|
||||
|
|
||||
2008 Issue Trends
State legislatures in 2008 will face an ever widening spectrum of difficult problems, from healthcare woes to illegal immigration. State Net staff previews some of the key issues we see lawmakers considering in the coming year:
Foreclosures, Bankruptcy, Lending
The "subprime crisis" is already spawning a variety of proposed measures dealing with foreclosures, future mortgage lending and credit. Specifically, proposed measures are providing for free mortgage foreclosure counseling and education to homeowners who have defaulted or are in danger of defaulting on the mortgages on their homes as well as certification standards for such counselors. Other proposals will require loan applicants for complex or nontraditional home loans to receive consumer counseling before the closing date. States are also looking at a new issue: discharged debts under bankruptcy still being reported as live and collectible, prompting them to be grabbed up by bankruptcy-debt buyers.
Privatization/Monetization of State Assets
With cash-hungry governors looking to solve budgetary shortfalls, conditions may be "go" for an unprecedented burst of buying and selling of state roads, utilities, lotteries, parking garages, water systems, airports and other properties. Such considerations are sure to spark legislative reactions. California and another dozen states are considering plans to sell or lease their lotteries. The temptation for potential state financial windfalls cuts across political lines.
Increasing numbers of hospitals, healthcare systems, and states are beginning to regulate drug company "promotions" to physicians and pharmacy benefit managers. Minnesota has already set limits on gifts, while at least 13 other states have similar bills that will be considered in 2008. Most of the bills call for disclosure by drug companies of the value, nature and purpose of any economic benefit provided in connection with "detailing", promotional or other marketing activities. Maine, Vermont and West Virginia have already adopted registry laws.
Billed as a means of reducing healthcare costs while at the same time catering to time-pressed consumers with garden variety ailments, hundreds of health clinics have sprung up in retail stores like CVS and Wal-Mart. Since the clinics are generally staffed by nurse practitioners who can write prescriptions, numerous oversight measures have been proposed, focusing on doctor supervision of the nurses and possible conflicts of interest between the clinics and their host retailers.
Hiring Immigrants/E-Verify/Sanction Cities
States considered over 1,400 immigration-related bills in 2007, and many expect a similar number to go before lawmakers in 2008. But states and municipalities are also responding in wildly different ways to undocumented workers. Lawmakers in at least a dozen states are mulling whether to introduce anti-illegal immigration measures similar to those adopted in 2007 in Oklahoma and Arizona allowing police to detain illegals and exposing employers to state fines and civil liability for hiring undocumented workers. Both of those laws are also under fire from business interests in those states who say they are suffering the unintended consequences of those measures, most notably a depletion of the available workforce.
The CDC reports that methicillin-resistant Staphylococcus aureus (MRSA, was responsible for almost 19,000 deaths in the US in 2005 - twice the number previously thought, and more than killed by AIDS. Such statistics are likely to result in bills requiring testing, disclosure and rigorous preventative actions in hospitals, medical facilities and long-term care centers where 85 percent of the cases occur. As with hospital-acquired infections (HAI), consumer groups have been lobbying states to mandate reporting in the hope that it will encourage facilities to take all possible steps to prevent MRSAs from occurring. At least five states - Illinois, New Jersey, Tennessee, Maine and Pennsylvania - approved MRSA-related measures this year.
Data Privacy
The privacy of personal, financial and health-related data continues to be a major subject of legislation. With most states already having enacted measures requiring data holders to notify consumers when a security breach occurs, the focus has shifted to providing consumers greater discretion over freezing access to their credit reports and scores and protection against discrimination from insurers and employers, in light of new testing technologies that indicate susceptibility to disease.
Seven states currently require photo ID to vote, while 17 others require identification that doesn't have to include a photo. But with the 2008 presidential election less than a year away, the political hot potato voter ID will figure prominently on legislative agendas, as the two major parties angle for every vote they can muster. Twenty one states have over 150 bills pertaining to the issue that will carry over into the 2008 session.
Carbon trading is already big business ($25 billion in 2006) and attracting Wall Street, global hedge funds and boutique trading firms. Companies are investing in reforestation and other projects that soak up or displace greenhouse gases, earning credits (offsets) that can be sold on the open market to power plants, cement manufacturers and others with caps on the volume of CO2/greenhouse gases they can permit. Cap-and-trade is expected to be the route to go rather than enacting carbon taxes.
The large scale food and product recalls this year, splintered federal food and product safety oversight and consumer/voter concern about where their food is coming from have prompted state legislatures to muscle in on this issue. Despite federal country-of-origin labeling (COOL) mandates - or because of their limited implementation - COOL bills were considered by a number of states in 2007. And despite the prospect of federal preemption, even more are likely next year.
In 2003, the European Community adopted the Restriction of Hazardous Substances (RoHS) Directive, restricting the use of lead, mercury, cadmium, chromium VI, PBB and PBDE in the manufacture of electrical equipment, and the Waste Electrical and Electronic Equipment (WEEE) Directive, making manufacturers responsible for the recovery and recycling of all types of electrical equipment and components. An increasing number of states are considering legislation referring specifically to the tough new standards.
It is estimated that the U.S. goes through 100 billion plastic bags a year. Those bags take an estimated 12 million barrels of oil to produce and last almost forever. According to the Earth Policy Institute, it takes another 1.5 million barrels of oil a year just to make the plastic water bottles Americans use. After San Francisco became the first major U.S. city to ban plastic shopping bags earlier this year, nine states followed up by introducing similar bills that would enact statewide bans or mandatory recycling. With many big city mayors now calling for citizens to choose the tap over bottled water, a likely increase in new measures by the states should be expected in 2008.
The increasing rate of obesity in the US and its direct relationship to the costly treatment and management of chronic illnesses has a serious impact on the economy. Like obese adults, obese children are at a greater risk for developing chronic diseases, and many state legislatures will again be aiming at improving school nutrition standards and making physical education requirements more demanding. Other bills could address better community design and zoning, advertising/marketing restrictions, and food/menu labeling.
When queried as to what would be the "most contentious" issue debated by state legislatures in 2008, member companies of a major insurance association overwhelmingly responded: use of credit scores in underwriting. Over 40 bills in 18 states will carryover into 2008 and many more are expected.
The passage of Referendum 67 in Washington, which makes it unlawful for insurers to unreasonably deny claims and entitles claimants to actual damages, attorney fees, and in some cases up to triple damages, has spooked insurers. At the same time, states may jump in if nothing develops at the federal level regarding the claim denial practices of LTC insurers who are being questioned about the doubling of claims denials over the past five years and a 70 percent overturn rate in favor of the policyholder upon appeal. Insurers fear a general resurgence in state "anti-insurer activism" over what the industry believes are accurate well-established underwriting criteria.
A recent survey by a leading national insurer found that nearly half of companies with 500 or more employees offered some form of "wellness program." Twenty percent said they impose financial penalties on employees for not following wellness guidelines. Future employer-employee reactions to such program trends are likely, in one form or another, to involve state lawmakers. For example, a new bill in Pennsylvania (HB 2027) provides an income tax exemption for wellness services and healthy living products and also exempts those products and services from sales taxes. On the other hand, the "tough love" approach is likely to cause employee push-back in the form of legal and legislative counter-measures.
Despite health care cost inflation outpacing national inflation, legislators are expected to continue to respond to policyholders/voters efforts to require additional medical treatment benefits from insurers. Two benefits categories expected to lead the coverage list are bariatric/gastric (weight-loss) surgery and "medically necessary rehabilitative services" such as autism, Asperger's Disorder and attention-deficit hyperactivity disorder (ADHD), the latter for persons younger than 19 and for services not provided through the individual's school. A bill providing such benefits was recently introduced in VA (HB 83).
Federal law authorizes the U.S. Energy Secretary to designate National Interest Electric Transmission Corridors in geographic areas experiencing electric energy transmission capacity constraints or congestion that adversely affects consumers. The federal government has already started identifying areas where large scale congestion problems exist or may be emerging. But three or more contiguous states can enter into an interstate compact to carry out siting responsibilities within those states rather than leaving it to the feds. Some "corridor" states are beginning to do so (WA H 1038) and others are likely to in 2008.
There are seemingly only two kinds of states these days: those that already have (or soon will have) some form of universal healthcare - Massachusetts, Maine and Vermont - and those that want it. The problem is, of course, how to pay for it. At least 21 states introduced a universal healthcare bill in 2007, and many of those measures will carry over into 2008. Many observers were also waiting to see what happened in California, where Gov. Arnold Schwarzenegger (R) made healthcare reform a major issue this year. But Schwarzenegger and Democratic leaders in the Legislature have yet to reach an agreement on a funding mechanism, and with the Golden State budget inching toward a $14 billion deficit, that compromise may not happen. New York Gov. Eliot Spitzer (D), however, recently set up a task force to explore bringing universal care to the Empire State, so the issue will remain a hot topic no matter what happens in California.
More:
State Net Capitol Journal, 12-17-2007
State Net Capitol Journal, 12-24-2007