LEG REG REVIEW
2017, 27th Issue *** August 21, 2017

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. 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 at 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. Whether you need help meeting your CE or have a particular problem/question, please go to our web site to explore how PHILLIPS ASSOCIATES may be of service to you, your employees, and your clients. www.vphillipsassoc.com

WOLF NAMES TERESA MILLER ACTING DHS SECRETARY
Governor Tom Wolf tapped Insurance Commissioner Teresa Miller as Acting Secretary of the Department of Human Services (DHS) effective August 21. She replaces Secretary Ted Dallas who is currently on medical leave. (According to one media report from Altoona radio station WRTA, Dallas will serve as an advisor to Governor Wolf when he returns to work.) Prior to becoming Insurance Commissioner in January 2015 at the start of the Wolf Administration, Acting Secretary Miller held government service in the Obama Administration at the U.S. Department of Human Services (HHS) Centers for Medicare and Medicaid Services (CMS) where she worked on the state-federal interface for the federally-facilitated marketplaces (exchanges) under the Affordable Care Act. Before that, she served as Oregon’s Director of Insurance where she developed a state-based exchange. Her tenure as PA Insurance Commissioner included many areas of overlap with the Department of Human Services some of which included integration of computer systems and transfer of CHIP administration to DHS.

Miller had previously been designated as Governor Wolf’s choice to head the proposed combination of four Cabinet departments into one (Health, Aging, Human Services and Health).

ALTMAN TO HEAD INSURANCE
Governor Wolf also announced his intention to nominate Insurance Department Chief of Staff Jessica Altman as Insurance Commissioner given Miller’s move to DHS. Altman, like Miller, will need to be confirmed by the Senate to remove the ‘Acting’ from her title. She is also a Washington, DC veteran, having worked to implement the Affordable Care Act at HHS’ Center for Consumer Information and Insurance Oversight (CCIIO). According to a bio sketch in the June 2015 Insurance Insights newsletter published by the PA Insurance Department, her Washington duties included “coordinating all policy activities for CCIIO (and) focused on policy areas such as health insurance exchanges, consumer protections, transparency, and insurance market reforms.” Jessica Altman earned a Master’s degree in public policy from Harvard University’s John F. Kennedy School of Government.

BUDGET UPDATE: JUA TARGETED IN SENATE REVENUE BILL
The House has not yet re-convened to consider the Senate-passed revenue package. Presumably, some of the major sticking points are taxing Marcellus Shale natural gas extraction and a range of taxes on telecommunications and home heating.

Of interest to the Insurance Community is a provision that would transfer $200 million from the PA Professional Liability Joint Underwriting Association (JUA) reserves (insurer of last resort for Medical Malpractice insurance) to the General Fund. JUA announced that it will file a lawsuit if the measure is passed. JUA’s statement said that “JUA is not a Pennsylvania agency, is not government funded and is not state-run. JUA money comes from premiums paid by practitioners and institutions for insurance and business operations. If HB 118 becomes law, the state would seize money it does not own and to which it has no right.” Details: 610-828-8890
MORE BUDGET UPDATES

According to State Treasurer Joe Torsella, a $750 million loan from the Treasury’s Short Term Investment Pool (STIP) was released to the General Fund August 16 to help the state’s cash flow until a revenue package is finalized by the General Assembly. Treasurer Torsella said that the General Fund balance will again fall below zero by August 29 and on or about September 15, the General Fund balance is projected to fall to minus $1.6 billion.
Revenues received in the first month of the fiscal year starting July 1, 2017 were released August 1 by the PA Revenue Department. This early in the fiscal year, the Revenue Department does not compare estimated revenues with actual monies received by the Commonwealth. As a fallback, LEG REG Review presents a comparison between actual revenues between July 2016 and July 2017 as a barometer on the current revenue picture. $100 million more in tax revenue was collected in July 2017 than in the same month last year.

Type of Tax                           July 2016                    July 2017
Sales Tax                                892.3 million             912.7 million
Personal Income Tax             760.4 million             827.0 million
Corporation Tax                     66.4 million                61.8 million
Inheritance Tax                       77.1 million                83.0 million
Realty Transfer Tax               32.6 million                not listed
Other General Fund Taxes     105.5 million             138.4 million
(Other General Fund Taxes include cigarette, malt beverage, and liquor and table games.)

POLITICS
According to the August 17 Patriot News, Rep. Kristin Phillips-Hill (R-York) plans to announce her candidacy for the Senate seat that will be vacated by incumbent Scott Wagner (R-York) as he seeks the Republican nomination for Governor in 2018. On July 10, the York Dispatch reported that she was “seriously considering” the move.

INSURANCE DEPARTMENT FEARS 20.3 PERCENT HEALTH PREMIUM HIKE FOR 2018
On July 31, PA Insurance Commissioner Teresa Miller wrote to HHS Secretary Tom Price to warn of dire consequences to Pennsylvanians if the Federal Government does not come through in paying insurance companies under the Affordable Care Act’s “cost-sharing” or market stabilization payments. She said that premiums would bump up to a statewide increase of 20.3 percent rather than the 8.8 percent statewide average filed with the Department in May. She said that if the Trump Administration does not commit now to making payments for the entire 2018 policy year, the Department will be forced to allow higher rates to prevent insurers ending participation in the individual market due to uncertainty.

UPCOMING…

On August 24, the PA Long-Term Care Council will meet in Harrisburg to discuss the State Long-Term Care Ombudsman program and the Opioid Crisis. Details: Charles Quinnan 717-705-7296, cquinnan@pa.gov
Independent Regulatory Review Commission (IRRC) meets in Harrisburg August 24.

INSURANCE DEPARTMENT NEWS NOTE
On August 10, the PA Insurance Department announced that $40.244 million had been reclaimed for more than 28,000 consumers in the first six months of 2017. According to the release, sources were companies not paying claims as they should, companies charging premiums above levels approved by the Insurance Department, and agents not sending in insurance premiums to the insurers.

PAHU MEMBERS: Next issue of LEG REG Review, there will be an importance announcement.