AN ACT ESTABLISHING THE CONNECTICUT HEALTHY STEPS PROGRAM.

This bill establishes the Connecticut Healthy Steps Program, which consists of numerous health insurance requirements, HUSKY program changes, and public health initiatives. It establishes a Health Care Reform Commission, the Connecticut Connector, a Healthy Lifestyles Commission, a health savings account incentive program, and a premium subsidy program. It also makes several appropriations.

The bill establishes a permanent 12–member Health Care Reform Commission as an independent body in the Office of Health Care Access (OHCA) for administrative purposes only. By July 1, 2008, the commission must develop (1) an affordable health care plan available for sale to small employers (50 or fewer employees) through the Connecticut Connector, which the bill establishes, and (2) a comprehensive health care plan that meets current statutory requirements.

By January 1, 2009, the commission must report to the Insurance and Real Estate Committee identifying the effect of statutorily required health insurance benefits on health care premiums that private sector employers pay. Beginning January 1, 2009, it must annually make recommendations to the General Assembly about the Connecticut Healthy Steps Program and improvements to the health care system, including cost controls.

1. develop incentives to encourage people to use health insurance responsibly;

2. develop a proposed plan and timetable for implementing statewide electronic prescribing, computerized physician order entry in hospitals, and a uniform electronic medical record system to improve the state's health care quality;

3. develop a plan for implementing a third-party administered pharmaceutical purchasing pool to cover all public employees and public programs;

4. establish the Connecticut Health Quality Partnership by July 1, 2009; and

5. determine whether residents should be required to have health insurance if the number of uninsured people has not decreased 50% by October 1, 2012.

Commission members include the Department of Social Services (DSS), OHCA, and insurance commissioners, or their designees, and nine appointed members. The Senate president pro tempore and House speaker each appoint two and the governor, House and Senate majority leaders, and House and Senate minority leaders each appoint one.

The initial members serve staggered terms with (1) the governor's and Senate president pro tempore's appointees serving for three years, (2) the House speaker's and Senate majority leader's appointees for two years, and (3) the remaining members for one year. After the initial terms expire, subsequent appointees serve three-year terms. The appointing authority must fill any vacancy for the unexpired term. Members are not compensated but are reimbursed for their expenses.

The bill requires the commission to meet as often as necessary to complete its work, but at least quarterly, and it can hire consultants within available appropriations.

The bill requires the Health Care Reform Commission to establish a nonprofit organization called the “Connecticut Health Quality Partnership” by July 1, 2009. The partnership must collect and report insurance claims and other data on the quality of care and services provided by health plans, hospitals, and health care providers to support quality improvement initiatives and help consumers make informed provider choices. It must include representatives from the public and private sectors, including health insurers, hospital associations, medical societies, consumer advocates not affiliated with any other members, and the Department of Public Health (DPH) and DSS commissioners. The partnership must seek private and public funding.

The bill requires the Insurance Department, in consultation with the Health Care Reform Commission, to develop, issue a request for proposals, and award a five-year contract to administer the Connecticut Connector (“Connector”). The contract must be awarded to a private nonprofit organization to serve as a health insurance purchasing pool, through which previously uninsured individuals and uninsured employers may purchase health plans. (Presumably “uninsured employers” means employers who do not offer employees health insurance. )

The bill requires the Connector's administrator to meet with the Health Care Reform Commission as the commission determines appropriate. The administrator must:

1. solicit insurers to sell products through the Connector;

2. review the products for compliance with Health Care Reform Commission-established benefits and standards;

3. provide plan selection assistance to, and publish easy-to-understand material that, compares plan costs and benefits for prospective purchasers;

4. screen applicants for eligibility to purchase through the pool;

5. work with the insurers selling products through the Connector to develop a uniform tool for collecting applicant or enrollee data needed for underwriting, enrollment, and other purposes;

6. collect premium contributions from employers and individuals and subsidies from the state and remit the funds to the enrollees' health plans;

7. collect fees from each insurer selling products through the Connector, based on rules the Health Care Reform Commission adopts, to support administration costs;

8. notify insureds when premiums are late and disenroll them or charge late penalties as appropriate;

9. provide creditable coverage notices as required under the federal Health Insurance Portability and Accountability Act (HIPAA);

10. market the health plans available though the Connector to potential purchasers;

11. receive money from the comptroller and make payments to individuals and employers eligible under the health savings account incentive and premium assistance programs the bill establishes; and

12. beginning July 1, 2009, provide data and reports annually to the Health Care Reform Commission and the General Assembly that include (a) the number and demographics of previously uninsured people covered through the Connector, by type of policy, (b) the Connector's per capita administrative costs, (c) any recommendations for improving service, health insurance policy offerings, and costs, and (d) any other information the commission requires.

The bill requires the Connector's administrator to offer the following three health insurance plans to each applicant: (1) an affordable health care plan; (2) a comprehensive health care plan currently available from insurers; and (3) a health savings account plus high deductible plan currently available from insurers. An employer purchasing coverage through the Connector may offer its employees any, but not necessarily a choice, of these plans.

1. coverage of physicians, clinics, ambulatory surgery, laboratory and diagnostic services, in-patient and out-patient hospital care, and medically necessary prescription drugs for physical or mental health;

2. coinsurance that reflects family income;

3. a copayment of up to $ 75 for inappropriate use of a hospital emergency department;

4. a minimum loss ratio (the percent of each premium dollar collected that must be used to pay claims) of 85% over any three-year moving average period; and

5. a lifetime benefits maximum of $ 500,000, contingent on the availability of an excess cost reinsurance program through DSS for which an individual or family would become eligible without spending all of their resources after exhausting their lifetime benefit. (It is unclear if this means that a lifetime benefit maximum is not permitted if DSS does not establish a reinsurance program. )

All Connector health care plans offered must be community-rated. The community rate is to be adjusted based on the individual's age, sex, county, and tobacco use. Each plan must also have a medical loss ratio of at least 85%.

The bill specifies that Connector health plan coverage is creditable coverage, as defined in HIPAA. (Creditable coverage is the time a person was covered under a prior plan that counts toward any preexisting condition coverage exclusion in a policy currently covering the person. ) Any health plan that next covers a person who was insured through the Connector is prohibited from excluding coverage for that person's preexisting conditions. But each Connector health care plan offered may exclude coverage for preexisting conditions of anyone who has been uninsured for more than 12 months (presumably the 12 months immediately preceding the effective date of the Connector plan).

The bill establishes the eligibility criteria for a person applying for individual coverage through the Connector. An eligible person (1) does not have access to employer-sponsored coverage for which the employer pays at least 50% of the employee's and dependents' coverage costs; (2) has been uninsured for at least six months; or (3) has been uninsured for less than six months and lost coverage due to a major life event. Major life events include:

1. loss of coverage due to job loss;

2. death of, or abandonment by, a family member who had provided coverage;

3. loss of dependent coverage because a spouse turned age 65 and became eligible for Medicare (but loss of dependent coverage because a spouse became Medicare-eligible before age 65 because of disability is apparently not included);

4. losing coverage as a dependent under a group comprehensive health care plan;

5. exhausting coverage under the federal Consolidated Omnibus Budget Reconciliation Act (COBRA);

6. extreme economic hardship on the part of either the employee or the employer, as determined by the Connector's administrator; and

7. any other events the Health Care Reform Commission may specify.

The bill establishes the eligibility criteria for an employer applying for group coverage through the Connector. An eligible employer is one that (1) has 50 or fewer employees, (2) has not offered a comprehensive health insurance plan to any employee for at least six months, and (3) will contribute at least 70% of the employee coverage cost and 50% of the dependent coverage cost.

The bill appropriates $ 1 million to the Insurance Department for Connecticut Connector start-up costs.

The bill establishes a health savings account (HSA) incentive program. To be eligible, a person must have a family income of up to 400% of the federal poverty level (FPL), a HSA, and a high-deductible plan. (FPL for 2007, as published in the Federal Register January 24, 2007, is $ 10,210 for an individual. Thus, 400% is $ 40,840. ) The bill requires the Connector to (1) contribute to a resident's HSA an amount based on a sliding scale by January 30 of any year for which the person made certain minimum HSA contributions in the prior calendar year and (2) establish procedures for people to claim payments. The table below provides the contributions required, by family income.

The bill requires the amounts specified for family income (1) between 200% and 300% of FPL and (2) between 300% and 400% FPL to be indexed annually to the consumer price index for medical care. It does not index the amounts specified for family income of 200% of FPL or less.

1. have family income of up to 400% of FPL;

2. not own an HSA either individually or as part of a family; and

3. have health care coverage through (a) an employer-sponsored plan for which the person annually pays at least $ 500 in premiums if single and at least $ 1,000 if covered by a family plan or (b) a nonemployer-based plan purchased through the individual market or the Connector. (A person could be both single and covered under a family plan if covering dependent children. Perhaps “single” means covered under an employee-only plan. )

The bill requires the Connector to (1) reimburse eligible people quarterly for premiums paid in the preceding quarter based on a sliding scale and (2) establish procedures by which eligible people may claim a premium subsidy.

For a family with income of 200% of FPL or less, the Connector must reimburse 80% of their premium share, up to $ 125 per quarter for an individual, $ 250 for an individual plus one dependent, or $ 375 for a family.

For a family with income between 200% and 300% of FPL, the Connector must reimburse 60% of their premium share, up to $ 100 per quarter for an individual, $ 200 for an individual plus one dependent, or $ 300 for a family.

For a family with income between 300% and 400% of FPL, the Connector must reimburse 40% of their premium share, up to $ 75 per quarter for an individual, $ 150 for an individual plus one dependent, or $ 225 for a family.

The bill directs the DSS commissioner to request a federal waiver (presumably of Medicaid rules) to obtain federal reimbursement for (1) state expenditures related to the HSA incentive and premium assistance programs and (2) establishing a Medicaid-funded state excess cost reinsurance program for residents enrolled in the Connector's affordable health plan who exhaust their plan's coverage to ensure that they do not have to spend all their assets on health care once this occurs.

The bill prohibits employers from offering health benefit plans to lower-paid employees that are of less value than those offered to higher-paid employees. It does not define “lower-paid” or “higher-paid. ”

Under current law, insurers and HMOs must use adjusted community rating when developing premium rates for small employer groups. Community rating is the process of developing a uniform rate for all enrollees. An adjusted community rate is one that modifies the community rate by one or more classifications specified in statute.

The classifications allowed by law are age, gender, location, industry classification, group size, family composition, and administrative cost and profit reduction savings resulting from administering or writing an association group plan or a Municipal Employee Health Insurance Plan (MEHIP).

The bill changes the effective date of the adjusted community rating law to July 1, 2008 and adds smoking status as a classification that insurers and HMOs may consider when developing a small employer's policy rates. In effect, the bill eliminates the rating requirement as of July 1, 2007 (the bill's effective date) and reinstates it July 1, 2008. (It is unclear what rating requirements insurers and HMOs are to follow until July 1, 2008. )

The bill requires individual health insurance and HMO policies that cover dependent unmarried children to cover a child until he or she turns age 26. Current law requires coverage until age 19, or age 23 if the child is a full-time student at an accredited institution.

The dependent age provision applies to individual health insurance and HMO policies that cover (1) basic hospital expenses, (2) basic medical-surgical expenses, (3) major medical expenses, (4) accidents, (5) limited benefits, and (6) hospital or medical services.

The bill does not change the dependent age for group comprehensive health care plans and plans continuing coverage after an employee's layoff, reduction of hours, leave of absence, or termination. For those plans, dependent age remains age 19, or age 23 if the child is a full-time student at an accredited institution.

Supplemental Coverage. The bill prohibits an insurer, HMO, or other entity issuing, renewing, continuing, or amending a health insurance policy beginning October 1, 2007 from issuing a limited benefit coverage policy (1) on an individual basis to any person unless the person signs a statement on the coverage application form confirming that he or she is covered under another health benefit plan or (2) on a group basis unless each employee electing the coverage confirms in writing that he or she is covered under another health benefit contract.

It requires the employer offering the limited benefit plan to (1) have each employee electing the coverage sign a statement confirming coverage under another plan and (2) submit the signed statements to the insurer, HMO, or other entity issuing the policy.

Conspicuous Statement. The bill requires each individual and group limited benefit coverage policy, contract, and certificate to include a conspicuous statement printed in capital letters and at least 12-point bold face type that says:

Definition. The bill defines “limited benefit coverage” as an insurance policy designed, advertised, and marketed to supplement major medical insurance. It includes the following types of policies:

1. accident only;

2. dental only;

3. vision only;

4. disability income only;

5. fixed or hospital indemnity coverage;

6. specified disease insurance;

7. credit insurance;

8. Taft-Hartley trusts; and

9. those covering more than one disease or service but with a total coverage limit less than $ 100,000 or a per service or condition coverage limit less than $ 20,000.

The bill increases the HUSKY A income limit for adult caretaker relatives of children enrolled in HUSKY A from 150% to 185% of FPL. Children are already covered at 185% of FPL.

The bill requires the DSS commissioner to file a Medicaid state plan amendment to increase the income limit for medically needy coverage from 143% of cash welfare benefits to 150% of the FPL. (The medically needy include aged, blind, and disabled individuals and certain others not covered under other Medicaid categories. ) For a one-person household, this would increase the limit from $ 476 per month to $ 1,276 per month. (As the income limit is set in federal law, it appears that DSS cannot increase it with a state plan amendment, but it can use an amendment to increase the amount of unearned income it disregards in determining eligibility, which would have the same effect. )

Increasing the income limit for the medically needy program will reduce, if not eliminate, the amount of excess income applicants must spend on medical bills before qualifying for assistance.

The bill restores continuous eligibility (CE) for children enrolled in HUSKY A or B and extends it to adults eligible for HUSKY A. (PA 03-2 eliminated it. ) Under the bill, CE allows enrollees to receive ongoing assistance for 12 months even if the parent's or caretaker's financial circumstances change during that time. The CE of both is contingent on the child being under age 19 and a state resident. During this period of CE, the family must comply with federal requirements for reporting information to DSS, such as a change of address.

The bill makes a corollary change by repealing a separate provision that prohibits adults enrolled in Medicaid from being guaranteed eligibility for six months without regard to changes in circumstances that would otherwise render them ineligible. (It does not appear that federal law allows CE for adults, so federal reimbursement may not be possible in these cases. )

The bill requires that any uninsured child born in a Connecticut hospital or an “eligible border state hospital” be enrolled in HUSKY B under an expedited process when (1) the child's family lives in Connecticut and (2) at least one parent authorizes the enrollment. It requires the DSS commissioner to pay to the HUSKY B managed care organization (MCO) the family chooses the first two month's premium the family would otherwise have to pay. Currently, families with incomes between 235% and 300% of FPL pay $ 30 per month ($ 50 family maximum) in premiums. Lower income families do not pay premiums.

Starting July 1, 2007, the bill requires any MCO entering into, renewing, or amending a HUSKY contract to limit its administrative costs to 10% or less of its capitated payments (amount state pays MCO to serve HUSKY clients).

In defining the administrative costs, the bill allows the commissioner to exclude disease management or other value-added clinical programs that the MCOs administer. But he may not exclude any utilization management, claims, member services, or other nonclinical functions.

The DSS commissioner must implement this change while in the process of adopting it in regulation, provided he publishes notice of intent to adopt the regulations in the Connecticut Law Journal within 20 days after implementing it. The policies and procedures are valid until the regulations become effective.

The bill requires the DSS commissioner to increase the fee-for-service (FFS) Medicaid reimbursement rates for physicians, dentists, and hospitals starting July 1, 2007. The following table shows the rate increases and inflationary adjustments.

The bill also requires the commissioner, on July 1, 2007, to amend each managed care contract it maintains, on renewal, to require the MCOs to increase reimbursements to at least the levels required for the FFS providers. (It is unclear whether July 1, 2007 is the same as the MCO renewal date. )

The bill appropriates an unspecified amount to DSS from the General Fund for FY 08 to carry out this section.

The bill requires the DSS commissioner to award 50 grants of up to $ 10,000 each to community-based organizations for public education, outreach, and recruitment of HUSKY-eligible children, including distributing applications and enrollment information. It appropriates $ 500,000 to DSS from the General Fund for FY 08 for the grants.

The bill requires the DSS commissioner to develop a plan to implement a primary care case management (PCCM) program for some or all Medicaid recipients who are aged, blind, or disabled. The commissioner can contract with an administrative services organization to run the program. The plan must include programs to improve medical service coordination and chronic disease management. It must also include predictive modeling for identifying high-risk, complex, and high-cost Medicaid beneficiaries and providing them with intensive care coordination.

Under the PCCM model, a beneficiary chooses a primary care provider who is responsible for coordinating the person's care. The provider is paid a separate fee above the regular fees paid for providing direct medical service.

Allowing Aged, Blind, and Disabled Beneficiaries to Voluntarily Enroll in Managed Care

Beginning January 1, 2008, the bill requires the DSS commissioner to allow aged, blind, or disabled Medicaid beneficiaries to enroll in the MCOs available to HUSKY beneficiaries. (Presumably, beneficiaries would choose between PCCM- or MCO-based care. )

On July 1, 2007, the bill increases by at least 5% the amount that DSS (or the MCO contracting with it to administer the program) must pay federally qualified health centers (FQHC) and other primary care providers serving SAGA medical assistance recipients. In subsequent fiscal years, this amount must increase by at least the percentage increase in the consumer price index.

The bill also eliminates the requirement that DSS make payments to these providers within available appropriations. In practice, FQHCs and other primary care providers (used when an FQHC is not feasible) must currently take any SAGA patients referred to them, regardless of whether state funding for them is sufficient.

The bill establishes, within existing appropriations, a smoking cessation program known as “Quit for Good. ” It is administered by the Department of Public Health (DPH), which must contract with one or more entities for implementation. The program must (1) promote smoking cessation among unserved and underserved people, (2) educate the public on the health complications of smoking and ways of quitting, (3) provide counseling and treatment referral services, and (4) establish a system for tracking and monitoring those receiving program smoking cessation assistance.

The bill defines “unserved or underserved populations” as those at or below 200% of FPL who do not have health insurance that comprehensively covers smoking cessation.

The bill establishes a 14-member permanent Commission on Healthy Lifestyles as an independent body in OHCA for administrative purposes only. By October 1, 2007, it must (1) develop a marketing campaign educating the public on basic ways to ensure good health and the consequences of poor health and (2) make recommendations to the General Assembly on incentives encouraging personal responsibility in making healthy lifestyle choices.

Commission members include the DPH, DSS, OHCA, education, and insurance commissioners and nine appointed members. The Senate president pro tempore and the House speaker each appoint two and the governor, House and Senate majority leaders, and House and Senate minority leaders each appoint one.

The initial members serve staggered terms with (1) the governor's and Senate president pro tempore's appointees serving for three years, (2) the House speaker's and Senate majority leader's appointees for two years, and (3) the remaining members for one year. After the initial terms expire, subsequent appointees serve three-year terms. Any vacancy must be filled by the appointing authority for the unexpired term. Members are not compensated but are reimbursed for their duties. (This creates a conflict since “reimbursed for duties” is compensation. )

The bill requires the commission to meet at least quarterly and allows it to hire consultants within available appropriations. OHCA must, within available appropriations, contract with one or more entities to implement the required marketing campaign.

Beginning October 1, 2007 and every five years afterward, OHCA must determine the number of uninsured Connecticut residents. The bill requires the Health Care Reform Commission to determine whether residents should be required to have health insurance if the number of uninsured has not decreased by 50% by October 1, 2012. By January 1, 2013, the commission must report its findings to the Insurance and Real Estate Committee.

By December 31, 2007 and annually afterwards, OHCA must conduct a survey to determine the number of Connecticut employers providing health insurance to their employees residing in Connecticut. OHCA must annually report its findings to the Insurance and Real Estate Committee beginning January 1, 2008.

The bill requires the remaining Tobacco and Health Trust Fund money to be transferred to the General Fund. It requires DPH to use $ 20 million of that amount for the Smoke-Free Connecticut Program (which is presumably the “Quit for Good” program discussed above).

The bill appropriates $ 1. 6 million to DPH from the General Fund for FY 08 to provide grants of $ 200,000 to each of eight different groups representing employers. These grants must be used to train employers to educate employees on the financial and health benefits of making lifestyle choices promoting good health, including regular exercise and maintaining a healthy weight.

On April 11, the House referred the bill (File 219) to the Public Health Committee, which reported it favorably.

On April 25, the House referred the bill to the Appropriations Committee, which reported a substitute bill deleting the requirement that providers accept and provide services to anyone enrolled in HUSKY and Medicaid.

On May 22, the House referred the bill (File 831) to the Finance, Revenue and Bonding Committee, which reported this substitute, deleting:

1. refundable tax credits for small employers offering employees health insurance,

2. a reduction in HMO premium taxes,

3. a repeal of the sales tax on health clubs,

4. a tax on cosmetic medical procedures,

5. an increase in the cigarette tax, and

6. a limit on how much physicians and hospitals can charge uninsured people.

Several legislative committees have reported bills favorably broadly addressing health care access. They are:

In addition, several committees have reported bills that have provisions similar or related to specific sections of sHB 6652. They are:


*Family Income = 200% or Less*
*Family HSA Contribution*	*Connector Contribution*
$ 2,500 (individual)	$ 500
$ 3,750 (family of two)	$ 1,000
$ 5,000 (family of three or more)	$ 1,500
*Family Income = 200% to 300%*
*Family HSA Contribution*	*Connector Contribution*
$ 2,500 (individual)	$ 400
$ 3,750 (family of two)	$ 800
$ 5,000 (family of three or more)	$ 1,200
*Family Income = 300% to 400%*
*Family HSA Contribution*	*Connector Contribution*
$ 2,500 (individual)	$ 300
$ 3,750 (family of two)	$ 600
$ 5,000 (family of three or more)	$ 900

*Provider/Service*	*FY 08 Increase*	*Annual Adjustment*
Dental services	60%	Consumer price index for medical care
Physicians	To 80% of aggregate Medicare rates	Maintain 80% of aggregate Medicare rates
Hospital services	To 90% of aggregate Medicare rates	Maintain 90% of aggregate Medicare rates

*Bill No.*	*Committee*	*File No.*
sSB 1	Public Health	472
sSB 3	Human Services	345
SB 70	Insurance	106
SB 1127	Human Services	685
sSB 1371	Insurance	233
sHB 6158	Children	246
sHB 7314	Labor	264, 856
sHB 7320	Labor	780
sHB 7375	Human Services	296
sHB 7396	Appropriations	784

*Bill No.*	*Committee*	*File No.*	*Provision*
SB 250	Insurance	78	Cost-benefit study of mandated health insurance benefits
HB 5496 Passed in concurrence PA # TBD	Insurance	243, 858	Limited benefit health plans
HB 6055 Passed in concurrence, PA 07-75	Insurance, Appropriations	245, 772	Dependent age
sHB 7055	Insurance	48, 796	Medically necessary definition
sHB 7069	Public Health	478	Medicaid dental rates