INDEPENDENT REGULATORY REVIEW COMMISSION Actions Taken by the Commission [26 Pa.B. 1885] The Independent Regulatory Review Commission met publicly at 11 a.m., Wednesday, April 3, 1996, and took the following actions:
Regulation Approved:
Insurance Department #11-133: Medicare Supplement Insurance Minimum Standards (amends 31 Pa. Code, Chapter 89, Subchapter K, Sections 89.771, 89.772, 89.775, 89.776, 89.778, 89.780, 89.783, 89.784, Appendices E and I)
Environmental Quality Board #7-284: Stream Redesignations--Pine and Elk Creeks, et al. (amends 25 Pa. Code § 93.9m)
Commissioners Present: John R. McGinley, Jr., Chairperson; Robert J. Harbison, III, Vice-Chairperson; Irvin G. Zimmerman
Public meeting held
April 3, 1996Insurance Department--Medicare Supplement Insurance Minimum Standards; Doc. No. 11-133
Order On March 6, 1996, the Independent Regulatory Review Commission (Commission) received this regulation from the Insurance Department. This rulemaking would amend 31 Pa. Code, Chapter 89, Subchapter K, Medicare Supplement Insurance Minimum Standards, Sections 89.771, 89.772, 89.775, 89.776, 89.778, 89.780, 89.783 and 89.784 and Appendices E and I. The authority for this regulation is The Administrative Code of 1929 (71 P. S. §§ 66, 186, 411 and 412) and the Federal Social Security Act Amendments of 1994 (42 U.S.C.A. § 1395ss(a)(2) and (p)(1)) and Section 171(m) of the Social Security Act. Notice of proposed rulemaking was omitted for this regulation; it will become effective upon publication in the Pennsylvania Bulletin.
On March 29, 1996, amendments to the final-omitted regulation were submitted by the Department to correct technical errors in the Pa. Code title and in section 89.776(1)(v)(E) and section 89.780(a)(3)(c).
To meet the requirements of the Social Security Act Amendments of 1994 (SSAA-94), this proposal standardizes Medicare supplement insurance coverage by establishing in regulation the revisions prepared by the National Association of Insurance Commissioners (NAIC). Revisions prepared by the NAIC were circulated to State Insurance Commissioners by the Department of Health and Human Services (HHS) Health Care Financing Administration which directed states to adopt changes to state regulatory programs before April 28, 1996. If Pennsylvania fails to make the changes in the proposal, Medicare supplemental policies could only be sold after April 28, 1996, if the Secretary of HHS certifies that the policies meet the new Federal standards. Revisions to existing regulations in this proposal include the minimum requirements for the approval of Medicare supplemental policies for issuance and sale in the Commonwealth.
Because the SSAA-94 permits some exceptions which allow the sale of Medicare Supplement insurance policies that duplicate Medicare benefits or duplicate existing supplemental coverage when proper disclosure is made, significant changes are made to section 89.783 (required disclosure provisions) and to the disclosure statements in Appendix I of this proposal. Revisions for the ''Statements'' and ''Questions'' section of an application must contain information to warn consumers about duplication of coverage.
In an addition to the ''Statements'' which must accompany an application, there is a warning to consumers that if the policy is purchased, they may want to evaluate existing health coverage and decide if multiple coverage is needed. An existing statement notifies consumers that counseling services may be available concerning medical assistance through the State Medicaid program. Benefits as a Qualified Medicare Beneficiary and a Specified Low-Income Medicare Beneficiary are added. The revision allows the sale of policies to Medicaid beneficiaries who meet specific income and asset guidelines.
The ''Questions'' portion of an application will now ask if the consumer intends to replace a current Medicare policy. The proposal requires an increase of type size, from 10 point to 12 point, for notices to the applicant. The text of the notice is modified to state that if the consumer decides to purchase the coverage, they should terminate other Medicare supplement coverage. Further, the notice will also warn the consumer to evaluate the need for other accident and sickness coverage that may be duplicated by the new policy. The agent must sign a statement which indicates to the best of their knowledge, the policy they are selling will not duplicate existing Medicare coverage because the consumer intends to terminate existing Medicare supplemental coverage. Applications provided to Medicare-eligible persons for health insurance must disclose the extent to which a policy duplicates Medicare. Additionally, when a replacement policy is sold to a consumer who already has an existing Medicare supplement policy, a replacement notice advising the consumer to terminate existing Medicare supplement coverage must be provided.
Other modifications in the proposal include a change in the definition of ''Medicare supplement policy'' which is revised to eliminate an exemption for health care prepayment plans which are not employer or union-based plans. The exception from notice requirements for basic, catastrophic, major medical and single premium nonrenewable policies is eliminated. An existing requirement for refund of premiums for retroactively-determined periods of Medicaid eligiblity is eliminated. The proposal allows a 6-month enrollment period at age 65 for all individuals whether or not previously enrolled. Loss ratio standards are established for policies issued prior to July 30, 1992. Also, refund or credit calculations for policies issued prior to July 30, 1992, must be calculated separately after the effective date of this proposal, for individual policies and all other group policies combined. The Medicare Supplement Refund Calculation form found in Appendix E of this proposal is changed accordingly.
We have reviewed this regulation and find it to be in the public interest. The amendments bring Subchapter K into compliance with minimum Federal statutory requirements by adopting the NAIC Model Regulation. Adoption of the proposal will allow the continued sale of Medicare supplemental policies in Pennsylvania. Further, the final-omitted regulation contains revisions which ben-efit consumers by ensuring complete disclosure of information.
Therefore, It Is Ordered That:
1. Regulation No. 11-133 from the Insurance Department, as submitted to the Commission on March 6, 1996, and amended on March 29, 1996, is approved; and
2. The Commission will transmit a copy of this Order to the Legislative Reference Bureau.
Commissioners Present: John R. McGinley, Jr., Chairperson; Robert J. Harbison, III, dissenting; Irvin G. Zimmerman
Public meeting held
April 3, 1996Environmental Quality Board--Stream Redesignations--Pine and Elk Creek et al.;Doc. No. 7-284
Order On November 14, 1994, the Independent Regulatory Review Commission (Commission) received this proposed regulation from the Environmental Quality Board (EQB). This rulemaking would amend 25 Pa. Code § 93.9m. The authority for this regulation is sections 5 and 402 of the Clean Streams Law (35 P. S. §§ 691.5 and 691.402), and section 1920-A of The Administrative Code of 1929 (71 P. S. § 510-20). The proposed regulation was published in the December 3, 1994 Pennsylvania Bulletin with a 72-day public comment period. The final-form regulation was submitted to the Commission on March 5, 1996.
The regulation would change the designations of nine stream segments in Centre County. Seven of the stream segments would be redesignated as ''Exceptional Value Waters'' (EV). Two others would be designated as ''High Quality Cold Water Fishes'' (HQ-CWF). Four of the segments proposed for EV designation are currently designated as ''Cold Water Fishes'' (CWF) and the three other segments are currently designated as HQ-CWF.
The objective of this regulation is the redesignation of stream segments in two watersheds in Centre County. Elk Creek is a tributary to Pine Creek which flows into Penns Creek. Above its confluence with Pine Creek, Penns Creek is currently designated as CWF. Below its merger with Pine Creek, Penns Creek is designated as HQ-CWF. These current designations for Penns Creek are not being revised by this regulation.
Both Elk and Pine Creeks begin in Bald Eagle State Forest. The headwaters and the first 2 miles of Pine Creek are located in the Hook Natural Area. This area is a 5,119 acre forest tract that is being preserved in its natural state by the Bureau of Forestry in the Department of Conservation and Natural Resources. Pine Creek flows for approximately 20.4 miles, and Elk Creek flows 18.5 miles. With the exception of their headwaters and upper segments, both streams run through private property. There is a considerable degree of agricultural and residential activity in both watersheds. Small, but active, towns, such as Millheim Borough, Coburn and Woodward, are located on the banks of Elk or Pine Creeks.
The preamble of the final-form regulation summarizes the potential costs and benefits for local governments and the private sector in the following manner:
Persons proposing activities or projects which result in discharges to streams must comply with the regulatory requirements relating to current stream designations. Such persons could be adversely affected by the recommended changes that increase the level of protection provided to a stream, if they expand their discharge, or add a new discharge point, since they may need to provide a higher level of treatment for their new or expanded discharge. These increased costs take the form of higher engineering, construction or operating costs for wastewater treatment facilities. Treatment costs are site-specific and may depend upon the size of the discharge in relation to the size of the stream and many other factors. It is therefore not possible to precisely predict the actual change in costs. In addition, non-point source controls necessary to protect High Quality and Exceptional Value Waters generally add to the cost of planning and development for new or expanded non-point source discharges.
Overall, the citizens of the Commonwealth will benefit from these recommended designations because they will provide, in some cases, an added degree of protection for important public natural sources and, in all cases, the most appropriate degree of protection for each stream in question.
Both supporters and opponents of the regulation agree that the regulation will increase costs for local governments, residents and the private sector. There is disagreement over how onerous the increases will be and when and how they will occur. The current discharge from Millheim Borough's sewage treatment plant is ''grandfathered'' as an existing use and will not be affected by the regulation. However, if Millheim needs to expand its discharge or if other neighboring municipalities opt to build sewage treatment systems, then there will be new and additional costs. The Millheim Borough Council and the Boards of Supervisors for both Penn and Miles are all concerned by the future costs and restrictions that could be imposed by the regulation. According to these officials, a significant number of residents in the area are retired persons or senior citizens who are on fixed incomes. These people may not be able to afford the additional costs for sewage treatment imposed by the regulation. Representatives of the farmers in the area are also concerned by the uncertainty over cost increases associated with the regulation.
During the public comment period, more than 4,700 written comments were received concerning this regulation. The EQB also held a public hearing on January 25, 1995, at Penns Valley High School near the two watersheds. More than 70 people either testified or submitted written comments at the hearing. In recent weeks, we received more than 850 pieces of correspondence concerning this regulation.
The following is a list of some of the individuals and organizations who submitted substantive comments in support for the regulation:
Haines Township Board of Supervisors, Centre County
Pennsylvania Fish and Boat Commission
Pennsylvania Federation of Sportsmen's Clubs, Inc.
Pennsylvania Trout, a Council of Trout Unlimited
Penns Valley Conservation Association
Western Pennsylvania Conservancy
Senator Edward W. Helfrick
Representative Camille George
Representative Ruth Rudy
Representative Merle H. PhillipsAlthough most of the written comments supported the regulation, strong opposition to the regulation was expressed by a number of local residents, local municipalities and other organizations. The following is a list of some of the parties who have expressed opposition to the regulation:
Centre County Farm Bureau
Con-Stone, Inc.
Miles Township Board of Supervisors, Centre County
Millheim Borough Council, Centre County
Penn Township Board of Supervisors, Centre County
Pennsylvania Farm Bureau
Representative Michael K. HannaSenator J. Doyle Corman forwarded correspondence to the Commission from both supporters and opponents of the regulation. Pine and Elk Creeks are located in his district and in Representative Rudy's district.
We have reviewed this regulation and find it to be in the public interest. This regulation is one of the most controversial and divisive regulations ever brought before us for review. A great deal of frustration, anger, ardent dedication and resolute determination have been expressed by all sides of the debate over this regulation. There is also a significant level of confusion about the actual objectives of the regulation and its impact on local residents in the two watersheds. In our view, the primary objective of this regulation is the protection of the backward sedge (Carex retrorsa), an endangered semi-aquatic plant species. According to the Department of Environmental Protection (DEP), this is the overriding factor behind the EV designations for the lower stream segments of both Pine and Elk Creeks. The focus of contention for all sides of the debate over this regulation was the lower segments of these two creeks.
We recognize and respect the fact that Pine and Elk Creeks on their own and as a tributary to Penns Creek represent a valuable native trout fishery. However, DEP noted in August 1994 that the current CWF designations or upgrades to HQ-CWF were the appropriate designations to protect this type of resource. This position is consistent with the policy guidelines set forth in the DEP Special Protection Waters Implementation Handbook (DEP Handbook). Although this regulation will provide additional protection for the fishery resource, the existence of the backward sedge is the prime determinant for the policy decision for the EV upgrade.
With regard to the backward sedge, there is an apparent lack of scientific information as to whether an EV designation is necessary to protect this species. None of the watersheds in which the backward sedge reportedly exists is currently classified as EV at 25 Pa. Code § 93.9. Although this may indicate that an EV designation is not necessary for the survival of this species, the DEP notes that many of these designations may not actually reflect the current water quality of these streams. At present, there is no way to be certain how fluctuations in water quality will impact the continuation of this species. With the support of such organizations as the Pennsylvania Natural Diversity Inventory and Western Pennsylvania Conservancy, the EQB and DEP decided to err on the side of caution and provide the backward sedge with the utmost protection available under the special protection program. Although majority of the Commission acknowledges the ecological prudence of this approach, we are concerned by its impact on local governments and residents in the watersheds and the application of this policy approach in future stream redesignations.
Our concern with this policy is generated by the DEP Handbook itself. In its summary of the reasons for the EV designations in the Pine and Elk Creeks watersheds, DEP lists ''EV Category IV.1--Waters of Substantial Ecological Significance'' as the basis for the EV designation of the downstream segments of Pine and Elk Creeks. On page II-27 of the DEP Handbook, EV Category IV.1 reads: ''Waters where maintenance of existing water quality is required to protect any life cycle phase of an endangered or threatened aquatic or semi-aquatic species.'' [Emphasis added] The policy decision for Pine and Elk Creeks contradicts a straight-forward reading of EV Category IV.1 if it is an evidentiary prerequisite for a determination that maintenance of the current water quality is necessary for the survival of an endangered species. We recommend that the EQB and DEP review this guideline, fully examine its potential impact on the Commonwealth, local governments and private sector, and set forth their intent in greater detail. Any clarification or revision to the policy should include public notice and an opportunity for public comment.
A final area of concern is the role of local government in the stream redesignation process. From the comments we have received, it appears that the DEP failed to keep the local governments informed about revisions made to its initial proposal. Although the Commonwealth is the legal guardian of Pennsylvania's water resources, the costs of the Commonwealth's water management policies often have the greatest impact on the pocketbooks of the local taxpayers, residents and businesses. There should be a recognition of this fact within the redesignation process. All of the duly elected representatives of local governments in the affected watersheds should be active partners in the stream redesignation process. A prime example of the benefits of including local governments in this process was the EV upgrade for Valley Creek in Chester and Montgomery Counties and the Valley Forge National Park. In this case, local government agencies played a crucial role in supporting the EV designation. We recommend that the DEP and EQB work towards an inclusive approach in the stream redesignation process.
Therefore, It Is Ordered That:
1. Regulation No. 7-284 from the Environmental Quality Board, as submitted to the Commission on March 5, 1996, is approved; and
2. The Commission will transmit a copy of this Order to the Legislative Reference Bureau.
JOHN R. MCGINLEY, Jr.
Chairperson[Pa.B. Doc. No. 96-648. Filed for public inspection April 19, 1996, 9:00 a.m.]
