States' Continue Own Health Reform Efforts

As the various provisions of the Affordable Care Act are implemented over time, the states continue to apply their own health care reform and cost-containment measures. Below we review some of the states’ recent actions.

California. Gov. Jerry Brown has signed a pair of bills designed to close a loophole that denies women maternity services. More than 200,000 women between the ages of 19 and 44 in California have health insurance plans that do not cover maternity care. The first bill requires health insurance companies to provide maternity coverage as a part of their individual insurance plans, and the second bill requires group health insurance policies to provide women with maternity coverage. These laws take effect on Jan. 1, 2012. Mr. Brown also signed a bill that makes insurers cover autism therapy, including behavioral health treatments. The law will be in effect from July 1, 2012, through July 1, 2014.

Indiana. The Obama Administration has denied a waiver for the Healthy Indiana Plan, the state’s Medicaid program, which means that over 45,000 state residents will lose coverage under the plan unless Indiana makes coverage changes that are more acceptable to the Obama Administration. In 2007, Indiana enacted the plan, an expansion of Medicaid that used consumer-driven (high-deductible) health plans with a spending account supposedly to encourage low-income beneficiaries to take a more active role in their own care. The state also has been promoting so-called consumer-driven health plans to its employee population. The Healthy Indiana Plan’s waiver expires at the end of 2012.

Louisiana. Helped by a $10 million federal grant, state officials and industry leaders have launched a web-based medical records exchange. Supporters of the platform indicated that the Louisiana Health Information Exchange is a way to link disparate health care providers, from primary care doctors to hospitals and pharmacists, so they can collectively provide better and cheaper patient care.
Minnesota. Gov. Mark Dayton has announced that a competitive-bidding process for state health insurance programs will save $242 million over the next two years. The measure was a part of his drive to improve government efficiency. The state required HMOs to competitively bid for state contracts in the seven-county metro area, and the savings will reduce the money taxpayers spend for health care without cutting any services.

New York. Gov. Andrew Cuomo has signed a bill that will require insurers to cover screening, diagnosis, and treatment for autism spectrum disorders. The law includes routine toddler screenings, behavioral health treatments, speech therapy, occupational therapy, and physical therapy. The measure was vetoed last year by former Gov. David Paterson as too expensive, but Mr. Cuomo said the current bill puts an important $45,000 annual cap on the coverage insurance companies would have to fund. The law takes effect Nov. 1, 2012, for insurance policies issued or renewed after that date.

In other New York news, the state’s Department of Financial Services has ordered 11 health insurers to refund $114.5 million to policyholders under minimum medical spending requirements. Implemented in June 2010, health insurers are now required to spend 82 cents of every dollar collected in premiums on medical care or refund the difference to policyholders. The federal Patient Protection and Affordable Care Act imposes a similar minimum medical loss ratio requirement on insurers nationally beginning in 2011. The refunds in New York will be paid to holders of group and individual health insurance policies that cover 573,748 people in the state.