Archive for January, 2012

In a Presidential Election Year, States Left to Pick Up the Pieces of Health Reform

January 26, 2012

By Robert Holden, Senior Vice President

On January 25, the Department of Health and Human Services (HHS), through its Center for Consumer Information and Insurance Oversight (CCIIO), released information identifying the three largest health plans in each state, as well as the three largest national Federal Employee Health Benefit Program (FEHBP) plans to aid states as they consider how to implement health reform.

From the perspective of the states, the implementation of the Affordable Care Act (ACA) has long been a waiting game. After its enactment in 2010, it became clear quickly that states would be doing much of the heavy lifting when it came to implementing the insurance reforms required under the act, primarily because until then health insurance regulation was almost exclusive to the states. Nevertheless, states were dependent on federal guidance and rulemaking before they could make progress towards many of the private insurance reforms and the 2014 implementation date for health benefit exchanges.

Throughout 2011, states had anticipated that federal HHS rules would then define the specific benefits that would be covered in each of these categories so that they could address this issue in the 2012 legislative sessions. However, after recommendations from the Institute of Medicine, HHS did not propose rules addressing specific benefits. Instead, the agency released a December 16, 2011, bulletin advising the states to develop a “bench mark” based on employer plans in their states, which could be the basis for benefits in their respective exchanges, and which HHS would review in 2016. This removed a potentially charged issue from discussion at the federal level until well after the 2012 election.

Now, even with information identifying their largest health plans, states must contend with a lack of federal guidance addressing one of health care reform’s most politically charged issues: what benefits will be covered under the new system?

Essential Health Benefits, the benefits that must be covered by health insurance plans offered through state health benefit exchanges, are defined broadly in the ACA to include the following categories: (1) ambulatory patient services, (2) emergency services (3) hospitalization, (4) maternity and newborn care, (5) mental health and substance use disorder services, including behavioral health treatment, (6) prescription drugs, (7) rehabilitative and habilitative services and devices, (8) laboratory services, (9) preventive and wellness services and chronic disease management, and (10) pediatric services, including oral and vision care.

While many of these categories are already covered by health plans, states have long had their own individual concepts of what constitutes an “essential” benefit. Each session, states introduce scores of bills mandating health insurers provide coverage for specific health benefits. These have been generally opposed by the insurance industry as increasing costs, but frequently address popular concerns, such as continued coverage of routine mammograms or coverage for the treatment of autism spectrum disorders. The ACA acknowledged the potential for increased costs created by coverage mandates. Because federal subsidies would keep premiums affordable for individuals utilizing the state exchanges, the act requires states to pay costs attributable for benefits required beyond the essential health benefits provided for under the ACA.

Unsurprisingly, the details of the essential health benefits had been greatly anticipated by state legislators who now, in light of the HHS bulletin, may have substantial leeway in preserving their current mandates. At a minimum, states will be able to use health plans (subject to their state’s mandates) to create a benchmark for the new state health benefit exchange. While there is still uncertainty as to how the state benchmarks will be judged by HHS in 2016, states have already started to determine processes to review their state mandates and how they fit into the ACA’s essential benefits.

Prior to the release of the HHS bulletin, Massachusetts and Minnesota introduced a number of bills placing a moratorium on new mandates, as well as legislation to require a comprehensive regulatory review of mandated benefits in their states. While Massachusetts legislation proposes to authorize the Division of Health Care Finance to review the mandated benefits, and Minnesota legislation authorizing their Commissioner of Commerce to do the same, South Carolina, Rhode Island and West Virginia would look to their respective insurance commissioners.

Regardless of the review process, states will be revisiting their mandated insurance benefits this legislative session, and the issue will undoubtedly receive attention at the state insurance commissioners’ (NAIC) meeting in March. Stakeholders, including disease treatment advocates, pharmaceutical and equipment manufacturers, as well as health care provider groups will be pressing the case that their services and products are essential to health care consumers.

State Legislators Convene to Protect Agriculture

January 12, 2012

By Stateside Associates

With many commodity prices soaring, the last few years have been good to American agriculture. High prices have translated into record profits and allowed many farmers to invest in new equipment and in turn, improve productivity. In fact, in Iowa alone, the value of agricultural sales has climbed from approximately $12 billion in 2002, to a projection of nearly $30 billion in 2012. However, while there may be more new pickups on Main Street, potential challenges for the agricultural sector remain, many of which were discussed this past weekend at the State Agriculture and Rural Leaders (SARL) Summit in Washington, D.C.

SARL brings together the state legislators that chair the country’s state agriculture committees to discuss the most pressing issues facing American Agriculture. While most reports at this year’s meeting were positive—largely echoing commodity prices, I noticed three primary issues that commanded the most discussion: ongoing regulatory concerns and their economic impact on American farmers; the need for increased economic and technological infrastructure for rural economies; and the continued importance of consumer demands on food product labeling.

Regulatory Concerns Remain at the Forefront

The key theme of this year’s meeting could be summed up in one word—regulation. Discussion about new state environmental, food labeling, and broadband connectivity regulatory issues, as a group, were the focus of prolonged discussion. On the environmental regulation front, discussion focused on two main themes—agricultural runoff and invasive plant and animal threats. It is clear that questions remain as to the appropriate division of responsibility between urban and rural pollution sources.

However, it was also clear that states are coming up with low-cost and effective strategies to do their part, like a new Michigan program to incentivize farmers to minimize pollution discharges or a coalition of states working to secure dedicated funds for state invasive species management programs. From the sounds of these discussions, and as is the case in many other industries, legislation impacting the agricultural sector will be centered on the “low-hanging fruit,” meaning efforts will be primarily focused on voluntary, low cost, measurable and easily implementable strategies will be the foundation of successful policy proposals.

Supporting the Rural Economy

Keeping the economic engine alive in rural areas was another key theme for meeting participants, especially those from the Midwest. Legislators discussed the challenges facing the small population of Americans engaged in agriculture, which today stands at 2%. In particular, the conversation focused on increased broadband connectivity and tax incentives for small businesses as tools to bolster and grow rural communities. Participants noted the challenge of securing infrastructure investment in rural areas for broadband. To this end, one proposal on the table was to require cable companies to install rural infrastructure in return for the deregulation of urban markets, while another was to use existing state-owned bandwidth as an alternative to private lines.

Tax credits were also a big chunk of the conversation. One presenter highlighted the impact small, state-led programs can have in rural areas. Citing an example from his community, he highlighted a small home-based business making wooden handicrafts that was able to grow into a seller with nationwide distribution and multiple employees thanks to state legislation that provided a small business tax credit. As well, non-tax legislation including proposals to allow the sale of additional value-added products such as beer and wine at farmers markets highlighted some of the additional ideas states are considering to provide economic opportunities in rural areas. Based on the strength of discussion around these topics, it appears likely that going forward, initiatives to expand rural economic opportunities are likely to garner the attention of lawmakers from rural districts.

Consumer Considerations

Another hot topic dealt with food labeling issues, specifically with the interest in some states for mandatory labeling of products containing genetically modified (GM) crops. Legislators discussed the merits of mandatory versus voluntary labeling as well as recent local government efforts to prohibit the planting of GM crops on public lands.

From the mood in the room, legislators appeared most interested in seeing voluntary labeling requirements remain the norm. Some present indicated voluntary labeling is already available for certain products and mandatory requirements that increase food product prices further are unlikely to gain momentum in these challenging economic times. Moving forward, this issue is likely to gain greater legislative attention as a wider and wider variety of GM products receive federal approval for use.

Looking Ahead

The above items represent some of the key themes that appear poised for discussion this legislative session as indicated by the conversations at the State Agriculture and Rural Leaders Summit this past week. As the legislative session unfolds, it’s likely one or more of these may be coming to a State House near you.

We’d like to hear your reactions. If you attended SARL, were there other topics you discussed? Is the agricultural sector in your state seeing different trends? What legislative or regulatory issues are you focusing on?

Stateside Associates’ List of the Best Local Politics Blogs That Are Worth Reading

January 5, 2012

Dear Clients and Other Friends of Stateside Associates,

We recently published the latest in our series of FactPadTM inserts, the Best Local Politics Blogs. Our staff compiled a list of the best municipal and/or regional issue politics blogs in the country. You can view the press release here.

This list comes on the heels of our nationally recognized Best State Politics Blogs list and mirrors the rapid expansion of our firm’s local government monitoring service. We know you will find this list and many of our other reference materials useful.

You can download this most recent FactPad insert in PDF format here or you can visit our site to see the list in HTML format here. If you need additional FactPad mouse pads free of cost, please reply to this email.

With the new year comes new legislative sessions and increased political activity. Blogs have become an invaluable part of our work to stay ahead of the curve because they provide information in real-time and they help identify trends. Other reference materials to keep you ahead of the curve include the 2012 Bill Introduction Deadlines or a list of the Partisan Splits. These reference materials and much more can be found at

As with all Stateside Associates materials, feel free to provide this information to your friends, colleagues and clients. We simply ask you recognize the hard work Stateside Associates staff has put into compiling these lists.

Have a prosperous and fulfilling new year.


Constance Campanella
President and CEO
Stateside Associates, Inc.
2300 Clarendon Boulevard, 4th Floor
Arlington, Virginia 22201
703-525-7466 ext 228 (w)
703-623-2408 (cell)