Blog

State Legislative Update

State legislative sessions are getting underway across the nation. Some states are still struggling with whether they want to run their own health exchange, while others are now focusing on the nitty-gritty details, including how brokers will work with exchanges.

The next big exchange deadline for some states is February 15 to declare whether they want to help run their federally facilitated exchange in partnership with the federal government.

States that have already declared they want to roll out a state-based exchange in 2015 face a deadline of November 18, 2013 to file a blueprint with HHS to gain final approval. That means that the states considering a state-based option will probably be pursuing additional legislation this session.

States are also likely to take action to align state laws with PPACA’s requirements. A new study by The Commonwealth Fund found that 22 states reported that there could be limits on a state’s authority to regulate the insurance market unless a state takes action. Yet, the study found that 39 states have not yet taken legislative or regulatory action to implement the reforms effective in 2014.

NAHU members across the country are engaged with their elected officials and Departments of Insurance in pursuing initiatives to bring state laws into compliance, strengthen state regulation of insurance and develop standards for states to regulate navigators.

Below are some of the states that have had notable activity on health and insurance issues since the last State Update.

Region 1

Connecticut
Connecticut is moving forward with the creation of their state exchange, Access Health CT, and required insurers to submit proposals by January 4, 2013 in order to sell in the new marketplace. Approved carriers will be announced in the spring. Meanwhile, legislation is pending to regulate the exchange and to possibly create an active purchasing model.

Maine
The 2012 election resulted in Democrats winning back the Maine House and Senate; positioning the legislature to advance exchange legislation against Governor Paul LePage’s opposition.

Massachusetts
Governor Deval Patrick issued his budget, which detailed the state’s goals for so-called “wrap plans” on its health exchange. The wrap plans will provide state assistance to individuals earning between 133% and 300% of the federal poverty level, as well as legal immigrants earning up to 300% of the poverty level. The Patrick administration says CMS has already indicated it will provide a 50% match for individuals, excluding immigrants, in wrap plans.

New Hampshire
The state special legislative committee dedicated to welcome a federal exchange in the state met in early January. New Hampshire was expected to create a state partnership exchange, but has defaulted to a federal exchange with hopes to transition in to a partnership.

New York
Senate Republicans are expected to challenge the Cuomo administration’s authority to use an executive order to create a state-based exchange.

Rhode Island
Rhode Island, following in the footsteps of neighboring Connecticut and Massachusetts, entered in to a contract with Deloitte Consulting to build the technology backbone of their exchange. The three-year contract is worth $105 million.

Vermont
The 2014 fiscal year budget unveiled by Governor Peter Shumlin late last week included $10.5 million in state funds to further subsidize exchange coverage for the poorest residents. Shumlin’s administration says the state funds will reduce the impact of the “benefits cliff” for people making the transition from more generous state programs.

Region 2

District of Columbia
Former Maine Insurance Commissioner Mila Kofman officially began her duties as the permanent Executive Director of DC’s Exchange earlier this month. Ms. Kofman has communicated that she would like to revisit some of the decisions that the exchange board undertook prior to her arrival, including the combining of the markets. The board’s decision must be authorized by the vote of the full DC City Council; however, no hearings or votes have yet been scheduled on the consolidation. NAHU CEO Janet Trautwein was selected to serve as the chairperson for the Broker and IT Working Group for the exchange. They will be sending the full board their recommendations in the coming weeks.

Maryland
The Speaker of the Maryland House Michael E. Busch recently introduced HB 228, the Maryland Health Progress Act of 2013. Prior to its introduction, Maryland had considered several different funding mechanisms for operating their state-based exchange, including assessments on insurance policies and sin taxes. HB 228 will instead fund the exchange by existing premium taxes, which will be funneled through the state’s general fund. The bill will also use an aggregate rating system based on the insured market, rather than employee census data and average age.

New Jersey
Governor Chris Christie has continued to express that he will not take any further action on state implementation of New Jersey’s FFE (federally facilitated exchange) until he has further guidance from HHS. Governor Christie remains undecided whether the state will expand Medicaid, citing the lack of guidance from HHS. A decision is expected by February 26, when he will deliver his annual budget address.

Pennsylvania
Despite Governor Corbett’s decision to default to the FFE, the legislature continues to consider bills to establish a full state-based exchange in the state. Minority Chair Tony DeLuca introduced HB 225 to establish a state-based and SHOP exchange. However, given Republican control of the governorship and both chambers, it is unlikely that this will move forward due to Governor Corbett’s concerns about a lack of clear information. Governor Corbett announced on February 5 that a Medicaid expansion for Pennsylvania “would be financially unsustainable for the taxpayers and I cannot recommend a dramatic Medicaid expansion.”

Virginia
Virginia held their Day on the Hill on January 30-31 and more than 20 NAHU members participated in legislative meetings with delegates and senators. The state legislature is currently meeting in a 30-day session to conclude on February 23. Any action taken by the legislature must have action from the governor by March 25. Given the state’s extensive early planning for a state-based exchange, it is one of few FFE candidates that may opt for a partnership exchange in advance of the February 15 deadline, although that remains an extremely unlikely possibility. There are currently two bills addressing the role of navigators that are being considered by the state legislature.

Region 3

Illinois
NAHU members in league with the broker coalition in the state are working on a legislative proposal to define the role of navigators. The bill requires licensure and training of navigators and other entities acting in similar capacity. The broker coalition is also engaged in a coalition of businesses and insurers retooling a proposal from last year to enact legislation to authorize a state-based exchange. Action must be taken this session for Illinois to submit a blueprint to HHS by the November 2013 deadline. Passage of the state exchange bill is uncertain despite veto-proof Democratic majorities in the House and Senate.

Several chapters in the state sponsored breakfast meetings with legislators during January. These sessions combined “meet and greet” opportunities with presentations regarding exchanges and legislative concerns for 2013.

Indiana
The Indiana Department of Insurance is pursuing legislation (HB 1319) to regulate navigators and other exchange related issues.

INAHU members Susan Rider, Dwight Hall and David Berman attended the Congressional swearing in ceremonies in Washington, D.C. They were able to makes the rounds of the ceremonies and open houses of many of the Indiana Congressional delegation.

Kentucky
Kentucky’s Agents Legislative Day will be held on February 13.

The navigator/agent subcommittee met in January for the first time since October of last year. Deloitte Consulting made a presentation on navigator/in-person assister program planning. Compensation and standards for agents participating in the exchange were also on the January meeting agenda. The SHOP subcommittee recommended that the contract with employers will allow for a review of employer records to ensure that the employer meets a required 75% participation rate.

Michigan
SB 0061 and SB 0062 passed out of the Senate Insurance Committee. The bills would transform the non-profit Blue Cross and Blue Shield insurance Company into a non-profit mutual company. It also bans the company from using "most-favored nation" agreements with hospitals and healthcare providers. Similar legislation was vetoed by the governor last year due to an amendment that included controversial abortion language. Timely passage of the Blue Cross mutualization bill is important to allow the insurer to meet a March deadline to file plans for the exchange.

Ohio
Ohio Representatives Sears and Kunze introduced HB 3, the agent/navigator bill. House Speaker Bill Batchelder noted that the first 10 bills “reflect some of the bigger issues we will face in the first six months.” The bill requires that navigators be certified and trained. It also requires training for brokers.

West Virginia
West Virginia is working with HHS on a partnership exchange including plan management and consumer assistance. Cost and sustainability of West Virginia’s role are major issues under consideration. The state is considering a partnership exchange to reduce what is expected to be a more significant regulatory burden if a fully federal exchange is implemented in the state.

Region 4

Iowa
The Iowa chapter held its Day on the Hill on February 5. Iowa selected a partnership exchange in December and is in the process of submitting its blueprint to HHS. Governor Branstad has continued to express frustration over the lack of information from HHS on how the partnership exchanges will be run.

Nebraska
The Nebraska chapter partnered with other agent groups to introduce a navigator licensing bill in January. In a notice to carriers on January 9, Insurance Commissioner Bruce Ramge noted that Nebraska prefers to keep risk pools separate for small group and individual markets, but use only one geographic area, and that agents and brokers will be compensated by the insurers, not the exchange directly. The notice also states that producers must “still be appointed with the company in order to place business with that company.”

Minnesota
The Minnesota legislature will be holding a total of 16 hearings on the state implementation of PPACA over the coming weeks, including several that will focus on agents and brokers. Minnesota’ state-based exchange bill has hit some roadblocks in its passage, but given that the Democratic-Farmer Labor party has control of the governorship, as well as both legislative chambers, it remains on fast-track to be passed by the end of March.

Wisconsin
The Wisconsin chapter will be holding its Day on the Hill on March 19. There has not been much legislative activity since Governor Walker announced his decision last year to default to the FFE. Republicans currently control the governorship and both chambers and have expressed an unwillingness to engage in any decisions over PPACA.

Region 5

Alabama
The past few legislative sessions have included aggressive legislation to create a state-based exchange. Although the state has elected to participate in a federal exchange, legislation may still be introduced this year in anticipation of a future state-based exchange.

Florida
The state’s short legislative session will not begin until March and it will adjourn in May. Earlier this month, Governor Rick Scott met with HHS Secretary Kathleen Sebelius to discuss exchanges and the ACA’s Medicaid expansion. No compromise was reached, but since the meeting Scott has announced that Florida will be defaulting to a federal exchange.

Georgia
The GAHU chapter participated in their Day on the Hill on January 31. GAHU has been active in pursuing the introduction of a bill to license navigators.

Mississippi
The Mississippi exchange saga between two elected state Republican officials continues! Mississippi Insurance Commissioner Mike Chaney has been moving forward with the creation of a state exchange and in mid-November Chaney submitted an exchange proposal to HHS for approval. But in an effort to block the state exchange, Governor Phil Bryant submitted his own letter to HHS on December 28 objecting to the creation of the state exchange on the basis that the insurance commissioner does not have the authority to determine whether the state will have an exchange. Governor Bryant believes that he is the only state official that has the power to make this decision for the state. HHS officials said they are going to let Mississippi officials sort things out before deciding on Commissioner Chaney’s blueprint. The state’s attorney general filed a legal opinion in mid-January stating that Chaney has the power to run an exchange on his own, but Governor Bryant has pledged to keep fighting against it. HHS has yet to approve Chaney’s proposal.

North Carolina
Last year North Carolina declared the state would participate in a state-federal partnership exchange, but has yet to submit a proposal to HHS. The state has until February 15 to submit a partnership exchange blueprint.

South Carolina
SCAHU is gearing up for their annual symposium on March 25-26. The symposium will feature presentations by Congressman Tim Scott as well as sessions on employer compliance, South Carolina’s exchange and an update on PPACA implementation from NAHU Director of State Affairs Marcy Buckner.

Tennessee
Legislators are limited to sponsoring 15 bills each and TNAHU members have worked with their legislators to ensure sponsorship for their legislative initiatives. Governor Bill Haslam had a lot to say about the ACA’s Medicaid expansion during his State of the State address on January 28 — except whether he wants to go through with it. He intends to gather more information to assess the impact on Tennessee’s budget and the impact on healthcare providers and the state’s citizens.

Region 6

Arkansas
Arkansas has been planning for a partnership exchange since December 2011 and has until February 15 to submit a partnership exchange blueprint. Democratic Governor Mike Beebe said he is still interested in building an exchange completely operated by the state, but the legislature rejected the idea in the weeks following the 2012 election. Legislation may be introduced during the 2013 session to fulfill Beebe’s aspirations of a state-based exchange.

Kansas
The state will have a federal exchange despite the best efforts of Insurance Commissioner Sandy Praeger, who has been a staunch advocate of the state creating its own exchange.

Louisiana
The state’s short legislative session will not begin until April 8 and will adjourn at the beginning of June. At the end of January, Louisiana Governor Bobby Jindal criticized recent changes in Medicaid in a Washington Post op-ed. He stated that President Obama and HHS Secretary Kathleen Sebelius should talk with states about reforming Medicaid before pushing them to expand the program.

Missouri
Democratic Governor Jay Nixon, who previously announced his support for the Medicaid expansion, devoted a good chunk of his State of the State address on January 28 to what he called the “biggest economic decision facing his state.” Nixon, who cited the four Republican governors who already support the expansion, said he would back a provision that would let Missouri roll back the expansion if the federal government cut its funding commitment.

Oklahoma
Oklahoma has asked a U.S. district court to reject the Obama Administration’s December request to dismiss the state’s lawsuit challenging the legality of an IRS rule providing subsidies through federal-run health insurance exchanges. In a filing on January 25, Oklahoma Attorney General Scott Pruitt argues that PPACA did not authorize subsidies in federal-run exchanges and he accuses the IRS of overstepping its legal authority when they saw states’ opposition to the law.

Texas
The Texas legislature was not in session during 2012, so it is expected to spend much of this session catching up on state initiatives to respond to the federal healthcare laws that were implemented while Texas was out of session last year. In Governor Rick Perry’s State of the State address on January 28 he emphasized that he would not back off “one iota” from his opposition to the health law, which he believes will drive the state into bankruptcy.

Region 7

Arizona
Arizona’s exchange activities have largely stopped based on the state’s decision to defer to a FFE. Governor Brewer has decided to pursue Medicaid expansion.

AAHU is working with other agent groups on drafting a bill to regulate navigators.

Colorado
Colorado’s exchange continues to make progress. The new name for the exchange is Connect for Health Colorado. The exchange is moving ahead with recommendations on the more detailed issues. Among the issues under consideration is how brokers will work with the exchange. Brokers may be required to contract with all carriers on the exchange in order to sell coverage through the exchange.

Colorado’s Day at the Capitol is taking place on February 5.

Idaho
Governor Otter has launched a petition to drum up support for a state-based exchange. Idaho’s legislators have not all been supportive of his decision to pursue a state-based exchange. IAHU members have been encouraging members and clients to sign the petition in support of an Idaho exchange.

New Mexico
Political issues are putting New Mexico’s exchange efforts in jeopardy. Governor Martinez’ administration is moving forward on an exchange based on executive order. The Democratic-controlled legislature is insisting that legislation is required to implement an exchange. Some of the concern is that Democrats are not in agreement with the direction that the exchange is taking so far, especially as it relates to the make-up of the governing board.

Utah
Utah’s legislature convened on January 28 for a session that ends on March 14. The legislature is expected to consider legislation to address changes to state law to address federal reform.

UAHU held their Day on the Hill on January 30.

Region 8

Alaska
Bills filed in advance of the January 15 opening of the legislative session were light in the healthcare arena. Energy issues are expected to be the focus for this session.

California
CAHU is bracing itself for two major legislative battles. They expect renewed attempts to regulate self-funding that would preclude smaller employers adopting self-funded plans as well as a revival of legislation that would significantly expand rate regulation in the state.

A special legislative session called an “extraordinary session” was convened on January 28 to consider legislation to implement legislation to align California law with PPACA.

The exchange, Covered California, is moving ahead. Bids from insurance carriers interested in participating in the exchange were due on January 23. The website will soon be live. It will include specific agent and employer content on the SHOP section.

Nevada
Nevada is planning a Day on the Hill in cooperation with other producer associations on March 14.

NVSAHU is also working with other producer associations on legislation that clarifies the role of navigators. Nevada’s exchange had previously endorsed licensing of navigators; legislation would ensure that the roles and responsibilities of navigators can be enforced.

Oregon
Sixteen health insurance carriers have submitted applications to participate in Cover Oregon when it launches for open enrollment in October. Fourteen have said they will offer plans in the individual market and 13 will offer plans in the small group market. Cover Oregon expects to certify the carriers that meet its requirements this spring. Plan details and rates must also be filed with the Oregon Insurance Division.

The exchange is contemplating that brokers selling through the exchange will be appointed to carriers through the exchange. This appointment will be valid only for exchange-based plans. Brokers will still need to be directly appointed by carriers to represent them for policies outside of the exchange.

Washington
Washington’s exchange had been considering a “managing general agent” approach to exchange/producer contracting. But, further research into the idea has raised questions regarding liability that the exchange could face. The exchange had been seeking a “hold harmless” arrangement with producers as a part of this arrangement; E&O carriers balked at this requirement.