Latest news with #SB297
Yahoo
4 days ago
- Business
- Yahoo
Scanlan opposes risk pool bill rewrite
Secretary of State David Scanlan has come out against legislation that would permit the state's four risk management pools, which provide health, property or casualty insurance for governmental units, to choose their regulator. 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@
Yahoo
25-03-2025
- Business
- Yahoo
State's largest risk pool threatens to end coverage if Scanlan's reform becomes law
Mar. 24—The largest risk pool that provides insurance coverage to local and county governments in New Hampshire threatens that it will exit the market entirely should a bill tightening regulations on them becomes law. Executives with HealthTrust were clearly upset at learning the state Senate had approved an amended version of the reform Secretary of State David Scanlan sought last Thursday on the consent calendar without debate. A spokesman for HealthTrust said it had received assurances the Senate would publicly debate the matter (SB 297). The HealthTrust board and officers released a scathing news release late Friday afternoon. It revealed that a day earlier, its board had voted that if Gov. Kelly Ayotte signed the bill as written, HealthTrust would end all coverages and services Dec. 31 for January groups and June 30, 2026, for groups that have a starting point of July 1, 2026. "HealthTrust will fulfill all obligations through those dates, in addition to full administration of run-out services. After the full run-out occurs, HealthTrust will distribute remaining surplus funds back to the member groups that we have proudly served," HealthTrust said in its statement. Scanlan defended the bill and said HealthTrust's statement makes no sense. "The statement from HealthTrust is irrational. They fail to explain how SB 297 harms their operations on behalf of the political subdivisions in any way. SB 297 adds a measure of accountability in the interest of cities and towns that does not currently exist and will help the financial stability of these organizations," Scanlan said in a statement. Last month, Scanlan asked that his office be given sweeping new powers to regulate the finances of risk pools after concluding two of the providers were "in danger of insolvency." Executives with those two risk pools, HealthTrust and the New Hampshire Interlocal Trust (NHIT), said Scanlan's solution would set a minimum floor and maximum cap for how much these firms can hold in reserves that were too low and would be financially irresponsible. Scanlan: 'They were not following actuarial advice' In 2010, the Legislature gave Scanlan's office authority to regulate the companies that give local governments a lower-cost option to manage and pay out insurance claims for them rather than a small town or city having to self-fund its own coverage. "Too often we see government failure when some event occurs that is pretty tragic and people are pointing fingers on who is responsible and how," Scanlan testified. "Unfortunately, the reason for this bill is two of the risk pools are in danger of insolvency. It's that simple. They were not following actuarial advice." HealthTrust represents 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 insisted its contingency reserve of $35.7 million was more than the thresholds contained in the Senate bill. It also rebutted the claim from Scanlan's hired actuary that HealthTrust was projected to lose $2.5 million per month. "This is false. It was then incorrectly stated that HealthTrust was projected to lose $12.5 (million) this fiscal year. This is also false. Our external actuarial projection shows a gain for (Fiscal Year) 2025," HealthTrust said. In the Senate's only public statement, Senate Finance Committee James Gray, R-Rochester, said his panel unanimously agreed with Scanlan's approach. "Recent circumstances have caused the secretary of state to be concerned that some risk pools may be in danger of insolvency without the changes identified in this bill, including mandatory minimums and maximums for retention of assets due to unforeseen circumstances," Gray wrote. HealthTrust also insisted the decision was about the pending bill and not HealthTrust's financial well-being. "To be clear and to be ahead of mischaracterizations, this decision has nothing to do with HealthTrust's finances. We are viable and would otherwise continue to be. This has everything to do with the extraordinarily flawed SB 297 that has been rushed through the legislative process without reasonable and objective scrutiny," HealthTrust said. If cities, towns, counties and school districts have to go to the commercial insurance market to provide health care or property coverage, HealthTrust officials insist, their costs would be higher and could lead to local property tax increases. klandrigan@
Yahoo
05-03-2025
- Business
- Yahoo
Scanlan says 2 municipal risk pools in danger of 'insolvency'
Mar. 4—Secretary of State David Scanlan asked the Legislature to give his office sweeping new powers to regulate the finances of risk pools that manage health and property insurance for cities, towns and school districts after concluding two of the providers were "in danger of insolvency." But executives with those two risk pools with the most losses, HealthTrust and the New Hampshire Interlocal Trust (NHIT), told two state Senate committees Tuesday that Scanlan's solution to set a minimum floor and maximum cap for how much these firms can hold in reserves was too low and wouldn't be financially responsible. In 2010, the Legislature gave Scanlan's office authority to regulate the companies that give local governments a lower-cost option to manage and pay out insurance claims for them rather than a small town or city having to self-fund its own coverage. "Too often we see government failure when some event occurs that is pretty tragic and people are pointing fingers on who is responsible and how," Scanlan said. "Unfortunately, the reason for this bill is two of the risk pools are in danger of insolvency. It's that simple. They were not following actuarial advice." Senate President Sharon Carson, R-Londonderry, agreed to author a late-filed bill (SB 297) on Scanlan's behalf. "This will go a long way to protecting the taxpayers, political subdivisions and their active and retired employees," Carson told the Senate Finance and Election and Municipal Affairs Committee meeting jointly to hear the matter. The pools are tax exempt and do not have to comply with the costly regulations imposed on commercial insurance companies. Scanlan's predecessor, former Secretary of State Bill Gardner, asked lawmakers to put his office in charge after accusing the pools of overcharging local governments and building up massive surpluses instead of providing refunds. Fifteen years later, Scanlan said the two programs have run into near financial ruin for the opposite reason, under-charging member towns or school districts in order to hold onto their business in what's become a competitive market. Hua Li is Scanlan's lead actuary and the owner of the Complete Actuarial Solutions Company (CASCO) in McLean, Virginia. Li said Health Trust, by far the largest of the pools, has lost money in five of the last seven years and is losing $2.5 million a month. "At the $2.5 million rate, they are likely down to about 15 days of cash and reserves near the end of the year and that's for a $500 million a year plan," Li said. Other pools in better financial shape The other two risk pools — Primex, which provides casualty coverage, and School Care, which specializes in insurance for educators — are in much better financial shape than Health Trust and NHIT, Li said. Carson's bill would allow the risk pools on their own to levy an additional assessment of local governments to build up reserves to avoid insolvency. If they didn't take such action, the legislation would give Scanlan the right to go to a Superior Court judge and ask that a receiver be appointed to mandate higher assessments. Starting in 2028, the pools would have to have between 16% and 20% of their total value in reserves. Health Trust Executive Director Scott DeRoche said all its reserves totaled more than 20% before huge losses hit in 2023-24. DeRoche said those losses were because the medical trend estimate of an 8-9% increase in health spending amounted to more than 20%. He denied his pool intentionally underpriced its premiums to keep domination in the market for the company that represents 191 municipalities, six counties, 85 school districts and 74 other entities like water districts. The group has taken several steps to improve its profit loss statement including an end to some expensive benefit offerings, he said. Scanlan's bill would be an unconstitutional mandate on local governments, making cities and towns face higher taxpayer costs to follow these new requirements, DeRoche said. The 16% floor for reserves would be $20 million lower than it should be, according to Health Trust's own actuary, he added. Jeff Reardon with the N.H. Interlocal Trust also said the 16% was too small a target for reserves. "We have taken action to build up our reserves and that should be in good order within three to five years," Reardon said. Last August, Scanlan sent a cease and desist letter alleging NHIT engaged in "unlawful practices" that included the claim it had set "not to exceed rates" to win over new business. "This disparate treatment creates 'winners and losers' among political subdivisions," Scanlan wrote at the time. klandrigan@
