Legislators concluded the 2004 legislative session in mid-June after a six month period of attempting new ways to provide government services while also tinkering with and preparing for what is a looming fiscal crisis in the next biennium. With the session behind them for this year, legislators seeking reelection and new candidates for office will turn their collective attentions to primary and general elections that will take place in September and November, respectively.
School Aid: An Issue Forevermore
For the fourth time in the last six years, the most contentious issue that the legislature addressed this year was the amount of and the distribution formula for state aid to education. The three previous debates had taken place in budget writing years (first year of the biennium) but this year's rancor occurred in the second year of the session as they attempted to alter the distribution formula in order to decrease the number of "donor" towns while increasing aid for those towns with a demonstrated need. The rancor stemmed from the legislature's failure to successfully do either.
In the closing weeks of the session, the Attorney General's office weighed in on the matter questioning the manner in which state aid to towns was determined. This opinion led the legislative leadership to change course from the effort to eliminate "donor" towns in the state's current "Robin Hood" funding structure. Handcuffed because the Governor had stated that he would veto any tax increase, the legislature could not find an alternative to alleviate the "donor" town dilemma and had to revert to the state's original reliance on the "donor" towns.
The school funding debate will repeat itself next year and coupled with the upcoming shortfall in Medicaid (see below) aid from the federal government in the next biennium, these and other fiscal issues are a preview of what we can expect to see during next year's budget cycle.
Three Failed Efforts: No Legal Reform, Health Care Reform, or Canadian Drugs
The legislature failed to enact a bill designed to reduce the cost of professional liability insurance for healthcare providers, preserving and improving access to certain health services, and ultimately reducing the costs of health insurance for employers and employees. Modeled after an existing Maine law where medical malpractice premiums are as much as 40% less than in NH, it was intended to promote more efficient resolution of malpractice claims through the establishment of screening panels for medical injury claims. Such a review by the screening panel would take place prior to trial in hopes of steering the parties towards a settlement before they go to court to determine the merits of the claimant's case. After weeks of heavy lobbying by the trial bar and the medical community, legislators were unable to reach a compromise on this promising initiative and the bill failed at the 11th hour
With sticker shock arriving in the world of health care insurance renewals this year, legislators have been concerned with the rate at which policy premiums have been increasing. Some small businesses have experienced premium increases as high as 60-90%. While believing that increases were to be limited to 25% per year when they passed the reforms of 2003, legislators attempted to enact the aggregate limit of 25% per policy but failed when proponents of the original law successfully argued that the new law needs time to work so that new insurance companies would enter the market to create greater competition with the hope that rates would stabilize or even decrease.
A bill which would have legalized the importation of prescription drugs from Canada if authorized by the federal government, failed to muster final passage in the waning days of the session. Without full knowledge of the safety of such importation and the fact that it was dependent on the approval of the federal government, legislators determined that waiting for the Food & Drug Administration to act was the appropriate step at this time. The issue of relief from increasing costs of prescription drugs will continue to receive attention from elected officials and candidates in the coming months.
Employment & Human Resources
In employment and human resources, the story this year is more about what didn't pass than what did. The closest vote in the House was on a bill to increase the minimum wage by 50-cents per year for three consecutive years beginning on July 1. It is traditional, but not required, that the Speaker of the House, when called upon to break a tie, casts his or her vote in favor of preserving the status quo. The tradition was upheld in this case and the bill was killed in the House by a vote of 173-172. Other proposals that were unsuccessful include a bill to extend unemployment benefits to workers seeking permanent part-time work or seeking full-time work but only during certain hours or shifts; a bill to create to a committee to study the feasibility of creating a trust fund to support a family and disability leave program, a baby-step in the long term goal of the bill's proponents which is to provide state-funded family leave and temporary disability coverage; and a bill to establish a Right to Work Act in New Hampshire.
Issues on the horizon in employment and human resources are continued efforts to achieve success on all of the above. These are perennial issues, and some are making progress little by little which keeps proponents on task.
Healthcare Matters
On the health and long-term care front, the biggest state issue facing many providers in New Hampshire is the state operating budget and its impact on Medicaid reimbursement rates. Although this was not a budget year, the issue came to the fore when the House added an amendment to a Senate bill that requires Fiscal Committee approval of any action by the Department of Health and Human Services to implement Medicaid block grants. Advocates fear a block grant system will increase revenues in the short term but, ultimately, lead to limited resources and reduced services. The Governor threatened to veto the bill, which also creates a nursing home provider tax aimed at increasing federal funds available for nursing home services, but he ultimately allowed the bill to become law without his signature.
Next year is a budget year, and the outlook for health care providers is not good. A recent study by the New Hampshire Center for Public Policy Studies (available at www.nhpolicy.org) predicts a $300 million deficit in the next biennium. According to HHS Commissioner John Stephen, at least $100 million of that deficit will be in the Health and Human Services budget as a result of federally-mandated changes to the hospital Medicaid Enhancement Tax. The state has relied for years on increases to business taxes, the tobacco tax, and other fees and assessments, to fill shortfalls here and there. But, a deficit of this size could lead to fundamental changes in the way state government is funded.
Key health and long term care bills enacted this year include a bill to establish criteria for health facility licensing rules in an effort to ensure a more appropriate balance is struck between protection of public safety and cost to implement and enforce, a mandatory immunization bill aimed at increasing the rate of immunization for flu and pneumonia and improving data collection related thereto, a bill that allows community needs assessments by health care charitable trusts to be performed once every five years rather than once every three years, a bill that requires all charitable trusts with revenues of $500,000 or more to file financial statements with the Office of Charitable Trusts and those with revenues of $1,000,000 or more to file audited financial statements, and a bill that allows New Hampshire to join the Nurse Licensure Compact thereby allowing out-of-state nurses who meet certain requirements to practice nursing in New Hampshire and vice versa.
Issues on the horizon in the health and long term care arena, in addition to the budget, include comprehensive changes to the statutes governing end-of-life care and advance directives, changes to the privilege for quality assurance information aimed at allowing similar types of providers to share information and learn from each other, and changes to Medicaid eligibility and available services including a review of all so-called optional services.
Campaign Season Begins
Political attention will now shift to those who have filed for office, with the September primary and November general elections filled with candidates from President to state representative. The most contested race will be for the Governor's office as Governor Craig Benson seeks a second two-year term. While Benson has no significant opposition in the primary, two Democrats have filed to challenge him in November. Long-time Democrat activist, Paul McEachern and businessman, John Lynch, will be squaring off in September to earn the right to challenge Benson. McEachern is currently a State Representative and past Democrat nominee for Governor (1986 & 1988). He is espousing a state income tax to address the inequities of the school funding issue in NH. Lynch was most recently the chair of the USNH Board of Trustees and he has taken the "pledge" to veto any general income or sales tax. Spirited contests are expected throughout the summer months and into the fall.
There will also be a lot attention surrounding the 24 state senate races as all but two incumbents are seeking reelection. Senator Jane O'Hearn, a Republican from Nashua and Senator Burt Cohen, a Democrat from New Castle will not be seeking office again. The current 18-6 majority for the Republicans will be difficult to maintain especially if the races at the top of the ticket are close.
With respect to the 400 member House, the 280-120 Republican majority is expected to shrink a little but do not look for any monumental shift. The Democrats will not top more than 135 or 140 seats in November.
Also, present legislators will be filing bills beginning in September to be considered next session and study committees will be working on reports to be submitted to the 2005 House and Senate. Action in Concord is a year round process, although regular legislative business for 2004 has ended.
This article is intended to serve as a summary of the issues outlined herein. While it may include some general guidance, it is not intended as, nor is it a substitute for, legal advice. Your receipt of Good Company or any of its individual articles does not create an attorney-client relationship between you and Sheehan Phinney Bass + Green or the Sheehan Phinney Capitol Group. The opinions expressed in Good Company are those of the authors of the specific articles.
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