Cover Texas Now Legislative Agenda

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✩Improve small business' access to affordable health insurance✩ ... 3Ensure that Texas has user-friendly and family-
Cover Texas Now quality, affordable health coverage...sustainable health care system

Legislative Agenda 2013

Policy Principles for Health Insurance



✩Quality affordable health insurance available for every Texan✩ ✩Long term services and supports are provided in the most integrated setting possible✩ ✩Maximum federal funding for Texas health care by preserving CHIP and Medicaid✩ ✩Common-sense protections for Texas health insurance consumers in state law✩ ✩Improve small business’ access to affordable health insurance✩ ✩Transparent, open systems that meet consumers’ needs✩ ✩Sustainable health care system✩

Getting the Best for Texas To get the best health insurance deal for Texans, the 2013 Texas Legislature should...

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Ensure that the parents of children on Medicaid and CHIP and other low-income adults have access to affordable health coverage so they are better able to meet other basic needs such as housing and food, and preserve comprehensive coverage in Medicaid and CHIP. Authorize the Texas Department of Insurance (TDI) to stop a health insurance rate increase it deems unreasonable. Ensure that Texas has user-friendly and family-centered systems for enrolling in health coverage programs.

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Encourage more affordable coverage and effective state-based consumer protection during sweeping insurance market changes in 2014. Ensure individuals and small employers can make apples-to-apples comparisons when shopping for health insurance and insurers don’t have backdoor ways to discriminate by age, disability, or health status.

Cover Texas Now!

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Legislative Agenda 2013

CTN believes we must preserve and strengthen Medicaid and CHIP to ensure access to care for the 4 million Texans, including more than 3 million children, who rely on the programs today to stay healthy. Any restructuring of the programs must be accomplished in a way that preserves access to comprehensive care for children, maintains eligibility standards, assures cost-sharing is affordable for low-income families, and preserves the current federal funding partnership. Authorize the Texas Department of Insurance (TDI) to stop a health insurance rate increase it deems unreasonable. TDI currently reviews many health insurance rate increases that exceed 10% to determine if they are reasonable; however, when TDI determines an increase is unreasonable, the agency lacks authority to stop the increase. Most other states have such authority. To protect Texas consumers from unjustified rate hikes, TDI needs the capacity to review all rate increases and authority to stop unreasonable rate hikes. The agency should also make more information on rate increases available online for consumers. The Office of Public Insurance Counsel should have a clear role to represent consumers’ interest in the process. Ensure that Texas has user-friendly and family-centered systems for enrolling in health coverage programs. New coverage options under the Affordable Care Act that will start in 2014 give Texas the opportunity to cut its uninsured rate in half and cover about 3 million Texas citizens who are uninsured today. With robust enrollment, Texas could even cut its uninsured rate by three-fourths. Big coverage gains in Texas will reduce uncompensated care in our hospitals (over $5 billion each year), help unclog our emergency rooms, reduce county property tax needs, and help ensure our friends and neighbors have access to health care.



To facilitate enrollment of eligible individuals, we must continue to modernize the Medicaid eligibility and enrollment system so that it is accurate, streamlined, and cost-effective for Texas. To avoid a recurrence of the problems that brought HHSC’s eligibility and enrollment system to the brink of collapse in 2006-09, HHSC needs sufficient authority to make needed changes to the Medicaid and CHIP eligibility system that will support streamlined eligibility determinations and minimize state employee costs. We support the HHSC LAR exceptional items that will help maintain the capacity of the system and ensure that it can interface with the federally facilitated health insurance exchange in 2014.



We must ensure full coordination between different coverage options (Medicaid, CHIP, CHIP for Adults, and the health insurance exchange) so that when incomes change and families move between programs, they do not fall through the cracks in the system. To the maximum extent possible, Texas should also ensure that children and their parents can enroll in the same program or with the same insurer so families can be covered together. We must also take advantage of all federal funding to modernize enrollment system design and ensure that sufficient and knowledgeable in-person assistance exists to help Texans who need it.

Ensure that the parents of children on Medicaid and CHIP and other low-income adults have access to affordable health coverage so they are better able to meet other basic needs such as housing and food, and preserve comprehensive coverage in Medicaid and CHIP. Cover Texas Now (CTN) supports ensuring that very poor adults (up to 133% of the federal poverty level or $25,390 a year for a family of 3), including the parents of children who are covered by Medicaid today, have access to Medicaid in 2014. Adult coverage will be fully federally funded in 2014-2016, and after that, Texas’ share of the cost never exceeds 10%. The Texas Health and Human Services Commission (HHSC) estimates the Medicaid expansion would cover about 1 million poor adults who are currently uninsured and have a state GR cost of $1.3 billion for the 4-year period from 2014-17—a fraction of the over $5 billion in uncompensated care delivered at Texas hospitals each year that is funded principally with local property taxes and with no federal match.

CTN also supports the creation of a “CHIP for Adults” program that would provide more affordable options for low-income adults (under twice the poverty level, or $38,180 a year for a family of 3). This option, also called the “Basic Health Plan,” is available to states that pursue the Medicaid expansion and is fully federally funded. Such a program would let kids on CHIP and their parents be covered by the same insurer and promote greater continuity of care for low-income families as they move between Medicaid, CHIP, and the new health insurance exchange.

Cover Texas Now!

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Legislative Agenda 2013

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Encourage more affordable coverage and effective state-based consumer protection during sweeping insurance market changes in 2014.



Sweeping insurance market changes from health reform will take effect as of January 1, 2014, including the creation of new health insurance exchanges and the implementation of new health insurance consumer rights and protections. Texas should prepare for market changes to help keep premiums reasonable, encourage competition, and ensure that TDI can protect Texas consumers.



With the introduction of a health insurance exchange in 2014 (regardless of whether it is administered by the state or federal government), Texas should take steps to see that insurers in Texas’ existing health insurance market and the new exchange play by the same rules and compete on a level field to keep insurance rates from spiraling. If the rules are not the same across markets, insurers or enrollees can take advantage of differences causing “adverse selection”—where more people who are sick get coverage in one of the two markets, driving up rates in that market. Markets inside and outside of the exchange should have the same rules, including those for open enrollment periods and levels of coverage offered.



TDI also needs authority to protect consumers and regulate insurers in the changing market starting in 2014. New consumer protections take effect in 2014. For example, insurers will no longer be able to exclude coverage for pre-existing conditions or charge smaller businesses more. Unless Texas updates its Insurance Code to reflect these new protections, conflicting state and federal laws will create confusion for consumers and insurers alike. And if TDI isn’t authorized to enforce new consumer protections, federal regulators may step in. To ensure that Texas health insurance consumers can get help from TDI and are not instead sent to federal regulators (and to keep insurers from answering to two regulators), the legislature must ensure that TDI can enforce all health insurance consumer protections.

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Ensure individuals and small employers can make apples-to-apples comparisons when shopping for health insurance and insurers don’t have backdoor ways to discriminate by age, disability, or health status. Starting in 2014, plans sold to individuals and small employers will contain “essential health benefits,” a new floor for insurance coverage. The most popular small employer plan in Texas will serve as the “benchmark” on which coverage in 2014 will be based. Federal law allows insurers to swap out benefits from the benchmark if they are replaced with others of similar value. Insurers may use these benefit swaps to design coverage that is more attractive to healthier people and does not meet the needs of people with significant health concerns. For example, coverage for home health services could be replaced by enhanced preventive care benefits. Benefit swaps will also prevent consumers and small employers from being able to make true apples-to-apples comparisons when shopping. Texas should prohibit insurers’ ability to swap essential health benefits, so consumers have the guarantee of a consistent floor for coverage, or limit swaps in a manner that increases transparency for consumers and assurances that swapping benefits does not have a discriminatory effect.

Cover Texas Now! is a project of more than a dozen organizations representing consumers, providers, insurers, advocates, communities of faith and businesses that support a comprehensive approach to increasing access to quality affordable health coverage and ensuring a sustainable health care infrastructure for all Texas. For more information about Cover Texas Now! and health issues in Texas, visit us online at www.covertexasnow.org Cover Texas Now!

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Legislative Agenda 2013