LEG REG REVIEW 2017, 18th Issue May 08th, 2017

CONGRESSIONAL REPUBLICANS MOVE POST-ACA
On May 4, U.S. House Republicans voted to forward a revised American Health Care Act (HR 1628) to the United States Senate.  The 217-213 vote showed a division in GOP ranks with 20 Republicans voting no along with all House Democrats.  All 18 PA Members of the U.S. House of Representatives were present and voted.  The breakdown was nine for passage and nine against the House Republicans’ Repeal & Replace bill.  Four Pennsylvania Republicans, Charlie Dent, Ryan Costello, Pat Meehan, and Brian Fitzpatrick voted no.  Groom Law Group has prepared a summary of the bill’s provisions:
https://www.groom.com/media/publication/1829_SUMMARY_OF_KEY_PROVISIONS_OF_THE%20AMERICAN_HEALTH_CARE_ACT.pdf
A link to the actual text follows:  https://www.congress.gov/bill/115th-congress/house-bill/1628/text

Some provisions:

  • Continued are ACA provisions dependant coverage up to age 26, first-dollar preventive care services, essential benefits (although states may ask for a waiver to change these)
  • Rate band changes from 3:1 to 5:1.This means that insurers will have more options when pricing coverage per age.States would have the option of having ratios greater than 5:1.
  • Coverage reporting requirements remain.Instead of an individual mandate, a person would have to document 12-months coverage or risk paying a 30% surcharge to the insurance company and not to the Federal Government.
  • Tax subsidies (called tax credits) could range between $2,000-4,000 per year depending on age (from $2,000 if person is under 30 at year’s start to $4,000 for those 60 and older).Subsidies phase out so that a modified adjusted gross income above $75,000 or $150,000 for joint filers means a 10% reduction in the subsidy for the portion of income above the threshold.Non-exchange plan policyholders would also be eligible for the subsidy.
  • Individuals with pre-existing conditions with no access to employer-offered coverage would be eligible to receive individual coverage due to insurers’ premiums being subsidized thanks to a new $100 billion Patient and State Stability Fund (supplemented by $15 billion in 2020 for maternity and newborn care or substance abuse care).
  • Repealed would be: ACA’s earliest tax, the 10% tax on tanning; Federal Health Insurance Tax on premiums (both in 2017); SHOP tax credits (finally ending in 2020); annual prescription drug tax (2017); and repeal on limitation to insurance executive compensation now limited to $500,000 by the Affordable Care Act (2017).Also repealed in 2017 would be the Medical Device Excise Tax (now 2.3% on gross sales).Repeal of ACA Medicare taxes in higher income individuals would be effective in 2022.Cadillac Tax would take effect in 2025.
  • ACA’s Expanded Medicaid eligibility to 133% of the Federal Poverty Level would end.

ADMINISTRATION REACTS TO HOUSE HEALTH VOTE
On May 4, PA Insurance Commissioner Teresa Miller issued a statement expressing disappointment that the U.S. House passed the American Health Care Act saying that the legislation “purports to make health care more affordable for all Americans, but that will only be the case if you are healthy, wealthy, and living in a non-rural area.  For older Pennsylvanians, individuals with chronic and pre-existing conditions, and those living in rural areas, this bill is a major step backwards.”

DEPARTMENT EXAMINATION LEGISLATION INTRODUCED
On May 5, House Insurance Committee Chair Tina Pickett (R-Bradford) introduced House Bill 1335.  The major legislative priority of the PA Association of Mutual Insurance Companies (PAMIC), the measure begins to address the issue of outsourced Insurance Department exams which can cause huge costs for PA domiciled carriers.  Similar legislation is expected in the Senate.  Specifically, HB 1335:

  • Requires the Insurance Department to annually report funds received and deposited into the Insurance Regulation & Oversight Fund (The Department’s annual General Government Operations money comes from this dedicated Fund.)
  • Discloses amounts paid to third parties for outsourced financial exams, market conduct exams, solvency monitoring, reviews of required transactions filed by regulated PA insurance companies
  • Identifies specific third-party consultants and amounts paid

PACE PROGRAM BILLS ON COMMITTEE AGENDA MAY 9
The House Aging & Older Adult Services Committee plans to take up four bills dealing with the state’s PACE/PACENET program which provides drug price subsidies to approximately 300,000 PA seniors.

  • House Bill 270 (Farry-R-Bucks) would increase the eligibility threshold from $23,500 to $31,000 for single individuals and from $31,500 to $41,000 for married couples.
  • House Bill 296 (Sonney-R-Erie) would exclude savings bonds and savings bond interest from income calculation in determining eligibility
  • House Bill 425 (Nelson-R-Westmoreland) provides that enrolled individuals not lose their eligibility if their maximum income limit is exceeded solely to a Social Security COLA (expiring Dec.  31, 2019)
  • House Bill 673 (Goodman-D-Schuylkill) eliminates veterans’ benefits from the definition of “income” when determining an individual’s PACE/PACENET eligibility

DEPARTMENT URGES CONGRESSIONAL FLOOD FIX
On May 2, Insurance Commissioner Miller wrote to PA’s congressional delegation regarding re-authorization of the National Flood Insurance Program (NFIP) which expires October 1, 2017. Her letter urged Congress to remove impediments to the growth of private sector alternatives to the NFIP.  Two examples:  allowing mid-term cancellation by the insured if he/she decides to get a private sector policy and requiring banks to recognize private sector flood policies as meeting their mortgage requirements.

MAY FLOOD TRAINING FROM NFIP
NFIP offers a two-part webinar on Key Fundamentals of Flood Insurance for Agents on May 9 and 10 with FEMA Mapping Changes being offered May 11.  Both are free.  nfiptraininginfo@h2opartnersusa.com.

REGULATORY NOTES…Saucon Mutual is seeking Department approval to convert to a stock company…BTY Health Partners, LLC, is seeking to acquire HMO Provider Partners Health Plan of PA, Inc….A final note from the National Flood Insurance Program.  Write Your Own (WYO) companies should accept electronic signatures on proofs of loss as FEMA does.  Details: FEMA-FIDClaimsMailbox@fema.dhs.gov.

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