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)
Michigan Insurance Matrix
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.