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June 2007

New State Updates

Connecticut: In an effort to expand access to public health insurance, the Connecticut legislature passed a health care reform bill in June 2007.  In addition to increasing Medicaid reimbursements for physicians and hospitals at an estimated cost of $151 million in 2008, Senate Bill 1484 makes a number of changes to the HUSKY (Connecticut’s Medicaid and State Children’s Health Insurance Program [SCHIP]) program:

  • Raises the income limit for HUSKY A (Medicaid) coverage for caretaker relatives from 150 percent  to 185 percent of the federal poverty level (FPL) at a cost of $17 million in 2008;
  • Expands HUSKY A coverage for pregnant women from 185 percent to 250 percent FPL, at an estimated cost of $3.5 million in 2008;
  • Expands HUSKY B (SCHIP) coverage for children from 300 percent to 400 percent FPL at a cost of $6 million in 2008; and
  • Requires automatic enrollment of uninsured newborns in HUSKY, and mandates that the state pay premiums for the first two months, at an estimated cost of $2.7 million in 2008.

Additionally, the bill establishes two new planning entities. The HealthFirst Connecticut Authority will recommend alternatives for affordable quality health care coverage for un- and underinsured people, cost containment measures, and insurance financing mechanisms. The Statewide Primary Care Authority will develop a universal system for providing primary care services, including prescription drugs, to all Connecticut residents.

Other features of the bill:

  • Establish a board to oversee a network that integrates state and social services data within and across various departments. It gives authority to the Public Health Department to develop standards to facilitate the development of a statewide, integrated electronic health information system that will be used by health care providers and institutions funded by the state.
  • Require the Department of Social Services (DSS) commissioner to develop and implement a preventive health services system for children covered by HUSKY A and B. Also the DSS commissioner is charged with establishing a child health quality improvement program to promote implementation of evidence-based strategies by HUSKY providers.
  • Extend (from age 23 to 26) the age to which group comprehensive and individual health insurance policies that cover children must do so.

Democrats estimate the bill will cost $62 million over two years after federal reimbursements, excluding the proposed provider rate increases. Republicans believe that the bill will actually cost $390 million over the next two years, including the proposed rate increases.

Governor Jodi Rell (R) is not expected to sign SB 1484 without a negotiated budget agreement. However, Democrats in the legislature believe they have “close to a veto-proof majority” and could override Rell’s potential veto.[1]


Missouri: In May 2007, the Missouri General Assembly passed a reconfigured state Medicaid system, called MO HealthNet. Senate Bill 577 restores coverage and benefits to some of the people whose services were eliminated two years ago.

The legislation:

  • Restores Medicaid coverage for about 4,000 workers with disabilities;
  • Restores Medicaid coverage for 6,000 children who lost coverage because their parents had access to employer-sponsored health insurance;
  • Restores some optional benefits in Medicaid, including dental and vision care, for adults;
  • Restores SCHIP coverage to 20,000 children through revised income eligibility requirements;
  • Offers cancer screenings and family planning services for about 90,000 women whose incomes make them ineligible for Medicaid ;
  • Requires Medicaid officials to devise a plan to increase provider reimbursements to the maximum federal level within four years;
  • Allows physicians to collect copayments from Medicaid beneficiaries;
  • Requires state Medicaid officials to assign beneficiaries to a primary care location and enroll them in a health improvement plan;
  • Establishes a pilot program in one rural area and one urban area of the state that allows workers to purchase employer-sponsored insurance subsidized by Medicaid; and
  • Forms an 18-member committee responsible for the supervision of changes to the state Medicaid program.

Despite the expansions in coverage, critics said that the bill will not restore Medicaid coverage for the 100,000 adults who lost coverage in 2005 when income eligibility for Medicaid was reduced from 75 percent FPL to 22 percent FPL.


Hawaii: Hawaii’s legislature passed several bills focused on expanding health insurance to children, raising the reimbursement rate for Medicaid providers, and reestablishing insurance rate regulation provisions.

House Bill 1008 expands health care coverage to infants and children in Hawaii through two pilot programs:

  • Hawaii Infant Health Program, which provides coverage to uninsured newborn infants, 1 to 30 days of age, up to $10,000 of health care assistance per child; and
  • Hawaii Children’s Health Care Program, in which eligible children will receive health care coverage through a public-private partnership with the Department of Human Services and one or more managed care plans.

Additionally, HB 1008 increases eligibility for state-only-funded medical assistance to 300 percent FPL from 200 percent.

Senate Bill 1672 provides funding to increase provider reimbursements for physician services caring for Medicaid-eligible persons (including those enrolled in both fee-for-service and managed care forms of Medicaid) up to 100 percent of the Medicare fee schedule.

Senate Bill 12 re-establishes health insurance rate regulation. A law, which had previously established health insurance rate regulation, had been repealed in June 2006 due to a sunset provision. SB 12 re-instates health insurance rate regulation for managed care plans by prohibiting insurance rates that are excessive, inadequate, or unfairly discriminatory. Additionally, the bill allows the insurance commissioner to impose monetary penalties on managed care plans that violate the provisions of the bill; up to $500 for each violation, and if the violation is found to be deliberate, the commissioner can impose a penalty of up to $5,000 for each violation. Additionally, the legislation permits the insurance commissioner to suspend the license or operating authority of a managed care plan that fails to comply with the law.


Oklahoma: Governor Brad Henry (D) signed into law two bills designed to expand access to health insurance in June. The first bill, Senate Bill 424, expands the income eligibility from 185 percent FPL to 300 percent FPL for children in Medicaid.

Under the All Kids Act, families with incomes between 185 percent FPL and 300 percent FPL are eligible to receive subsidies toward the cost of privately sponsored health insurance. Parents will pay up to 26 percent of the costs for the private health plan while the state and federal government will pay the remainder. If privately sponsored health insurance is not available, parents could buy into Medicaid, paying up to 51 percent of the premium and copayment costs. The income eligibility expansion could provide health insurance coverage to as many as 45,500 additional children and is expected to cost about $8.2 million over three years, to be funded through a tobacco tax.

Additionally, Governor Henry signed into law House Bill 1225, which would expand eligibility for the Insure Oklahoma program. Insure Oklahoma provides subsidies for businesses to purchase health insurance for their employees. Funded through the tobacco tax and a $500,000 payment from tobacco companies as part of a 1998 settlement, the expansion will extend eligibility to businesses with 250 or fewer employees and workers who earn up to 250 percent FPL (from 50 or fewer employees and workers who earned no more than 185 percent FPL).


Texas: Enrollment in the Texas SCHIP program has continued to decline recently. Five thousand children were lost from the program in June, the fourth consecutive month with a decrease in enrollment. While the program currently reaches 300,800 children, roughly 25,000 children have lost coverage since December 2006. Some attribute June’s loss in enrollment to an agency decision to end an amnesty program for families with incomplete applications.

Lawmakers imposed restrictions on SCHIP enrollment in 2003 by shortening the enrollment period from one year to six months and including a stricter asset test. However, Governor Rick Perry (R) recently signed House Bill 109, which would allow families below 185 percent of the federal poverty level (FPL) to enroll once a year instead of twice, would revise the 90-day waiting period requirement so that it would only apply to children who had health insurance during the 90 days prior to applying for SCHIP, and would change restrictions on a family’s assets. Through these changes, an additional 100,000 children could be added to Texas’ SCHIP program.

Governor Perry also signed Senate Bill 10, Texas’ Medicaid reform bill, in June. SB 10 could expand healthcare coverage to an estimated 200,000 individuals, a portion of the five million uninsured Texans.

The legislation:

  • Creates a tailored benefit package for children with special health care needs, as well as the option for creating tailored benefit packages for other categories of Medicaid recipients. The bill requires that the tailored benefit packages would increase the state’s flexibility in Medicaid funding without reducing the scope of benefits, not to be implemented before September 2009.
  • Creates a pilot program for voluntary health savings accounts (HSA) under Medicaid. The pilot program is designed to promote appropriate utilization of Medicaid services. However, recipients have the option of discontinuing the HSA program and resume receiving services under the traditional Medicaid model.
  • Creates the Healthy Lives pilot program, which will reward Medicaid patients who complete smoking cessation, weight loss, and other preventive health programs in one region of the state. The pilot program could provide expanded health benefits, value-added benefits, or establish reward accounts for Medicaid recipients in disease management programs that could be exchanged for health-related items not covered by Medicaid.
  • Authorizes the Health and Human Services Commission to seek a Medicaid waiver to implement the Texas Health Opportunity Pool (THOP), which would utilize federal Disproportionate Share Hospital and Hospital Upper Payment Limit funds, as well as other federal and state funds, to create a trust fund. These funds would be used to reduce the number of Texans who do not have health insurance coverage, reduce the need for uncompensated care provided by Texas hospitals, and other purposes specified by the waiver. The waiver could provide up to $1 billion to help low-income workers obtain health insurance.
  • Authorizes counties to establish and participate in a local or regional health care program, which would provide healthcare services or benefits to employees of small employers. Regional health care programs could receive THOP funds if they comply with waiver requirements.
  • Establishes a second tier of eligibility for the Health Insurance Premium Payment (HIPP) program. Those in the second tier (individuals for whom enrolling in a group health plan is not cost effective) who would prefer to enroll in the group plan versus receiving Medicaid benefits may do so. The Health and Human Services Commission would pay the employee’s share of the required premiums, except when the employee’s share of required premiums exceeds the total estimated Medicaid costs for the individual. Then, the employee would be required to pay the difference. The individual would also be responsible for paying all deductibles, copayments, coinsurance, and other cost-sharing obligations.



[1] Poitras C., Keating C. Rell, Democrats clash over health care bill. Hartford Courant. June 7, 2007. Accessed at:,0,5453612.story