Frank O'Bannon on Health Care Former Democratic IN Governor

No federal pre-emption of employee health plan regulation.

The Issue

NGA’s Position

The Governors support efforts designed to enable small employers to join together to participate more effectively in the health insurance market. In fact, Governors have taken the lead in facilitating the development of such partnerships and alliances. However, these partnerships must be carefully structured and regulated by state agencies in order to protect consumers and small businesses from fraud and abuse and underinsurance. NGA opposes attempts to expand federal authority under ERISA. The Governors have identified the prevention of such federal legislation in the 107th Congress as a top legislative priority.

States have the primary responsibility for health insurance regulation. Across the nation, Governors are working to protect consumers and patients and to properly regulate the complicated health insurance industry.

Maintain Medicare funding of HMO benefits.

• WHEREAS, Medicare premiums paid to Health Maintenance Organizations (HMO) are set at 95% of the current fee-for-service Medicare spending on residents of the county where the HMO is to be offered; and
• WHEREAS, The lack of readily accessible medical care in some areas results in lower utilization of medical services and lower Medicare spending; and
• WHEREAS, The combination of the Medicare HMO premium formula and differences in medical care service utilization results in fewer medical benefits for many Medicare HMO participants in rural, and other low medical care utilization areas; and
• WHEREAS, Medicaid will likely be used to fill the coverage gap in these areas, requiring additional state money; and
• WHEREAS, Language in the 1997 Balanced Budget Act was designed to address these inequities; now therefore be it,
• RESOLVED, That the Midwestern Governors’ Conference encourages Congress to continue its effort to address these inequities, and to resist efforts to reverse the changes made to Medicare HMO premiums in the Balanced Budget Act of 1997.

Protect state tobacco settlement funds from federal seizure.

As you know, preserving and protecting the state tobacco settlement funds is the nation’s Governors’ highest priority. We strongly urge you to reach final agreement and pass the conference report on the emergency supplemental appropriations bill soon, and to retain the Senate provision that protects our settlement funds from federal seizure.

Many of our state legislatures are currently in session, and some have already completed work on their budgets. Therefore, it is critical that conferees reach agreement quickly on this issue. Governors are unified in their commitment to ensuring that the funds remain in the states and that there be no restrictions on states’ ability to tailor spending to meet the needs of their citizens.

We offer our strongest support for conferees to recede to the Senate version of the bill containing the Hutchison/Graham bipartisan tobacco recoupment protection legislation.