UPDATED: Senate, House negotiators mull compromise plan to narrowly align state insurance rules with 'Obamacare'
CONCORD – New Hampshire House and Senate negotiators decided late Wednesday to bring to their respective caucuses a compromise proposal to narrowly align a handful of key state insurance rules with those of the Affordable Care Act.
Senate Majority Leader Jeb Bradley, R-Wolfeboro, characterized the plan, hammered out after four hours of talks, as a “path to an agreement,” but not even a tentative agreement. The conferees are scheduled to meet Thursday morning, as a mid-day deadline for committee of conference reports approaches, to agree on the plan, continue talks, or agree to disagree, which would kill the legislation.
While the Senate GOP majority initially rejected outright the House-passed plan to more broadly align state rules with the rules of the ACA, its leadership then agreed to sit down with Democratic-led House conferees to try to find a way to avoid what the state insurance department warned could be increased premiums.
The potential deal carves out state-regulated rules on “age banding” to avoid the implementation of community rating, which both sides agreed would most likely lead to increased premiums and a possible continued upward cost spiral.
The proposal being weighed also says that the insurance department cannot expand its current rule-making authority, effectively preventing it from using its rule-making authority to aligning state rules with any additional provisions of the ACA. Current law says any department plans for additional rules must be approved by the legislative Health Care Oversight Committee.
House Bill 668 was produced by House Democrats to broadly align the state’s individual and small market insurance rules with the ACA as a way, they said, of retaining local control over the law known as “Obamacare.”
But the Senate Republicans, citing a state law that forbids the state from producing its own insurance exchange, killed the bill, choosing to allow the federal law to preempt the state law, and to essentially, keep New Hampshire out of much of the implementation of the new law.
The insurance department, however, then warned that not all of the state rules would be preempted and the potential conflicts would cause confusion in the market and potential cost increases, especially on the age issue, through the implementation of community rating.
As a result, the Senate agreed to sit down for a committee of conference on the bill and tried to specify areas in which state regulations should be written to coincide with the ACA to avoid community rating and further disruption in the market.
Sen. Andy Sanborn R-Bedford, who chaired the committee of conference, said the GOP Senate majority has “struggled with the late bulletin from the insurance department suggesting there will be complete disruption in the marketplace” if the bill was killed.
He said that there were “four or five issues” that concerned him, including differences between the state and federal rules on “age banding,” in which there are different rates for different age groups; different rules on how to price products for those who use tobacco, differences in billing practices and different rules for enrollment. There are also differing definitions between the state and federal rules in how many employees are considered under the definition of “small group.”
The conference committee agreed to defer the other issues and focus on age banding.
But before that agreement, Rep. Ed Butler, D-Hart’s Location, said, “We, too, have been struggling to understand why we were so diligently working on this bill relative to the market rules to make it possible for the insurance department to manage its responsibility of oversight and consumer protection,” only to have it killed, at least initially, by the Senate GOP majority.
“We can’t understand why the Senate has had such difficulty with preserving and protecting what has been traditional within our state for dozens of year,” Butler said, referring to state regulation of the industry and market.
“We need to preserve market stability, and we are willing to work toward making that happen, to preserve the ability for our carriers to sell products,” said Butler.
Bradley said to have the state align with the ACA “is the antithesis of protecting our local control. All we’d get is for our department to push the paperwork of federal bureaucrats. I just don’t see what we’d get. It just doesn’t work for me.”
But Bradley said that if there was no agreement on aligning with how the federal law addresses rates for different age groups, the result would be “pure community rating,” which prohibits insurance rate variations based on factors such as age or gender and which, according to the insurance department, would cause rates to rise.
Federal law requires rate changes based on age at one-year intervals, while state law allows five-year intervals.
The question, said Bradley, was whether the negotiators “could find a way to have a narrow change in state statute so that there would be no bureaucratically-imposed community rating.”
He also sought the specific language in any potential amendment to ban the state insurance department from imposing other aspects of the ACA through a emergency rules-making process.
As a result, the conferees sought a narrow, specific amendment that specified in what areas the state would align with the ACA.
Sen. David Pierce, the lone Democrat among the Senate conferees, suggested that the original House bill addressed Bradley and Sanborn’s concerns.
He said that to kill House Bill 668 “is not local control. That’s accepting the federal rules lock, stock and barrel, good, bad or otherwise.”
Added Democratic Rep. Donna Schlachman of Exeter, “This allows us to maintain our regulation, which is our intent.”
A separate portion of the bill dealt with renewable electric portfolio standards. Agreement was quickly reached on that issue, with the adjustment benefiting wood-power small energy producers and the forest industry in the North Country, Bradley said.