Scanlan opposes risk pool bill rewrite
Scanlan opposes latest rewrite of risk pool bill
Secretary of State David Scanlan said he opposed a rewrite of legislation he had sought to give his office more sweeping powers over regulating risk pools that provide insurance coverages for governmental units.
The House Commerce Committee earlier this week unanimously approved a rewrite of a Senate-approved bill (SB 297) Scanlan had requested to give his office more sweeping powers to regulate these entities.
Scanlan had sought the change after he charged that two of the companies were on the brink of financial insolvency because their executives ignored the advice of actuaries and kept their rates too low to hold onto market share.
One of those two risk pools, the New Hampshire Interlocal Trust, has declared bankruptcy, and Scanlan convinced a Superior Court judge to name a receiver to take over its finances.
The other risk pool that drew Scanlan's criticism is HealthTrust, the largest in the state, which supports 191 of the state's 234 cities and towns, six of 10 counties, 85 school groups and 74 other units like water, library and fire districts.
HealthTrust has denied Scanlan's claims and threatened to pull out of the market if Scanlan's proposal was signed into law.
The House committee's proposal would instead give these risk entities the option of coming under the supervision of Scanlan's office or before the Department of Insurance.
Chairman and Rep. John Hunt, R-Rindge, came up with the idea and said there is a precedent for this since banks get to choose whether to come under state or federal regulation.
'This was written to also protect their tax-exempt status,' Hunt said.
Rep. Julie Miles, R-Merrimack, explained that the risk pools would remain under Scanlan if they were member owned, responsible for their own deficits and had to return all surpluses to governmental unit members.
If those conditions did not apply to the risk pool, then they could be regulated by the Insurance Department.
'This bill strengthens the structural boundaries and provides clarity, accountability and long-term stability to these risk pools,' Miles said.
Scanlan said the bill has lost its original intent.
'The bill does not address the underlying concerns we have expressed specifically related to HealthTrust and the potential impact their fiscal management practices may have on the taxpayers and public sector employees in this state,' Scanlan said.
'The amendment should be rejected. SB 297 has changed from a bill requiring transparency and accountability with financial guardrails and triggers to a bill that changes who can regulate a pooled risk organization.'
Opponents line up against Scanlan's bill
Lisa Duquette, executive director of SchoolCare, one of the risk pools that represents 100 school districts, said her group opposes the House change because it could require them to seek the approval of rates by the Insurance Department.
"This would be a loss of local control," she said.
HealthTrust officials are pleased with the rewrite and if it became law the group would come under insurance regulation.
'HealthTrust's model is non-assessable (meaning we have committed to not sending member groups an assessment for additional revenue mid-year), which was no longer permitted under the original SB 297,' HealthTrust said in a statement.
'In a non-assessable plan, member groups are only responsible for their monthly contribution costs and do not bear the risk of mid-year assessments due to adverse claims experience, which allows for the predictability that is critical for public sector budgets.'
Roughly 100 municipal officials who were members of HealthTrust signed up online in opposition to Scanlan's bill and many cited the provision that could require them to raise their rates in the middle of the year.
HealthTrust officials had also maintained Scanlan's bill set too low an acceptable standard for minimum reserves that these risk pools should have to cover their losses.
'While the amendment contains more rigorous oversight requirements, HealthTrust welcomes effective regulation, particularly with recent volatility in the market,' HealthTrust said. 'Risk pools fulfill an essential function for New Hampshire's public sector and member groups, covered individuals, and taxpayers deserve financially sound systems.'
What's Next: The full House will vote on this proposal when it next meets on June 5.
Prospects: This issue appears likely headed to a conference committee to try and work out differences between House and Senate plans. Senate President Sharon Carson, R-Londonderry, authored Scanlan's original proposal and is likely to take Scanlan's side about it.
klandrigan@unionleader.com
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