1 1 2 COMMONWEALTH OF PENNSYLVANIA HOUSE OF REPRESENTATIVES 3 APPROPRIATIONS COMMITTEE 4 MAIN CAPITOL 5 ROOM 140 HARRISBURG, PENNSYLVANIA 6 7 BUDGET HEARING DEPARTMENT OF INSURANCE 8 9 MONDAY, MARCH 7, 2016 10 2: 47 P. M. 11 BEFORE: 12 HONORABLE WILLIAM F. ADOLPH, JR., 13 Majority Chairman HONORABLE KAREN BOBACK 14 HONORABLE JIM CHRISTIANA HONORABLE GARY DAY 15 HONORABLE GEORGE DUNBAR HONORABLE GARTH EVERETT 16 HONORABLE KEITH GREINER HONORABLE SETH GROVE 17 HONORABLE SUE HELM HONORABLE WARREN KAMPF 18 HONORABLE FRED KELLER HONORABLE TOM KILLION 19 HONORABLE JIM MARSHALL HONORABLE KURT MASSER 20 HONORABLE DAVID MILLARD HONORABLE DUANE MILNE 21 HONORABLE MARK MUSTIO HONORABLE MIKE PEIFER 22 HONORABLE JEFFREY PYLE HONORABLE CURT SONNEY 23 HONORABLE MIKE VEREB HONORABLE JOSEPH MARKOSEK, Minority Chairman 24 HONORABLE LESLIE ACOSTA HONORABLE MATTHEW BRADFORD 25 2 1 BEFORE cont'd! 2 HONORABLE TIM BRIGGS 3 HONORABLE DONNA BULLOCK HONORABLE MARY JO DALEY 4 HONORABLE MADELEINE DEAN HONORABLE STEPHEN KINSEY 5 HONORABLE MICHAEL O'BRIEN HONORABLE MARK ROZZI 6 HONORABLE KEVIN SCHREIBER HONORABLE PETER SCHWEYER 7 ALSO PRESENT 8 HONORABLE CRIS DUSH 9 HONORABLE MATT GABLER HONORABLE ROBERT GODSHALL 10 HONORABLE ADAM HARRIS HONORABLE KRISTIN PHILLIPS HILL 11 HONORABLE DARYL METCALFE HONORABLE SCOTT PETRI 12 HONORABLE TINA PICKETT HONORABLE RICK SACCONE 13 HONORABLE STAN SAYLOR HONORABLE DOM COSTA 14 HONORABLE JARET GIBBONS HONORABLE MARK LONGIETTI 15 HONORABLE EDDIE PASHINSKI 16 DAVID DONLEY, MAJORITY EXECUTIVE DIRECTOR 17 RITCHIE LAFAVER, MAJORITY DEPUTY EXECUTIVE DIRECTOR CURT SCHRODER, MAJORITY CHIEF COUNSEL 18 MIRIAM FOX, MINORITY EXECUTIVE DIRECTOR TARA TREES, MINORITY CHIEF COUNSEL 19 20 21 22 23 BRENDA J. PARDUN, RPR 24 P. O. BOX 278 MAYTOWN, PA 17550 25 717-426-1596 3 1 INDEX 2 NAME PAGE 3 TERESA MILLER 4 COMMISSIONER 4 DEPARTMENT OF INSURANCE 5 SETH MENDELSOHN 40 EXECUTIVE DEPUTY INSURANCE COMMISSIONER 6 DEPARTMENT OF INSURANCE 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 4 1 P R O C E E D I N G S 2 MAJORITY CHAIRMAN ADOLPH: Thank you. 3 And good afternoon, everyone. 4 I’d like to reconvene the House 5 Appropriations Committee for the budget hearing for 6 the fiscal year '16-'17. With us today is the 7 Department of Insurance. To my right is the 8 vice -- Democrat vice chair of the Appropriations 9 Committee, Representative O ’Brien. And I am Bill 10 Adolph, the Republican chair. 11 Commissioner, the mic is yours. 12 COMMISSIONER MILLER: Thank you, 13 Chairman Adolph and Vice Chair O ’Brien and members 14 of the committee. Thank you for the opportunity to 15 be here today. 16 Before I begin I just want to briefly 17 introduce the people with me. To my left is 18 Jessica Altman, who is the department’s chief of 19 staff, and to my right is Seth Mendelsohn, who’s 20 the department’s executive deputy commissioner. 21 So, thank you again for the opportunity 22 to be here. We’ve been looking forward to talking 23 to you. We had a busy year since we talked to you 24 last, and we’re anxious to come share with you some 25 of the initiatives that we’ve been working on to 5 1 provide your constituents and the consumers of the 2 commonwealth the protection that they need and 3 deserve when they're purchasing and making 4 insurance-related decision. 5 Maintaining a vibrant marketplace is 6 one of the keys to consumer protection, because it 7 means that consumers have a choice of products at 8 competitive prices. Transparency in the way that 9 we do business and providing a level playing field 10 are, I believe, two important means to attract and 11 keep insurers in Pennsylvania. 12 To keep our stakeholders updated and 13 bring more transparency to department ' ' ' 14 we began pushing a monthly newsletter last year, 15 describing the of the department over 16 that month. 17 I also think it's important to be open 18 and public about department positions on critical 19 issues. For example, the department has had a 20 long-standing position on an issue called price 21 optimization, where certain consumers who present 22 the same risk as other consumers are charged a 23 higher rate, perhaps based on whether the 24 consumer’s likely to shop for other coverage. 25 We knew that there were a few 6 1 companies, but very few, who were seriously 2 considering including these pricing practices in 3 their rating models, while the vast majority of our 4 companies were not. By issuing a statement and 5 making it clear to all companies that this practice 6 is not allowed in Pennsylvania, we ensured an even 7 playing field for all of our companies and 8 protected consumers from this unfairly 9 discriminatory practice. 10 We’re fortunate in Pennsylvania that we 11 have a competitive market in a number of lines of 12 insurance, including health insurance. Every 13 Pennsylvanian seeking to buy individual health 14 coverage on the exchange had at least four plans 15 from which to choose during open enrollment, and 16 many Pennsylvanians had more choices than that. 17 This strong market is one of the reasons I was able 18 to reduce proposed health insurance rates by nearly 19 81 million dollars. 20 Governor Wolf has made consumer 21 protection the top priority for the Insurance 22 department. And with the governor, we’ve taken 23 several strong stands for consumers this past year. 24 We successfully went to court to protect more than 25 180,000 seniors and allow them to keep their 7 1 doctors and hospitals by preventing UPMC from 2 violating the consent decree. 3 My department also held a public 4 hearing to gather input from stakeholders before 5 approving Highmark’s request to transfer 175 6 million dollars to the Allegheny Health Network. 7 Other important consumer protection 8 actions over the last year include Governor Wolf’s 9 announcement in October that all mammograms, 10 including newer 3D technology mammograms are 11 included in Pennsylvania’s law that covers these 12 often life-savings tests for women at no cost. 13 I announced that my department will not 14 approve any auto rate filings that contain a 15 so-called widow’s penalty, where an insurer charges 16 a widow or widower a higher rate solely due to the 17 loss of a spouse, unless that insurer can provide 18 statistical evidence for this rate. 19 We announced a proposal to protect 20 consumers from surprise balance bills when 21 consumers make good faith efforts to use in-network 22 provides and facilities and end up, somewhere in 23 their course of treatment, receiving services from 24 an out-of-network provider and then get a bill from 25 that provider that they weren’t expecting. 8 1 We held a hearing on this issue last 2 fall and received good input from stakeholders. We 3 recently invited comments on a legislative proposed 4 solution, and are now reviewing that feedback, 5 mindful that the ultimate goal is to protect 6 consumers from these unwanted, unexpected bills. 7 And we look forward to working with you over the 8 coming months to address this issue. 9 The department has also ramped up our 10 outreach efforts. We hired a consumer liaison to 11 enhance our interaction with consumers and consumer 12 advocacy organizations and increased the awareness 13 of the department by getting out into the community 14 more. 15 I participated in various open 16 enrollment events to encourage consumers to 17 purchase health insurance, and we also partnered 18 with the AAA, and with that partnership, I visited 19 several mature driver classes around the state to 20 highlight the importance of these classes in both 21 making our roads safer and saving seniors money on 22 their auto insurance. 23 Recently we announced a web page 24 listing private flood insurance available in 25 Pennsylvania. With the cost of coverage under the 9 1 federal program continuing to go up, we're finding 2 that private coverage is available and much less 3 costly as an alternative for a number of homeowners 4 and wanted to make it easier for Pennsylvanians to 5 shop for this alternative coverage. 6 We continue to provide a place for 7 consumers to bring questions and complaints related 8 to insurance. Our consumer services bureau, in 9 2015, fielded more than 12,000 written complaints 10 and nearly 47,000 phone calls. 11 We also recovered more than 185 million 12 dollars in restitution from more than 12,000 13 Pennsylvanians last year. 14 And finally, I want to thank all of you 15 for working with us to transfer and transition 16 Pennsylvania's CHIP program from the Insurance 17 department to the Department of Human Services. As 18 you know, this program provides excellent coverage 19 to Pennsylvania's children, more than 150,000 of 20 them, but it's now where it belongs, in a service 21 agency as opposed to a regulatory one. 22 Recent changes to federal Medicaid 23 regulations more closely align CHIP with Medicaid, 24 so having both programs run by the same agency will 25 mean better service to CHIP families. And IT 10 1 system upgrades required by the federal government 2 can now be done more efficiently, saving 3 Pennsylvanians tax dollars. 4 Again I appreciate the opportunity to 5 be here today and look forward to your questions 6 and to working with you in the coming years.