Aetna 2009 Annual Report Download - page 32

Annual Report – Page 26
made to comply with the HIPAA regulations. HHS has also adopted security regulations designed to protect member
health information from unauthorized use or disclosure.
In addition, states have adopted regulations to implement provisions of the Financial Modernization Act of 1999 (also
known as Gramm-Leach-Bliley Act (“GLBA”)) which generally require insurers to provide customers with notice
regarding how their non-public personal health and financial information is used and the opportunity to “opt out” of
certain disclosures before the insurer shares such information with a non-affiliated third party. In addition to health
insurance, the GLBA regulations apply to life and disability insurance. Like HIPAA, this law sets a “floor” standard,
allowing states to adopt more stringent requirements governing privacy protection. GLBA also gives banks and other
financial institutions the ability to affiliate with insurance companies, which may lead to new competitors in the
insurance and health benefits businesses.
Legislative and Regulatory Initiatives
In addition to broad-based federal health reform legislation, there has been a continuing trend of increased legislative
activity concerning health reform and regulation at both the federal and state levels. For example, Massachusetts has
enacted comprehensive reform, including an individual health coverage mandate and a health insurance exchange.
However, in 2009, less than a dozen states considered major structural reforms, and only two of those states enacted
such proposals into law. For example, Oregon adopted elements of a comprehensive reform proposal, many of which
are elements contained in the federal health reform legislation. Utah adopted a voluntary health insurance exchange,
as well as a new basic benefit plan that must be offered by all individual and small group carriers.
Other states are expected to consider these types of reforms as well as more modest reforms aimed at expanding
Medicaid and SCHIP eligibility. These proposals include provisions affecting both public programs and privately-
financed health insurance arrangements, and some of these proposals could have the longer-term effect of materially
altering the current role of employers in providing health benefits. Broadly stated, these proposals attempt to increase
the number of insured by expanding eligibility for Medicaid and other public programs and compelling individuals
and/or employers to purchase health insurance coverage while expanding access to coverage through guaranteed issue
requirements, and through new insurance exchanges and/or other mechanisms. At the same time, these proposals
could change the underwriting and marketing practices of health plans, for example by placing restrictions on pricing
and mandating minimum medical benefit ratios.
Legislation, regulation and initiatives relating to this continuing trend include among other things, the following:
 Amending or supplementing ERISA to impose greater requirements on the administration of employer-funded
benefit plans or limit the scope of current ERISA pre-emption, which would among other things expose us and
other health plans to expanded liability for punitive and other extra-contractual damages and additional state
regulation
 Imposing assessments on (or to be collected by) health plans or health carriers, which may or may not be
passed onto their customers. These assessments may include assessments for insolvency, assessments for
uninsured or high-risk pools, assessments for uncompensated care, or assessments to defray provider medical
malpractice insurance costs.
 Reducing government funding of government-sponsored health programs in which we participate.
 Mandating minimum medical benefit ratios or otherwise restricting health plans’ profitability.
 Extending malpractice and other liability exposure for decisions made by health plans.
 Mandating coverage for certain conditions and/or specified procedures, drugs or devices (for example,
treatment for autism and infertility and experimental pharmaceuticals).
 Mandating expanded employer and consumer disclosures and notices.
 Regulating e-connectivity.
 Mandating health insurance access and/or affordability.
 Mandating or regulating the disclosure of provider fee schedules and other data about our payments to
providers.
 Mandating or regulating disclosure of provider outcome and/or efficiency information.
 Imposing substantial penalties for our failure to pay claims within specified time periods.
 Imposing payment levels for services rendered to our members by providers who do not have contracts with
us.