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Concierge Medicine Poses Problems for State Regulators

One of the main effects of the Affordable Care Act has been that it’s incited substantial changes to the health care system, among them the required inclusion of certain essential benefits, such as maternal care, newborn services and preventative care. In turn, these new mandated benefits have led to a spike in the use of primary care services and providers. According to a report by the UnitedHealth Center for Health Reform and Modernization, the ACA has created 25 million more annual primary care visits to already stressed primary care physicians. In response to the rising costs of health care and increased primary care physician workload, an alternative and privatized option for health care has developed over the past 20 years known as concierge medicine.

According to Concierge Medicine Today, an information repository and trade publication for the industry, concierge medicine is a relationship between a patient and a primary care physician in which the patient pays an annual fee or monthly retainer. In return, the patient receives enhanced and specialized care from physicians. Concierge physicians have many fewer patients than traditional practices: typically ranging in the hundreds as opposed to thousands that a physician may otherwise be responsible for. This allows physicians to ensure a deeper level of commitment to their patients in both time and availability. These plans can also boast specialty services such as telephone or email consultations, house calls, 24-hour access, next-day appointments, and more tailored preventative and wellness care for patients.

While there are varying models of concierge medicine services, the increasingly most popular is Direct Primary Care, or DPC, an emerging model that aims to provide a more affordable version of concierge medicine to a wider variety of patients. This model embraces a low, flat rate monthly fee for physician services, with monthly rates ranging between $50 and $100. Other concierge services in contrast range closer to $1,000 to $1,500 a month. In addition, unlike other concierge medicine services, DPC does not accept payment through a typical insurance policy; instead there is an upfront cost for services between patients and physicians without the barriers such as co-pays, deductibles or co-insurance fees.

Currently 42 states have DPC practices, ranging from as many as 10-13 practices in California to 1-3 practices in Maine. These sorts of practices have a growth rate of almost 25 percent a year. As a result of this rapid proliferation, states are having trouble finding an acceptable method of regulation for DPCs, often placing them under existing insurance regulations despite the fact that DPCs have explicit non-insurance policies.

Arizona, Louisiana, Michigan, Mississippi, Oregon, Utah, Washington and West Virginia are the only states thus far to have passed legislation explicitly stating DPC practices are not subject to insurance regulations. There is legislation currently pending in Florida, Idaho, Kansas, Missouri, Oklahoma and Texas to address this important distinction.

The Direct Primary Care Coalition has cited four key issues state legislation should address in attempting to regulate this new model of care: clarifying DPC as a healthcare service outside the scope of state insurance regulations, allowing healthcare consumers to purchase DPC options on health care exchanges, providing tax parity for DPC services and payments, and allowing Medicare and Medicaid beneficiaries to participate in DPC programs.

As states continue to explore options to reduce healthcare costs and expand primary care and employers are looking to comply with the ACA, DPC plans are increasingly becoming a preferred option. With pending legislation in six states and the increasing popularity of concierge medicine services, it is likely that states will continue to look at ways to bring these types of plans into the fold in upcoming legislative sessions.

A Twofold Approach to Federal Emission Standards

Greenhouse gas emissions have been a hot topic for states since the U.S. Environmental Protection Agency (EPA) released its controversial Clean Power Plan in June 2014. The plan, which aims to reduce carbon pollution from power plants by 30 percent by 2030, has been met with a variety of responses at the state level to either conform with or resist these standards. Under the rules, each state would be required to provide the EPA with its own plan for cutting emissions from power plants within its borders by June 2016. The rules are expected to be finalized and promulgated by the EPA by mid-summer.

The rules would also require each state to reduce its emissions based on a formula that divides the states total CO2 emissions from power plants in pounds by the total amount of megawatt hours the state’s plants generate in power. As such, these reductions can vary from state to state, with Vermont and the District of Columbia not required to reduce emissions at all; neither is home to an active power plant. Washington’s power generators would have to reduce their carbon emissions by nearly 72 percent, the largest reduction needed in the country. Arizona, where some of the most vehement opposition to the plan has originated, would have to reduce emissions by nearly 52 percent.

Opposition to these rules has been fierce at both the state and national level. Earlier this month, the pressure opposing them was markedly increased by U.S. Senate Majority Leader Mitch McConnell, R-Kentucky. In an op-ed to the Lexington Herald-Leader, Senator McConnell took the unprecedented step of urging states and state leaders to outright ignore the EPA rules, should they be finalized and take effect, calling them unfair and “probably illegal.”

Despite the fierce and vocal opposition to the plans – particularly in red states and those with economies heavily dependent on the energy sector – numerous states are opting to take a twofold approach to the pending rules, by passing a resolution stating opposition to the EPA action while also creating a plan to come into compliance with the rules should they take effect.

Alabama, Arizona, Arkansas, Florida, Georgia, Illinois, Indiana, Kansas, Mississippi, Missouri, Nebraska, Oklahoma, Pennsylvania, West Virginia and Wyoming have all passed resolutions urging the EPA to respect the primacy of the state’s authority to regulate carbon dioxide performance standards or otherwise going on-the-record with their opposition to the plans, while resolutions are pending in several others.

In order to stay in compliance with the potential rules, Arkansas, Kansas, Kentucky, Louisiana, Missouri, Pennsylvania, Virginia, West Virginia and Wyoming have all passed bills that would authorize the creation of a state plan to cut emissions pursuant to the EPA’s proposed rules. Additionally, bills of this nature are pending in Alaska, Arizona, Colorado, Florida, Illinois, Indiana, Minnesota, Mississippi, Montana, Nebraska, Nevada, North Dakota, Oregon, South Carolina, South Dakota, Tennessee, Texas and Washington.

Looking forward through the 2016 legislative season, it is likely that the states which have not done so this will be in a rush to adopt legislation with the new emissions standards in mind, with the June 2016 deadline for a blueprint fast approaching. With only nine states having adopted bills to date, look for this to be a major issue next year.

States Consider Renewable Portfolio Standards for Debate in 2015

As the use of renewable energy sources, such as wind and solar power, have taken off across the U.S. in recent years, so too have state-based legislative policies that promote and incentivize growth in these burgeoning sectors. To this effect, many states have been actively adopting and tailoring policies that invest in new and alternative green energy technologies in order to benefit their own economies and the environment at the same time. The most popular among these policies has been the adoption of renewable portfolio standards, or RPS standards. Currently, 38 states and the District of Columbia have adopted these standards, and they remain an active topic of debate in committee chambers and on the floors of numerous state legislative chambers.

These standards work by either requiring or recommending that a state meet a certain percentage of its energy needs through renewable energy generation technologies. These standards vary by both target year and target goal – the most ambitious being Maine, which seeks to meet 40 percent of its energy needs through renewable means by 2017. On the opposite end of this spectrum is South Carolina, which has set a target goal of two percent by 2021.

The adoption of RPS standards over the past decade has led to overwhelmingly positive growth in the renewable energy sector. A 2014 study on the effects of these policies by the University of California has shown that they’ve spurred an eightfold increase in renewable energy generation over the past decade.

States with Renewable Portfolio Standards

States with Renewable Portfolio Standards

Source: NCSL, CQ Statetrack.

To date, Alabama, Alaska, Florida, Georgia, Idaho, Kentucky, Louisiana, Mississippi, Nebraska, Tennessee and Wyoming have not adopted any type of RPS standard and have also not introduced bills that would do so during the 2015 legislative session. Additionally, and in contrast to most state efforts, West Virginia repealed its RPS standard in January with the adoption of HB 2001, which did away with the program entirely.

Thirty states currently have RPS bills pending: Arizona, Arkansas, California, Colorado, Connecticut, Hawaii, Illinois, Indiana, Kansas, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, Oklahoma, Oregon, Pennsylvania, Rhode Island, Texas, Vermont, Virginia and Washington. The topics of these bills can vary considerably based on legislative control of the state: Kansas is considering legislation that would sunset the program in the coming years, New Mexico is seeking to reduce their current targets, while Indiana is seeking to strengthen its program by moving from a recommended target goal to a required goal.

With 45 states still in session across the country and over 100 bills pending, it remains likely that states will continue to take further action in creating, altering or even eliminating their renewable portfolio standards.

Broadband Expanding in Wake of FCC Ruling

Last week the Federal Communications Commission (FCC) took two controversial votes that are likely to affect the nation’s broadband landscape for decades to come, assuming that the rules are not struck down in the courts, where they are likely to be challenged. While the so-called ‘net neutrality’ ruling had been widely publicized and spurred its own grassroots campaign to urge the Commission to approve the measure, the other far less publicized ruling is likely to have a much bigger impact on the average Internet user. In this ruling, the FCC struck down numerous statewide bans on municipally owned cable and broadband providers.

In the wake of this ruling, numerous states and municipalities are now free to move forward more aggressively on expanding broadband in areas where it was not previously possible due to broad restrictions on public ownership of broadband networks. In total, the FCC’s ruling struck down municipal bans in 19 states:

Broadband Expanding in Wake of FCC Ruling

With these bans now out of the way, cities and towns are now free to provide broadband networks where the provision of high-speed service was previously considered to be cost-prohibitive by traditional telecommunications providers. States are now likely to look at new ways to provide the needed funds to spur this development, including allowing municipalities to apply for funds that were previously restricted to private broadband providers.

States will also look at more traditional ways to expand broadband funding regardless of whether it will go to public or private providers: California, Montana, Nevada and New Mexico are all considering such legislation. Bills that would establish a tax credit for businesses investing in broadband access in rural communities were introduced in New Jersey and Virginia in 2014 and will carry-over to the 2015 session.

California legislators could consider AB 57, which was introduced without specific policy language, but states the intent of the legislature to enact legislation to remove barriers to broadband infrastructure investment. Montana Rep. Kelly McCarthy, D-Billings, recently prefiled HB 14, which would allow the state to issue bonds up to $15 million in order to create a broadband development fund to be administered by the Department of Commerce. New Mexico SB 34 was introduced by Sen. Michael Padilla, D-Albuquerque, and would create a broadband infrastructure fund in the state treasury appropriated with $10 million annually from the state’s general fund. This account would be overseen by the state’s Department of Information Technology, who would use it to provide 50 percent matching money for federal grants to bring broadband infrastructure to rural areas in the state, including for retail customers.

Some governors have already taken action or announced plans to do so. Iowa legislators killed a proposal last year that would have improved their broadband network, but Republican Gov. Terry Brandstad is determined that a revised proposal, “Connect Every Acre,” will pass. This plan would focus on providing incentives for broadband companies to build in profitable agricultural areas, reported Omaha.com. According to The River City News, Kentucky Republican Gov. Steve Beshear announced that the state is relying on a public-private partnership to improve their broadband network. The project is expected to be completed with no cost to taxpayers and will move their service from being one of the slowest connections in the country to one of the fastest. New York Democratic Gov. Andrew Cuomo is expected to release guidelines for his $500 million broadband expansion program, “NY Broadband Fund,” which would provide grants to broadband companies offering to match funds to improve existing infrastructure, capitalnewyork.com reports. Vermont Democratic Gov. Peter Shumlin announced in December that he plans to ensure that the areas with the slowest available broadband speeds will receive priority upgrades through a program called “Connect VT.”

Broadband Expanding in Wake of FCC Ruling

States Look to Fill Pot Holes and Budget Holes

States are facing three major hurdles to filling their transportation and infrastructure coffers in 2015: continued fallout from the recession, crumbling infrastructure and an increase in the utilization of alternative transportation fuels. Much of the current funding for state infrastructure needs comes from two sources – federal funding and state gas taxes. Pressure has been on both federal and state lawmakers to raise their respective gas taxes in order to shore up infrastructure maintenance, but the move remains unpopular among the public despite plummeting gas prices.

In addition to the gas tax, many states are looking at alternative proposals in order to fill gaps in their maintenance funds, including a tax or fee on “miles traveled” as well as raising excise or sales taxes on traditional fuels. Below we look at numerous state efforts to do so.

In Connecticut, Democratic Gov. Dannel Malloy made transportation investment a priority for his second term, but did not offer specifics about potential projects. On December 3, Governor Malloy told the CT Mirror, “I’m going to be talking about transportation…so people can make decisions. That will be ongoing throughout the next four years. Certainly, we will begin in earnest shortly.” The state will open a new busway in March 2015 and begin a major expansion for its commuter rail system in 2016.

Delaware Transportation Secretary Shailen Bhatt directly criticized the troubled federal transportation budget process, claiming that states “should not have to engage in creative financing to solve a federal budget problem,” according to the Delaware News Journal. When adjusted for regional inflation, the state’s Transportation Trust Fund has lost 34 percent of its buying power, and it has been forced to shelve a number of much-needed infrastructure improvements.

Republican legislators in Georgia will be challenged to find as much as $1.5 billion in new money to address the state’s aging and insufficient infrastructure, according to the Atlanta Journal Constitution. These lawmakers could face a vote on a gas tax hike or an increase in the state sales tax, both of which are distasteful for a Republican majority with a healthy number of Tea Party supporters. Keith Golden, the state Department of Transportation commissioner, tried to appeal to a state’s rights position before a gathering of lawmakers in early December. “We are much too dependent…on the federal government and that gas tax program,” he said. Republican Gov. Nathan Deal has declined to propose a solution at this time, stating that he prefers that a House or Senate committee make the first move.

A transportation task force appointed by Idaho Republican Gov. Butch Otter estimates that the state would need an additional $260 million per year to maintain its transportation infrastructure. Policy proposals for fixing this shortfall include increasing vehicle registration fees, utilizing the current sales tax on automotive parts for transportation funding, increasing fuel taxes and charging a purchase fee for new or used vehicles, according to the Capital Press.

Iowa Republican Gov. Terry Branstad indicated that the time is right to raise the state’s fuel tax in an effort to fund much needed road and bridge improvements. According to the Des Moines Register, this emphasis on a politically controversial issue marks a shift from his campaign, which addressed mostly small and unproblematic policy proposals. The problem of highway funding has dogged the legislature for years, and neither Democrats nor Republicans have previously been willing to support tax increases to improve those conditions. However, legislators are likely to be in a more cooperative mood in 2015, since Governor Branstad was reelected and the parties will share power in the House and Senate.

Republican Gov. Rick Snyder and legislative leaders will put a ballot proposal before Michigan voters in May 2015 to increase the state’s sales tax from six percent to seven percent, while eliminating the sales tax on motor fuels. This is one piece of a larger plan to generate $1.2 billion a year in new revenue for transportation maintenance, according to MLive.com. A package of bills recently passed by the House and Senate stand to take effect if the ballot proposal is approved. These bills would, in part, change the calculation of existing fuel taxes, as well as eliminate certain registration discounts and increase fees for heavy trucks.

The Minnesota Department of Transportation commissioner Charles Zelle told Minnesota Public Radio that he does not see room in the state’s $1 billion budget surplus to fix its roads and bridges. He would prefer that the state establish a steady stream of revenue, like a road-usage fee, rather than rely on one-time funding. Democratic Gov. Mark Dayton proposed a wholesale gas tax in 2014, but Republicans found the proposal unacceptable.

Legislators on both sides of the aisle in New Jersey have expressed reluctant support for a gas tax hike in an effort to address the looming collapse of the state’s Transportation Trust Fund, according to the Asbury Park Press. Although many acknowledge that the state must address this problem with some kind of tax increase, Assembly members are particularly loath to approve a tax hike because they will face reelection in 2015.

In light of a $5 billion windfall from bank settlements, many in New York are calling for Democratic Gov. Andrew Cuomo to use the funds to improve infrastructure and transportation systems, according to cityandstateny.com. Sen. Joseph Robach, R-Greece, chair of the Senate Transportation Committee, plans to negotiate more reliable transportation funding with the federal government for the future, and would like to shift away from a fuel tax toward something independent of fossil fuel consumption. Governor Cuomo has supported the idea of using these funds to bolster aging infrastructure and would like to do so through a new infrastructure bank, but other legislators caution against treating these one-time funds like an ongoing source of revenue.

Wisconsin also faces a difficult choice in addressing its transportation budget shortfalls, according to the Wisconsin State-Journal. The Transportation Finance and Policy Commission has recommended a number of solutions, including increasing its gas tax by five cents per gallon, increasing annual commercial vehicle registration fees by 73 percent and increasing driver’s license fees. It also proposed to eliminate the sales tax exemption for a vehicle’s trade-in value and adopting a mileage-based fee system for passenger vehicles and light trucks. Many state lawmakers have joined Republican Gov. Scott Walker in decrying a gas tax increase, as well as the possibility of instituting toll roads.