INSURANCE COMMITTEE CONVENES PRESCRIPTION PRICE TRANSPARENCY HEARING
On February 8, the House Insurance Committee held a hearing on House Bill 161 (DeLuca-D-Allegheny), mandating the drug manufacturers to supply data to the Insurance Department on drug prices and costs of production including research and development costs versus consumer marketing costs. HB 161 would require reporting by drug companies if the price increase exceeded a certain level and would not be triggered if a price increase was in normal range. Testifiers included PA Insurance Commissioner Teresa Miller, Pharma (manufacturers), insurance companies, pharmacists, AARP, and PA Association of Health Underwriters (PAHU). Drug companies insisted that their prices were justified by the long expense trail of development costs. Regarding a trademark where manufacturers has a de facto monopoly on a new drug, the testifier said that trademark protection is warranted given that 90% of the market is quickly grabbed by generics from the brand name drug when the trademark protection period ends. PAHU pointed out that however unpleasant insurance premiums are, they are a symptom of increasing health care costs, much of which are fueled by prescription drug price increases.
Rep. Eli Evankovich (R-Westmoreland/Allegheny) suggested that there needs to be transparency from manufacturer to consumer, noting that each segment has its own costs that should be disclosed. (NOTE: Governor Wolf proposed creation of a state consumer resource, All Payer Claims Database, on February 7 to provide a tool to better see health care and prescription care pricing. To be run by the PA Health Care Cost Containment Council (PHC4), the All Payer Claims Database will increase PHC4’s budget from $2.7 million to $4.7 million.).
HOUSE PASSES INSURANCE DATA BASE BILL
On February 8, the PA House voted to approve House Bill 152 (Quinn-R-Bucks). This bill provides access to life insurance company information via the PA Insurance Department so as to help beneficiaries locate an insurer which was sold or merged, yet still has a legal obligation to pay a death claim.
ADDITIONAL STATE BUDGET ITEMS for FY 2017-18
- Title Insurance Premium Tax revenue to the state in FY 2017-18 is expected to be $5.5 million, down from the current $5.9 million.
- Workers’ Compensation Security Fund which pays claimants if the WC carrier is insolvent has $641.569 million available versus an expected outlay of only $26,000.
- In the Workers’ Compensation Supersedeas Fund which reimburses insurers for WC payments to those later deemed to be ineligible, available monies are expected to drop from $25.583 million to $23.5 million in FY 2017-18
- Uninsured Employers’ Guaranty Fund which pays WC claims if the employer does not carry Workers’ Compensation is expected to have $7.972 million available in FY 2017-18.
MEDICAL MALPRACTICE INSURANCE UPDATE
The PA Insurance Department issued two Notices published in the February 11 PA Bulletin regarding Medical Malpractice insurance. First is a data call to insurers in this market where the Notice states that data for 2017 is different than that being sought previously. It also says that new for 2017, insurers have the option to designate their NAIC Annual Statement as their response to this data call. If they use this option, their reporting responsibility to the Department will have been completed. Deadline for data submission is March 1, 2017. This data call is mandatory.
The second Notice states that the Department is conducting a Medical Malpractice insurance study to determine if sufficient private sector market capacity would allow for limiting the range of insurance under the Medical Care Availability & Reduction of Errors (MCARE) Act. In Pennsylvania, Medical Malpractice has three tiers, private sector market up to a certain level, then MCARE, then the private sector for Excess & Surplus Lines coverage. The MCARE tier is government-run. This law has as its goal elimination of the MCARE tier should there be enough insurer capacity to warrant the withdrawal of the government. Unlike the first Notice, submission of information of market capacity is voluntary. Details for both Notices: Dennis Sloand, Office of Insurance Product Regulation, email@example.com, 717-214-1927.
GOODBYS: THANK YOU READING I DAY
After 55 years of bringing quality educational programming to Berks County and southeastern PA, the Reading I Day is ending. Originally organized in 1961 by the CPCU Society and the National Association of Insurance Women, Reading I Day has offered presentations by Insurance Commissioners, industry leaders, technical expertise to insurance producers and company employees. Thank you to members of the Reading I Day Committee: Julie Angstadt (Encompass), Pat Eggles (The Loomis Company), Craig Rider (Lititz Mutual), Lisa Lavender (Berks Fire Water Restorations), Amy Miller (BB&T Insurance Services), Jill Branford (Encompass), Phil Washington (Washington Adjusting), and Rick Angstadt (Retired – Encompass). PERSONAL NOTE: I have spoken at the Reading I Day on numbers of occasions on topics as distinct as health insurance, insurance fraud and legislative issues. I truly will miss this gathering of friends
GOODBYS: THANK YOU SPARKS CLUB CLINICS
In 2017, the SPARKS Club will not hold its September Clinics, which for 70 years have provided continuing education to insurance producers and Mutual Insurance Company employees in PA, MD, and DE. (In 2016, SPARKS only held Clinics in Pennsylvania.). SPARKS has been a way for Mutual Insurance Companies to nurture relationships with independent insurance agencies in the tri-state area. A meeting will be held February 17 to decide on the future direction of the organization. PERSONAL NOTE: For 14 years, PHILLIPS ASSOCIATES served as the meeting planner and speaker resource for SPARKS. It has been an absolute pleasure to work with the Mutual Insurance Companies’ field marketing representatives.
CORRECTION…In LEG REG Review 2017.7, Representative Paul Schemel from Franklin County was incorrectly identified as representing Lancaster County. LEG REG Review regrets the error and wishes to express thanks to reader Mike Landis to pointing this out.
CONGRATULATIONS…to Lancaster insurance agency Murray Securus for being named Rough Notes Agency of the Year for 2016, as announced in the February 2017 issue of Rough Notes magazine.
LEG REG Review SUBSCRIPTION UPDATE. Please don’t be cut from the list. LEG REG Review has always been available on a paid subscription basis, but there are many who receive LEG REG Review free of charge. Since preparing each issue takes four to five hours, PHILLIPS ASSOCIATES is asking readers (except for members of lobbying clients PAHU, & CIAAP) to remit $100 for the subscription to help cover the overhead.
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 Pennsylvania legislation and regulations impacting the Insurance and Business Communities. It is a free member benefit for those who are members of the Pennsylvania Association of Health Underwriters (PAHU). Subscriptions are $100 per year and further 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. Whether it means meeting your CE need or helping with a particular problem/question, please visit our web site to explore how PHILLIPS ASSOCIATES may be of service to you, your employees and your clients. www.vphillipsassoc.com