HIAA Sees Continued Slowdown In State Mandated-Benefit Laws

In its State Forecast 2003 report, HIAA identifies several other issues that are likely to emerge in state legislatures this year.

One is so-called “prompt payment of claims.” Provider groups, HIAA says, will advocate legislation that establishes more stringent standards and shorter time frames for payment of claims.

Moreover, the legislation will increase the penalties for late payment, HIAA says.

The typical penalties, according to HIAA, are higher interest rates, increased administrative penalties imposed by regulators and a private right of action to enforce the laws.

On prescription drugs, HIAA says at least two-thirds of the states will consider measures to rein in drug costs. These could include drug rebates and discounts, along with generic substitution measures, bulk purchasing arrangements and uniform prescription drug cards, HIAA says.

On single-payer systems, HIAA says there has been some talk about establishing state-based systems.

Gabardi notes that Oregon considered a single-payer system as part of a ballot initiative, but it was defeated by a substantial margin.

He says that one reason the initiative lost so badly was the fact it was so extensive that it would have required the state to double its budget in order to provide health insurance.

However, Gabardi says, he expects advocates of a single-payer system in Oregon to try again with a scaled-down proposal.

Moreover, he says, there has been some talk of a single-payer ballot initiative in California.

On long-term care, HIAA says that several states will likely consider legislation providing state tax incentives for the purchase of LTC coverage.

Some 23 states already have such incentives, according to HIAA.

At the same time, to control rate increases and educate consumers, HIAA says state regulators are likely to consider implementing the rate stabilization and consumer disclosure requirements in the Long-Term Care Insurance Model Regulation developed by the National Association of Insurance Commissioners, Kansas City, Mo.

Finally, HIAA says, there is the issue of “tier rating,” or reunderwriting, of individual health policies.

HIAA notes that tier rating became an issue in 2002 following news reports that insurance companies use health status as a rating factor at renewal.

A handful of states, HIAA says, will probably introduce legislation to prohibit tier rating.

Nonetheless, HIAA says, the expectation is that health insurance issues overall will be a lower priority in state legislatures than in previous years because of state fiscal problems.

There will still be pressure to address health insurance issues, HIAA says, but with dire state revenue forecasts, funding will be limited.

Reproduced from National Underwriter Edition, February 3, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.