LEG REG REVIEW 2014, 4th Issue February 17, 2014

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 xenobun@aol.com.  Please email jtrout2792@aol.com supplying both your name and e-mail address if you wish to be removed from or added to this list.


Insurance broker and past legislative chair of the PA Association of Health Underwriters (PAHU) Scott Crane was appointed by Governor Tom Corbett to the new Long-Term Care Commission, a body established through executive order to assist in mapping out improvements in how the state addresses long-term care needs of PA’s seniors.  Establishing the LTC Commission is part of the Governor’s Healthy PA initiative.  Having a licensed insurance producer appointed to a state-level body of this type has been a long-standing PAHU goal for several years.


The Joint State Government Commission Advisory Committee on Long-Term Care Services and Support heard testimony from insurance agents, carriers, health care providers and policy experts at a February 6 hearing in Harrisburg.  While many focused on the growing need for LTC services because of the aging of PA’s population, those representing the private sector insurance industry stressed several points:

  • Private sector LTC insurance placement is only four percent of the universe of those potentially needing long-term care.
  • LTC insurance policies stress the need for consumers to take care of themselves and reduce Medicaid expenditures for long-term care.
  • Medicaid taxpayer expenditures continue to grow, fueled by demographics and by the Patient Protection Affordable Care Act (PPACA)’s desire to have Medicaid eligibility increased to 138% of the federal poverty level.  In 2003, $269 billion was spent nationally on Medicare.  By 2012, the cost to taxpayers was $421 billion.  With PPACA, the number of Medicaid recipients is expected to grow by another 20 million, bringing the total to 76 million adults covered by the program.  (In PA, the number is one person out of six receiving a Medicaid entitlement.)
  • Many advisors are reluctant to promote LTC insurance because of the product’s complexity and compliance with a myriad of government marketing rules.
  • Insurance agents should be seen as allies by the Department of Aging and the APPRISE program.
  • Advocated was enactment of a state tax credit to encourage the purchase of LTC insurance by consumers.

Agent witnesses represented both PAHU and NAIFA-PA at the hearing.


Speaker of the House Sam Smith (R-Jefferson) announced that he has chosen not to seek re-election to the PA House of Representatives.  Elected in 1986, the Speaker’s most recent legislative achievement was to secure House passage of transportation funding.  What this portends in the House for 2015 are major leadership changes.  Assuming the Republicans retain control of the PA House, a new Speaker means shifts in other caucus leadership positions.  A backdrop to this is the retirement of two major committee chairs, Rep. Nicholas Micozzie (R-Delaware) from Transportation and Rep. Paul Clymer (R-Bucks) who chairs the House Education Committee.  Additionally, Rep. Ron Miller (R-York) is seeking the Senate seat vacated by Michael Waugh who left the Senate to head the Farm Show.  Miller serves as chair of the House Environmental Resources & Energy Committee.


CHIP outreach was the major topic discussed at the Senate Appropriations Committee hearing on the FY 2014-15 Insurance Department budget this last week.  The Department plans a media buy, bus ads, and marketing of CHIP through school nurses, etc.  The campaign would stress to consumers that they could enroll children directly through the Insurance Department or through the carrier.

Several of the questions from Senators to Insurance Department Commissioner Michael Consedine centered on the solvency of the Underground Storage Tank Indemnification Fund (USTIF) given the Corbett Administration’s decision to suspend repayment of the loan for a year from USTIF to the General Fund. (It is.)  Phasing out of MCARE was also discussed as desirable since PA is one of the very few states having its own medical malpractice insurance tier.  The problem is capitalizing the unfunded liability of MCARE (those potential claims that may have to be addressed).  On the plus side, Consedine reported that the medical malpractice market has rebounded in PA thanks to the emergence of risk retention groups and because of tort reform legislation passed by the General Assembly.  Some of the other topics:

  • A thanks to the General Assembly for enacting a dedicated source of revenue for the Insurance Department
  • Integration of the Insurance Department’s IT needs with the Department of Public Welfare’s IT system


Insurance Department Deputy Commissioner Ron Gallagher is leaving the government to assume the position of President of the PA Association of Mutual Insurance Companies (PAMIC) March 10.  Gallagher has 24 years at the Department – no word on replacement — and has had managerial responsibilities for the special funds area (USTIF etc.), enforcement, market conduct, market analysis, field investigations, and IT.  He succeeds Steve Elliott as PAMIC President.  PAMIC represents Mutual Insurance Companies in PA and has under Elliott established itself as a regional force within the National Association of Mutual Insurance Companies (NAMIC).


GOP nominee Jesse Topper from Bedford won a special election to fill the term of the late Dick Hess who died unexpectedly in 2013.  The district includes parts of Bedford, Fulton and Huntingdon counties.  The election does not affect the party ratio since Hess was also a Republican.


Agency                                   Senate                                     House

DEP                                        2/18                                         2/19
DCNR                                     2/19                                         2/25
Health                                     2/19                                         2/24
DPW                                       2/24                                         2/26
L&I                                          2/25                                         2/18
Agriculture                              2/25                                         2/24
Banking & Securities               2/26                                         completed
Education                                2/26                                         2/18
Aging                                       2/27                                         completed
PennDOT                                2/27                                         2/26
Insurance                                completed                                2/27


  • ARI Mutual Insurance Company has submitted an application to the Insurance Department to redomesticate from New Jersey to Pennsylvania. 

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