April 28, 2010-Bismarck Tribune
Lawmakers hear testimony on new health care law
By REBECCA BEITSCH Bismarck Tribune | Posted: Wednesday, April 28, 2010 6:21 pm
With some deadlines only days away, the Industry Business and Labor committee heard testimony Wednesday regarding the new health care law and what action the state needs to take to be compliant.
The state needs to communicate to the federal government by Friday how it intends to establish an insurance pool for those too sick to purchase insurance or the federal government will head the task of administering it.
That news came from Insurance Commissioner Adam Hamm, and consensus was quickly built among committee members that allowing the federal government to take over a state pool program for the uninsurable would not be an option.
Testimony from Hamm and other state agency heads indicated that additional staff would be needed to help deliver the measures set forth in the law and keep track of approaching deadlines.
Hamm said his office is considering filling its one vacant position with a lawyer who will help them keep track of what changes need to happen in accordance with the law’s various phase-ins.
“Quite frankly we’re getting to the point already, just a month after this thing has become a law, where we’re starting to get really nervous. Are we missing anything? Are there gaps in our state law that we need to be addressing in the next legislative session so that we don’t run afoul of the federal government and get preempted?” Hamm said.
Depending on whether the state charges the insurance department with overseeing the various health insurance exchanges, Hamm estimates his department will need as many as 19 more full-time employees and nearly $4 million in additional funds, although more will be needed later to update a website to house exchanges and other information about the law.
“They’re going to be coming back to us with a lot of new budgetary figures,” said committee Chairman Rep. George Keiser, R-Bismarck. “These departments can’t just go out and hire the people they need to deal with all this, they have to come to the Legislature first and get the money.”
The Department of Human Services faces the task of administering a much-expanded Medicaid program, which will now incorporate a greater income range and for the first time is now open to childless adults.
Maggie Anderson, director for the medical services division of DHS, said that will mean nearly an additional $106 million to the state as the program is implemented through 2019 and also would mean the department would need another 30 full time employees.
Keiser said one of the problems with having a session every other year is the inability to deal immediately with approaching deadlines like the high risk pool, programs that provide assistance to pregnant minors, and various grants from the federal government.
Another looming deadline is how the state plans to address the portion of the law dealing with health insurance exchanges. Plans that are included in the exchanges must meet certain criteria set forth in the law, but states are permitted to pass more stringent requirements of the plans and oversee the operation of the exchange.
A number of legislators have expressed interest in a regional exchange with nearby states, and while Hamm agreed to exploring this option, he’s not sure how such a program would be administered across state lines.
Hamm said a decision needs to be made in the 2011 legislative session because, while the exchanges won’t being to function until 2014, they must be certified by the federal Health and Human Services Department by the Jan. 1, 2013, just before the start of the 2013 session.
The law says online information about the exchanges must rate all the plans according to quality and cost and must provide an income calculator that tells people whether or not they are eligible for Medicaid or the State Children’s Health Insurance Program — a move that could direct more people to services administered by DHS.
The committee also heard testimony from Blue Cross Blue Shield.
Paul von Ebers, chief executive of Blue Cross Blue Shield of North Dakota, said his company has some serious concerns over the law, namely that while the company would likely pick up some business as the reforms take effect, it may not bring them much in the way of healthy clientele.
“It’s good news, bad news. Obviously more business means we can spread out the costs among our base. The bad news is we think most of the new people coming into the system will be sicker,” von Ebers said.
That sentiment was not shared by Joshua Goldberg, who gave testimony on behalf of the National Association of Insurance Commissioners.
“We’re likely to see something rarely mentioned in health circles called a health spiral. People usually talk about a death spiral where risk in a plan degrades over time, yet premiums go up, and it’s a vicious cycle. We’re looking at the opposite here because there’s a good chance that individuals that are older and sicker will be attracted to the new plans which are more favorable to them,” said Goldberg, meaning traditional plans will soon be left to the healthy.
Either situation could be bad if sick and healthy populations are segregated and risk cannot be shared.
Von Ebers said that while prices would not skyrocket immediately, it was likely that premiums would go up.
Several Republicans on the committee said they were discouraged by some of the testimony but said it was time to move past their partisan feelings about the bill and move forward in complying with it in the smartest way possible.
“It’s the law of the land, and we have to work with it the best we can,” said House Majority Leader Al Carlson, R-Fargo.
“This is where the rubber hits the road,” said Keiser, adding that the Legislature really doesn’t have that much time to get seriously prepared for the next session. “We need to move carefully, judiciously, and quickly.”
The committee meeting provided the first opportunity for many legislators to hear a presentation on the general provisions of the law and ask questions of a panel of experts.