Amended Healthcare Regulatory Bill Heads to House

The state Senate passed omnibus legislation imposing a broad range of new regulations on the health insurance industry May 21.

An amended version of SB 10 was approved on a 31-5 vote after earlier navigating the Insurance and Real Estate Committee, Judiciary Committee, and Appropriations Committee.

The Insurance Committee removed onerous language regulating stop-loss and placing mandates on self-funded plans before approving the bill in March.

In addition, the Senate floor amendment significantly weakened two troubling sections that threatened employer cost increases of tens of millions of dollars annually.

An independent analysis by the healthcare consultancy Havarti Risk determined the original bill would increase costs in the fully insured market by $697 million to $907 million annually.

Self funded employers were looking at annual cost hikes of $554 million-$743 million, while the state employee health plan would see cost increases between $43 million-$64 million.

Necessary Service

Currently, a treating clinician must prove to a health carrier that a medical service is necessary.

The initial version of SB 10 reversed that practice and established a rebuttal presumption of burden of proof, placing the onus on the carrier to prove that a medical service is not necessary.

By eliminating prior authorization and assuming all services are medically necessary, employers faced increased premiums in both the fully-insured and self-insured markets. 

Individuals, families, and employers enrolled in fully insured plans faced premium increases of 6.6% to 8.5%.

Individuals, families, and employers enrolled in fully insured plans faced premium increases of 6.6% to 8.5%—between $2,668 to $3,418 annually for a family of four. 

Employers who self fund health plans faced annual premium increases between 5.3% to 6.9%, the equivalent of $2,124 to $2,792 for a family of four. 

The bill passed by the Senate removed this provision entirely. 

Step Therapy

Step therapy requires patients to try lower-risk drugs before switching to a higher-risk medication.

Typically, patients must prove that their current dose/prescription is ineffective before being approved for a higher-risk medication. 

SB 10 prohibited health insurance policies from requiring step therapy for drugs used to treat mental/behavioral health conditions, or disabling/life-threatening chronic diseases. 

Employers who self fund faced an increase of $212 to $340 annually for a family of four.

For fully insured plans, this provision increased premiums by $100 per year for a family of four. Employers who self fund faced an increase of $212 to $340 annually for a family of four. 

The amended bill passed by the Senate prohibits step therapy for life-threatening/chronic diseases only, not all mental and behavioral disorders. 

SB 10 awaits a vote in the House.

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For more information, contact CBIA’s Grace Brangwynne (860.244.1163).