LEG REG REVIEW is a periodic newsletter produced by PHILLIPS ASSOCIATES, a professional lobbying and consultant firm located near the State Capitol. It contains news on the legislative and regulatory scene in Pennsylvania that may be of interest to the Insurance and Business Communities. It is a free member benefit for those who are members of the Pennsylvania Association of Health Underwriters (PAHU). Subscription information may be obtained by contacting PHILLIPS ASSOCIATES at 717/728-1217 FAX 717/232-7005 or e-mail to email@example.com. Please email firstname.lastname@example.org supplying both your name and e-mail address if you wish to be removed from or added to this list.
NAVIGATOR LEGISLATION RUNS OUT OF TIME
Despite October 14 passage by the Senate, Pennsylvania legislation regulating Patient Protection Affordable Care Act (PPACA) navigators and certified application counselors is dead for this legislative session because the General Assembly ran out of days on which to act. Senate Bill 1268 (Eichelberger-R-Blair) would have required navigators et al to register with the PA Insurance Department and mandate that individuals working for a navigator or certified application counselor (such as a food bank, library, etc.) undergo a criminal background check. The PA Association of Health Underwriters (PAHU) supported SB 1268 and has criticized PPACA as using unlicensed persons who have access to financial information as they calculate possible tax subsidies.
The Senate went along with this line of thinking with a 23-27 party line vote (Republicans voting for). Democrats opposed the bill. Senate Minority Chair of the Senate Banking & Insurance Committee Mike Stack (D-Phila.) earlier said that state regulation might interfere with PPACA’s goal of trying to enroll as many people as possible. Stack is running for Lt. Governor on the Democratic ticket. Earlier, opposition to SB 1268 came from the Republican Corbett Administration which testified that it did not see the need for the legislation given that the Insurance Department issued a Notice in the PA Bulletin in November 2013 reminding navigators not to engage in activities where an insurance license was needed. Prior to passage in the Senate, Republican legislators beat back an amendment from Democratic Senator Vincent Hughes (Phila.) that tied enactment of SB 1268 to establishment of a state-based exchange by PA. (PA utilizes the federally-facilitated marketplace.) Once past the Senate, the bill was referred to the House Insurance Committee but the process ran out of time.
On the House side, House Bill 1522 (Tobash-R-Schuylkill) went as far as being reported out of the House Health Committee and House Rules Committee but the Republican leadership never opted to bring it to the House for a vote by that chamber. Again, opposition by the Corbett Administration appeared to be the factor prompting leadership to let the bill die.
FORMER SENATOR MIKE WAUGH DIES
Farm Show Executive Director and long-time agriculture advocate Michael Waugh passed away at the age of 58. He also had a distinguished record of service as a York County State Senator where he held a leadership position as well as serving as former Chair of the Senate Agriculture & Rural Affairs Committee.
EDUCATION COMMITTEE REVIEWS FINANCIAL LITERACY
In October, the House Education Committee convened a hearing on financial literacy. While most testimony such as that from the Banking & Securities Department focused on how particularly younger consumers need to understand the essentials of financial management, the PA Association of Health Underwriters suggested that understanding insurance fundamentals was critical to financial literacy. An example from the testimony as to what most people do not grasp about insurance follows:
- Cost-shifting: Someone has to pay the bill. A health care provider that does not receive adequate reimbursement from the government will have to find another way to absorb those costs. Cost-shifting means that the cost is shifted to whoever can pay whether it is through self-insurance or the insured patient.
BILLS SENT TO THE GOVERNOR. The General Assembly completed action on a number of pieces of insurance legislation, presenting them to Governor Corbett for his signature.
PROPERTY CASUALTY BILLS:
- Senate Bills 1356 and Senate Bill 1357 (Corman-R-Centre) streamline transfers of policyholders’ homeowner and auto insurance from one affiliated carrier to another. Current law dictates that there is a termination first even though the insurance carriers are affiliated.
- House Bill 573 (Fleck-R-Huntingdon) requires that a neighborhood electric vehicle REGISTERED OR OPERATED ON A HIGHWAY must be insured at $15,000 for injury to one person in any one accident, $30,000 for injury to two or more persons in any one accident and $5,000 for damage of property of others in any one accident. The bill defines ‘neighborhood electric vehicle’ as a four-wheeled electric vehicle with maximum speed of 20-25 miles per hour.
HEALTH INSURANCE BILLS:
- House Bill 1436 (Truitt-R-Chester) is a mandated benefit bill specifying that health insurers cover costs of amino-acid based elemental formulas for children with severe food allergies who cannot consume normal foods. It passed the Senate 48-2 and the House 192-0 before going to the Governor. PAHU voiced concern to legislators and to the Corbett Administration that adding a mandated benefit might trigger a provision in PPACA forcing state taxpayers to bear additional costs if the exchange was included.
- Senate Bill 1180 (Vance-R-Cumberland) attempts to strengthen the state system for prescription drug monitoring and gives health care providers electronic access to a patient’s prescription drug history. After passing the Senate 47-2, the House 194-2, and the Senate 46-2 (concurrence with House amendments), the bill was signed in the Senate October 16. Once signed in the House, it goes to the Governor.
INSURANCE COMPANY CREDITOR BILL SIGNED
Signed by the Governor as Act 144 of 2014 on October 14 was House Bill 2353 (Evankovich-R-Westmoreland). This establishes parity under state law with federal law as it relates to allowing the Pittsburgh Federal Home Loan Bank to be a secured creditor to insurance companies.
PROPERTY TAX REFORM RAN OUT OF STEAM
Senate Bill 76 (Argall-R-Schuylkill) saw some late session activity with the September 16 movement of the bill through the Senate Finance Committee. SB 76 sought to eliminate school district property taxes in exchange for increased Personal Income Taxes to 4.34% (now at 3.07%), an increase in the state sales tax to seven percent (now 6%), and sales taxes being imposed on numerous now exempt categories. Numerous business groups (Chambers, retailers, accountants, NFIB, and manufacturers) lined up in opposition but two powerful groups, the PA Farm Bureau and the PA Association of Realtors supported the bill. Despite the Senate Finance Committee vote, SB 76 saw no further action and so died. Vote in the Senate Finance Committee was 6-5 with three Republicans, Senators Pat Vance (Cumberland) Scott Hutchinson (Venango) and Stewart Greenleaf (Montgomery) voting no.
On the House side, Senate Bill 491 (Folmer-R-Lebanon) was amended by the House Finance Committee September 22 to include major school property tax reforms — a far cry from the bill’s original intent to allow farmers to use a simpler method for local tax filing. Adding those major property tax provisions eliminated any chance of final action during this session.
MCARE SETTLEMENT ANNOUNCED OCTOBER 16
Governor Corbett announced a settlement to the 2009 lawsuit brought by doctors and hospitals against the legislative transfer of Medical Care Availability and Reduction of Errors Fund (MCARE) monies into the General Fund to help balance a Rendell Administration budget. The settlement means $139 million over 18 months to health care providers and a $61 million reduction in the 2015 MCARE assessment paid by doctors and hospitals to a middle tier of medical malpractice insurance operated by the state.