04/11/2007   Washington Legislative update

Legislative Update

Health care reform is a hot topic in Olympia this year with lawmakers considering dozens of health-related bills. Some, like the bill expanding health coverage to children, are practical solutions to specific problems. Others, like those seeking to add to the 50 or so state health insurance mandates already on the books are of significant concern.

Asuris’s public policy team, together with other carriers, employers and business organizations has been working hard to influence the outcome of this year’s active legislative session.

March 14 was the deadline for all bills to be sent to the opposite (non-originating) chamber, and April 13 is the last day for bills to be considered by the opposite chamber. Legislators have also begun intense discussions and negotiations around those bills still alive. They have also turned their attention to the budget for the 2007-2009 biennium. April 22 is the last day allowed for regular session under the state constitution. The Governor has five days after adjournment to take action on those bills sent to her desk.

If you have any questions about these bills, or any other concerns about a legislative or regulatory issue, please contact Asuris or your state legislator. This link will help you find contact information for legislators in your district.

Here’s an overview of key bills and their status at this time.

Governor’s Health Care Reform Bill

Asuris is supporting the Governor’s deliberative approach to health reform (Senate Bill 5930) which directs the Health Care Authority to research a ‘Connector’ model during 2007 and bring this proposal back to the legislature in 2008 for implementation approval. SB 5930 passed out of the Senate unanimously on March 9. Asuris is pleased that a provision was included in the bill that would allow carriers to offer at least one mandate-free policy if they offer one comprehensive policy. The amended bill also included provisions that would give carriers more rating flexibility. Although these provisions were stripped from SB 5930 in the House, we remain hopeful they will be restored when the bill goes back to the Senate for concurrence.

Cody/Hinkle Reform Bill

Asuris strongly opposes this ‘alternative’ to the Governor’s bill. House Bill 1569 originally stated that by January 2009 all small employers must purchase health insurance exclusively through the Washington health insurance ‘Partnership’. (There is no parallel, voluntary commercial small group market as there is in the Massachusetts ‘Connector’ model).

A recent amendment would establish a Connector Board and evaluate by 2008 whether the individual and small group markets should be included in the Partnership. The Board will also evaluate by 2009 whether the high-risk pool, Basic Health Plan, Public Employees Benefits Board and public school employees should also be included. While this sounds similar to the Governor’s proposal, our belief is that it would be the beginning of a requirement that all insurance be purchased only through a ‘Connector-style’ mechanism dominated by state government limitations on choice.

Individual Market Rating Bill

This OIC request legislation (SB 5261) would re-regulate the individual market by moving to a file and use requirement amounting to prior approval of rates in this market. The bill was recently revised to delete a provision that would have allowed the Commissioner to "take into consideration" the surplus of a carrier before approving or denying rates. However, the bill was also amended to increase the minimum loss ratio in the individual market from 74% (minus 2% premium tax) to 77% (minus 2% premium tax). This means that carriers must devote 75 cents of every premium dollar to medical care in the individual market.

Asuris is opposed to this bill because we feel that the individual market in Washington is thriving—it now covers close to 250,000 people whereas only 127,000 were covered in this market in the late 1990s.

Any Willing Provider Bills

Senate Bill 5597 passed the Senate by a vote of 39-10 and was heard in the House Appropriations Committee the last week of March. This bill would require that carriers like Asuris pay claims for services provided by employees of contracted chiropractors, even if those employees are not contracted or credentialed by us. This bill would affect our ability to control the size and quality of our provider network, and set a dangerous precedent for other provider groups in later years. We also believe this bill would have a very detrimental cost impact on the health care delivery system in Washington. The Puget Sound Health Alliance is also "opposed" to bills like these which create "one-size-fits-all" approaches that stifle innovation. The State Health Care Authority has also testified in opposition to this bill.

New Mandates

On March 30, the Governor signed into law a mental health parity requirement for the individual and small group markets. It mandates a phased-in implementation. Asuris estimates this bill will increase individual premiums by 3-4%, and small group premiums by 2.8%. A mandate to provide colorectal cancer screening tests also passed both chambers and is awaiting action by the Governor. We were able to defeat several other costly mandates this session, such as mandates to cover hearing aids and instruments, neurodevelopmental therapy benefits up to age 18, and elemental formulas.

Retainer Medicine

Under SB 5958, direct patient-provider primary care practices are exempt from the definition of health care service contractors in insurance law. Under these arrangements, patients enter into a contractual relationship with medical practitioners and pay a fixed monthly amount directly to the health care provider for primary care services.

Asuris and other carriers argue that these practices are risk-bearing entities. The retainer physicians accept the risk that the fixed monthly amount will be sufficient to cover all primary care services during the contract period. We have also argued that if other risk-bearing entities like Asuris must comply with the consumer protections, financial requirements and mandates in the Insurance Code, all risk-bearing entities should adhere to these same requirements. Conversely, we’ve also maintained that if these arrangements are allowed to go forward, health plans should also be allowed to set up such arrangements. However, neither of these arguments has been persuasive to the bill's sponsors. SB 5958 passed the Senate on March 9 by a vote of 38-10 and is awaiting House floor action.

Producer Licensing Model

This OIC request legislation, SB 5715 (based on an NAIC model), would eliminate the distinctions under our current law between agents and brokers and in its place create a new ‘producer license’. The bill would also change the appointment process so that all licensed brokers could go out and write business and then have up to 15 days to be appointed by the insurer for whom that business was written.

Most Asuris-connected producers appear to support the changes and no major problems have been identified so far. SB 5715 passed both chambers unanimously and is now awaiting action by the Governor.

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