Delaware Healthcare Industry Blog

Let’s Talk Healthcare Law June 30th – The 149th Delaware General Assembly Deadline

Over the course of the next few weeks Morris James is going to tell you everything you need to know about healthcare bills that should be on your radar as we close out this legislative session. Guns, mental health, opiates, primary care reform, marijuana, and “the Benchmark” are all on the radar screen. If the world was created in seven days, we can give you that many days of posts to set the healthcare law table on the 149^th on each of these topics.  Of course, there are always a few “June Surprises” as well that we’ll stay on top of for you.

First, to understand these bills, let’s place them in the right historic context; nothing does that like the budget. In the words of Delaware’s own Vice President Joe Biden, “Don't tell me what you value, show me your budget, and I'll tell you what you value.”  So this first post will be about the 2018 Budget and “one time investments.”  After the 2017 “shared sacrifice” budget battle and cuts that led to the first late budget in nearly fifty years, it is hard now to reconcile that the state has nearly $430 million in “surplus” revenue as we enter the final month of the 149^th Session. For many legislators, this is the first session in their careers that is not predicated on finding cuts and generating revenue. In that context, Governor Carney has been strongly urging caution.  “One-time revenues for one-time investments” is the mantra from the executive branch. Governor Carney consistently urges that the fundamental budget still has long-term structural flaws and that putting budget dollars into continued programming may lead to the legislature having to cut that very same programming in the near future. 

“Budget Smoothing” has been promoted by the Republican Treasurer Ken Simpler and supported by Governor Carney. As an oversimplification, it proposes to revamp the “rainy day fund” and put it to work by storing a portion of revenue in “up” years to be the applied during the down, thereby “smoothing” natural cycles in the economy and therefor the budget. However, it appears the legislature has opted not to embrace this the “smoothing” concept this year, at least in the Joint Finance Committee which concluded its work at the end of May. Remember, the budget is the legislature’s strongest policy tool and the Treasurer and Governor are in a separate branch of Government. Regardless, the undercurrent of restraint and long-term planning remains, even in an election year with excess revenues. No one seems to argue that the budget still has structural deficits the state needs to address. What remains to be seen is what, if any, new revenue makes it into the budget come June 30^th. 

Two big healthcare revenue questions, that we’ll delve into in detail later, are around the legalization and taxation of marijuana and the taxation of opiates. For healthcare savings, the Benchmark remains the Governor’s preferred method of curbing the healthcare inflation rate: at its base, tying (but not capping) an entity-level cost inflation rate to the state’s growth rate. As the saying goes, the devil’s in the details.  Lastly, for now, as a late addition this session, the healthcare providers have sounded the alarm on primary care. Legislation with a short-term shoring up of small practices and a long-term drive of resources into preventative care has been filed. We’ll talk about that bill in our next post.  Watch this space!

For more information, contact Drew Wilson at dwilson@morrisjames.com.

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