Kentucky eyes high-risk pool to relieve pressure on insurance market and lure carriers back to state
FRANKFORT, KY—Kentucky’s Insurance Commissioner George Nichols III has a plan for fixing a health insurance market many agree has run amok. But Gov. Paul Patton said he won’t call a special session of the legislature until lawmakers reach some consensus first.
To control premium costs and lure back some of the insurance companies that have fled the state, Mr. Nichols has proposed creating a high-risk pool for people with serious illnesses. With the guaranteed issue requirement, critics say reforms have made health insurance more affordable for the sickly and more expensive for the healthy. Under Mr. Nichols’ proposal, the high-risk pool would be funded by a $1.25 per policy per month charge. To further ensure that costs for caring for the sick are shared among insurers, companies would have to pay out at least 70% of their premium income in claims or risk paying a penalty.
A state senator has proposed a more "politically palatable" way to finance a high-risk pool by assessing a lump sum rather than a per-policy charge that could easily be passed along to consumers.
A coalition of consumers, associations and insurance companies, notably Humana and Anthem Blue Cross & Blue Shield, have proposed a "pay or play" mechanism. Under the plan, an insurer could choose to offer coverage to high-risk people or pay assessments to cover costs of insurers who do cover these high-risk subscribers. A small insurance pool also would be created.
To spread the cost of high-risk customers, some legislators are considering requiring that reinsurance companies pay the assessment, too. In that way the self-insured market, which is usually immune to such costs, would share some of the responsibility.
The insurance commissioner said it will take two years for a "pay or play" mechanism to bring stability to the market, and the Health Insurance Association of American and the Council for Affordable Health Insurance sent a letter to lawmakers warning that a "pay or play" mechanism is skewed in favor of the managed-care industry.
Many Kentuckians haven’t had a rate increase in two years, because freezes on when policies have to be converted to the state’s standard plans have shielded them from the effects of the reforms. The latest order will expire Oct. 15.
Kentucky’s insurance reforms, passed in 1994 and 1996, provided protections to the 16% of Kentuckians who buy insurance in the individual or small group market.
Lexington Herald-Leader, Sept. 10, 1997, Cincinnati Post, Sept. 6, 10, 1997
Nine states scrutinize Columbia/HCA Medicaid billings
SALT LAKE CITY—As a federal probe of Columbia/HCA Healthcare Corp. expands, at least nine states are scrutinizing billings from the hospital chain to see if their Medicaid programs have been overcharged. Officials in Arkansas, Kentucky, Massachusetts, Nevada, Utah, Wyoming, Alabama, Florida and Texas have confirmed that they are conducting inquiries in their states.
"We obviously are looking for Medicaid fraud or fraudulent claims and billing practices on the part of Columbia," Lt. Col. Earl Morris of Utah’s Division of Criminal Investigations told Associated Press. "We’re still sifting through loads of documents. But, I suspect that, in the end, we will find some state interests that need to be addressed."
Several states started examining records following a federal raid of the company hospitals over Medicare records, but in Utah, two state Medicaid fraud investigators have been working with federal agents for more than a year and as many as 11 have been involved in the case at times.
Associated Press, Inquirer, Philadelphia, Aug. 29, 1997
NJ medical society pioneers physician database
TRENTON, NJ—The Medical Society of New Jersey will pioneer a national database program created by the American Medical Association (AMA). Except for malpractice suits, the data base will make most information about physicians’ credentials and performance available to the public.
Meanwhile, a state senator was continuing to push a bill, opposed by the Medical Society, which would allow for publication of the amounts of malpractice settlements by physicians. The Medical Society opposes the inclusion of this information. The bill calls for the information to be included in a database operated by the state Board of Medical Examiners and funded by physician licensing fees.
The AMA program is voluntary and includes basic physician credentials, such as education, licenses, and disciplinary actions by a hospital or board of medical examiners. Also provided will be peer review of clinical performance, patient care results, ethical behavior, participation in continuing medical education and office site review. The information will be free to the public but doctors will pay an application fee and hospitals, HMOs and other health care organizations would pay a fee to access the data.
The database proposal in the the legislature would give the dollar amounts of malpractice settlements, but not the number, and their malpractice experience would be compared with that of other providers in their specialty area.
The Record, Bergen County, New Jersey, Aug. 24, 1997
CA task force opposes blanket veto of HMO bills
SACRAMENTO, CA—Gov. Pete Wilson’s intention to veto about 85 managed bills passed by the legislature this session drew opposition from a task force appointed to study how best to regulate the HMO industry. The governor has stated he plans to veto the bills because he wants to await the health-care task force’s recommendations which will be released in early 1998 .
The 30-member group sent a statement to the governor that legislation should be considered "on its merits" and that the panel’s work "should not impede the legislative process." Task force members, who joined legislators and consumer groups in decrying the governor’s position, said the panel was being turned into a "graveyard" for health reforms .
In a memorandum to the Legislature, the governor wrote that it "has an obligation . . . to wait for the (task force’s) recommendations rather than engage in a piecemeal, uncoordinated approach" to health reform.
While Taxpayers Against Higher Health Costs, a group whose members include Blue Cross of California and the California Healthcare Assn., a hospital trade group, supported the governor’s position, the California Association of Health Plans expressed surprise at the governor’s stance. The health plan association, which opposed many of the HMO reforms, said it had been working with lawmakers to strike a "reasonable compromise on bills that address legitimate patient concerns, (and) we had hoped to see these bills signed," according to Maureen O’Haren, the group’s executive vice president.
However, she added, "we respect the governor’s decision to legislate more comprehensively."
Los Angeles Times, Aug. 8, 1997
Orange County increases spending on indigent care
SANTA ANA, CA—The Orange County Board of Supervisors has approved a plan for indigent health care that has been in development for years. The county will increase spending for indigent health care by 16% in the hopes of reducing hospital care and encouraging more doctors and clinics to care for these patients. Unlike other California counties, Orange County does not operate any public hospital and relies on a network of private medical centers and physicians to care for the poor.
Borrowing a page from managed care, the county also plans to assign indigent patients with chronic illnesses to one of a dozen private clinics where doctors will monitor their condition and provide referrals if needed.
"This is very significant, because it provides a stronger safety net for people without insurance," said Board of Supervisors Chairman William G. Steiner. "Ultimately, the taxpayers benefit through lower emergency room costs . . . and by preventing medical problems from becoming chronic."
Most of the added $6 million came from state health funding that is tied to local sales taxes and motor vehicle fees. The county’s Health Care Agency is now in the process of selecting the clinics and determining which patients will take part in the new system. Officials estimate that 9,000 to 13,000 people in the indigent care program suffer from "chronic" medical conditions. But it is unlikely that all of them will be immediately assigned to a clinic because funding is limited.
Los Angeles Times, Sept. 10, 1997
Each month, this page features selected short items about state health-care policy digested from newspapers around the country.
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