August 17, 2015 Legislative Update

In This Issue…

  1. Lawmakers OK 2nd Temporary Budget
  2. State Health Plan Updates
  3. Lots of Legislative Activity, but No Budget
  4. Senate Begins Budget Bartering with Referenda, Tax Proposals, and Medicaid Reform

Lawmakers OK 2nd Temporary Budget

The General Assembly approved S560, Continuing Budget Authority on Aug. 12. The measure allows state government to continue to operate at last year’s spending levels until midnight on Aug. 31. Gov. Pat McCrory signed the bill into law on Aug. 13, just a day ahead of the expiration of the previous temporary budget – Aug. 14 at midnight.

State Health Plan Updates

State Health Plan Switching Enrollment Vendors Following Serious Computer Problems

At a stakeholders’ meeting on Aug. 11, State Health Plan staff announced that the contract with enrollment vendor AON Hewitt, was being cancelled due to serious computer problems. Reports emerged that practitioners refused to treat SHP members because their proof of insurance could not be verified. The SHP has cancelled the contract with AON Hewitt and is returning to Benefits Focus, the former vendor. Benefits Focus encountered complaints in the past, but not of the scale encountered during this transition. Furthermore, Benefits Focus has had time to correct their issues and also to learn from the difficulties AON generated. The difficulties generated media coverage about the issue, which can be seen here.  A statement about the matter from the SHP can be seen here.

State Health Plan Rates in Limbo, Pending Legislative Budget Agreement

Annual enrollment for the SHP for Educators and State Employees is coming soon. The enrollment period will begin Oct. 15 and mailers are already being distributed. SHP staff indicated that they could not publish rates until the General Assembly concludes work on the state budget, which is why the enrollment date is being pushed to Oct. 15. See more about upcoming annual enrollment here.

State Health Plan Medicare Outreach Events Coming Soon

SHP representatives announced the schedule for 2016 State Health Plan Medicare Primary Outreach Events. These events are aimed at retirees who are making decisions about Medicare plan enrollment. They are key opportunities to learn about Medicare, Medicare Advantage and SHP options available to retirees. You can see the complete schedule hereThe SHP will also offer a series of “Telephone Town Hall Meetings.” The schedule for these events and link to register can be seen here.

Lots of Legislative Activity, but No Budget

Although there is no resolution to report on the 2015-2017 state budget, H 97there is hope. House Speaker Tim Moore (R-Cleveland) stated that he was hopeful that Senate and House leaders would agree upon a total spending target before last weekend. While neither chamber scheduled votes for tonight’s session, Speaker Moore advised House Appropriations Subcommittee Chairs to return to Raleigh by 2 PM to be ready for instructions, pending a baseline budget agreement. Rep. Nelson Dollar, the Senior Appropriations Chairman responded to a question about a budget resolution in light of the start of the traditional school year. “We are making progress. We certainly would like to conclude as quickly and as reasonably as possible, but we must make sure that we provide for education,” he stated.

Senate Begins Budget Bartering with Referenda, Tax Proposals, and Medicaid Reform

The Senate leadership wasted no time in commencing cross-chamber dealing, starting with H943, Connect NC Bond Act of 2015. Upon receipt of the bill from the House, the bill was sent to the Senate Ways and Means Committee on August 10 – the equivalent of legislative limbo, because the committee rarely, if ever, meets. The bill would put a referendum on the March 2016 ballot – which will be the date of the Presidential Primary Election – to authorize the issuance of more than $2.8 billion in government obligation bonds to address construction and renovation needs throughout North Carolina, including $500 million to address schools’ needs.

Next, the Senate approved H117, NC Competes Act and S607, Constitutional Amendment on Tax and H372, Medicaid Modernization Act on Aug. 12 and sent them to the House for consideration.

  • H117 addresses, among other tax changes, distribution of sales tax revenue among local governmental units. It has generated controversy by creating “winners and losers.” Simply put, large, more urban areas generate tax but that revenue is redistributed to the benefit of more rural areas.
  • S607 would put a referendum on the Nov. 2016 ballot to limit the maximum annual percentage increase in spending to the average inflation growth for the prior three calendar years plus the average growth in State population for the prior three fiscal years. This is commonly referred to as “TABOR” – taxpayer bill of rights. The referendum also would mandate creation of the Emergency Savings Reserve Fund and would require the General Assembly to invest 2% of General Fund in the Reserve Fund until it contains 12.5% of the amount appropriated for capital and operating expenses for the prior fiscal year. The referendum would also limit to 5% the maximum income tax beginning in tax year 2020.
  • H372 was rewritten to replace the House’s version of Medicaid reform with the Senate’s version, which is more commercial managed care focused than the House’s version. The Senate’s version subscribes to a more aggressive time schedule and changes the governance over the program. The Senate’s version is supported by managed care companies and generally opposed by groups representing hospitals, physicians and others in the health care community.

These bills are likely to be caught up in the budget negotiations.

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Submitted by Evelyn Hawthorne

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