Legislature(2007 - 2008)BUTROVICH 205
02/18/2008 01:30 PM Senate HEALTH, EDUCATION & SOCIAL SERVICES
| Audio | Topic |
|---|---|
| Start | |
| SB117 | |
| SB160 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 117 | TELECONFERENCED | |
| = | SB 160 | ||
SB 160-MANDATORY UNIVERSAL HEALTH CARE
2:12:17 PM
CHAIR DAVIS announced the consideration of SB 160.
SENATOR FRENCH, sponsor of SB 160, said this is a comprehensive
bill. He said the basic idea is to make affordable health
insurance available to every Alaskan by establishing a health
care board that would oversee a fund and help certify health
care plans. Four to five private insurance plans would be
available to Alaska citizens who would get a voucher to help
them buy one of these plans. Most people would fall into the
zone of between 100 and 300 percent of the federal poverty
level. They would get a sliding scale voucher depending on their
income which would help them buy a plan. This doesn't affect
anyone who currently has health insurance; it is only meant for
those who don't get health insurance as part of their job. It is
not government run or socialized medicine, but rather using the
private market place to make private insurance available to
Alaska citizens through the creation of a health care fund.
He said this is the third time the committee has heard this
bill. There was a hearing in September 2007 in which 12
stakeholders including representatives from small business, the
medical profession, and the insurance industry helped outline
problems and difficulties with one hundred thousand uninsured
Alaskans. Two nationally prominent health care experts from the
Heritage Foundation and the Cato Institute commented on the
problem here and the solutions proposed. The CS that was
presented in January 2008 was the result of numerous
conversations and comments since the bill was introduced. He
said his office has had meetings with the Alaska Nurses
Association, Aetna, representatives from the Department of
Health and Social Services, the Division of Insurance, and
Commonwealth North's Health Care Roundtable. He has spoken
personally with over a dozen groups in the community including
the Alaska Association of Health Underwriters, AFL-CIO's Alaska
Conference, AARP, and the Alaska Chamber of Commerce. He will be
meeting with the National Federation of Independent Businesses.
His office has had hundreds of emails from Alaskans about the
bill.
2:15:42 PM
SENATOR FRENCH said there are misunderstandings about the bill.
He recently received an email from a small businessman who was
unhappy with an employer levy because while he'd like to provide
health insurance for his employees, the levy would put him in
the hole. In fact, Senator French said, the bill says there is
no levy if an employer has zero to 10 employees. So, it would
actually help his employees at no cost to him.
If an employer has between 10 and 20 employees, the levy is
percent of the gross payroll. If an employer has 20 or more
employees the levy is 2 percent. There are even ways to get
around those levies. If an employer offers to pay 33 percent of
the premium costs of a health insurance plan, there's no levy.
If employers enroll 25 percent of employees in an employer
sponsored plan, there's no levy. If an employer sets up a
Section 125 cafeteria plan, a plan made available by the federal
government to small businesses, that plan allows employees to
purchase health care coverage with pre federal tax dollars,
making employers exempt from the levy. The cost of a basic 125
plan to an employer is $300.
SENATOR FRENCH said he has used the internet to get the word out
to employees with a website. They have an interactive calculator
that allows people to go to the website, plug in their income
level, and find out what it would actually cost them to get a
health insurance policy. People from all over the state have
signed a letter of support and are signed up to get email
updates.
He said the bill will not address Medicare or reimbursement
rates. People over 65 years of age in Alaska will continue to
face difficulties getting a medical doctor as long as the
medical reimbursement rates set by the federal government remain
so far from the demands of the market. The legislation will not
establish a single payer government-run program. He said he gets
some flack from the right alleging that he's trying to push
socialized medicine which is not true. The same people that
object to government run medical care are often are signed up
for Medicare which is a single payer system which covers anyone
over 65. This bill relies on market forces and competition to
lower costs while at the same time ensuring that patients have
the financial capability to get the care they need. It doesn't
increase the number of doctors in Alaska.
2:19:51 PM
SENATOR FRENCH said the bill will reduce the unspoken financial
penalty paid by individuals and businesses who currently buy
coverage for people who opt out or cannot afford health care.
Federal law requires that hospitals give medical attention to
everyone who needs emergency care. When someone cannot pay, the
costs are transferred to those of us who can pay. Fixed state
and federal reimbursement rates for medical care prevent this
cost shifting from being borne by government programs like
Medicare and Medicaid. In 2005 after modest uncompensated care
reimbursement from the state and federal government, over $100
million worth of unpaid medical bills were left outstanding in
Alaska. Last September during the SB 160 hearings Joel
Gilbertson reported that Providence was likely to surpass $100
million of uncompensated care in 2007. Families USA estimate
that this unspoken tax will easily surpass $1000 per year per
family in 2010. As costs continue to go up, the free rider
problem will only get larger increasing the penalty of being
unprepared with a health care coverage plan.
SENATOR FRENCH said SB 160 is a work in progress and he'd like
to offer an amendment inspired by conversations with Chair
Davis. It states that Medicaid will continue to have a crucial
role to play in health reform efforts. The amendment charges the
health care board to offer recommendations on possible expansion
of Medicaid, taking into account the fiscal impact of those
changes. From these recommendations the legislature would have a
basis to act with the fiscal interests of the state in mind. The
legislation is methodical and it's a well thought-out proposal
that won't address all medical issues but it's a good start.
2:22:29 PM
CANDY SIMS, Anchorage, AK, said she has three major concerns:
the cost to the individual if her family doesn't qualify for the
voucher system by making too much money. She asked if there's
going to be some kind of a sliding scale. She said she's
concerned about the penalties mentioned in the last hearing one
of which was if you don't have insurance, perhaps you won't be
able to go to college. This would kill her daughter's dreams.
Her family doesn't currently have insurance and she has an
incurable disease. She was able to afford insurance for a while
but at a certain point she couldn't afford both insurance
coverage and the cost of prescriptions. When she tried to get
coverage for herself and her daughter, carriers refused to cover
her when she mentioned her disease.
MS. SIMS said she received an email from Senator French stating
that pre existing conditions would not be a problem. She asked
if the clearing house that would be set up would offer insurance
policies for people with chronic illness. If she has a problem,
for example, if she's been overcharged, she asked how the two
medical boards would interact.
CHAIR DAVIS said that she would bring the sponsor back to answer
some of Ms. Sims' questions, but some of the questions did not
pertain to the bill. This bill is not the answer to all the
problems.
2:28:55 PM
ANDY MODOROW, staff, Senator French, said the guarantee issue as
stated in the bill does require that an insurance company issue
a policy to an individual who is within the Alaska health care
program. Currently there is such a law for Alaska's small group
market with between two and fifty and it's one of the things the
responsibility clauses in the bill provide for. It reduces the
moral hazard that would come about without having coverage
required for everyone.
He said college access being tied to health care as an
enforcement tool is not in the bill. Some people on ACHIA
(Alaska Comprehensive Health Insurance Association) expressed
concern about being able to get coverage. ACHIA is Alaska's high
risk pool and the current draft of the bill provides vouchers of
up to 450 percent of the federal poverty line - an increased
amount that should make coverage affordable for them. While the
guarantee issue clause does overlap, it will provide a safety
valve while this legislation is being implemented.
2:30:50 PM
PATRICIA SENNER, Advanced Nurse Practitioner, Alaska Nurses
Association (ANA), Anchorage, AK said the Alaska Nurses
Association is very appreciative of Senators French and
Wielechowski for introducing this bill and starting the
discussion of how to solve Alaska's current health care crisis.
The members are concerned about their patients who are unable to
afford health care insurance. She personally had to advise a
young man not to get a job so he could remain eligible for
Medicaid and be treated for his leukemia. Many members work in
hospitals where fewer and fewer patients have health care
insurance while at the same time many of the sources of income
for the hospital are being siphoned off by private surgery and
imaging centers.
She said it is difficult for the members to analyze whether the
model outlined in SB 160 is financially viable, but they are
convinced that the solution to getting affordable health care
for Alaskans is to have the cost of that insurance be split
between the individual, the state and the employer. They also
think it is appropriate for the individual to assume some of the
responsibility for insuring that health care services are
available in Alaska. If Alaskans want a hospital to be available
when they need it, they should be willing to help pay for them
to keep their doors open.
The members also want to thank the senators for including a
nurse on the Alaska Health Care Board. If the board does become
a reality, there probably should be two boards, one dealing with
financial issues and running the program, and the other board
dealing with clinical issues concerning coverage services.
2:33:17 PM
LARRY WEISS, Executive Director, Alaska Center for Public
Policy, Anchorage, AK, said legislators have shown serious
interest in a difficult problem and they have put it on the
table for wide discussion. He said he does have some concerns
about the way the bill is structured and that SB 160 was chosen
in comparison to several other possible health reform plans.
When California was considering health care reform, state policy
analysts invited nine different organizations to submit
comprehensive proposals. On one end of the spectrum were
proposals that recommended minor tinkering around the edges of
the health care industry. At the other end was a proposal to
create the California Health Service, a health plan which made
all health care facilities publicly owned.
The nine plans were submitted to a large East Coast consulting
firm. The final report provides a detailed discussion of the
cost and coverage implications of each of the nine proposals. A
second selected contractor did a qualitative analysis of the
options which included such things as access, utilization,
continuity of care, quality of appropriateness of care,
etcetera. All the documentation is online. Anyone in California
has the ability to look this information up and comment on it.
MR. WEISS said he's also concerned about the over reliance on
private health insurance. That means very expensive and
unnecessary overhead for the state that isn't characteristic of
other approaches. It will include expensive deductibles and co-
payments for patients. Research shows that this will prevent
people from using the insurance once they have it. He's also
concerned that private health insurance in Alaska is actually a
very concentrated market where only one insurer controls 60
percent of all private health insurance in the state. The market
here is not competitive.
MR. WEISS expressed concern for the lack of provisions for
quality of care and the notion of individual mandates. It's a
punitive approach that is stumbling in Massachusetts and is
unnecessary with other plans. He suggested they take a serious
look at programs already in place that have a demonstrated track
record, that are cost effective and that have quality of care
elements already built in.
He thought Medicaid should be expanded to the maximum extent
possible and went on to discuss some of its benefits.
He also recommended developing a comprehensive package of
funding for the 130 community health clinics scattered across
Alaska to enable these non-profit federally subsidized clinics
to recruit and retain staff and to directly serve those who need
health care. This approach would eliminate unnecessary
administrative and other costs of private health insurance and
at the same time directly provide medical care to those in need.
Care costs for community health centers have been documented to
be far below those in for-profit health care settings. This
approach would also address the Medicare problem because
Medicare patients are accepted at every community health clinic
in Alaska.
2:39:37 PM
CHAIR DAVIS said that Medicaid can be expanded but this bill is
strictly intended to provide health care for all Alaskans.
2:40:41 PM
MARK VINSEL, Executive Director, United Fisherman of Alaska
(UFA), Juneau, AK, said that UFA doesn't have a position on this
bill, but gave an overview of the challenges facing commercial
fishermen regarding access to health care and insurance. UFA
thinks that commercial fishermen fall through the cracks to an
extent that is not seen in any other demographic or occupation
that they might compare themselves to. A higher percentage lives
in rural areas that are less likely to be served by a hospital
or a road system that would provide the ability to get to health
care facilities. Being largely self-employed with variable and
seasonable income opportunities, affordable health insurance is
difficult to come by. This is a problem that needs to be
addressed.
2:43:15 PM
WILLIAM STREUR, Deputy Commissioner for Medicaid and Health Care
Policy, Department of Health and Social Services (DHSS),
Anchorage, AK, said Senator French's new amendment has increased
his interest. He supported this bill and the intent to make
health care a reality for all Alaskans. He spent 30 years
helping people get access to health care when there was none,
mostly through Medicaid. He advised that the state must also
ensure that there are providers of health care available and
willing to accept those seeking services. Health insurance alone
does not guarantee that those seeking services will receive it
if there are no providers.
MR. STREUR said this bill is primarily an access and insurance
issue, and is not best placed under the sole management and
implementation of DHSS. The issues DHSS deals with like
eligibility, provider systems, rates, and premiums are not
familiar Medicaid issues. This is a new paradigm for Alaska and
no one department may be currently equipped to address this
legislation.
2:45:40 PM
SENATOR COWDERY asked if there were any cost estimates and where
the money would come from.
CHAIR DAVIS replied that was not an issue that would be
considered in this committee.
2:46:36 PM
SENATOR THOMAS asked if the administration agreed with the
requirement for every Alaskan to have health insurance.
MR.STREUR said the department itself has not taken a position,
but it is a goal that access is available to every citizen.
SENATOR DYSON said that access is different than requiring that
everyone have health insurance. This bill requires that everyone
have health insurance leaving no self-payers in the state. A
multi-millionaire who chooses to pay his own bills would not be
allowed to do that. He asked Mr. Streur if that was his
position.
MR. STREUR replied he was not prepared to answer.
SENATOR DYSON asked for confirmation that Mr. Streur was
personally in favor of this bill.
MR. STREUR replied he was.
SENATOR DYSON asked if Mr. Streur's support included that
provision.
MR. STREUR replied yes.
SENATOR DYSON asked if Mr. Streur was in favor of forcing an
insurance company to take any citizen including one who is being
very reckless their health, swapping body fluids or weighing 800
pounds or all kinds of toxic things and the insurance company
would have to take that person even though their behavior was
destructive and they were unrepentant.
MR. STREUR replied that as a former health care insurer that was
what he was faced with.
SENATOR DYSON asked if Mr. Streur was in favor of insurance
companies being forced to take people with any pre-existing
conditions including ones that are behavior-related.
MR. STREUR replied that if the senator was talking about
destructive behavior being allowed, [he thought] it was not
covered under this bill but would defer to the sponsor.
2:48:54 PM
SENATOR ELTON asked who is paying for the health consequences of
the behavior previously cited. He said his impression is that
much of those health care costs are being borne by the general
public. The hospital in his community is a taxpayer-supported
hospital. He said it would be helpful to talk about who is
paying for the health care consequences of that kind of
behavior.
MR. STREUR replied that everyone is paying for it. Providence
Hospital has $11 million in write-offs.
SENATOR DYSON said instead of everyone paying through cost-
shifting, individual insurance companies will be forced to take
anyone who applies even with pre-existing conditions. Even
though everyone is paying now, it is still a paradigm shift to
go out there and force someone in private enterprise to assume
this burden.
CHAIR DAVIS said people who already have insurance won't be
affected by the bill.
SENATOR DYSON said that according to the bill if a person has
pre-existing bad behavior and is unrepentant, the insurance
company has to take him/her, which is different than paying as
part of a public responsibility.
2:52:02 PM
SENATOR THOMAS asked for an interpretation of lines 30 and 31 on
page 2.
SENATOR FRENCH said he appreciated the committee's wrestling
with the essence of the bill. Those lines state the requirement
that an individual has to have a health insurance policy. This
is a topic that's playing out on a national level. One of the
big disputes between Barak Obama and Hillary Clinton is that
Senator Clinton's plan has a mandatory insurance provision and
Senator Obama's does not.
He believes the mandatory requirement has the better of the
argument. Universal health care is not achievable by letting
healthy adults out of the insurance net. Insurance works best
when everyone participates; that is the basic idea behind it.
Every human being has a body and they are going to need a doctor
sooner or later. If they don't have insurance someone else will
pay when they get sick or have an accident. It is possible to
set a policy for young healthy adults and people that hate to
pay into the system in a way that fits their needs but isn't
onerous and doesn't cost a lot, more like a cell phone bill or a
cable bill. They chip in to the system to cover themselves for
when they do need it. It's part of the human compact.
2:54:41 PM
SENATOR DYSON restated his concern about the person who is a
multi-millionaire and has never had a dime's worth of welfare or
had anyone else pay his bill and can easily assume
responsibility for their health care but would not be able to do
it under this bill.
SENATOR FRENCH said he'd be happy to write an amendment that
would excuse the half dozen multi-millionaires in the state that
currently don't have insurance if they're willing to post a bond
sufficient to cover their health insurance problems when they
arise or with the posting of some financial net worth to satisfy
the health care board.
SENATOR DYSON said he suspected that both he and Senator French
were guilty of demagoguing the issue. To him it is a personal
liberties issue. Everyone in the state being forced to do this
because of the worry that this multimillionaire might run out of
his wealth and not be able to pay his own bills is questionable
policy.
He restated his question about not allowing insurance companies
to opt out of taking people with bad behavior.
SENATOR FRENCH said the flip side of requiring every citizen to
get insurance is to make insurance available in a meaningful way
to every citizen. If people who are overweight or who smoke
can't be issued policies the whole thing falls apart. As the
former witness stated, everyone pays those bills. If a drug-
addicted prostitute wakes up tomorrow on the streets of Juneau
with HIV, the Juneau hospital will take her in and care for her,
and everyone in the state is going to pay those bills because
this is a humane society. The idea that we would exclude those
individuals from an insurance policy because of the decisions
they made is not part of a humane society. He agreed that
positive lifestyle choices should get someone a cheaper form of
insurance. Healthy people who don't smoke should pay less for
insurance but at some level every person must be allowed to buy
a policy.
2:57:27 PM
SENATOR ELTON said Senator Dyson always makes him think. He said
there's a model for forcing rich people to buy insurance that
everyone has become accustomed to - mandatory auto insurance and
nobody has protested it. He asked Senator French if he had
thought of his bill in terms of what is now done with auto
insurance.
SENATOR FRENCH said the parallels are profound. Some states
allow people to post a $100,000 bond to cover expenses in a car
crash. It's conceivable to write this kind of an exception for
health insurance.
SENATOR DYSON said he didn't think they were parallel situations
because what is required for car insurance is liability so that
other people who might be harmed are covered. It you could force
people who were swapping needles or body fluids, it would be a
parallel situation. Auto insurance is not required unless the
car is driven on public roads which is why that analogy breaks
down. It's a difference between liability coverage and harm done
to others as opposed to the damage one does to oneself. The
system must reward individual responsibility and institute a
downside to irresponsible behavior.
He appreciates having an auto insurance company that gives him a
reward for having 25 years of accident free insurance. He'd
liked to have a reward for having fire alarms and a sprinkler
system in his house. He'd like to have his brakes and excellent
tires inspected and he'd like to be rewarded for prudent
behavior. Ultimately this must be done with health insurance.
His concern is that the system is so bastardized. Frank
Murkowski talked about having the tax base pay the hospitals for
taking care of the indigent. Then those who assume the public
and human responsibility would pay directly. Instead the
hospitals are forced to do this perverted system of cost-
shifting so that they shift the cost to their profit centers and
the high return businesses like imaging in order to cover the
indigent. It's a shell game that masks the real cost. As a
result, a part of the bill has responsible people covering the
indigent. He wished for legislation that would at least provide
a tax deduction for this charitable gift to the indigent but
instead there's a refusal to get at the fundamental issues.
3:01:27 PM
SENATOR THOMAS asked for clarification of what premiums would be
paid by different income levels.
SENATOR FRENCH responded if this bill passes, a millionaire who
doesn't have insurance should get a 15 percent reduction in an
insurance policy through the clearing house; they wouldn't get a
voucher since they are over 300 percent of the federal poverty
limit.
3:03:54 PM
SENATOR ELTON asked if the board of the proposed clearing house
would approve private health insurance plans and not others
based on deductibles or services covered.
SENATOR FRENCH replied yes and he envisioned a plan something
like the state has now and the voucher would get the price down
to where a working Alaskan could afford it.
3:05:41 PM
SENATOR ELTON said he was intrigued by the list of services and
asked what happens if there is no private insurer that wants to
participate.
SENATOR FRENCH replied he didn't have the answer. He said he
assumed someone would move into that market.
3:06:32 PM
CHAIR DAVIS asked Senator French to explain Amendment 1.
AMENDMENT 1
OFFERED IN THE SENATE BY SENATOR FRENCH
TO: CSSB 160( ), Draft Version "V"
Page 10, line 23, following "Medicaid":
Insert "and the potential expansion of the Alaska
Medicaid program, including a comparison between the
costs of expanding the Alaska Medicaid program and the
cost of providing benefits through the Alaska health
care program"
SENATOR FRENCH said Amendment 1 was prompted by a conversation
between himself and the chair to make the most of Medicaid by
comparing it to the cost of providing benefits through this
bill. If a huge imbalance was found, a push could be made toward
Medicaid.
3:08:42 PM
SENATOR ELTON moved to adopt Amendment 1, labeled 25-LS0728\V.1.
There being no objection, the motion carried.
He said this amendment adds a requirement to report on something
that makes sense. It does not require action by the legislature,
but provides information upon which a decision could be made in
the future.
SENATOR DYSON said that most providers argue that Medicaid
reimbursement rates are significantly less than the cost of
providing the service and that's why indigent people have
difficulty finding someone to provide the service. He asked if
it's possible for the state to reimburse the provider for the
difference between the Medicaid rate and the actual cost.
3:11:19 PM
SENATOR ELTON moved to report committee substitute for SB 160,
as amended, from committee with individual recommendations and
attached fiscal note(s).
SENATOR DYSON objected.
A roll call vote was taken. Senators Elton, Thomas, Davis voted
yea; and Senator Dyson voted nay; so CSSB 160(HES) moved from
committee.
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