LEG REG REVIEW GPAHU Edition 2017, 30th Issue September 19, 2017


On September 13, Socialist/Democrat Senator Bernie Sanders (D-VT) introduced S. 1804 to convert the U.S. insurance system to a single payer system.  He was joined by 16 Democratic co-sponsors including potential contenders for the 2018 Democratic presidential nomination, Senators Elizabeth Warren (MA) and Cory Booker (NJ).  Called “Medicare for All”, the advantage of the plan per Sanders is that “Under this legislation, Americans will no longer have to pay premiums, co-payments, or deductibles to private health insurance companies that put profits over the needs of the American people. Instead of writing a big check to private health insurance companies, most Americans and businesses would be paying a much smaller percentage of their income to fund Medicare-for-all.”  It envisions a four-year phase-in.  A resource for this legislation is found at the Library of Congress web site, https://www.congress.gov/bill/115th-congress/senate-bill/1804/all-info.


Senator Sanders’ website offers a summary of provisions: https://www.sanders.senate.gov/download/medicare-for-all-act-of-2017-executive-summary?id=943E7DB5-FCCA-4EA4-B215-A92F6642BA2C&download=1&inline=file


A September 19 New York Times opinion editorial by Lanhee J. Chen, Research Fellow at the Hoover Institution and former Policy Director for the Romney-Ryan presidential campaign and Micah Weinberg, President, the Economic Institute at the Bay Area Council, an employer-backed policy advocacy group in San Francisco, were quick to rebut the Medicare for All assertions:


We recently conducted an analysis of international health systems and concluded that single-payer advocates are substantially overstating the prevalence and success of such systems. While many other countries have universal health systems and feature more government control over individual health care decisions, almost none are actually single-payer. And all of them are wrestling with largely the same challenges Americans are, making different but equally difficult trade-offs on cost, quality and access.


On September 13, the PA House voted 103-91 to pass a revenue plan (House Bill 453) that relies on tapping $616 million from dedicated funds and one billion dollars in future payments from the Tobacco Settlement.  All Democrats voted no.  They were joined by 15 Republicans, all but one from southeast PA.

An insurance-related Fund was included in the House-passed bill. $10 million would come from the Insurance Regulation & Oversight Fund, of which approximately half  goes into the Department’s operating budget of $27 million while the other half  is siphoned off into the General Fund.  On September 13, Acting Insurance Commissioner Jessica Altman wrote to the chairs of the House Insurance Committee and the Senate Banking & Insurance Committee to explain how pulling money out of the Insurance Regulation & Oversight Find (IROF) would hinder the Department’s ability to fulfill its regulatory responsibilities.  She said that the biggest problem with transferring from IROF to the General Fund is the Department’s cash flow. While there was a balance in IROF of $23.8 million in July, the Insurance Department operates on a significant negative cash flow basis from July through March, and needs the IROF balance to be able to meet payroll, pay vendors, and provide all services.  Most money from fees and company assessments comes in the second half of the fiscal year.  This means a working general operations deficit which IROF absorbs for much of the year.


$100 million would be loaned from the Underground Storage Tank Indemnification Fund (USTIF) to the General Fund.  USTIF collects a small part of gasoline pump sales in order to fund cleaning up oil or gasoline spills from PA below and above ground storage facilities.  It also contains a specialized program to fund oil spills from household furnaces up to $5,000 – not covered by traditional homeowners’ insurance policies.  This Fund has been “borrowed from” before.  A $100 million loan taken out in Fiscal Year 2002-2003 has still not been paid back according to House Appropriations Committee Minority Chair Rep. Joe Markosek (D-Allegheny).  He said that only $32.5 million had been paid back.  Both the old loan and the new one this year must be paid back by 2029. (Source: 9/12/17 Budget Briefing from Rep. Markosek).

Two additional insurance funds were also on the list:

  • $25 million from the Banking Fund. This Fund provides General Government operations money for the PA Department of Banking & Securities.
  • $1.992 million from the PA eHealth Partnership Fund. This fund provides support to a state agency seeking to make medical records accessible electronically to health care providers so as to reduce duplicative tests which drive up the overall cost of health care borne by insurers.

Not included was an earlier plan to take $200 million from the Joint Underwriting Association (JUA), the medical malpractice insurer of last resort.

The bill went to a highly skeptical PA Senate.  This week’s result may see creation of a Conference Committee between House and Senate to come up with a compromise plan that might be acceptable to both House and Senate.


  • PHC4 Reauthorization was approved by the House Health Committee September 13.  House Bill 1613 (Cutler-R-Lancaster) reauthorizes the PA Health Care Cost Containment Council (PHC4).  This entity’s main function is to compare cost and effectiveness data for specific hospital medical procedures.  It also reviews proposed mandated benefits to identify market impact if requested by the General Assembly.  Text of the bill follows:  https://www.legis.state.pa.us/cfdocs/billInfo/billInfo.cfm?sYear=2017&sInd=0&body=H&type=B&bn=1613
  • Introduced by Rep. Brian Ellis (R-Butler) September 14 is House Bill 1763 to increase minimums for auto insurance in PA to $30,000 (up from current $15,000) bodily injury, $60,000 per accident (up from existing $30,000) and $10,000 for property damage (up from current $5,000).  Unlike the last legislative session, this bill was referred to the House Insurance Committee instead of the House Transportation Committee.


  • Elected in 1984, veteran House member John Taylor (R-Phila.) has opted not to run for re-election in 2018.
  • Rep. Tarah Toohil (R-Luzerne) announced that she is not running for the congressional seat being vacated by Rep. Lou Barletta (R-11) according to PoliticsPA.

 REGULATORY UPDATE:  PA-based United Concordia Life & Health Insurance Company is seeking to merge into Arizona-based United Concordia Insurance Company.

A SPECIAL ELECTION.  House Speaker Michael Turzai (R-Allegheny) has set December 5 as the date for a special election to fill Representative Dan McNeill’s (D-Lehigh) unexpired term.

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