State lawmakers spent much of 1999 wrestling with how to spend their portion of the whopping $206 billion settlement with the tobacco industry, enacting patient-protection legislation and considering how to provide more services for the elderly. States were also busy getting their Children's Health Insurance Programs off the ground and signing up uninsured kids.
Highlights from 1999 include:
California and Georgia joined Texas in adopting laws allowing people to sue their HMO.
A total of 44 states and the District of Columbia have now passed comprehensive consumer rights laws. In 1999, 10 states -- California, Georgia, Iowa, Illinois, Ohio, Oklahoma, North Dakota, South Dakota, Tennessee and Virginia -- passed sweeping laws.
Almost 40 states now cover assisted-living services under Medicaid -- 13 more than in mid-1998.
Across the country, states' Children's Health Insurance Programs are well under way, with a total of 1.3 million kids of the working poor now enrolled in insurance plans.
But, even with a booming economy, historically low unemployment and inflation rates, reductions in poverty, and a deceleration in health care costs, an estimated 44.3 million people -- one in six -- went without health insurance last year, according to new statistics from the U.S. Census Bureau.
How to find an affordable way to cover the uninsured was an issue that resurfaced in state legislatures in 1999 -- six years after President Clinton's universal health care proposal failed miserably.
"Access to care for the uninsured is back on the radar screen," said Trish Riley, executive director of the National Academy for State Health Policy in Portland, Maine. But with the costs of health insurance increasing, finding a way to cover people is a challenge to states. "Costs are absolutely going up...I have not seen ideas surface about what to do." Riley said.
Hawaii comes closest to providing universal health coverage as the result of a 1974 law that requires employers to provide health insurance for full-time workers. The Aloha State also developed a state insurance plan for low-income, part-time workers and Medicaid recipients. The law was grandfathered from the federal Employment Retirement Income Security Act of 1974 (ERISA), passed by Congress. ERISA shields self-insured firms from the reach of state regulators, and has been a bone of contention for consumer advocates who say it is a roadblock to patient protection.
Several groups in California will soon start looking at ways to provide health insurance for everyone in the state. California Gov. Gray Davis signed a bill this year, which requires the state to examine options for universal health care. Also, John Burton, president pro tem of the California Senate, requested the Senate Office of Research to conduct a study with the University of California to compare various strategies to implement universal health coverage.
"I don't think they (universal health care proposals) are going anyplace but they are coming back again," Riley said.
Big Tobacco, Big Money
On Nov. 23, 1998, 46 states and the District of Columbia signed the Master Settlement Agreement with the big tobacco companies, which will provide to states $196 billion over 25 years, ranging from a high of $25 billion to California to a low of $669 million for Alaska. According to the National Association of Attorneys General, the tobacco industry will also contribute $1.5 billion over the next five years for a national public education fund which would carry out a massive education and advertising campaign.
Florida, Minnesota, Mississippi and Texas had previously reached agreements totaling $40 billion with tobacco companies.
"This is the largest windfall of money most states have ever gotten with no strings attached," said Pat Johnson, a policy specialist with the National Conference of State Legislatures' Health Policy Tracking Service.
As of mid-November, all states except Alabama, Arizona, Arkansas, Missouri, New Jersey, Pennsylvania and Tennessee had court-approved the settlement, and will begin receiving payments before Dec. 1, 1999.
How to spend the infusion of settlement money was up for discussion in all state legislatures in 1999. But, not all states agreed on how to allocate the first year's payments. States that have allocated some or all of the first year's settlement money are: Alabama, Alaska, Arkansas, Connecticut, Florida, Hawaii, Indiana, Maine, Michigan, Minnesota, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Jersey, North Carolina, North Dakota, Rhode Island, Vermont, Texas and Wisconsin, Johnson said.
New Jersey, Michigan and Nevada are the only states to have allocated all of their first year's tobacco money. Massachusetts, New York and Pennsylvania passed no legislation outlining how their settlement money will be spent, Johnson said.
Only 15 percent of the $8.8 billion that states are set to receive in 2000 has been allocated to specific programs. But states that have not specifically allocated money may have set up trust funds for public health, tobacco control or education in which to receive the first year's funds.
Of the 15 percent specifically allocated to a program or service, 30 percent will go towards health care programs, 24 percent towards education, 17 percent will go into states' general or rainy day funds, 10 percent will go towards children's non-health related services, 10 percent will go towards senior services, including long-term care and prescription drug benefits for low-income seniors.
Ironically, the smallest amount allocated so far -- 9 percent -- will go towards tobacco control efforts, Johnson said.
Johnson said that the percentage going towards tobacco control is expected to increase once Massachusetts, Louisiana, and New Jersey finish allocating their funds. Those states are expected to contribute much of their funds to tobacco control programs.
"Every year these dollar amounts and percentages will change depending on what is going on in the states at the time," Johnson said. For instance, New Hampshire --mired in a school funding crisis after a 1997 state Supreme Court ruling said the state must pay to equalize education spending in poor school districts -- plans to put about $20 million of its tobacco settlement per year into education.
But Johnson said New Hampshire "could come back next year and change those percentages" if they wanted to.
States Forge Ahead With Patient-Protection Legislation
The states are way ahead of the U.S. Congress when it comes to setting standards for the nation's 160 million people enrolled in managed care plans. Forty-four states and the District of Columbia have passed Patients' Rights legislation, 10 did so this year, and two states California and Georgia joined Texas this year in giving health insurance customers the right to sue their HMO. In addition, Louisiana passed a law that gives patients legal recourse if turned down by the state's independent appeals process.
California is the latest state to pass comprehensive patient-protection legislation. California Gov. Gray Davis signed a package of 21 bills in September, which included among them the right for Californians in Health Maintenance Organizations to seek independent reviews of medical decisions, and then to sue HMOs if they suffer "substantial harm" because treatments are denied.
"With the help of many legislators from both sides of the political aisle, we have developed a well-crafted, even-handed package of reforms that will improve health care delivery in California while keeping it affordable for families and their employers," Davis said during the bill-signing session.
Also included in California's health care package are bills that create a new state agency to regulate the managed care industry, strengthen medical privacy laws, and require health plans to provide coverage for mental illness, contraceptives, and cancer screening.
Ohio Gov. Bob Taft also signed into law this year a patient-protection plan that will give patients more rights when appealing health insurer decisions, provide better benefits for female patients, and give $80 billion in tax cuts to the uninsured, the elderly and those who have suffered from a catastrophic illness.
Other states that enacted patient-protection legislation this year are Georgia, Iowa, Illinois, Oklahoma, North Dakota, South Dakota, Tennessee and Virginia.
As part of their health care legislation, Georgia acted to create a consumer ombudsman's office that would scrutinize health insurance rates and receive complaints. While the bill was being debated, it was described as a "first-in-the-nation attempt to regulate or control insurance rates," said Dick Cauchi, a policy specialist with the National Conference of State Legislature's health care program
Georgia is not the first state to create a healthcare ombudsman's office. California, Connecticut, Illinois, Maryland, Minnesota, Rhode Island, Utah and Virginia also adopted laws this year to create ombudsman offices or consumer health care divisions to field consumer complaints against their health care providers.
Assistance For The Elderly
The number of people 65 years and older will more than double by the middle of the next century to79 million. The elderly are projected to increase from 12.8 percent of the total population in 1996to 20 percent in 2030, and to remain at about 20 percent until 2050, according to the U.S. Census Bureau. This reflects the aging of the post-World War II Baby Boom generation, persons born from1946 to 1964. Because the elderly are staying healthier longer and requiring nursing homes at a later age, states want to find ways to increase the availability of services provided to the elderly and provide them with more home-based services so that they can live a functional, independent lifestyle longer.
A solution that nearly 40 states have adopted so far, is to cover medical services in assisted-living facilities using Medicaid. To get these benefits, individuals must qualify for Medicaid and meet the same criteria needed to reside in a nursing home.
In mid-1998, 26 states had adopted these requirements, and as of June 1999, another 13 states adopted the policy.
"This gives people more choice as to where they want to live. There are lots of people who can't live at home because there are no services available on nights and weekends. (Assisted-living facilities) give them that residential setting with services available as they need them," said Robert Mollica, deputy director of the National Academy for State Health Policy.
Another nagging issue for states is how to assist the elderly in covering the increasing costs of pharmaceuticals.
"States have grappled with ways to make (drugs) more affordable. Some states subsidize them. We can't just keep biting at pieces of the pie. It needs a more comprehensive solution," said Trish Riley of the National Academy for State Health Policy.
Every year for the last five years, the prices of the 50 drugs most used by older Americans have increased faster than the rate of inflation, with increases in 1998, on average, four times the rate of inflation, according to a November report by the consumer watchdog group Families USA. From January 1998 to January 1999 the rate of inflation increased 1.6 percent and the prices of the 50 most prescribed drugs for older Americans increased 6.6 percent.
The report says that older Americans fill over 18 prescriptions per year, and nearly half of all Medicare beneficiaries live on less than $15,000 per year. Prescription drugs are not covered under Medicare.
"It is unconscionable that the sickest and oldest Americans go without prescription drug coverage as part of their basic benefit package," added Pollack. "Each year their Social Security checks increase only at the rate of inflation, while the costs of the drugs they take rise at two, three or four times the rate of inflation."
This year, Massachusetts allocated tobacco settlement money to help pay for prescription drugs for Medicare patients.
Other state innovations to help the elderly include:
Wisconsin created a demonstration program that will reorganize the long-term care delivery system. Under the bill, a resource center or agency could authorize long-term care services using money pulled from a variety of sources, which are currently capped or fixed.
In order to anticipate the needs of the elderly in 2020 and beyond, Minnesota established a unit a year ago to gather data and hold meetings across state to identify what people saw as the needs of the aging, and how a rising population will affect the state. They issued their first report earlier this year.
"Long term care does not have the same kind of sex appeal as children's health and access to care. It is a difficult thing for legislatures to grapple with -- it is very personal, it is about how we age and die," Riley said.
Acting To Insure Kids
About 1.3 million children from low-income families are getting healthcare benefits under states' Children's Health Insurance Programs (CHIP), according to figures complied by theHealth Care Financing Administration and the Kaiser Commission on Medicaid and the Uninsured.
When the program was established in 1997, an estimated nine million to 11.6 million children were uninsured -- 15 percent of all kids 18 and under. Nearly half came from families whose parents earn too much to qualify for Medicaid, the government health insurance program for the poor, but not enough to pay for private health insurance. CHIP funds, $24 billion over the first five years of the program, first became available to states in October 1997. The plan marked the biggest federal investment in health insurance since Medicare and Medicaid were established 34 years ago.
CHIP enrollment numbers appear to show that one in five of the estimated five million children eligible is enrolled so far.
In 1999 Washington and Wyoming passed children's health plans, completing adoption of plans in all 50 states. Together, states anticipate providing health insurance to more than 2.6 million currently uninsured children by September 2000, according to the Department of Health and Human Services.
Although CHIP plans are making headway in most states, Families USA report released in October found that in the 12 states with the most uninsured children, fewer children were covered under the Children's Health Insurance Program (CHIP) and Medicaid in 1999 than were covered by Medicaid alone in 1996.
The report highlights recent and very significant increases in CHIP coverage over the last few months, but these gains were more than offset by reductions in children's Medicaid coverage largely due to welfare reform. Children's enrollment in federal-state programs in the 12 states declined by 219,910, from 11,166,178 in 1996 to 10,946,268 in 1999.
Other Health Care Legislation
Besides hot-button health issues such as HMO lawsuits and paying for prescription drugs for the elderly, states also addressed other important health legislation this year.
Nine states passed laws in 1999 that either allow a woman to breastfeed in a public place or require employers to provide reasonable, unpaid break time to an employee to express breast milk. Those states are: Georgia, Hawaii, Missouri, Montana, New Hampshire, New Mexico, Oregon, Tennessee and Utah.
As of mid-November, 22 states had laws on the books expanding access to newborn hearing testing and in some cases, mandating insurance coverage of the procedure. That's up from nine going into the year, according to the American Speech-Language Hearing Association.