7:30 AM Registration - Mackinac Room - Anderson House Office Building - 5th Fl
8:00 AM Legislative Breakfast - Mackinac Room
9:30 AM Legislative Lobbying 101 - Mackinac Room
10:15 AM Individual appointments and drop bys
Capitol, Anderson Bldg, Binsfeld Bldg
Individual Registration - $20 per person NAHU Members, $50 per person non-members
STATE LEGISLATION CURRENTLY BEING TRACKED
MAHU HB 4019 - INSURANCE, Health Insurers, Require reimbursement for dispensing of a 365-day supply of covered prescription contraception. (Faris, Pam (D), 01/12/17) (Status: 01/18/2017 - bill electronically reproduced 01/12/2017)
HB 4074 - INSURANCE, Health Insurers, Require abuse-deterrent opioid analgesic drug coverage. (Kesto, Klint (R), 01/24/17) (Status: 01/25/2017 - bill electronically reproduced 01/24/2017)
HB 4325 - INSURANCE, Producers, Provide for continuing education credit carryover system for insurance producers. (Barrett, Tom (R), 03/07/17) (Status: 03/08/2017 - bill electronically reproduced 03/07/2017)
HR 0013 - Affordable Care Act, A resolution to memorialize Congress to repeal the Affordable Care Act. (Johnson, Bert (D), 01/26/17) (Status: 01/26/2017 - introduced by Representative Steven Johnson)
SB 0029 - INSURANCE, Health Insurers, Modify health insurance claims assessment rate under certain circumstances. (Horn, Ken (R), 01/18/17) (Status: 01/24/2017 - DISCHARGE COMMITTEE APPROVED)
SB 0030 - INSURANCE, Health Insurers, Create health services fund. (Stamas, Jim (R), 01/18/17) (Status: 01/24/2017 - DISCHARGE COMMITTEE APPROVED)
SB 0031 - USE TAX, Collections, Provide for allocation of certain revenues collected into the health services fund. (MacGregor, Peter (R), 01/18/17) (Status: 01/24/2017 - DISCHARGE COMMITTEE APPROVED)
SB 0043 - PUBLIC EMPLOYEES AND OFFICERS, Compensation and Benefits, Allow alternative cash reserves option for pooled plans. (Hansen, Goeff (R), 01/18/17) (Status: 03/21/2017 - REPORTED FAVORABLY WITHOUT AMENDMENT)
SB 0096 - INSURANCE, Health Insurers, Exempt Michigan's federally recognized Indian tribes from health insurance claims assessment act. (Schmidt, Wayne A. (R), 02/02/17) (Status: 02/02/2017 - INTRODUCED BY SENATOR WAYNE SCHMIDT)
SB 0213 - HEALTH, Other, Provide prescribing drugs including controlled substances via tele-health under certain circumstances. (MacGregor, Peter (R), 03/02/17) (Status: 03/15/2017 - referred to second reading)
Part one of the 2017-2018 legislative cycle wrapped up in Lansing with considerably less fireworks than previous years. The big issue on the table, retirement benefit reform for municipal employees went away quietly with the legislature passing recommendations from a bi-partisan workgroup after Republican leadership pushed hard for tougher reforms but failed. Other legislative accomplishments include final passage of the package bills aimed at curbing the opioid epidemic (see full story below), overhauling the state’s unemployment insurance system, and supplemental funding for Medicaid rates and aid to help communities dealing with PFAS soil and groundwater contaminations. Bills that have not yet been passed by both chambers have until next December to do so, with “lame duck” session starting after the conclusion of the November elections.
As mentioned in previous reports, 2018 is a landmark year for elections in Michigan with term limits forcing openings in the gubernatorial, Secretary of State, and Attorney General elections along with at least 28 open State Senate seats and upwards of 40 or more State House seats. Adding to the musical chairs are open Congressional seats in the 11th as Congressman Trott has indicated he will not seek re-election and the resignation of Congressman John Conyers in the 13th amid sexual harassment accusations. Throw in the Senate election with Debbie Stabenow that national Republicans think they can swing after the Trump victory in 2016 and you have the makings for a chaotic political season. KRKM will keep you up to date through the party conventions this summer, leading up to the August primary and through the November election.
Federal Tax Reform Passes with Individual Mandate Repeal
After failing to repeal and replace the Affordable Care Act, Congress took on tax reform and managed to get the bill across the finish line and onto the President’s desk. Included in the final bill was a repeal of the individual mandate, or at least eliminating the financial penalty of failing to purchase health insurance for qualified adults. The individual market is already unstable after CSR payments were stopped by the administration, this could potentially be a deathblow to the ACA insurance exchanges. Likewise, at the state level, with only one year before there is a new Governor, the Department of Insurance and Financial Services is unwilling to take action to try and stabilize the individual market through a 1332 waiver. The new pick for DHHS Secretary after the resignation of Tom Price, Alex Azar, is controversial due to his ties to PhRMA and has yet to be confirmed. Democrats are continuing to use health care costs as one of their key campaign issues. All of this seems to be coming to a head leading into the 2018 election cycle.
Opioid Package Aimed at Curbing Abuse Signed into Law
After a few months sitting idle, the state legislature finally passed new restrictions on opioid prescriptions along with more education and prevention opportunities. Most notably, starting next June, physicians will be required to check the states automated prescription monitoring system (MAPS) when issuing a prescription for a controlled substance. The system was overhauled last year after only a small fraction of physicians were utilizing it due to the outdated system. There will also be a 7 day limit for opioids prescribed for acute pain and parental consent is required before an opioid can be prescribed to a minor. Blue Cross Blue Shield has also announced they are limiting approved supplies of opioids beginning Feb. 1 for 30 days for chronic conditions and as little as 5 days for acute conditions. This continues an industry wide trend of reducing opioid supplies and requiring stricter prior authorization for prescriptions.
MAHU Legislative Report
Heading into the holiday season, the Michigan Legislature has 3 schedule weeks of session left before the Christmas break. Although not a ‘lame duck’ December, its typical for each chamber to try and move some major pieces of legislation using the time constraints of the holidays to increase the pressure. After the failure of the Auto No-Fault reform legislation earlier this month on the House floor, it appears the new issue is municipal pension and other post-employment benefit (OPEB) reform. This issue has been on Governor Snyder’s radar for a while and earlier this year he convened a work group made up of local government, civil service unions, police and fire, as well as academics and actuaries. They issued a series of recommendations that focused on better reporting and more accountability for local governments to get their pension and OPEB funds in shape. As far as the policy goes, a majority of municipal pension funds are prefunded and most are at 80% of future obligations. OPEB funds have traditionally been pay-as-you-go and coupled with the rising cost of health care and longer life expectancy, are drastically underfunded across the state. The municipalities hit hardest by pension obligations are those that have traditional manufacturing bases and have had significant population reductions. While some local governments have moved toward defined contribution plans for retirement and also for health care stipends, there are also legacy costs from employees that retired before changes were made. In all, local governments are on the hook for billions of dollars of retirement costs and the state is looking reign in some of that debt. A proposal is likely to be introduced in the House early in December that goes beyond the Governor’s work group recommendations and requires significant changes to systems that are grossly underfunded. This is likely to draw the ire of employee unions, particularly police and fire, who have significant more sway with Republican legislators. It’s an issue that the House, Senate, and the Governor want to tackle, what remains to be seen is how far reforms go to reeling in benefits. There is already a precedent set with the Detroit bankruptcy which saw large retractions for post-employment health care issued to retirees.
Air Ambulance Balance Billing Legislation Heard in Committee
HBs 5217-5219 that require disclosure on the possible costs of air ambulance transport to patients were heard in the House Insurance Committee this past month. The legislation would require health care providers to inform patients on the potential financial impact of utilizing an air ambulance if the ambulance provider is out of network in non-emergency situations. The bills only pertain to air ambulance transports and testimony in the committee from self-insured employers stated that balance billing could result in tens of thousands of dollars in out of pocket costs to patients whose air ambulance provider was out of network. The legislation is being supported by Blue Cross Blue Shield, the Economic Alliance of Michigan, the greater business community including the Michigan Chamber of Commerce. Physician groups, in particular the Emergency Physicians, are asking for technical changes that better spell out their requirements. The Michigan Health and Hospital Association and several air ambulance providers are opposing the legislation as being overly burdensome. The bills are likely to have amendments and being voted out of committee in December.
Auto No-Fault Reform Legislative Voted Down on House Floor
After a tense month of moving the bills through the House Insurance Committee, a 45-63 vote effectively killed HB 5013 earlier this month. Only 4 Detroit area Democrats ended up voting for the bill which was strongly supported by Mayor Mike Duggan and Speaker Tom Leonard. The rest of the Democratic Caucus along with a handful of Republicans, mostly from Oakland, Macomb, and Wayne counties, put up enough votes to stop the measure. This marks the second major policy defeat for Speaker Leonard, who failed to pass an income tax repeal bill earlier this session. The issue still remains a priority for the administration as well as members of the Senate, who in previous sessions have passed a version of no-fault reform. With next year being a critical election year, the issue may pop up again come lame duck but it looks to be put on the back burner for the coming months.
MAHU Legislative Report
The trending topic for October has been the Auto No-Fault reform debate. Michigan offers unlimited lifetime medical benefits and assistance for those seriously injured in an auto accident since the inception of the state’s no-fault auto insurance statute from 40 years ago. Michigan is an outlier where no other state has such a robust benefit, however, we also boast some of the highest insurance rates in the country. There have been Republican lead efforts to reform the system every legislative cycle for the past few decades. Typically, the insurance groups square off against health care providers, attorneys, patient advocates, and hospitals. The session is perhaps the closest the legislature has come to passing a reform bill. The Michigan Senate passed a reform bill by a single vote margin last cycle but the bill died on the House floor. Speaker Tom Leonard is a former chair of the House Insurance Committee and has made No-Fault reform one of his personal issues. Additionally, there has been a significant amount of activity trying to court House Democratic votes to get the number needed for passage. Detroit Mayor Mike Duggan and businessman Dan Gilbert have been working behind the scenes to woo Detroit area Democrats to supporting the measure citing the need for revitalizing Detroit. The Michigan Association of Health Plans has also become involved actively in the debate as the House Fiscal Agency estimated a cost shift of approximately $150mil over 10 years to Medicaid by eliminating unlimited medical benefits. There is also assumed to be an unknown amount of costs transferred to private health insurance lines if the bills were to pass. There is a possibility for a vote as early as November 1 but even if HB 5013 makes it through the House, it faces an uncertainty in the Senate. Any reforms or amendments added to placate concerns and round up a few more votes may end up being stripped in the Senate. The issue is large enough to change the dynamic of the legislative session, much like the failed income tax repeal bill that galvanized a dozen House Republican members against their speaker earlier this year.
Oral Chemotherapy Parity bill passes Senate
SB 492 introduced by Senator Geoff Hansen passed the Senate with little opposition, 36-1. The bill would require health insurance companies to cover oral chemotherapy drugs the same as their interveinious counterparts and cap the maximum co-pay that could be charged. Spearheaded by the Cancer Societies, this bill has been around in one form or another for several sessions. Senator Hansen has a personal interest as well, having lost an adult son to cancer who had tried many different chemotherapy treatments, including oral options, that were not covered by his insurance. The business community and health plans have united opposed to this insurance mandate, as they have in the past. Just like the past, the bills have flown through the Senate with little opposition from members. Traditionally, the House Insurance chairperson has been more sympathetic to the cost implications and the philosophical opposition to the mandate and the bill has died in committee. Even with a hearing, the business groups have prepped potential amendments requiring pharmacy transparency as part of the bill which often brings about opposition from PhRMA and could potentially kill the bill as well. At this point in time, I’ll be watching the issue closely and if there is a chance of a House hearing will look to the Board for a course of action.
DIFS Confirms Average Insurance Rate Up 27%
Leading up to open enrollment, DIFS put out a statement confirming that the rates in the individual market will increase on average 27% throughout the state. The size of the increase is due to the Trump administration not continuing to fund the cost sharing reductions (CSRs) moving forward. Small group rates are set to increase about 4% on average. The individual market increases have been a great conversation starter on a potential 1332 waiver as legislators are now hearing from their constituents on the rate increases. With continued inaction in Congress, it appears any attempts to stabilize Michigan’s individual market will likely come from an initiative from the state.
MAHU Legislative Report
The election dominos continue to fall. First, Congressman David Trott, a Republican from the 11th Congressional district in Wayne and Oakland counites, announced he was not going to seek re-election in 2018. This seat has an interesting history. Once held by Thaddeous McCotter, he lost the seat in 2012 after getting kicked off the ballot for a scandal involving falsified information on nominating petitions. The Republican leaning seat led to little known tea party activist, actor, teacher, and reindeer farmer Kerry Bentivolio winning the election, leading to the moniker, “the accidental Congressman”. Bentivolio had has own set of issues involving personal bankruptcy, campaign finance violations, and having been reprimanded for threatening students. For the 2014 election cycle, prominent Republican political donor and foreclosure attorney, David Trott, dipped into his personal fortune to win the Republican primary and ultimately the seat. His announced of retirement has set off a whirlwind of activity on the Republican side due to the concentration of current and former lawmakers and even the 11th being the home seat of National Party Chair Ronna Romney-McDaniel. As of right now, Republican declared candidates include State Rep. Klint Kesto, Lana Epstein (she changed her campaign for the GOP Senate nomination to the 11th Congressional nomination), Kerry Bentivolio, and perennial candidate Rocky Raczkowski. Other notable Republicans who may join include State Senator Mike Kowall, State Senator Marty Knollenberg (his father, Joe Knollenberg previously held the seat), State Rep. Laura Cox, former State Rep. Kurt Heise, and even the former Congressman, Thaddeous McCotter. Democrats also see this as an open seat and putting money behind Haley Stevens, a former Obama Administration official who has at least one primary opponent in Fayrouz Saad.
Its also highly speculated that Congressman Fred Upton in the 6th Congressional district will be running for the GOP nomination for US Senate. While not as nearly a crowded field, the heavily Republican seat will likely be filled by the winner of the primary between State Senator John Proos and the current Lottery Commissioner, Aric Nesbitt. This has several implications at the state level as current State Reps evaluate options for running for State Senate.
The 2017 Primary is still 10 months away so there is sure to be more surprises as more individuals make official announcements of their candidacy.
Michigan 1332 Waiver Application Process
MAHU is part of a coalition that includes the Michigan Association of Health Plans, business groups and advocates to push for waiver under Section 1332 of the Affordable Care Act. The waiver itself is a multistep process requiring enabling legislation, agreement on the terms of a waiver, and final submission and approval from CMS. Currently, the bill is being drafted and will likely be sponsored by Sen. Mike Shirkey. Sen. Shirkey has been one of the leading voices on healthcare in the legislature and currently chairs the Senate Health Policy Committee. Additionally, he’s likely to be the next Senate Majority Leader and having his political weight behind the bill will be helpful as Michigan Republicans have soured any legislation that even mentions the ACA. Ideally, the bill will be introduced in October and hopefully passed by both chambers by the end of the year. The legislation will call for the formation of a stakeholder group, that MAHU will be a prominent part of, to draft the final recommendations for what should be in the waiver. If all parties can be held to the strict timeline, the Director of the Department of Insurance and Financial Services will be able to submit a waiver application early next year to affect the 2019 Plan Year. There is still many moving parts and this issue will remain MAHU’s top legislative priority.
Opioid Package Nears Passage
A package of bills to address the opioid epidemic in Michigan is getting hearings from the House Health Policy Committee. The legislation includes requiring physicians to check the Michigan Automated Prescription System (MAPS) when prescribing a schedule 2 through 5 drug, strict limits on prescribing opioids for acute pain, referrals for substance abuse treatment for those who overdose, and requiring a “bona fide patient relationship”. There are other bills for more stiff regulation of pain clinics, educational requirements for opioid addiction in schools, and additional information given to patients who are prescribed opioids. There is a significant amount of political momentum for the legislature to address the issue and I anticipate these bills being on the Governor’s desk by Thanksgiving.
MAHU Legislative Report
The summer before an election year marks the time when political candidates start coming out of the woodwork. The 2018 election will be quite transformative for Michigan. Our current Governor, Attorney General, and Secretary of State are term limited from office as well as 26 of 38 state senators and 25 state representatives. Due to Michigan’s strict term limits, statewide offices are limited to 2 4-year terms, Senators to 2 4-year terms, and Representatives to 3 2-year terms, many current office holders will run for another elected office. Additionally, Democratic Senator Debbie Stabenow is up for re-election after Michigan voted for President Donald Trump in 2016 and there is always rumors of Congressman John Conyers or Fred Upton retiring.
To add another layer of complexity, current Michigan State Senators and Representatives jockey for leaderships positions for the 2018-2019 legislative cycle. Its most prominent in the Senate where Republicans hold a supermajority of 27-11 and barring a political hurricane, will likely maintain control of the Chamber. A group of 8 current Republican Senators who have one term remaining have apparently come to an agreement that Mike Shirkey will be the next Majority Leader with Jim Stamas serving as Appropriations Chair. On the House side, Republicans are lining up behind Lee Chatfield as possibly the next leader with no clear heir apparent on the Democratic side although Christine Greig, who is the current minority floor leader is likely candidate. Granted, this is all speculation at this point in time being over a year out from elections and the pieces on the board change every time a new candidate announces their campaign.
Historically, the party that holds the White House has a poor showing in the midterm elections. It remains to be seen whether the 2016 election cycle was an anomaly or a harbinger of change.
House Democrats Hold Press Conference on Pharmaceutical Price Transparency
House Democratic leadership held a press conference on August 21st to highlight soon to be introduced legislation that would create a Prescription Drug Consumer Protection Board to oversee pharmaceutical price increases and allow the Attorney General to investigate price gouging. The bills have not yet been finalized but there has been a slew of activity across the country from state legislators as pharmaceutical pricing continues to be one of the fastest rising costs of health insurance. Notably, this was a Democratic initiative and while affordable drugs have long been a goal by both parties, the most recent push seems to be intertwined with campaign rhetoric from Democrats after Congressional Republicans failed to get the votes to repeal the Affordable Care Act. Michigan Republicans and the Michigan Association of Health Plans are rumored to be working on their own solutions to pharmaceutical costs, particularly in the light of the state budget. Medicaid pharmacy trends are greatly outpacing annual increases and new drugs for Hepatitis C, cystic fibrosis, HIV, and cancer treatments may create a future budget crisis. We will be watching this type of legislation closely to see if meaningful reform may soon take shape.
MAHU Legislative Report
The biggest impact to Michigan, and frankly the country, happened in July as the U.S. Senate failed to get the votes necessary to repeal the Affordable Care Act. A full repeal and replace measure was soundly defeated after more conservative members of the caucus, Ted Cruz and Rand Paul voted against the measure. Next on the docket was the “skinny repeal” which repealed bits of the ACA but was seen as a way to get the bill to a conference committee with the House of Representatives. After a contentious procedural vote to advance the bill to debate, Senator John McCain, recently diagnosed with brain cancer, went back to Washington D.C. to vote against the Republican “skinny repeal” bill. He joined fellow Republicans Susan Collins and Lisa Murkowski in voting no, effectively killing any chance at health care reform this summer. Senators Collins and Murkowski were on record as being “no votes”, as they had voted against the earlier procedural vote. With only one more “no” vote needed, there is much speculation as to whether Sen. McCain was voting to protect more moderate and politically vulnerable senators, such as Rob Portman (OH) and Dean Heller (NV). Health reform is now dead, at least for a bit. There are more pressing issues in Washington, such as the debt ceiling and reauthorization of military spending, that need to be addressed by the end of the fiscal year (Sept. 30) and other issues, like tax reform, that Congress wants to tackle. Give it some time and expect for a new repeal and replace bill to take shape this fall or winter, just in time to get some attention prior to the February midterm primary elections.
Health Plans Exploring Sec 1332 Waiver
There is work beginning on putting together a proposal for a 1332 waiver for the ACA aimed at stabilizing the individual market. I’ve been working with the Michigan Association of Health Plans (MAHP) after Tom Price became director of CMS to gauge their interest. Up until now, the sentiment was to wait until Congress repealed the ACA or portions of it before pursuing a waiver. In the wake of the failed U.S. Senate vote, a 1332 waiver is again a possibility. There will likely be a work group formed to include carriers, underwriters/agents, payors, and consumers that will draft proposed legislation. Legislative authorization is required under the ACA. After the Governor signs the bill into law, the Insurance Commissioner can request one or more waivers from the ACA rules to be approved by CMS. Recent waiver approvals by Alaska and Hawaii are a good sign the new administration is willing to work with states. Also of note, Iowa submitted a waiver that would significantly change many of the ACA requirements. Approval of this wavier would bode well for anything for which Michigan may want to apply. More updates to follow as this topic evolves.
MAHU Legislative Report
It took some time but the Governor, the Senate, and the House agreed on moving a version of teacher retirement reform in early June to coincide with passing the budget. The bills would close the existing hybrid retirement system, part defined-contribution and part defined-benefit, in favor of an enhanced match rate for a defined-contribution only system for new hires going forward. The benefit would be very similar in structure, vestment, and matching amounts to what is currently available to all state employees. The FY18 budget was also passed by the legislature, making it 7 “early” budgets in a row for the Governor who likes to have the process wrapped up in June. The only hang up is the “Good Jobs” bill package, a pet project of Governor Snyder’s, that would allow large corporations that create a significant amount of new, good paying jobs in the state, to keep the income tax generated by their workforce as an economic incentive. Most notably, its an attempt for Michigan to land Foxconn, the manufacturer of iPhones, as the company is looking to make a multibillion dollar manufacturing investment in the United States. The bills passed the Senate easily but stalled in the House in the 11th hour. There are not enough votes in the GOP caucus to pass the legislation as more conservative members view it as “corporate welfare”. Passing this legislation was part of the agreement over teacher retirement reform and the budget, however, Speaker Tom Leonard disagreed with how the Governor and his staff were dealing with Democrats to wrangle up the necessary votes. The Speaker publicly denounced the Governor for undermining his caucus’s priorities and the outcome of the legislation awaits a July 11th meeting between the Speaker, the Governor and Senate Majority Leader. Until then, the budget is being held by the legislature and awaiting a July 12th session of the House.
CE Bill Presented to the Governor
HB 4325 passed the Senate unanimously and made it back to the House for concurrence before they adjourned. There was one new development. Apparently, an error in a worker’s compensation bill at the end of last session caused one actuarial annuity table to be missing. As the only “second chamber” Insurance Code bill available, HB 4325 was used as a vehicle to add an amendment to reinsert the missing table into law. It was important to Rep. Tom Barrett, the sponsor, and since there was no opposition to the amendment and still time to pass the bill, it was added into the final legislation. This amendment will save worker’s compensation underwriting companies approximately $75-100 million annually due to the updated annuity table. It also has the added bonus of propelling the bill to the Governor’s desk in a much more expedient manner. The bill was presented on the morning of June 26th and its anticipated to be signed by the end of the month.
US Senate Receives CBO Score on BCRA, Still No Word on if It Moves
The Congressional Budget Office scored the US Senate’s version of the Health Care reform bill to repeal and replace Obamacare. It made significantly deeper cuts to Medicaid and health insurance subsidies and removed other requirements such as essential benefit structures, saving approximately $321 billion over 10 years. This gives the Senate plenty of leeway to build back in dollar incentives to bring some of the vulnerable GOP Senators from swing states on board. What remains to be seen is if the conservative wing of the party, ala Rand and Cruz, will come around to voting for what many right wingers consider “Obamacare-lite”. Until then, most state level innovations are at a stand still. However, there is going to be a group, lead by the Health Plans, to prepare the required legislative and administrative processes to accomplish a 1332 waiver if necessary. I’ll continue to be part of that coalition to ensure that MAHU’s concerns are part of those discussions.
New Rules for Advanced Marketing and Rate Materials Release
DIFS has released new rules for advanced marketing materials but they only apply to the small group market. The new rules allow for advanced marketing as long as there is a disclaimer added to the literature that states “These rates are subject to final approval and may change at a later date”. Rate approval is still being targeted for late summer but whether the state and the new CMS administration can keep on track remains to be seen. The change is a much needed improvement over the October 1 date that was implemented last year.
For the individual market, advanced marketing before final approval of rates will still be prohibited. However, once rates are finalized all materials are allowed to be used before open enrollment begins.
MAHU Legislative Report
This year’s budget process is a bit different than the last six under Governor Snyder. In order to account for an income tax reform that failed earlier this year, the House of Representatives built their budget with a significant amount of General Fund savings. Likewise, the Senate composed their budget with approximately $250 million worth of General Fund savings. Since income tax reductions were off the table, the legislature turned its attention to Public School Retirement reform. State employees moved to a 401k style defined contribution program in 1997. In 2012, a hybrid defined contribution and defined benefit system was put in place for teachers and public school retirees. Combined with lower than expected returns and a shrinking work force, Michigan is about $29.1 million in debt for future retiree pension obligations for school employees. Governor Snyder originally resisted moving from the hybrid system to a 401k defined contribution system for new hires and it was at this time that the House and Senate decided to continue the budget process without the input of the Governor. Currently, the House and Senate are negotiating a budget between themselves while leadership negotiates with Governor Snyder to reach some meaningful reform to Michigan’s outstanding pension liability. This may possibly delay the budget process and is eating up significant amounts of time and political capital for all parties.
CE Bill Moves to Senate
HB 4325 is now officially in the Senate Insurance Committee. Earlier this year at the MAHU Legislative Day, Senator Joe Hune, the Chair of the Senate Insurance Committee, committed to taking up the bill. However, he is notorious for holding very few committee meetings. As of this report, the Senate Insurance Committee has met just once this year. I’ve been lobbying Senator Hune to hold a hearing and report the bill before the Legislature breaks for recess. We have a hard date of July 2018 in the bill that allows DIFS the one year they requested to change their systems to comply with CE rollover. Any delay at this point may mean kicking the can down the road for a Fall 2018 date. I have the assurance that the bill will be on the agenda, its just the question of getting the hearing. I’ve had preliminary meetings with the committee members to ensure a smooth passage.
Still Waiting for the US Senate to Take Up the AHCA to See What it Means for Michigan Markets
The US Senate is taking their time evaluating the AHCA and it appears they may be writing their bill for consideration. The constant guess work of what’s coming out of Washington makes it difficult to implement any state based reforms. Concepts such as expanded rates bands, modifying the essential health benefits and other possibilities under 1332 waivers remain a secondary priority to seeing if Congress can actually pass some sort of reform bill. Until there is a clear direction of a bill, or a clear failure of reform to take place, little of the state side reform appears to be on the table.
Advanced Marketing and Rate Materials Release
After having preliminary talks with DIFS this year on fixing the advanced marketing materials and rate release dates, things seem to have come to a head. MAHP and BCBS were lobbying hard to go back to a late summer/early fall timeframe for releasing materials to clients, specifically in the small group market.
My conversations with DIFS have been good, however, I’ve been trying to confirm that the Department is moving past a stringent enforcement of a specific date for materials release to little avail. Staff change over and pre-occupation with the Auto No Fault debate has sucked away much of their time and this issue, while very important to MAHU, is considered small potatoes to them. I’m hearing from third parties, including the carriers, that it seems to have been resolved but I will continue to pursue talks with DIFS until I can confirm it directly form them.
April marks the start of the real work on the State budget for Fiscal Year 2018 that begins October 1st. Much of the policy work slows down for a few weeks while appropriations subcommittee chairs hold hearings and eventually pass budgets related to individual state departments. Those individual budget bills are then combined into two large omnibus bills, one pertaining to K-12 school funding (School Bus) and the other for all other state spending (General Omnibus). Procedurally, those individual budget bills will be voted down by each respective chamber, requiring a conference committee where subcommittee chairs from each chamber will negotiate a final number for their budget. However, that final number for the state budget will not be agreed upon until after the May meeting of the Consensus Revenue Estimating Conference (CREC). The CREC will determine projected state tax revenues and liabilities, along with such estimates as Medicaid caseload, on which to base the final FY2018 budget bill.
CE Bill Passes House
On Wednesday, April 26th the Michigan House of Representatives passed HB 4325 106-2-1. Reps. John Bizon (R-Battle Creek) and Rose Mary Robinson (D-Detroit) voted “no” with Rep. Robert Wittenberg (D-Oak Park) abstaining, excusing himself from the vote on the premise that he is a licensed insurance agent and it may be conceived as a conflict of interest. The bill now advances to the Senate, where it was referred to the Committee on Insurance. The Chairman, Senator Joe Hune, has been vocally supportive and stated he will take the bill up for a hearing when appropriate. I will continue to work to ensure that the Senate passes HB 4325 by the time the legislature breaks for summer recess.
MAHU Takes Lead on State Prohibition on Advanced Marketing and Rate Release
Last month, Blue Cross Blue Shield and the Michigan Association of Health Plans penned a joint letter to the Department of Insurance and Financial Services opposing the Oct. 1 date for releasing marketing materials and rates for the individual and small group markets. The issue remains rather low on DIFS’ agenda and speaking with the Health Plans, I agreed that MAHU should have a larger voice in the issue. I am drafting a letter that will be shared with the other agent groups in Michigan to cosign, (MAIA and MI NAIFA) and if approved will also be co-signed by BCBS and MAHP. Additionally, it will likely be shopped around to the business groups for inclusion as well, MI Chamber, Small Business Association of Michigan, National Federation of Independent Businesses, who represent some of the largest purchasers in the small group market. The idea being if carriers, underwriters/agents, and purchasers can agree on an earlier date it provides a more convincing argument to the Department to modify their rule. Stay tuned on this issue as it moves forward.
MAHU Legislative Report
The million dollar question this month is what Congress will do with the federal health care reform. Many state initiatives such as Sec 1332 waivers and Medicaid policy are hinged on whether Congress acts on the Trump administrations outline for how to repeal and replace the ACA. This waiting game has shelved many issues here at the state level until there is some guidance moving forward.
MAHU CE Bill Receives House Insurance Committee Hearing
Cathy Cooper, as MAHU’s legislative chair, testified in the House Insurance Committee in support of HB 4325 on March 16th. This bill would allow for insurance agents to rollover up to up to 12 credit hours of Continuing Education during their two-year license cycle. MAHU has worked with the sponsor, Rep. Tom Barrett, and the Department of Insurance and Financial Services who both supported the bill in committee. A substitute (H-1) was adopted that addressed an implementation date to be within one year after the bill becomes law. This was negotiated with DIFS as they acknowledged time needed to update their computer systems.
The committee was generally supportive of the bill although no vote for passage was taken. The other agent groups, Michigan Association of Insurance Agents and the Michigan Chapter of the National Association of Insurance and Financial Advisors also put in cards of support for the bill. It’s likely that the bill will be voted out the next time the House Insurance Committee reconvenes. Last legislative session, a similar bill passed unanimously with the three licensed insurance agents on the committee abstaining due to a possible conflict of interest.
MAHU holds Day at the Capitol
The 2017 MAHU Legislative Day was a great success. Rep. Lana Theis, the chair of the House Insurance Committee, and Rep. Tom Barrett, the sponsor of the CE legislation were invited to speak as special guests. Unfortunately, due to a medical emergency, Rep. Barrett could not make it but had sent his legislative director in his place. There was 100% saturation of legislative offices and I received numerous emails from MAHU members providing positive feedback on their interaction with legislators and legislative staff. These experiences help legislators put a human face on MAHU and makes lobbying easier on my end. The focus this year was on educating legislators on HB 4325 and also giving them a brief introduction to the proposed federal health care reforms and how that may impact Michigan’s insurance marketplace.
DIFS Special Assistant to the Director moves to Senate position
Chad Arnold, who was serving as the special assistant to the Director at the Department of Insurance and Financial Services has changed positions to become the liaison for the Governor to the Michigan Senate. Chad was supportive of the agent community and easy to work with, its not clear if DIFS has anyone slated to take his position. MAHU will continue to work with Chad in his new position in the Senate.
MAHU Legislative Report
The biggest thing to happen in February was the Michigan House of Representatives failing to pass HB 4001, to repeal a portion of the state income tax, after a marathon session that started on Wednesday the 23rd and lasted until the early hours of Thursday morning. Even more surprising is that the bill went to a final vote of 52-55 with 12 Republican members voting ‘no’ and one Democratic voting ‘yes’. Typically, when a bill in the House does not have the votes to pass a bill, the Speaker will have the board “cleared” which essentially means the vote never happened and is not recorded. This allows for the vote to be reconsidered later, giving time for the majority party to find the votes they need to pass the legislation. By finalizing the vote, it makes the income tax repeal essentially dead, it puts 12 Republicans and all but one Democrat on record as voting against decreasing taxes, and it may have broader consequences on Speaker Tom Leonard’s leadership team and relationships within the GOP caucus. The political take away is the Democratic House Caucus is unified, the Republican House Caucus appears fractured, and there are serious questions moving forward if the House will be able to agree with the Senate and Governor on other issues.
Business Groups Testify before House Health Policy Committee
On Wednesday, February 22nd the Michigan Manufacturer’s Association, Michigan Chamber of Commerce, and the Small Business Association of Michigan testified together at the House Health Policy committee to discuss the issue they face as the major purchasers of health insurance. Much of what was discussed echoes MAHU’s and NAHU’s efforts to reform the health care industry. The most prudent point was having Congress move regulatory authority away from the federal government and back to the states. The business community was united in saying that state control over rate banding, benefit design, use of HSAs, and definitions of small group and full-time employee would significantly improve the cost and quality of health insurance for purchase. These types of committee hearings are fairly common in the early part of legislative sessions to inform new members and those new to the committee about the stakeholders they will be working with. The next Health Policy Committee hearing will feature Blue Cross Blue Shield and the Michigan Association of Health Plans discussing topics of interest for them.
DIFS Likely to Allow Extension of Transitional Plans Through 2018
With CMS allowing grandfathered Transitional Plans to be extended through the 2018 calendar year, its expected that DIFS will be releasing a Director’s Order in the near future stipulating that those plans will continue to be permissible in Michigan.
CE Rollover Bill to be Introduced by Rep. Tom Barrett in the First Week of March
Representative Tom Barrett is set to introduce legislation to allow up to 12 hours of Continuing Education to be rolled over for a 2 year license cycle. I am currently working with the Chair of the House Insurance Committee, Rep. Lana Theis, who expressed her conceptual support for the bill but wanted additional time to review the specific language. The goal is to have a hearing in the early March.
MAHU Legislative Report
The 99th Michigan Legislature has convened and the month of January has been fairly inactive. Much of the in the House of Representatives has been spent on training 42 new members on the daily activities of holding office. Governor Snyder’s State of the State Speech was widely panned as lacking any significant direction or detail. At the end of the month, House committee assignments were released, about a week later than in previous years, which only fueled speculation. The House Insurance committee received a significant make over with 6 new Republican members and 4 new Democratic members. Rep. Lana Theis (R- Brighton) is the new chair after serving as the Vice-Chair last session. Rep. Brian Banks (D- Harper Woods) steps in as the new Minority Vice Chair. Freshman Curt Vanderwall (R-Ludington) is the new Vice Chair serving with fellow freshmen Republicans Joe Bellino, Michele Hoitenga, Beau LaFave, and Jason Wentworth and freshmen Democrat Donna Lisinski. Returning members to the committee are Republicans Tom Barrett, Jim Runestad, Hank Vaupel and Mike Webber and Democrat Robert Wittenberg. New to the committee is Gary Glenn, who was part of Speaker Leonard’s leadership team, former Minority Leader Tim Greimel and fellow Democrats Sherry Gay-Dagnogo and Phil Phelps.
There has been little in the way of meaningful legislative introduced. Senator Ken Horn is again leading the charge on a package to remove the Health Insurance Claim Assessment. The fate of these bills is inherently tied to what the federal government decides to do with Medicaid. A handful of insurance mandate bills have been introduced as well including one requiring a carrier to cover a year supply of contraception HB 4019 (D- Faris) and another for requiring carriers to cover abuse deterrent opioids in certain circumstances HB 4074 (R Kesto). I will be closely monitoring these bills in case they do receive a committee hearing.
Most of the speculation remains on what a Trump administration will do with the Affordable Care Act. ACA Section 1332 waivers which were a potential legislative objective have been put on hold. The Senate committee confirmation hearing of Tom Price, Trump’s pick to head up the Department of Health and Human Services, was boycotted by Democrats and had to be delayed. It may be sometime until Price is confirmed due to allegations of insider trading related to his previous committee post as a Congressmen. Until there is further clarification from the federal government much of the state based initiatives are stuck in a holding pattern.
Kandler, Reed, Khoury, and Muchmore
Tonight Governor Snyder gave his State of the State speech for his outlook on Michigan for 2017. Compared to previous speeches, it was very retrospective in nature. Governor Snyder spent a majority of the time focused on the positive changes in Michigan and the accomplishments of the state legislature. He covered a wide breadth of topics but continually brought the conversation back to how Michigan was improving. The overall sentiment was to make Michigan a destination for both business and people by “place making”.
Economically, Gov. Snyder praised Michigan’s agriculture and tourism industries. He also celebrated the reinvestment in Michigan from companies that lead to some of the strongest job growth numbers in the country. Later in the speech he brought back the economic investment back to the renewed vigor of the auto industry and the recently passed autonomous vehicle legislation.
In healthcare, Governor Snyder praised the Healthy Michigan program as a potential model for the nation going forward. He acknowledge the success of Healthy Kids Dental being expanded state wide and the scourge of the opioid epidemic. Flint water was mentioned along with other environmental determinants of health. Most notably, Governor Snyder said that retiree health care obligations need to be addressed reflecting on the bills that were introduced and died in lame duck.
Governor Snyder counted the Detroit School legislation as a big win for state. He continued to lobby for a larger investment in education both in the trades and technical skills across the curriculum. He also made a strong pitch for early education and reading comprehension.
Lastly, Gov. Snyder spent some time complimenting the recent reforms to Veterans benefits, sexual assault and human trafficking, and school discipline. These were all in tune with legislation that recently passed in lame duck.
In conclusion, the speech itself was positive with a focus on the recent work of the legislature and the improving economic climate. The Governor praised his partnerships with leaders across the state and hoped to build on the progress he created.
Please contact KRKM if you have any additonal questions,
Kandler Reed Khoury & Muchmore
124 W. Allegan Street, Suite 1700
Lansing, MI 48933
MAHU Legislative Report
The 2015-2016 Michigan legislative cycle came to end this December with a less than tumultuous lame duck session. Many major reform initiatives including addressing local municipal retiree pension and health care obligations fell by the way side and will likely be brought back up next session. There are over 40 new State Representatives taking office in January along with new leadership in the House that was detailed in post-election memorandums. New committee chairmanships have yet to be named but I will let MAHU’s membership know as soon as the information is released. There was little left on MAHU’s legislative watch list that had a chance of moving lame duck but I’ve pulled several issues that have bills that waiting to be signed by the Governor or will likely be hot topics going into next year.
I hope everyone has had a safe and enjoyable holiday season.
Kandler, Reed, Khoury and Muchmore
HICA Reform Part 2
After Governor Snyder had vetoed a package of bills (SB 987-990) the legislature still needed to repeal the current Use Tax mechanism otherwise Medicaid health plans would have been assessed a tax that they were previously being reimbursed for. In light of the November election that ushered in President-elect Donald Trump, SB 1172 aims to try and skirt the issue. The Medicaid HMO Use Tax will be repealed as of December 31st, 2106 however if the Federal government allows for that mechanism to be used for Medicaid matching funds then the tax would be reinstated and HICA would be repealed. The bill has yet to be signed by the Governor and potentially may be vetoed.
Scope of Practice and Licensure
There was a compromise reached between the physician and advanced practice nurse groups over APRN scope of practice. HB 5400 officially gives state licensure and limited prescribing rights to APRNs under the supervision and delegation of a physician. HB 5533 modifies how Physician Assistants operate under supervision of a physician and limits the number of PA’s that can be supervised. SB 1015/1016 license Applied Behavior Analysts in Michigan, practitioners that focus mainly on treating autism. HB 4598 gives licensure to certified midwives and gives them a limited scope of practice. All these bills have either been signed or are believed to be signed into law.
Everything Else That Didn’t Make It
Most notable was a push for a compromise on auto no-fault reform. The hospital group tried to negotiate a deal that would have left fee schedules for medical care out of a reform package in exchange for limits in other areas. This fell apart in the wee hours of the morning but has splintered the group defending no-fault as they promptly expelled the hospitals from their organization. Speaker-elect Leonard is a major proponent of no-fault reform and this legislation will be a major issue next year.
HB 4437 and HB 4812 would have allowed for pharmacists to substitute a biosimilar for a biologic medication. There was significant fighting between PHARMA and Health Plans over what would be required for making the substitution. This legislation is likely to move next year as more and more biosimilar products come on the market and the ability to substitute for the cheaper version becomes more important to health insurers.
SB 625 would require oral chemotherapy medications to be covered by insurance companies. This bill passed the Senate with near unanimous consent before dying in the House Insurance committee. This has been a contentious issue for several years between cancer patient advocates saying that oral drugs are better for patients and insurance companies trying to keep costs down. It’s likely to be reintroduced next cycle.
MAHU Legislative Report
Here’s the first installment of a monthly MAHU legislative report. These reports will likely be separated into issue areas, the current status of that issue, actions that have been taken in the previous month, and next steps. I will try to get these reports completed by the 1st of each month but depending on schedule it may be pushed back to the first Friday. Moving forward, please let me know if there are suggestions for modifying this report to better suit the needs of the organization.
Kandler, Reed, Khoury and Muchmore
Continuing Education Carry Over
HB 5831 (Barrett) passed the House Insurance Committee on 12/1/16 on a unanimous vote outside of three Representatives that are also licensed producers abstaining due to conflict of interest. MAHU submitted a one pager info sheet on the bill for testimony. Cathy Cooper was scheduled to testify but unfortunately had to withdraw due to illness. The other insurance agent interest groups supported the bill along the Department of Insurance and Financial Services. Logistically, the bill must pass the House of Representatives by Tuesday, Dec. 6th in order to be transferred to the Senate and taken up in a hearing in the Senate Insurance Committee on Wednesday, Dec. 7th. If passed this year, the bill would take effect on Jan. 1 2018 to give DIFS enough time to change their computer system.
Sec 1332 ACA Waiver
Prior to the November general election, MAHU communicated a list of possible waiver options to the Michigan Association of Health Plans under Sec 1332 of the Affordable Care Act that allow for states to modify provisions of the act that do not interfere with its core tenants. Following the election of Donald Trump and with Republicans maintaining control of the US House and Senate, the future of the ACA is unknown. Given the uncertainty, MAHP is unwilling to aggressively pursue a Sec 1332 waiver at this time. Without carrier support, legislative action is unlikely. MAHU will continue to prepare for a waiver and work towards resolving some of the more minor issues such as materials and rate release dates.
Municipal Retiree Health Care
The House recently introduced legislation, HB 5074-5086, that would drastically effect how municipalities finance retiree healthcare aiming to reduce long term liabilities. Under the proposal, current healthcare retirement funds that were less than 80% funded would be subject to an 80/20 split, where the employer may only pay up to 80% of the benefit cost, with at least 20% falling on the individual. Current municipal employees would no longer be able to use retiree health care as a bargaining chip during negotiations and municipalities would be restricted to contributing a set amount (currently 2%) towards a Health Retirement Account (HRA). The legislation is currently in the House Local Government committee and is being spearheaded by outgoing Speaker Kevin Cotter. MAHU will continue to monitor this legislation.
2017-2018 Legislative Session Caucus Elections
Republicans maintained a 63-47 majority for control of the Michigan House of Representatives. Prior to the November general election, Republican Rep. Rob VerHuelen conceded the leadership race to Rep. Tom Leonard who will lead the Republican caucus as Speaker of the House in 2017. Immediately following the November 8th election, current Democratic minority leader Tim Greimel, announced he would not be seeking the leadership post during his final term. Sam Singh, the current Minority Floor Leader, was elected to replace him.
Speaker Leonard has also named Dan Pero as his Chief of Staff. Pero previously worked in Governor Engler’s administration. Current Leonard aide, Phillip Goodrich, will be retained as the Deputy Chief of Staff.
Below is the list of elected positions within each caucus. Committee chairs and membership will be determined prior to the start of the 2017-2018 legislative session.
Speaker of the House: Tom Leonard (93rd, DeWitt) Speaker Pro Tempore: Lee Chatfield (107th, Levering) Majority Floor Leader: Dan Lauwers (81st, Brockway) Caucus Whip: Rob VerHuelen (74th, Walker) Caucus Chair: Eric Leutheuser (58th, Hillsdale) Associate Speaker Pro Tempore: Gary Glenn (98th, Larkin) and Jim Tedder (43rd, Clarkston) Associate Floor Leaders: Tristan Cole (105th, Mancelona) and Lana Theis (42nd, Brighton) Caucus Vice Chair: Mary Whiteford (80th, South Haven) Deputy Whip: Jim Lower (70th, Cedar Lake)
Democratic Caucus Minority Leader: Sam Singh (69th, East Lansing) Minority Floor Leader: Christine Greig (37th, Farmington Hills)
2017-2018 November General Election Results UPDATE
The votes have been tallied and Donald Trump has unofficially won the state of Michigan by slightly more than 13,000 votes or .27%. He is the first Republican to carry Michigan in a presidential election since George H.W. Bush in 1988.
The Republicans also made significant gains on the State Board of Education and state university governance boards.
Republicans Tom McMillin and Nikki Snyder won the two open State Board of Education seats, ousting current Board President Democrat John Austin. The State Board of Education will now have a 4-4 party split.
On the University of Michigan Board of Regents, Democrat Denise Ilitch held her seat while Republican Ron Weiser will be joining the Board. Republican Dan Kelly lead the vote totals for the Michigan State University Board of Trustees. Democrat Dianne Byrum finished a close second and will maintain her seat. The Wayne State Board of Governors will add Democrat Mark Gaffney and Republican Michael Busuito. Both the University of Michigan and Wayne State Boards will continue to be controlled by Democrats but they are now a 5-3 split. Michigan State University Board of Trustees moves to a 4-4 party split.
Additionally, following the election results this morning, House Minority Leader Rep. Tim Greimel (29th District, Pontiac) announced he will not be seeking the post for his final term. The Republicans will most likely select Rep. Tom Leonard (93rd District, DeWitt) to be Speaker of the House after Rep. Rob VerHuelen (74th District, Walker) had previously conceded the Republican leadership race.
Caucus leadership elections for both parties will occur in the near future. KRKM will send an update once leadership positions are announced.