SESSION DAY 4: Rules Committee Chair Senator Respicio’s Report


Guam – Rules Committee Chair Senator Rory Respicio provides the following report on day 4 of the current legislative session.

Health Insurance “Medical Loss Ratio” Dominates Discussions

(Hagåtña, Guam) – Majority Leader and Rules Committee Chair Senator Rory J. Respicio reports that senators concluded day four of discussions on Substitute Bill No. 145-31, the Fiscal Year 2012 government budget bill.

During today’s Session, Vice Speaker B.J. Cruz urged the Legislature to consider in their deliberations of the FY 2012 government budget, the provisions of U.S. Public Law 111-148 – The “Patient Protection and Affordable Care Act” (PPACA) and its applicability to the Government of Guam Group Health Insurance Program. PPACA was enacted on March 23, 2010 and effective by September 2010. PPACA mandates that health insurance providers who do not spend 80-85% of premium dollars on medical care and health care quality improvements, must provide a rebate to their customers. Payment of these rebates is required to be made beginning in 2012.

Using the 73% Medical Loss Ratio from FY2010 figures, the vice speaker believes that the Government of Guam, its employees and retirees, are entitled to a rebate total of $8,737,166 for FY2011. Of this amount, up to $6,578,647 is available for the Legislature to allocate for government obligations in FY2012. Additionally, approximately $2,158,520 should be refunded to government employees and retirees. Vice Speaker Cruz expressed his intention to amend the General Fund revenue projections to include this rebate amount. Senator Respicio also expressed his intention to propose an amendment mandating the Department of Administration director to withhold payments to the government health insurance provider, if the provider is the same from one fiscal year to the next, to offset the cost of the rebate owed for the previous fiscal year. This mandate will also require that the Medical Loss Ratio calculations be certified by the Public Auditor.

Minority Leader Senator Frank Blas Jr. expressed support for the Cruz amendment and added that any amounts collected above what’s being
projected, must be used to pay past due tax refunds.

Session resumes at 2:00 PM Monday, August 22.