit authority to disapprove of or reduce proposed premium increases through the state Assembly.

And in New Mexico, the state’s Republican Governor recently signed into law a bill that enhances the state’s rate review authority. The new law includes strong provisions encouraging public participation by establishing a thirty day public comment period on proposed rate increases and requiring insurers to notify policyholders of any possible increase in their premium rate before the increase can be implemented. The statute further gives policyholders the right to request a public hearing on rate increases that the Insurance Superintendent has approved.

Affordable Care Act Mandates Rate Review
The Affordable Care Act requires an annual review of unreasonable health insurance premium increases. Federal regulations, soon to be finalized, outline the process through which the U.S. Department of Health and Human Services (HHS), together with state regulators, will review and evaluate health insurance premium rate increases.

While several states currently have review processes requiring a comprehensive evaluation of proposed rate increases before insurers may charge consumers and businesses more for their premiums, other states are using the new federal rate review requirement to expand consumer protections. In February, HHS announced $200 million worth of federal grant money available to states to help them strengthen their rate review processes and states will finalize their application for this money this summer.

Together with their Insurance Departments, and independently, state consumer health advocates are making tremendous progress toward protecting consumers from unreasonably high insurance premium increase. At the end of this blog post you will find new resources Community Catalyst has developed to assist states in advocating for stronger rate review laws.

State Advocates are Helping to Improve Rate Review Processes
State consumer health advocates all over the country are taking the lead to guide their states toward revising and implementing stronger rate review laws. For example, in Pennsylvania, the PA Health Access Network is developing an online petition that they intend to use to encourage their insurance commissioner to hold public hearings on proposed rate increases, giving consumers and policyholders the opportunity to provide input on rate increases.

Advocates with Illinois’ Campaign for Better Health Care are supporting legislation that would give their insurance commissioner authority to disapprove or reduce proposed premium rate increases. Recent data released by the Illinois Department of Insurance shows that while insurance premium rates have increased 181 percent since 2005 for individuals and families in Illinois, the top five insurers brought in more than $28 billion in profits in 2010 alone.

And in Ohio, advocates at UHCAN Ohio are in the research phase of their campaign to improve the state’s rate review process, enhance transparency and consumer involvement as a means to protect individuals, families, and small businesses from rising health insurance costs. These advocates are in communication with officials at the Ohio Department of Insurance to better understand the current rate review process and gather data about increasing premium rates.

While we provide three examples here of state advocates working to strengthen their states’ rate review laws and two states where reform is on the horizon, many other states are progressing toward stronger, consumer protective rate review processes or currently have robust laws on the books.

Tools for States to Engage in Rate Review Reform
Because most states will continue to oversee health insurance premium rate increases in their markets, Community Catalyst has designed a toolkit to assist state advocates in evaluating their state’s current rate review process and to develop advocacy resources supporting stronger rate review laws. Use the general fact sheet to explain rate review to policymakers and community organizers. The state-specific template is a guide to asking the right questions and gathering the right information and data to demonstrate the critical need for enhanced rate review authority in your state.

Sarah Blumenthal
Community Catalyst (originally posted on Health Policy Hub)

Register now! Monday Conference Call with Senator Koehler!

Sen. Dave Koehler on SB1729 "Illinois' Competitive Health Care Marketplace: the Insurance Exchange"
Monday, April 25 12-1 PM

THE SCORE SO FAR

Round One - The passage of State Rep. Mautino's Exchange bill, HB1577, written by and for the insurance industry. No consumer participation, no consumer protections, no governance mechanism, eliminates IL's opportunity for $150-250 million in federal funding. Win for Big Insurance.

Round Two - HB1577, the insurance industry bill, has thus far been stopped in the Senate because of consumer involvement. A better, consumer-based alternative, SB1729, sponsored by Sen. Dave Koehler (D-Peoria) introduced as the first step in developing the Illinois exchange. Written by and for a variety of stakeholders, this competitive health care marketplace introduces a framework that includes a governance structure, some consumer protections, conflict of interest clauses, and begins to require insurance companies to meet strict standards for participation. SB1729 now numbers 17 co-sponsors and growing! WIN for Illinois consumers and small businesses!

Round Three - Consumers around the state are gearing up to win by making sure the insurance industry's bill is defeated and SB1729, the better consumer alternative, is passed in Springfield. We need to bring the same intensity to Springfield that we brought to the federal battle last year. JOIN US IN MAKING IT HAPPEN!

Register today to hear Sen. Dave Koehler explain SB1729 and how it impacts consumers and small businesses in Illinois. NOTE: Please update your calendar - this call is happening on Monday, April 25 at noon.

ABOUT SENATOR KOEHLER

Prior to making the jump to the Illinois Senate, Sen. Dave Koehler served as a minister for the United Church of Christ; was a staff member for the National Farm Worker Ministry and for Peoria Friendship House, served as Executive Director of the Peoria Area Labor Management Council (PALM), and the President for Labor Management Cooperative Health Programs, Inc. He served on the Peoria County Board from 1982 through 1988, and the Peoria City Council from 1989 to 1997. He is a current co-owner of the Peoria Bread Company. Sen. Dave Koehler (D-Peoria) serves as the Vice President of the Health Care Justice Act's Adequate Health Care Task Force.

UPCOMING CALLS

CBHC has conference calls every second and fourth Monday of every month. For more information on upcoming calls, speakers, and topics, visit our conference call webpage. Missed a call? Don't worry; you can listen to past calls on our audio archive!

HAVE AN IDEA FOR CALL TOPIC?

Let us know! These calls are meant to give you the information you want about health care reform in Illinois. Please let us know what topics you'd like to see us cover in future calls by emailing Kathleen Duffy with your ideas.

Jim Duffett
Campaign for Better Health Care

ACTION ALERT: Tell Senator Cullerton to Stand Up for Working Families & Small Businesses in Illinois!

1. Call IL Senate President Cullerton TODAY!
Toll-free number to the Capitol: 1.888.616.3322
Springfield Office: 217.782.2728
Chicago District Office: 773.883.0770

Tell him: OPPOSE the insurance industry supported health exchange bill - SUPPORT Passage of SB1729, The Consumer & Small Business Health Exchange.

2. Call your state senator (http://ilga.gov/senate/) TODAY!

Ask them to be a co-sponsor of SB1729, The Consumer and Small Business Health Exchange
Toll-free number to the Capitol: 1.888.616.3322
(Not sure who your State Senator is? Find out here!)

The Illinois General Assembly is considering their next steps in implementing the health reform we fought so hard for last year. They need to hear from you today!

Background
One of the next big steps to take is the development of Illinois' competitive health care marketplace, commonly referred to as the Health Care Exchange. The exchange will be a easy to use website that is one centralized place for consumers to choose insurance plans and purchase the one that fits both your needs and budget the best, like Travelocity. It will enable small businesses to negotiate better rates for their groups, just like the big corporations do. Most importantly, it will make sure that consumers have a voice in the governance process by ensuring that there is a place at the table for them both during the creation of the Exchange, and when it is up and running.

Current Legislative Situation in Springfield
A. The Insurance Bill: HB1577 was developed by and for the insurance industry and has no consumer participation. It prevents small businesses from maximizing the same power of negotiation as larger corporations get. It does not include any consumer or small business protections, and it does not offer any means of helping consumers understand or use the Exchange. Most importantly, it does not establish a governance board of consumers and small businesses. This not only means the insurance industry gets to keep all their current advantages over consumers, but as written today, the State of Illinois will be unable to access between $150-250 million dollars of federal funding to develop this competitive health care marketplace through the Affordable Care Act - money Illinois sorely needs right now. Without these federal resources, Illinois will not be able to move forward. This bill has currently passed the House, and is awaiting legislative action in the Senate.

B. Consumer/Small Business Alternative: There is an alternative. SB1729 (chief sponsor: Sen. Dave Koehler, Peoria) was developed with the participation of providers, small businesses, consumers and insurers. It creates the first phase of a marketplace that is fair to individuals and small businesses, giving them the same access to information and power of negotiation as the big guys. It includes consumer protections against fraud and insurance industry abuses by establishing a strong independent oversight board that includes a consumer, small employer, and an employee of a small employer, among others. This bill offers the strong provisions of integrity, transparency and avoiding conflicts of interest that the insurance industry bill does not.

Senate President John Cullerton is making a decision within the next day as to which of these bills is going to be advanced for consideration by the General Assembly. We need to let him know that we want an Exchange that is designed to protect all of us, not just the insurance industry! Sen. Cullerton is being lobbied hard by the insurance industry right now - if we don't speak up NOW, they will be speaking for us.

Please call Senate President Cullerton and your State Senator TODAY and say you want them to support SB1729 and develop a fair Exchange for Illinois!

Jim Duffett
Campaign for Better Health Care

Illinois Needs a Competitive Health Insurance Marketplace - SB 1729 Will Establish One

The Illinois General Assembly has a lot of contentious, difficult, and time-consuming items on its 2011 agenda—the state budget, pensions, workers compensation to name a few.

But one item—passage of legislation establishing a competitive marketplace for health insurance where everyone will be able to find comprehensive coverage that is affordable—has already been researched and debated and is ready for a quick decision.

SB 1729, the Illinois Health Coverage Exchange Establishment Act of 2011, is the product of months of work by the Illinois Health Care Reform Implementation Council followed by open and robust discussions about the bill’s components and language in stakeholder working groups of patient and family advocates, employers, insurers, providers, and insurance producers convened by the Illinois Department of Insurance. SB 1729 is s sponsored by Senator David Koehler and, as of April 11, 2011, 13 other senators.

SB 1729 creates a marketplace in which individuals and small businesses can shop for high-quality, affordable health plans and individuals and families of modest means can enroll in public programs, such as Medicaid or All Kids, or obtain federal subsidies to purchase private health plans. Under the bill, this marketplace, officially called the Illinois Health Benefits Exchange, will be an independent body, governed by a nine-member board representing health care consumers, providers, small businesses, employees, labor, and insurance producers, who are appointed by the Governor and Attorney General, subject to confirmation by the Senate. Strong conflict-of-interest rules will keep board members focused on the public good, not narrow interests.

The Illinois marketplace needs to be up and running by January 1, 2014, when many of the federal Affordable Care Act insurance reforms (including no denials for pre-existing conditions and premium prices based only on age, geography, and smoking status and not on health condition) and expansions of coverage for lower income individuals go into effect. Illinois needs to have made substantial progress toward establishment of its marketplace by January 1, 2013, or the federal government will run it for Illinois.

SB 1729 will put Illinois on the road to having an effective exchange operational by 2014 and will allow Illinois to receive $150-200 million in federal funds for implementation. A competing bill, HB 1577, was drafted without any public input, lacks a governance plan, totally ignores the public program side of an exchange, makes preemptive decisions on insurance offerings, and delays Illinois’s progress toward establishing a health insurance marketplace that truly serves Illinois’s small businesses, employees, individuals, and families well.

Those interested in the future of affordable, comprehensive health coverage in Illinois should call their state senator and ask him or her to support SB 1729 and even become a sponsor. Call 1.888.616.3322 (AARP’s health line) to reach your senator.


Margaret Stapleton
Sargent Shriver National Center on Poverty Law
(Originally posted here in the Shriver Brief)

Illinois Nonprofit Leader Appointed by President Obama to Serve on Affordable Care Act Advisory Group

As part of the Affordable Care Act, President Obama established the Advisory Group on Prevention, Health Promotion and Integrative and Public Health. The inaugural meeting of this Advisory Group is April 12-13, 2011 in Washington DC. An agenda for the meeting can be found here.

We are proud that Barbara Otto, CEO of Chicago-based Health & Disability Advocates, will be serving as a member of this esteemed and diverse Advisory Group. Ms. Otto has over 20 years experience working on issues such as health care reform, Medicaid, Medicare and other public benefits programs for older adults, children, and adults with disabilities. She is also a principal in the National Consortium for Health Systems Development, a state-to-state technical assistance center, where she focuses on the intersection of health and employment policy.

This advisory group is charged with providing recommendations and advice to the National Prevention, Health Promotion, and Public Health Council also established under the Affordable Care Act of 2010 and chaired by US Surgeon General, Regina Benjamin. The appointees will develop policy and program recommendations and advise the council on lifestyle-based chronic-disease prevention and management, integrative health care practices, and health promotion.

In announcing Ms. Otto’s and several other key administrative posts, President Obama said, “Our nation will be greatly served by the talent and expertise these individuals bring to their new roles." We couldn't agree more.

Sue Augustus
Chief Operating Officer, Health & Disability Advocates

Sliding further down a slippery slope: Congress weakens ACA affordability protections again

Earlier today, Congress approved a bill that reduces paperwork requirements on small business by repealing what's known as the enhanced 1099 reporting requirements passed as part of the Affordable Care Act (ACA). Congress paid for this change by weakening the ACA's health insurance affordability protections for low- and moderate-income families. While repeal of 1099 reporting requirements is an important priority for small businesses, the costs of this adjustment should not come directly from the pockets of struggling families.

How did Congress pay for 1099 repeal?

Starting in 2014, the Affordable Care Act provides sliding-scale tax credits to help lower the costs of premiums for people earning up to 400 percent of the Federal Poverty Level (around $73,000 for a family of three.) The law allows the federal government to pay these tax credits directly to the insurer each month, so beneficiaries will only be billed for the amount of the premium they owe in excess of their tax credit. But if a person’s income changes during the year, they could potentially be eligible for an additional credit or owe an additional amount when they file their taxes. To strike a balance between recapturing subsidies and not hitting working families too hard, Congress placed caps in the ACA on how much low- and moderate-income families could be required to repay.

Earlier today, that balance was tipped against working families. Congress paid for the 1099 repeal by increasing the amount by $500, and sometimes more, that some low- and moderate-income families could have to repay at the end of the year if their annual income was higher than expected.

For example, a family may start the year off with a very low income and qualify for substantial premium tax credits each month. Midway through the year, one family member then gets a new job that raises the family’s income and offers health insurance, and they stop receiving monthly premium tax credits. However, at the end of the year that family will have to repay some of the tax credits they received when their income was lower, since their annual income turned out to be higher than their expected annual income when they qualified for the credits. The 1099 repeal bill passed by the Senate today increases the amount that many families in this situation will have to repay.

This provision is harmful to families and is politically dangerous because it:

•  Increases financial penalties on low- and moderate-income families for having found a better job or gotten a raise. These new costs will impose financial hardship on already-struggling families.
•  Reduces the number of people who will enroll in the advanced tax credits, since they will fear this type of unexpected cost. This means fewer people will get the coverage they need.
• Jeopardizes public support for the ACA. Stories of families owing substantial unexpected costs could lead to further decline in public support for the law.

Does this feel like déjà vu?
That’s because Congress already increased these repayment amounts to pay for a law passed last December that averted a scheduled 25 percent cut in Medicare reimbursement rates for doctors. We blogged about it then, warning that it was the first step down a slippery slope. We’re sorry to see Congress take yet another step down that dangerous slope today.

Katherine Howitt
Community Catalyst
(originally posted at Health Policy Hub here)

Effective Exchange Key to Lower Health Insurance Costs for Illinois Families

It’s hard not to notice the out-of-control health insurance cost increases in recent years. Three out of every four individual-market policyholders saw a premium increase from early 2009 to early 2010.  Small businesses are particularly hard hit. They now pay 18% more for insurance than their larger competitors and have seen repeated double digit premium increases.

But what can Illinois policymakers do to help Illinois families? Turns out, there’s a lot they can do.

The Affordable Care Act (ACA) allows states to create a health insurance exchange for individuals and small businesses. Much the way a large employer negotiates insurance rates for their employees, an exchange would allow small businesses and individuals the ability to pool their buying power and negotiate a better as well, saving Illinois families billions of dollars.

An exchange works to lower costs because it increases competition and improves the choices customers have in the state’s insurance market. But it only works if the exchange is accountable to the public, and the individual and small business consumers it’s designed to serve, not the special interests.

As policy makers consider an exchange program over the coming months, the consumer advocacy group Illinois PIRG will be highlighting many of the important policy questions in a series of policy briefs.

The first in the series of seven details steps policy-makers can take to ensure that the exchange program is accountable to the public and operates in the best interests of consumers and businesses.

Take a look by going here.

Brian Imus
Illinois PIRG