Updates on recent legislative activities

• ABx11, a Compromise Health Reform Bill Introduced (California)  — The latest health care proposal by the Democratic leadership bridges much of the gap between Governor Schwarzenegger and the State Legislature, and may lead to an agreement. The vehicle, ABx11, meets the Governor halfway on the contentious issues of payroll taxes and an individual mandate, coupled with “guarantee issue” as a requirement for health plans. Senior advisors to the Governor publicly expressed optimism about the proposal, while top Democrats have surprised many by overcoming the strident opposition of some labor groups to the reform effort. Complicating the outlook for funding the proposal, however, is the state’s growing structural deficit, which could reach $10 billion in the next fiscal year due to slower collection of tax revenues ­– a consequence of the sub-prime mortgage crisis and its crippling effect on the California housing market.

• Timely Access Regulations Expected to be Reissued Soon (California)  — Delta Dental Public Affairs staff attended the annual conference of the California Association of Health Plans (CAHP) in October, at which DMHC Director Cyndi Ehnes indicated that dental plans have made a convincing case regarding the need for a less intrusive approach toward regulation. She thought dental plans will likely to find themselves “amenable” to the changes soon to be released in the 3rd draft of the regulation. That draft, expected to be released any day now, remains on track to be adopted by January 1, 2008.

• SB1324, Prior Authorization, Signed by Governor (California) — As expected, a new law forbidding health plans from rescinding payment for any treatment approved via prior authorization was signed into law by the Governor, over the objections of CAHP. This law has limited impact on DDC fee-for-service programs, but could have impact on DeltaCare programs in cases where prior authorization is granted and treatment is rendered, but can no longer be rescinded, even if the patient’s eligibility is withdrawn by the sponsoring group. Delta Dental's Office of Compliance is studying how often this actually occurs, and how severe the impacts - if any - might actually prove to be for Delta Dental.

• SCHIP Bargaining Continues (Federal) — House and Senate leaders continue to negotiate terms of a veto-proof expansion of the State Children’s Health Insurance Program, including details of funding levels and eligibility restrictions. Talks are currently centered on three issues: prohibiting illegal immigrants from enrolling; encouraging states to create programs to help low-income people buy private insurance; and creating a mechanism that would force states to show that they have covered most children from families earning less than twice the federal poverty level — about $41,000 a year for a family of four — before expanding SCHIP to families with greater incomes. As the current funding authorization approaches its sunset, California officials have begun to develop a plan to waitlist, and perhaps even disenroll some current Healthy Families enrollees, as federal funding could dry up before the program is re-authorized.

• Other Pending Legislation (Pennsylvania and New York) — A hearing schedule this week for HB 1841, Governor Rendell’s bill in PA to create a single health benefits system for all school district employees, was cancelled, most likely due to a lack of votes to move the bill out of committee. The development is a setback for the bill, but does not end what most Pennsylvania insurance interests consider a threat that will continue to move its way through the state house. Public Affairs, meanwhile, confirmed with a regional lobbying director of America’s Health Insurance Plans (AHIP) that at least half a dozen troublesome bills we’ve been watching in New York are considered dead for 2007, though likely to be re-introduced next year.

• Special Legislative Session in Maryland Prompts Defensive Action to Preserve DDP Tax Exemption — Public Affairs has been closely watching to ensure a move by the State Legislature to bridge its budget deficit does not lead to the loss of our current tax exemption as a nonprofit healthcare service plan. One troublesome proposal known as "uniform reporting" in the special session called for any for-profit affiliate companies licensed in the state to report the enrollment of its affiliated parent company, even if out-of-state, as part of the calculation to determine premium taxes owed. This proposal appears to have been shelved at the close of the special session, but will be taken up again at a later time.

• Fluoridation Bill Supported in Pennsylvania Legislature — Delta Dental's enterprise Public Affairs department coordinated development and distribution of letters of support to key Pennsylvania State Senators for a measure that would fund expanded water fluoridation throughout the state. According to Delta Dental of Pennsylvania ’s lobbyist, our formal support for HB 1588 was much appreciated by the Pennsylvania State Dental Association and the state’s dental hygienists association, both of which championed the measure. It has passed the house and now awaits consideration before a senate subcommittee.