Dan Pilcher

CACI Senior Vice President

& Chief Operating Officer

Phone: 303.866.9600

E-Mail: dpilcher@cochamber.com

Friday, April 24, 2009

The Surviving Pinnacol Bill: Still Seeking to Kill the Goose that Lays the Golden Egg?

Yesterday, the House passed on final, Third Reading, with the absolute minimum number of votes--33--the remaining bill, SB-281, targeting Pinnacol Assurance.  Thirty members of the House voted against the bill, which now goes back to the Senate for concurrence.

The bill calls for a “performance” audit of Pinnacol, although Pinnacol now is subject to a performance audit at any time by the legislature’s Joint Legislative Audit Committee as well as financial audits by the Colorado Division of Insurance.

The more troubling provision of the bill for CACI and the business community, however, calls for a study after the legislature adjourns the session.  The committee is to be called the “Workers Safety and Injury Compensation Study Group.”  It would be charged with examining and recommending changes to the legislature “on changes to laws governing worker safety and work-related injury compensation.”  This means that the committee could go far beyond just studying Pinnacol and could try to open up the state’s workers’ comp laws to change, which CACI would oppose.  The committee would study “both the feasibility of the continued operation and the public policy implications of Pinnacol Assurance as a division of state government or the feasibility and public policy implications of selling Pinnacol Assurance to a willing Third-Party buyer.”

In addition, the study committee would be comprised of five members of the Senate, five members of the House, the CEO of Pinnacol, or his designee, and one member of the Pinnacol Board of Directors.  CACI believes that the business community will clearly be shortchanged in terms of representation by the composition of this committee, should the bill become law in its current form.

Of the five Senate members, three would be appointed Senate president and two by the Senate minority leader.  The same composition would apply to the House members, with three appointed by the Speaker and two by the House minority leader.  The Senate president would appoint the committee chair and the House Speaker would appoint the committee vice-chair.  In short, majority Democratic legislators would control the committee. 

Some historical perspective on workers’ comp may be helpful to those CACI members new to Colorado.  By the late 1980s, Colorado's business community was increasingly crippled by skyrocketing costs of workers' compensation insurance.  In 1991, premiums were projected to increase 38 percent.  In that year, CACI marshaled through the legislature a major reform of the state workers' compensation that, since then, has saved businesses hundreds of millions of dollars.  The omnibus reform bill, SB-218, included provisions that:

• Increased benefits for more seriously injured workers;

• Streamlined the administrative process;

• Contained medical costs

• Tightened the definition of "permanent partial disability"

Each legislative session, CACI fights to protect the 1991 reforms, which we believe are fair and balanced, from proposals that would drive up the costs of the workers' compensation system and, ultimately, the insurance premiums paid by businesses, which solely fund the system.  In 2003, for example, CACI saved workers' compensation insurance providers up to $13 million annually by working to defeat one bill and to pass another.

CACI consistently opposes bills and amendments that would allow injured workers to select their own physicians or other health-care professionals. CACI also opposes efforts to significantly change the administrative system established by the 19991 reforms that would weaken employers’ rights either in favor of the Administrative Law Judges, who hear the claims, or the lawyers for the injured workers.

For coverage of SB-281 by The Denver Post, click on:

http://www.denverpost.com/legislature/ci_12214369

Senate Passes Autism Bill on Second Reading

This morning, the Senate gave initial approval on Second Reading to SB-244, which would force businesses to provide unprecedented, expensive health-insurance coverage for workers whose children have autism.   Estimates indicate that SB-244 will increase the annual cost of premiums—which are paid by private-sector employers and their workers--by $372 million.

The bill, sponsored by Senate President Brandon Shaffer (D-Longmont), awaits Third Reading by the Senate, probably on Monday.  If approved, the bill then will go the House for consideration.

The bill, however, exempts State Government workers, children insured under the State-Federal health-insurance plan known as CHP+ and adults enrolled with Medicaid because it would cost Colorado over $80 million in the first two years to comply with the mandate.

CACI and CACI members Anthem Blue Cross Blue Shield, Rocky Mountain Health Plans and Colorado Association of Health Plans, along with other business organizations, are fighting the bill.

Single-Payer Health Insurance Bill Killed at Sponsor’s Request

This afternoon, Representative Joe Rice (D-Littleton), asked the committee that he chairs, the House Business Affairs and Labor Committee, to kill HB-1358, the single-payer bill advocated by the South Metro Chamber of Commerce.  Representative Rice said the various parties involved in the health-care policy debate would be working with the Governor’s Office after the session to move health-care reform forward.  

Last week, the House killed HB-1273, a bill that would have begun laying the foundation for a single-payer health-insurance system for Colorado.  HB-1273 was sponsored by Representative John Kefalas (D-Fort Collins) and 15 fellow House Democrats, but opposed by Democratic Governor Bill Ritter.  CACI strongly opposed HB-1273.

Last month, the CACI Board of Directors unanimously approved a resolution reaffirming CACI’s position to oppose legislation that tries to implement a mandate on individuals to obtain health-insurance.  Instead, CACI favors incentives for individuals and employers for greater coverage of workers.

Med-Mal Bill Dies in the House

On Wednesday the bill, HB-1344, which as introduced would have increased the maximum amount on damages for medical malpractice insurance awards for non-economic damages, went down to defeat on a recorded Third Reading by the House.

The version that died Wednesday would have forced medical-malpractice insurers to obtain prior approval from the state insurance commissioner if they wanted to increase premiums by more than 5 percent annually.  The bill had been approved on a voice vote by the House on Tuesday on Second Reading.

On Monday, the House Judiciary Committee stripped out the increases in the cap.  The House sponsor was Representative Christine Scanlan (D-Dillon), and the bill was pushed by the Colorado Trial Lawyers Association.

As introduced, the bill would have increased the damage caps on non-economic loss or injury called “pain and suffering” in medical-malpractice cases from $300,000 now to a much higher level, perhaps 50 percent higher, based on the cumulative annual inflation rate from 1988 to 2009.

CACI worked with a broad coalition of business organizations and specialized medical organizations to defeat the bill that argued three main points against the bill:

• Higher liability caps will increase health-insurance premiums.

• Higher caps increase “defensive medicine,” which increases health-care costs.

• Specialty doctors and rural areas will be adversely affected by higher liability caps.

This is the second time in two years that the effort to increase med-mal caps on non-economic damages has failed.  For coverage of HB-1344 by The Denver Post, click on:

http://www.denverpost.com/politics/ci_12187580

Subject of Compromise, Bill to End Six Percent General Fund Growth Limit Heads to House Floor

Governor Ritter and various organizations, including some business ones, have weighed in on SB-228, the bill that as introduced would have terminated the six percent limit on the annual growth in State General Fund spending.

Consequently, some business organizations have moved to a “neutral” position because of the amendments that have been made to the bill.  Others remain opposed.

The result is a complex, compromise bill that was debated and approved yesterday afternoon by the House Transportation and Energy Committee, which debated and then passed the legislation on a party-line six-to-five vote.  This morning, the House Appropriations Committee approved the bill on a seven-to-three vote, with three legislators excused, sending it on to the House Floor for Second Reading.

The House co-sponsors are Representative Don Marostica (R-Fort Collins) and Representative Lois Court (D-Denver).  The bill originated in the Senate, which passed the legislation.  It was sponsored by Senator John Morse (D-Colorado Springs). 

The new version of the bill would repeal the limit and restrict the growth of the General Fund to no more than 5 percent of the state’s personal income annually.  Although that would allow the Fund to grow considerably more than allowed by the six percent limit, no one expects the state’s revenue to pick up that much for several years because of the current economic recession.

The bill in its new form would eliminate the “ratchet down” effect of the current law that says the maximum growth can only be six percent above the prior year’s Fund amount.  When revenues fall because of an economic downturn and the legislature has less to spend, the limit applies to that lower dollar amount.

The compromise bill also would provide two percent of General Fund monies to transportation for five years--beginning in 2012 if personal income from the year before is greater than five percent--which would yield about $160 million per year.

In March, the CACI Board of Directors unanimously voted to oppose SB-228.  CACI is concerned that, in the bill’s present form, funding for transportation and for capital construction (read higher education) remains problematic for various reasons when compared to the existing law, discussed below.

In addition to CACI, the following CACI members are opposed to the bill: West Chamber Serving Jefferson County, Colorado Springs Chamber of Commerce, the Metro North Chamber of Commerce and the Northern Colorado Legislative Alliance (whose three chambers--Loveland, Fort Collins and Greeley--are CACI members).

The six-percent spending limit is known as Arveschoug-Bird for two legislators who sponsored the bill in 1991.  Although Arveschoug-Bird contains an emergency override--a two-thirds vote required by each chamber--the legislature has never attempted an override.

After Arveschoug-Bird was enacted, subsequent legislation provided that excess revenue above the six percent limit would go mainly to transportation and the “controlled maintenance fund,” which is for capital construction at the state’s higher-educational institutions.  Essentially, the limit is a method to allocate some state spending to transportation and higher education when available revenues exceed the six percent spending limit.

For coverage of the bill by The Denver Post, click on:

http://www.denverpost.com/legislature/ci_12214494

Finally, the Post today editorialized in support of the bill in its current form, calling it a “reasonable fix”:

http://www.denverpost.com/opinion/ci_12213200

Correction: Senate Elects Senator Shaffer as President, Senator Morse as Senate Majority Leader--but They Will Not Assume Positions until May

Last Friday, I reported that the Senate elected Senator Brandon Shaffer (D-Longmont), who has served as Senate Majority Leader, as Senate President to replace Senator Peter Groff (D-Denver), whose resignation I stated was effective that day.  That was incorrect.

Both Senators will continue holding their respective legislative leadership positions through the end of the session, which must end on Wednesday, May 6th, according to the State Constitution.

After he resigns from the Senate on May 8th, Senator Groff will then join the U.S. Department of Education.  Senator John Morse (D-Colorado Springs) was elected Senate Majority Leader to replace Senator Shaffer.

For More Information on Legislation . . . 

CACI members with questions about legislation that CACI opposes or supports should contact Chuck Berry, CACI President, at 303.866.9652 or e-mail him at cberry@COchamber.com

Questions pertaining to health-care bills should be directed to Ralph Pollock, Chair of the CACI HealthCare Council, at 303.866.9657 or via e-mail at ralph@apaccess.com