While health care reform got the votes it needed in Washington, it still faces resistance in many states.


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Inside This Issue - News

Health care reform met with resistance in many states

August 30th, 2010

NEW YORK – While health care reform got the votes it needed in Washington, it still faces resistance in many states.

Blocking maneuvers from lawsuits to legislative action to referenda are occurring from Florida to Alaska.

In Missouri, voters this month passed a referendum aimed at overturning the health care reform law. The measure, which was approved by 71% of voters, seeks to nullify the law’s requirement that people get health insurance or they must pay a tax penalty.

Backers said it would send a message to Washington about how Missouri, often a bellwether in presidential elections, felt about such a law. However, less than 1 million people voted in total, and most of those were believed to also be casting ballots in Republican primaries.

Besides, courts are likely to settle the mandatory insurance question before it goes into effect in 2014. Still, referenda that have the same goal in Oklahoma and Arizona are expected to pass when they come up for votes on November 2.

Opposition to reform got a boost at the beginning of August when a federal judge ruled that Virginia could go ahead with a lawsuit contending that the insurance requirement is unconstitutional. Twenty other states have joined in a similar suit. Because federal law usually preempts state law, the lawsuits may be mostly symbolic, although the issue is still expected to reach the Supreme Court.

Legislatures in five states have passed laws invalidating the insurance requirement. The Virginia legislature did so in March, even before the reform bill was enacted, and those in Idaho, Utah, Georgia and Louisiana followed suit.

Meanwhile, the Department of Health and Human Services announced grants of $46 million to 45 states and the District of Columbia to bolster regulation of health insurance rate hikes. Another $204 million is to be given out within five years.

The announcement came as insurance commissioners in about half the states — including California, Florida and Michigan — said they lacked authority to enforce rules taking effect in September. New requirements include coverage for children under 19, coverage for children up to age 26 under their parents’ plans, no co-payments on preventive services, no lifetime limits on benefits, appeals when benefits are denied, and no withdrawals of coverage except in cases of fraud.

For too long, insurance companies have boosted premiums with little oversight, transparency or public accountability, according to HHS. Health premiums have doubled on average during the past 10 years, rising much faster than wages and inflation, putting coverage out of reach for millions of Americans and business owners, says the department.

Just 26 states and the District of Columbia have the authority to reject a proposed increase that is excessive, lacks justification or otherwise exceeds state standards, HHS notes, adding that many states that have the authority lack resources to exercise it meaningfully.

The new law “puts in place critical market reforms to improve quality and reduce the cost of health care for employers and individuals,” says HHS secretary Kathleen Sebelius.

Greater competition, lower overhead and better risk pooling in health insurance exchanges in 2014 are expected to drop premiums by 14% to 20%, she adds, citing an analysis by the Congressional Budget Office.

“Between now and then, we will continue to work with states to ensure consumers are receiving value for their premium dollars and to avoid the kind of double-digit premium increases seen recently,” explains Sebelius.

Over the winter, she chastised Anthem Blue Cross of California for rate increases of up to 39%. Parent company Wellpoint Inc., the largest health insurer in the country, subsequently acknowledged “inadvertent” mistakes and filed for smaller increases.

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