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 firstname.lastname@example.org. Please email email@example.com supplying both your name and e-mail address if you wish to be removed from or added to this list.
GENERAL ASSEMBLY RETURNS FOR FALL SESSION
The PA General Assembly has returned to Harrisburg for work on its’ fall agenda which looks uncomfortably like its’ summer agenda after Governor Wolf vetoed state spending plans passed by Republicans. As negotiations continue, on September 18, the Senate passed a bill to provide $11.2 billion in short-term relief to social service providers that are hamstrung by the budget impasse. In turn, the Governor said he is inclined to veto, preferring reconsideration of his State budget proposal. His press secretary Jeff Sheridan issued the following: “The Republican plan to pass a stopgap budget is yet another gimmick that further highlights the Republicans’ clear comfort with politics as usual in Harrisburg and embracing a failed status quo that is holding Pennsylvania back.”
The three bills are Senate Bill 1000 (Stop-Gap Appropriations Act), Senate Bill 1001 (Fiscal Code Budget Implementation) and House Bill 224 (Public School Code). SB 1001 also reauthorizes the State Workers’ Insurance Fund (SWIF) until 2018 — important since SWIF has been working without legislative authority since June 30, 2015.
While attention is focused on where negotiations are with regards to the Budget, there are two insurance items on the Senate’s voting calendar. They are:
- House Bill 60 (Baker-R-Tioga) to require parity in insurer payment between intravenous chemotherapy and oral chemotherapy.
- House Bill 857 (Pickett-R-Bradford) re-authorizes CHIP.
The House has one insurance bill on its voting calendar. Senate Bill 494 (Ward-R-Westmoreland) eliminates an Insurance Department report on Flood Insurance policy numbers which is provided to the General Assembly.
INSURANCE DEPARTMENT HEARING ON BALANCE BILLING
On October 1, the PA Insurance Department will hold a public hearing in Harrisburg to focus on the issue of balance billing where an insured goes to an in-network provider who secures services for the patient from a non-network provider. As a result, the patient pays the higher amount for non-network services, for the ‘balance’ not covered as in-network. Details: Consumer Liaison David Buono firstname.lastname@example.org .
Notice 2015-07 was published in the September 19 PA Bulletin to provide guidance on the Insurance Department’s position. Among other things, it spells out requirements for a health care provider’s directory which health insurers must provide. It says that “the policyholder may reasonably believe that coverage for the services provided by that provider will be covered as in-network services.” Details:
DEPARTMENT ISSUES AUTO INSURANCE ADVISORY
On September 16, the PA Insurance Department issued a warning to auto insurance companies not to discriminate against widows and widowers who would pay more for auto insurance after their spouse dies. According to the statement, the Insurance Commissioner will not approve new rate filings which allow for increased auto premiums to the survivor.
- Anthem, Inc. filed an application to acquire domestic HMO Bravo Health Pennsylvania, Inc., domestic PPO Cigna Dental Health of Pennsylvania, Inc., and Life Insurance Company of North America, a domestic stock life insurance company.
- The FAIR Plan administered by the Insurance Placement Facility has moved to 190 North Independence Mall West, Suite 301, Philadelphia, PA 19106. FAIR Plan is the property insurer of last resort in PA. Phone number remains 215-629-8800
- The PA Health Care Cost Containment Council (PHC4) published a list September 19 of the 35 diseases, procedures, and medical conditions it is mandated to track. (Heart Attack, Pneumonia, Blood Clots, etc.)
FEMA SANDY CLAIM REMINDER
On September 17, the PA Insurance Department issued an alert to Pennsylvanians who filed claims resulting from meteorological event Sandy (aka Super Storm Sandy) in October 2012 to say that October 15, 2015 is the deadline to ask for a review. This is for claims filed between October 27 and November 6, 2012. Those requesting a review should contact the National Flood Insurance Program at 866-337-4262. NOTE: Although the phrase “Hurricane Sandy” was used five times in the press release, Sandy was downgraded from a category 1 hurricane to a post-tropical cyclone, prompting then Governor Tom Corbett to announce that insurance companies “have been advised that hurricane deductibles should not be applied to any homeowner’s insurance claims.” Similar statements were issued by NY, CT, NJ, DE, and MD state governments regarding the hurricane deductible.
MARYLAND MIA NEWS
- Maryland Insurance Administration (MIA) announced a revised schedule of town hall meetings which now include: Tuesday September 29 in Waldorf at the Charles County Department of Health 2-4 p.m.; Wednesday October 7 Prince George’s County at the Cheverly Town Hall 2-4 p.m.; Wednesday October 21 Harford County at Harford Community College in Bel Air 9:30-11:30 a.m.; Thursday October 22 at the University System at Hagerstown 10 am. – 12 noon. Details: Nancy Egan at MIA, email@example.com
- MIA issued Revised Bulletin 15-24 on September 11, 2015, as a clarification on commission sharing by insurance producers. It says that a producer “may pay a referral fee, split a commission, or offer other valuable consideration” to another licensed producer if the recipient is not appointed by a carrier. Excluded from this are title insurance producers. The legal citations are Section 11-407 of the Insurance Article and Section 14-127 of the Real Property Article. Details: Victoria August 410-468-2217 or Victoria.firstname.lastname@example.org .
PRICE OPTIMIZATION A NO-NO
The PA Insurance Department issued a consumer alert that the Wolf Administration will continue to oppose a practice known as “price optimization”. According to the release, price optimization occurs when insurers use “sophisticated pricing tools” to charge different premiums to policyholders who present basically the same risk. Regulators in other states such as Maryland (Bulletin 14-23 October 31, 2014) have also come down against price optimization. The Consumer Federation of America raised the issue last year, saying that a major insurer’s formulas “can range from giving a customer a 90% discount off the standard rate to increasing a premium by 800% depending on analysis of the individual’s market considerations” not tied to risk.
Global consultant Bain & Company says that price optimization is used in various industries to help businesses determine initial pricing, promotional pricing and discount pricing: (https://www.bain.com/publications/articles/management-tools-price-optimization-models.aspx )