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Source: StateScape

Despite all 50 states convening for session in 2011 with legislators from 39 states returning in January, at least four states returned or plan to return for a special session in 2010.  New York Governor David Paterson (D) called an extraordinary session beginning November 29 to discuss a budget deficit of $315 million before the end of the calendar year.  Although legislators have yet to make much progress in reaching a budget solution, they passed a measure to eliminate certain cost-sharing requirements for tier IV prescription drugs considered to be too cost prohibitive for those with serious and often life-threatening conditions.

Declaring a fiscal emergency in the state, California Governor Arnold Schwarzenegger (R) called a special session to begin December 6th in order for legislators to begin chipping away at the state’s $6 billion budget deficit—which the Los Angeles Times reported may grow to as much as $25.4 billion over the next year and a half.  Governor-Elect Jerry Brown (D) has until January 10 to propose his budget for the state legislature to consider during the regular 2011 legislative session.

Governor Chris Gregoire (D) is pushing for a December special session for Washington State legislators to enact a series of drastic spending cuts balancing the state’s budget through July.  Although the Governor made across-the-board cuts to many programs earlier this year, the deficit grew by about $385 million due to slow growth in tax collections.  According to incoming House Majority Leader Pat Sullivan (D), Democrats prefer a full supplemental budget over Governor Gregoire’s suggested cuts, which include eliminating the Basic Health Program, a program providing subsidized medical insurance to low-income individuals and families.  Although the Governor does not need legislators’ permission to call a special session, because a session’s duration is limited to 30 days, she wants legislators to agree on an agenda beforehand.

Alabama Governor Bob Riley (R) also will require legislators to return to the Capitol on December 8 to pass anti-corruption legislation.  Among the reforms under consideration are full disclosure of spending by lobbyists on all public officials and public employees; an end to unlimited gift-giving to public officials; and a ban on pass-through pork spending.


(Image from the Kaiser Commission on Medicaid and the Uninsured presentation)

June 18, 2010 – UPDATE: According to American Medical News, the federal government pays for 57 percent of Medicaid costs on average, varying by state. The 2009 economic stimulus package increased this average by at least six percentage points through December 31, 2010, which helped prevent significant program cuts, including reductions in physician pay.

The National Conference of State Legislatures says at least 33 states as of late April 2010 proposed or adopted budgets that included the expected (not yet passed by Congress) additional federal dollars. The Senate version of the American Jobs and Closing Tax Loopholes Act would continue enhanced Medicaid stimulus funding through June 30, 2011.

California Governor Arnold Schwarzenegger is attempting to address the state’s $18 billion fiscal 2010-11 deficit by proposing to end the state’s welfare program and require co-pays for Medicaid enrollees.

(Image from American Medical News based on Kaiser Family Foundation report)


Original post — May 20, 2010

All states, with the exception of Vermont, are legally required to balance their budgets annually or biennially.  To accomplish this, states attempt a variety of approaches to cut spending and increase savings — and Medicaid is often one of the first state programs on the chopping block. Governor Rick Perry (R) recently released a plan to save $1.2 billion in the current Texas FY 2010-2011 budget.  With the state Medicaid program reduced by $64 million, provider reimbursement rates were not spared.  Although a two percent cut was a possiblity, some are concerned the one percent reduction taking effect September 1 will discourage providers from accepting new patients enrolled in the program.

In Missouri, the 2011 state budget approved by lawmakers assumes: (1) Medicaid costs will grow by less than originally projected; (2) savings as a result of several bills that have yet to pass the Legislature; and (3) additional savings by shuffling money among earmarked accounts.  Also in an effort to close a $350 million budget gap, lawmakers considered taxing insurance premiums for Medicaid managed care plans, but ultimately removed this provision from the final version of the bill.  Currently, only California has such a tax.

Arizona Governor Jan Brewer (R) recently signed legislation to restore $385 million to the state’s Medicaid program. The funding cut approved by the Governor in March as part of the state’s FY 2011 budget would have dropped more than 310,000 people from the program effective January 1.  The new law also reauthorizes and finances the state’s Children’s Health Insurance Program, which covers 47,000 low-income children.  The shift in state policy follows the enactment of the federal health care legislation, which requires states to continue funding health care programs at current levels or risk forfeiting all future federal funding.  Voters recently approved a ballot measure to institute a temporary one percent sales tax increase to raise state revenue.

Despite pressure from a Democratic-controlled legislature, Minnesota Governor Tim Pawlenty (R) would not approve an expansion to the state’s Medicaid program during budget negotiations.  The new health reform law enhances federal matching funds, sweetening the deal for states to enroll more participants in medical assistance programs.  Some speculation as to whether the Governor—who is not seeking reelection—is opposing “Obamacare” to boost his chances in becoming the Republican presidential candidate in 2012.

In order to maintain funding levels and increase Medicaid recipients, the Alabama Legislature tapped state funds — by transfering from other state agencies, state drug rebates, tobacco settlement funds and provider specific assessments — and utilizing available federal matching funds.  The state also is pursuing means to save money within Medicaid by using new technology to aggressively address fraud and abuse.


Additional resources on Medicaid

Kaiser report on Medicaid funding under Health Care Reform

Other KFF Medicaid / CHIP resources

May 10, 2010 — UPDATE: Image from State Net Capitol Journal:

Friday, April 30 was one of the first deadlines established under the federal health care reform legislation.  States were required to decide whether they would work with the federal government to establish a health insurance pool for high risk individuals.

Much of the debate amounted to mere partisan ties.  Of the 29 states that agreed to create a pool, Alaska, California, Connecticut, New Jersey, South Dakota and Vermont have Republican governors.

Participating states didn’t want their residents’ health care left up to the federal government.  A spokesperson from Michigan Governor Jennifer Granholm’s office (D) says, “We know our market. We are connected to our consumers, and we can properly respond to them.”

In Connecticut, Governor M. Jodi Rell’s (R) response to Secretary Sebelius seeks a partnership between the state’s existing pool, which Connecticut formed in 1976, and the requirements of the federal legislation.   According to the Governor, “[Connecticut’s] participation will depend on the state not being forced to pick up any additional financial burdens as a result of the new venture.”

According to the Washington Post, 19 states will not join HHS in creating a state pool:

  • Alabama 
  • Arizona 
  • Delaware*
  • Florida 
  • Georgia 
  • Hawaii 
  • Idaho 
  • Indiana 
  • Louisiana 
  • Minnesota 
  • Mississippi 
  • Nebraska
  • Nevada
  • North Dakota
  • South Carolina
  • Tennessee*
  • Texas
  • Virginia
  • Wyoming*

* the 3 states with Democratic governors

Arizona Governor Jan Brewer (R) explained her decision not to participate by saying, “In light of Arizona’s existing fiscal challenges, I cannot commit the state to a program without confidence that there is funding available to sustain it.”

Expressing similar concerns in a recent press release, Wyoming Governor Dave Freudenthal (D) says, “The state’s involvement would be an unnecessary addition to the process that would result in redundant administrative costs and unnecessary delays in the implementation process.”

Always the rebels, Rhode Island and Utah—both with Republican governors—are undecided.


Additional resources on:

38 states with established high risk pools

State and federal pools 

HHS available funding for the pools by state’s High Risk pool site

June 2, 2010 — UPDATE: In a recent statement, Vermont Governor James H. Douglas (R) laid out his conflicting opinions—on the state’s 2010 universal health care legislation—which lead to the ultimate decision not to sign or veto the measure.  Included in the letter, SB 88:

+ Shows promise for quality improvement and cost reduction – representing the culmination of years of work by revising the state’s existing program, Blueprint for Health.

+ Articulates the components of the integrated medical home and community health team payment reform model.

+ Requires insurance carriers to participate in the statewide expansion of the Blueprint as a condition of doing business in the state.

+ Establishes interoperable connectivity through the state Health Information Exchange and a one-year primary care work force development committee.

+ Charges the Department of Banking, Insurance, Securities and Health Care Administration with limiting the rate of growth in hospital spending and insurance premiums.

– Has caused concerns among health care professionals regarding low-income residents’ access to free prescription samples.

– Mandates studies that are a “wasteful expense of time and scare resources, as Vermont would be prevented by the federal health care reform law from implementing any of the new ‘designs’ until 2017 at the earliest.”

– Jeopardizes Vermont’s participation in the CMS Advanced Primary Care Practice Medicare demo.

May 17, 2010 — UPDATE: Image from the Kaiser Commission on Medicaid and the Uninsured:

In Vermont, a state with more than 90 percent of residents insured and ranked #1 in the Commonwealth Fund’s most recent State Scorecard on Health System Performance, the legislature is close to adopting a change to the health care delivery system not accomplished by Congress—universal coverage.   Both chambers of the state’s Democratic-controlled General Assembly passed different versions of SB 88—the original version of the bill, passed by the Senate, would establish a single-payer system.  The House amended the legislation, replacing single-payer with a public option, which would allow the state to create a health insurance program to compete with private payers.

Legislators currently are working out the details in a conference committee.  Governor Jim Douglas (R) has not yet indicated whether he will sign either version of the bill if it reaches his desk.  The governor supports certain cost-containing provisions of the legislation but does not approve of either bill in its entirety.  The state could not pursue such plans until 2017 as required by the new federal health care law.

Vermont, however, isn’t alone in its efforts.  Minnesota SF 118 was introduced in 2009 but has received little attention from the Legislature in 2010.  During the current legislative session, HB 767 and SB 682 were considered by the Maryland General Assembly but ultimately were reported as unfavorable by their respective initial committees of referral.

California also is considering a single payer bill, SB 810, which passed the state Senate and is under consideration in the Assembly.  In a recent press release concerning federal health reform, Governor Arnold Schwarzenegger (R) indicated that he supports reform and expanding coverage.  However, given the state’s current economic condition, adoption in 2010 seems unlikely.


Additional resources on universal health care in Vermont

History of Health Care Reform Legislation in Vermont

Details of Vermont’s Premium Assistance Program & Buy-In Option

As coverage expands under the implementation of the federal health care reform, the role of telemedicine—allowing health care providers to connect to patients and other providers across the country at any time of day via the Internet—is increasingly essential to ensure that access to care is adequate, particularly in rural and underserved areas.  Patient consultations that utilize telemedicine avoid many of the delays experienced in traditional health care delivery and can help to prevent unneeded emergency rooms visits. 

On April 5, Virginia Governor Bob McConnell (R) signed SB 675, which unanimously passed both chambers of the state General Assembly.  The measure requires all health insurers to cover health care services provided via telemedicine (defined as the “use of interactive audio, video or other electronic media for the purpose of diagnosis, consultation or treatment”) – excluding audio-only telephone, e-mail or fax transmission.  Virginia is the 12th state to adopt such a mandate. 

Some insurers utilize telemedicine services without a state mandate.  The Blue Cross Blue Shield plan of Hawaii, for instance, recently announced that it will become the first health plan to deploy Online Care Team Edition, an online care system to allow live, on-demand specialist care consultations in primary care provider exam rooms.  The new product moves beyond previous telehealth services—that connect patients at home to doctors via the Internet—by putting primary care physicians at the center of coordinating care.  Through this online medical home, a PCP needing to refer a patient can go online from a regular office computer, find an in-network specialist, and launch a live consultation with the physician.  American Well, the creator of the online system, says this will not only reduce the delay, inconvenience and cost associated with the traditional referral process, but also enhance physician collaboration.

Because physicians often are not reimbursed for time spent on the telephone with insurance companies or responding to patients’ emails, payment for telemedicine services can help to financially stabilize providers, particularly those in small private practices.  For a listing of telemedicine reimbursement mandates by state and additional telemedicine resources, refer to my Telemedicine Reimbursement PDF.

June 1, 2010 — UPDATE: According to a San Jose Mercury News article, in order to plan for and begin implementing the federal health reform legislation, the California Legislature is considering more than 20 bills, of which as many as a dozen may be voted on this week as lawmakers face a deadline to pass bills out of their house of origin.   

The article says, “Lawmakers and the governor’s staff have met with Jon Kingsdale, the executive director of Massachusetts Connector, that state’s health insurance exchange, who will consult with California as it develops its own version.”   

Included in the bills currently being debated are:   

  • SB 890 – Prohibits annual or lifetime benefit limits, establishes a medical loss ratio of 85 percent, and allows for changes in individual health plans or insurers on annual renewal dates.
  • SB 900 – Establishes a state health insurance exchange.
  • SB 1088 – Allows enrollment in parents’ insurance coverage up to age 26.
  • SB 1163 – Requires health insurers to give 180 days written notice of changes in the premium rate or coverage and extends requirements placed on health insurers to deny coverage.
  • AB 1595 – Expands eligibility for Medi-Cal, the state’s Medicaid program.
  • AB 1600 – Establishes mental health parity.
  • AB 1602 – Establishes a state health insurance exchange, eliminates annual and lifetime limits on health care coverage, and allows enrollment in parents’ insurance coverage up to age 26.
  • AB 1825 – Requires coverage of maternity services.
  • AB 1887 – Establishes framework for the operation of California’s temporary high risk pool.
  • AB 2244 – Prohibits denial of coverage based on preexisting conditions.
  • AB 2470 – Imposes specific requirements and standards on health insurers related to the application forms, medical underwriting, and notice and disclosure of rights and responsibilities.
  • AB 2477 – Establishes continuous eligibility for children under Medi-Cal.
  • AB 2578 – Prohibits health insurers from increasing rates without prior approval from the Department of Managed Health Care or the California Department of Insurance.

California is not alone in its efforts to replicate and build upon federal health reform. In Michigan, legislators are considering similar legislation:   

  • HB 6034 – Prohibits denial of coverage based on preexisting conditions, allows enrollment in parents’ insurance coverage up to age 26, and requires that rates are adequate, equitable and not excessive.
  • HB 6035 – Requires continuation of coverage and approval of rate increases.
  • HB 6036 – Allows enrollment in parents’ insurance coverage up to age 26 and limits when a health benefit plan can be changed or cancelled.
  • HB 6037 – Establishes the MI-Health Board to develop a standard guaranteed issue health plan, which will serve as a minimum level of coverage for all health plans in the state.


May 26, 2010 — UPDATE: Governors are continuing to establish the infrastructure needed by their states to implement the new laws and prepare for the new opportunities included in the federal health reform bill.  Most recently, Washington state Governor Christine Gregoire (D) signed an executive order creating a Health Care Cabinet and California Governor Arnold Schwarzenegger (R) established a state Health Care Reform Task Force.   

In Michigan, Governor Jennifer Granholm (D) created a Health Insurance Reform Coordinating Council, New Mexico Governor Bill Richardson (D) set up a Health Care Reform Leadership Team, and launched by Pennsylvania Governor Ed Rendell (D) is a Commonwealth Health Care Reform Implementation Committee and Advisory Committee.   

May 19, 2010 — UPDATE: Despite involvement in a lawsuit against the federal government concerning the constitutionality of the new health reform law, Virginia Secretary of Health and Human Resources Bill Hazel, MD announced the establishment of the state’s Health Care Reform Initiative. Funded from existing resources, this statewide initiative is located within the Office of the Secretary of Health and Human Resources and will serve as the liaison between the Governor’s office, agencies and entities affected by health care reform, lead development of the required Health Insurance Exchange and identify and coordinate grants to fund health care reform. The new program is charged with making recommendations addressing Medicaid reform, insurance reform and health care delivery reform, due to the Governor by September 30, 2010 and annually by January 10 until 2014.   

May 17, 2010 — UPDATE: New York also laid the groundwork to begin implementation. Governor David Paterson (D) recently created the Governor’s Health Care Reform Cabinet, which will advise and make recommendations to the Governor on all aspects of federal health care reform. The Director of State Operations will serve as the chair, with the Deputy Secretary for Health, Medicaid and Oversight and the Deputy Secretary for Labor and Financial Regulation serving as vice-chairs. Included in its responsibilities are identifying deadlines established under federal law; determining with which provisions the state must comply and those that are optional; and assessing the state’s capacity to carry out those provisions.   

April 28, 2010 — UPDATE: Maine joined at least four other states in establishing the infrastructure needed to implement the new federal health reform laws.  Governor John E. Baldacci (D) recently issued an executive order creating the Health Reform Implementation Steering Committee.  Utilizing existing state resources including the Governor’s Office of Health Policy and Finance, State health officials, and the Advisory Council on Health Systems Development, the steering committee will begin the planning to meet requirements under the federal law. The new committee will also work with the Joint Select Committee on Implementation created by the Maine Legislature this session.   

Additional information can be found at AAFP News Now.   


On Tuesday, April 20, Colorado Governor Bill Ritter signed an executive order, creating a new inter-agency task force and naming Lorez Meinhold, the Governor’s healthcare policy expert, as director.  Governor Ritter says, “National reform allows us to accelerate and build on our work to provide higher quality care at lower costs to more Coloradans. Today marks a new chapter for healthcare in Colorado.”   

With similar “ahead-of-the-curve” intentions, Wisconsin Governor Jim Doyle established the state’s Office of Health Care Reform to develop an implementation plan that uses national health care reform to build on Wisconsin’s successful reform efforts and ensure the state’s residents and businesses realize the benefits of reform as soon as possible.  The Governor’s press releases says, “Wisconsin has already developed initial plans for an exchange under Governor Doyle’s leadership, making the state uniquely positioned to be a leader in implementation.”   

Connecticut Governor M. Jodi Rell also announced that she has established a Health Care Reform Cabinet, comprising officials from several state agencies, to ensure that state-administered health programs and other key elements meet the goals and requirements of the recently passed national health care reform law.   

Maryland makes head of the class.  The day after President Obama signed the federal health care reform legislation into law, Governor Martin O’Malley unveiled an executive order creating the Maryland Health Care Reform Coordinating Council to advise the administration on policies and procedures to implement the new federal law as efficiently and effectively as possible.   

However, not all states’ approaches to addressing health reform are alike.  Governor Sean Parnell announced Alaska will join 20 other states in legally challenging the constitutionality of the federal legislation.  According to the National Conference of State Legislatures, 39 states—including the four mentioned above—have filed legislation opposing certain provisions of federal health reform.

A Pennsylvania court ruled 4-1 that the General Assembly cannot use $808 million from the medical liability fund—funded by PA doctors and hospitals—to balance the state’s budget.  The majority opinion says the money collected for the fund is not tax dollars and therefore belongs “to the provider and not generally to the Commonwealth.”

The Wisconsin Supreme Court is considering a similar case, after Governor Doyle transferred $200 million from the Patients Compensation Fund to the Medical Assistance Fund in 2007.  The Wisconsin Medical Society wants the state to return the money to the fund to be used for the original purpose, medical malpractice, rather than as a “revenue raising tool for the state.”  For the past two fiscal years, the fund’s balance has been negative.

In January, the New Hampshire Supreme Court also handed a victory to physicians fighting against the state government’s attempts to solve budget shortfalls by tapping into a state-created medical liability insurance fund.  The court found unconstitutional a state law authorizing the transfer of $110 million from the Medical Malpractice Joint Underwriting Association to the state’s general fund. The money was to be used to expand state health care programs for underserved populations. In his FY 2010-11 budget, Governor John Lynch (D) approved this transfer of what lawmakers considered to be a surplus in the fund.


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