Publisher's note: The author of this post is Dan Way, who is an associate editor for the Carolina Journal, John Hood Publisher.
Coverage requirements exceed regulations forced by Obamacare
RALEIGH North Carolina insurance policy holders will pick up $10.5 million in additional premium costs if a bill requiring expanded coverage of chiropractic services recommended April 21 by a legislative study committee is approved in the General Assembly's short session opening this week.
Critics of the health mandate to lower patients' co-pays for chiropractic services from the current, higher specialist rates say Senate Bill 561
would entice other specialists, such as physical and occupational therapists, to seek similar payment parity. That would shift more costs from individual patients to all insurance consumers.
The chiropractic co-pay parity bill is one of 10 insurance mandates the General Assembly is expected to consider this session.
If state lawmakers pass bills requiring insurance companies to provide that extra coverage, the higher costs could make insurance policies unaffordable for small businesses, and workers could lose their employer-paid policies, opponents of the mandates say. Mandates force insurers to cover specific treatments or services in every policy they sell, making coverage cost more.
These state-imposed mandates are in addition to coverage mandates required by the Affordable Care Act, or Obamacare.
"North Carolina has 55 mandates already, just one behind California, 13th most in the country," said Blue Cross Blue Shield of North Carolina spokesman Lew Borman.
"Passing the mandates currently under consideration would move us into the Top 10 in the country," Borman said, past California, Massachusetts, New Jersey, and Vermont, "driving premiums even higher."
If all those mandates were passed into law, "We would see the majority of small businesses that are covering employees with health care coverage probably drop their insurance because the insurance companies would have to absorb some of that [cost] and pass some of it on," said Gregg Thompson, state director of the National Federation of Independent Businesses/North Carolina.
If insurers passed along all the costs, "they would probably lose all of their small business [clients] because it is such an expense," Thompson said.
The Committee on Health Care Provider Practice Sustainability and Training/Additional Transparency in Health Care, heard testimony on the chiropractic bill, sponsored by Sen. Ralph Hise, R-Mitchell, the committee co-chairman.
Brian Caveny, BCBSNC vice president and medical director and a faculty member in the Duke University medical school's Division of Occupational & Environmental Medicine, and Harry Kaplan, a lobbyist for the North Carolina Association of Health Plans, said chiropractic is specialized care for specific, often single-issue treatment.
Therefore, they said, it should not have lower co-pays than primary care physicians receive for broader services and treatments.
Caveney told the committee that the chiropractic mandate was put in place under former Speaker of the House Jim Black from March 1, 2006, through Oct. 1, 2007. Utilization increased, and claims payments went up. Because only 4 percent of Blue Cross policyholders use chiropractic services, it is unfair to spread the costs over all patients, he said.
Joe Siragusa, executive director of the North Carolina Chiropractic Association, spoke in favor of the bill. Advocates say insurance-required co-pays are sometimes more expensive than the price of the service, preventing those suffering from neck and back pain from seeking treatment.
That leads to tens of billions of dollars nationally in direct medical costs and absentee, disability, and lost productivity costs, they said.
Among other health mandates being considered in the short session, three deal with vision services, House Bill 511
, and Senate Bills 477
. House Bill 498
targets autism, and House Bill 609
deals with oral chemotherapy.
Senate Bills 364
address electronic prescription rules; House Bill 740
covers athletic and sports trainers, and Senate Bill 572
would require insurers to screen newborns for Krabbe Disease.
Thompson sent a letter to lawmakers showing that the average annual family premium for covered employees in small businesses increased 96 percent since 2002, from $7,781 to $15,253 in 2012. Small businesses, on average, pay 18 percent than large employers pay more for the same level of coverage in a health insurance plan.
"There's a lot of pressure from outside groups for them to pass the mandates," Thompson said.
"If you're the Autism Society ... vision, or chiropractic, or whatever, each bill has their own constituency at the legislative building fighting for that bill to be passed, and we're fighting on no additional mandates," Thompson said.
"It's a difficult, emotional issue for both the proponents of the bill and for the opponents," Thompson said. "I want to stress that the health issues that are being proposed to be covered are certainly not the target of the opposition. It is the mandate of additional coverage."
"I am very accustomed to the NFIB opposition and arguments against it everywhere I've worked on the bill, so this is not new for me," said Lorrie Unumb, vice president, state government affairs, at Autism Speaks, who works from her Lexington, S.C., home for the New York-based organization. She is the mother of an autistic child.
While she understands NFIB's concerns about the cumulative cost effect of so many health insurance mandates, she said the autism bill has an opt-out provision "especially for small businesses," so any business that could demonstrate the added coverage would increase insurance costs by 1 percent or more could forgo the coverage.
"I'm not going to stand here and say there's no price tag. It's about 31 cents per member per month," Unumb said, drawing that number from analysis of costs in South Carolina, which in 2007 became one of the first states to pass the model legislation being considered in North Carolina, and other early states that enacted the law.
"We've got no reason to believe it would be any different in North Carolina," she said.
The model bill passed the Nebraska legislature April 9 and Gov. Dave Heineman signed it into law April 21, making the Cornhusker State the 36th to adopt it.
The raft of insurance mandate bills have a host of Republican primary sponsors, even though the GOP-controlled General Assembly has made reducing mandates and regulations a top priority to relieve small businesses from burdensome regulations and stimulate the economy.
Carolina Journal contacted numerous Republican sponsors of mandate bills; none responded to requests for comment.
"A lot of conservative Republicans support the autism bill in particular," Unumb said. "There is tremendous support from conservatives all over the country," and Republican presidential aspirants Gov. Bobby Jindal of Louisiana, and Gov. Rick Perry of Texas signed autism bills into law, and later signed expansions.
There is a solid reason for that, Unumb said: "It's a classic long-term investment."
Just-released statistics from the federal Centers for Disease Control and Prevention say one of every 68 children nationally is born with some level of autism. The ratio is one in 58 in North Carolina.
"There's an economic tsunami that's going to hit the state of North Carolina unless the autism issue is dealt with," Unumb said. "It just makes sense" from a cost-benefit perspective.
"When you've got a child with autism who can't function, a lot of these children are headed to a lifetime of institutionalization, and will become wards of the state at taxpayer expense unless we get in there and give them the intervention and treatment that they need" to become, if not working, tax-paying, productive members of society, at least less expensive to care for, Unumb said.
"It's an emotional issue with parents with autistic children, or cancer patients that need oral chemo," Thompson said.
But small business owners with thin profit margins are faced with the choice of discontinuing health care insurance for their employees entirely, or eliminating employer coverage and implementing a defined-contribution system, providing employees a set amount of money to offset the costs of purchasing individual health plans, Thompson said.
Companies also face less-desirable alternatives, including raising the costs of their products, making them less competitive, or shedding jobs so that the company hires fewer workers than the 50-employee trigger under which Obamacare requires employers to provide coverage, Thompson said. Business owners can do this either by shifting some employees to part-time status or laying off enough to fall below the threshold.