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Wednesday, May 4, 2016

Legislative Report

Monday, March 14, 2011

Rep.Dan Huseman
House passed new pre-school plan

The House of Representatives came close to achieving its goal of passing all of the budget bills out of appropriations committee by the end of the week. Two remain ready for consideration, and would have passed, but the House took up a bill that deals with collective bargaining instead. At this writing, after 14 hours of debate, only six or seven amendments have been considered. With about 100 more to go, it looks like a long two or three days.

The House has passed a new pre-school plan, which replaces the current program established in 2007. This particular plan is the work of the Governor and the department of education. Debate lasted for nearly four hours as both sides defended their position. Those opposed to the new plan made reference to the effectiveness and popularity of the current preschool program. It was mentioned many times that schools, parents and teachers who have used the program, and received free preschool were very happy about it. Well, that would surely make sense. What is being ignored is the fact that over the past three years, while the state was spending $150 million for preschool, it also failed to fund the other 13 grades. That shortfall was $450 million. I am not saying that the current program is bad. I like preschool, and believe there are positive benefits, as a result of early education. The problem is the cost, which will rise to over $100 million per year very soon. The Governor believes this is not a sustainable figure. Most Iowans feel the same way. While 80% think preschool is good, 57% say the state cannot afford the current plan right now. The bill that passed this week is a fair and balanced approach that ensures quality and helps those with the most need.

I saw some interesting statistics a few days ago regarding preschool. In Iowa, it currently costs about $3530 per student or about $400 per month. Private preschools charge an average of $150 per month. Other states vary on cost and results. Oklahoma spends $8000 per child, per year, yet struggles nationally in their K-12 assessment scores. Florida, on the other hand, spends around $2200 per student, and is still rising in their scores. Also, there are a lot more private preschools in Florida.

As I mentioned before, quality is still there and so is access. The big difference is of course, the cost. Those with the most need will pay very little -- maybe $3.00 per month, while more well-to-do parents will pay more. The bill now heads to the Senate where its fate is uncertain. However, I do not believe they will simply kill it, because this is a priority for the Governor, and I'm sure he will fight for it or some sort of compromise. I supported the bill.

On Wednesday, the U.S. Department of Health and Human Services made Maine the first state to receive a waiver from a requirement in the federal health care reform bill that insurance companies spend at least 80 percent of revenue on actual health care.

The rule -- known as the Medical Loss Ratio (MLR) - requires insurance companies to spend a certain percentage of their revenue from premiums on medical care. For "large" insurers, the requirement is that they spend 85% on care. Smaller insurers will be required to spend 80% on care. Congress adopted this requirement to ensure that premium dollars went to pay for health care instead of administrative excess and corporate profits.

Maine and other states have issued warnings about the impact of this requirement on consumer choice. A number of states have discussed filing for the waiver, as the rule may dramatically reduce the number of health insurance companies offering coverage in their state. Another concern is the impact on insurance brokers and agents. Commissions paid to brokers and agents for signing up people were determined to be outside the 80% requirement. Because of this, many insurance companies are reducing what they pay brokers and agents for signing up plan enrollees.

One state that expressed concern from the start of the MLR process was Iowa. With the low number of insurers offering health coverage in the state, Insurance Commissioner Susan Voss has been quite open about her concern that the MLR rule would have on consumer choice and insurance premiums in Iowa. And last week, it was learned that five insurers have decided to stop offering health insurance in the state. Without the waiver, Iowans will probably only have two choices for health care coverage -- Wellmark and United Health Care.

At this point though, Iowa has yet to file for the waiver. Only Kentucky, Nevada, and New Hampshire have MLR waiver applications pending.

You may reach me at the Capitol during the week by phoning me at 515-281-3221, or at home on weekends at 712-434-5880. You may write me at the State Capitol, Des Moines, Iowa 50319. My home address is P.O. Box 398, Aurelia, Iowa 51005. If you have email, please contact me at dan.huseman@legis.state.ia.us.