Health Policy--Federal Issues

July 18, 2006

The Honorable Michael Enzi
Chairman, Committee on Health, Education,
Labor and Pensions
United States Senate
Washington, D.C. 20510
The Honorable John A. Boehner
Majority Leader
United States House of Representatives
Washington, D.C. 20515

Dear Senator Enzi and Majority Leader Boehner:

On behalf of the National Conference of State Legislatures (NCSL) I am writing to express my concern about a provision in the House-passed version of H.R. 2830, the Pension Protection Act of 2005, currently under consideration as part of the House/Senate conference consideration of your respective versions of the bill.

On May 15, 2006, the U.S. Supreme Court in a unanimous decision determined that insurance plans and Health Maintenance Organizations can sue plan participants “in equity” to obtain reimbursement for the cost of medical treatment they provided or paid for a plan participant who received a judgment or settlement from a third party for the injuries the plan provided or paid for. The Court, in Sereboff v. Mid Atlantic Medical Services, Inc., left intact current federal law that provides that “insured” plans are subject to state laws regulating insurance. Section 307 of the House-passed version of H.R. 2830 would preempt these state laws.

The Court decision establishes a clear avenue for insurance plans and HMOs to assert their claims for recovery. Given the sweeping nature of the ERISA preemption of state laws, any efforts to erode the limited provisions in current law that “save” state laws should not be disturbed. It is extremely important that any contemplation of such an expansion be the subject of extensive Congressional hearings where states would be afforded an opportunity to express in detail our concerns. This has not occurred.

We strongly urge you not to include, Section 307 of the House-passed version of H.R. 2830, “Recovery by Reimbursement or Subrogation with Respect to Provided Benefits,” in the final conference agreement. As always, NCSL looks forward to working with you on pensions and other issues of mutual interest in the coming months.

Please contact Joy Johnson Wilson, NCSL’s Health Policy Director at 202-624-8689 or by e-mail at joy.wilson@ncsl.org if you have any questions or if NCSL can be of additional assistance to you.

Sincerely,

Dennis Byars
Nebraska State Senate
Chair, NCSL Standing Committee on Health
cc: House and Senate Conferees for H.R. 2830