Monday, March 26, 2012

Though implementing health reform, states are fighting for its repeal

As we’ve passed the second anniversary of landmark health reform legislation, the Patient Protection and Affordable Care Act (PPACA), 26 states are challenging the constitutionality of the law, even though every state, except for Arizona, is actively implementing the law. Though the PPACA strengthened federal laws, the states remain the primary regulators of health insurance and thus are key players in the implementation of the PPACA.

According to a new report from the Commonwealth Fund, 49 states plus the District of Columbia have either (1) passed new legislation, (2) issued a new regulation, (3) issued new subregulatory guidance (such as a bulletin), or (4) are actively reviewing insurer policy forms for compliance with the early market reform protections of PPACA. These 10 early market reforms, collectively known as the Patient’s Bill of Rights, include such protections as the prohibition on lifetime limits for essential health benefits and the requirement that dependent coverage must be available until age 26, and took effect on September 23, 2010.

According to the report, nearly half of the states—23 states plus the District of Columbia—took either legislative or regulatory action on at least one early market reform while an additional 26 states took action through subregulatory guidance or review of policy forms. Of these states, the Commonwealth Fund reports, 12 states—Connecticut, Hawaii, Iowa, Maine, Maryland, Nebraska, New York, North Carolina, North Dakota, South Dakota, Vermont, and Virginia—passed new legislation or issued a new regulation that addressed all 10 early market reforms. Thus, the report suggests, states have many options, and great flexibility, to ensure that the protections promised by the PPACA are delivered. According to the Commonwealth Fund, state regulators report that subregula­tory guidance or review of policy forms appear to have been the most effective tool in promoting compliance with the reforms.

Only one state took no action. According to the Commonwealth Fund, only one state, Arizona, did not pass new legislation, issue a new regulation, issue new subregulatory guidance, or report that the state is actively reviewing insurer policy forms for compliance with these early market reforms. However, the Commonwealth Fund notes, Arizona has indicated that it is informally advising insurers where their policy forms are not in compliance with federal law.

Going forward. States may have taken a cautious “wait and see” approach to implementing health reform, pending the Supreme Court’s decision on the constitutionality of the law. Further, as the Commonwealth Fund points out, many of the broader market reforms, such as a ban on preexisting condition exclusions, which would take effect in 2014, do not exist in state law. Where these state standards do exist, the report notes, they may be inconsistent with these broader market reforms found in the federal law.

It’s showtime!! Starting today, the U.S. Supreme Court will spend a highly unusual six hours over three days listening to and questioning attorneys for the parties on several aspects of the health reform law. This should be interesting. Stay tuned.


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