Legislature(2017 - 2018)HOUSE FINANCE 519

05/12/2017 01:30 PM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 6 INDUSTRIAL HEMP PRODUCTION TELECONFERENCED
Heard & Held
+= SB 28 MUNICIPAL LAND SELECTIONS: PETERSBURG TELECONFERENCED
Moved SB 28 Out of Committee
+= SB 107 ALASKA CAPITAL INCOME FUND TELECONFERENCED
Scheduled but Not Heard
+ Bills Previously Heard/Scheduled TELECONFERENCED
*+ HJR 23 CONST AM: PERMANENT FUND; POMV; DIVIDEND; TELECONFERENCED
<Bill Hearing Canceled>
-- Public Testimony <Time Limit 2 Minutes> --
+= HB 25 INSURANCE COVERAGE FOR CONTRACEPTIVES TELECONFERENCED
Moved CSHB 25(FIN) Out of Committee
HOUSE BILL NO. 25                                                                                                             
                                                                                                                                
     "An   Act   relating    to   insurance   coverage   for                                                                    
     contraceptives  and   related  services;   relating  to                                                                    
     medical  assistance  coverage  for  contraceptives  and                                                                    
     related  services;  and   providing  for  an  effective                                                                    
     date."                                                                                                                     
                                                                                                                                
1:36:32 PM                                                                                                                    
                                                                                                                                
LIZZIE KUBITZ, STAFF TO REPRESENTATIVE MATT CLAMAN,                                                                             
ANCHORAGE (via teleconference), relayed that she was                                                                            
available for questions regarding the amendments.                                                                               
                                                                                                                                
1:38:35 PM                                                                                                                    
                                                                                                                                
Representative Kawasaki MOVED to ADOPT Amendment 1, 30-                                                                         
LS0261\0.1 (Wallace, 4/18/17) (copy on file):                                                                                   
                                                                                                                                
     Page 3, following line 13:                                                                                                 
                                                                                                                                
     Insert new bill sections to read:                                                                                          
                                                                                                                                
     "*Sec.  2. AS  29.10.200  is amended  by  adding a  new                                                                    
     paragraph to read:                                                                                                         
                                                                                                                                
     (66)  AS 29.20.420 (health care insurance plans).                                                                          
                                                                                                                                
     *Sec. 3.  AS 29.20 is  amended by adding a  new section                                                                    
     to article 5 to read:                                                                                                      
                                                                                                                                
     Sec. 29.20.420.  Health care insurance plans.  (a) If a                                                                    
     municipality offers a group  health care insurance plan                                                                    
     covering  municipal employees,  including  by means  of                                                                    
     self-insurance,  the  municipal health  care  insurance                                                                    
     plan is subject to the requirements of AS 21.42.427.                                                                       
                                                                                                                                
     (b) This section  applies to home rule  and general law                                                                    
     municipalities.                                                                                                            
                                                                                                                                
     (c) In  this section, "health care  insurance plan" has                                                                    
     the meaning given in 12 AS 21.54.500."                                                                                     
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
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Representative Wilson OBJECTED.                                                                                                 
                                                                                                                                
Representative   Kawasaki  explained   the  amendment.   The                                                                    
amendment safeguarded  that municipalities  who self-insured                                                                    
were also covered within the  twelve month period. He shared                                                                    
that  he contacted  the "top  three" municipalities  and was                                                                    
informed that they  already had a similar  provision. He did                                                                    
not feel the legislation impacted municipalities.                                                                               
                                                                                                                                
Representative Wilson did not  support the amendment without                                                                    
knowing  how the  bill impacted  municipalities. She  stated                                                                    
that  how   the  legislation  impacted   municipalities  was                                                                    
unknown.   The   bill   mandated  insurance   coverage   for                                                                    
contraceptives;  it  was  not  merely  about  extending  the                                                                    
prescription to 12 months.                                                                                                      
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Guttenberg, Kawasaki, Ortiz,  Gara, Grenn, Foster,                                                                    
Seaton                                                                                                                          
OPPOSED: Pruitt, Neuman, Tilton, Wilson                                                                                         
                                                                                                                                
The MOTION to Adopt Amendment 1 PASSED (7/4).                                                                                   
                                                                                                                                
1:40:49 PM                                                                                                                    
                                                                                                                                
Representative  Wilson  MOVED  to  ADOPT  Amendment  2,  30-                                                                    
LS0261\0.4 (Wallace, 4/18/17):                                                                                                  
                                                                                                                                
     Page 1, line 8, following "market":                                                                                        
                                                                                                                                
     Insert "that provides coverage for prescription                                                                            
     contraceptives"                                                                                                            
                                                                                                                                
Co-Chair Seaton OBJECTED.                                                                                                       
                                                                                                                                
Representative  Wilson  explained  the  amendment.  She  was                                                                    
concerned    that   the    bill   mandated    coverage   for                                                                    
contraceptives. She  felt that some people  purchased health                                                                    
insurance  policies  based  on  their  needs  and  that  the                                                                    
mandate  would increase  premium costs  to individuals  that                                                                    
did not  need contraceptives.  The amendment  clarified that                                                                    
the  bill  only applied  to  insurers  who already  provided                                                                    
coverage for contraceptives.                                                                                                    
                                                                                                                                
Co-Chair  Seaton asked  whether the  bill sponsor  wanted to                                                                    
speak to the amendment.                                                                                                         
                                                                                                                                
REPRESENTATIVE  MATT CLAMAN,  SPONSOR, did  not support  the                                                                    
amendment. He  commented that the amendment  was contrary to                                                                    
the point of the bill.                                                                                                          
                                                                                                                                
Representative  Kawasaki  asked  whether there  were  health                                                                    
insurance policies  and "individual  market plans"  that did                                                                    
not currently cover contraceptives.                                                                                             
                                                                                                                                
Representative  Wilson  responded  that she  did  not  know,                                                                    
which characterized  the point  of her amendment.  She spoke                                                                    
to her  understanding of the  bill. She reiterated  that the                                                                    
bill required every plan to  provide the coverage even if it                                                                    
currently did not.  Ms. Kubitz replied that HB  25 was about                                                                    
expanding  access to  contraceptives. She  pointed out  that                                                                    
the  amendment would  not allow  the expansion  of coverage.                                                                    
She believed coverage for contraceptives  was a "standard of                                                                    
care"  Alaskan women  were entitled  to  unless an  employer                                                                    
upheld a religious exemption.                                                                                                   
                                                                                                                                
1:45:39 PM                                                                                                                    
                                                                                                                                
Representative Ortiz asked whether  the sponsor's intent was                                                                    
to  force  insurers to  provide  contraceptives  as part  of                                                                    
their  plan. Representative  Claman believed  that the  only                                                                    
plans  that  did  not  allow  coverage  were  policies  with                                                                    
religious exemptions.  He did  not believe  HB 25  created a                                                                    
mandate and  that contraceptive coverage was  required under                                                                    
the Affordable Care Act (ACA).                                                                                                  
                                                                                                                                
Representative Wilson believed the  amendment would not harm                                                                    
existing  practices.  She   maintained  that  the  amendment                                                                    
clarified that  the bill did  not create a mandate  that had                                                                    
unintended negative consequences.                                                                                               
                                                                                                                                
Representative  Neuman asked  how the  12 month  requirement                                                                    
pertained to  the amendment. Representative  Wilson answered                                                                    
that the  12 month language  was in the bill.  She explained                                                                    
that  the bill  dealt with  other contraceptive  methods but                                                                    
extending prescriptions  for pills was a  major provision to                                                                    
prevent  the inconvenience  for women  having to  obtain the                                                                    
prescription from  a pharmacy multiple times  each year. She                                                                    
restated  that  her  amendment  ensured  that  contraceptive                                                                    
coverage was already included in  the policy before the rest                                                                    
of the bill's provisions were applied.                                                                                          
                                                                                                                                
Representative Guttenberg  asked whether there would  be any                                                                    
other impacts  from the  bill and if  the sponsor  had heard                                                                    
from   anyone   who   was    concerned   by   the   mandate.                                                                    
Representative  Claman replied  that he  had not  heard from                                                                    
anyone  whose policies  did not  provide  coverage and  were                                                                    
apprehensive over the requirement.                                                                                              
                                                                                                                                
Co-Chair  Seaton   asked  whether   Representative  Wilson's                                                                    
intention was  to provide  contraceptive coverage  in Alaska                                                                    
regardless of whether  or not the ACA  mandated the coverage                                                                    
or was repealed.                                                                                                                
                                                                                                                                
1:51:33 PM                                                                                                                    
                                                                                                                                
Representative Wilson answered that  was not her intent. She                                                                    
cited a  letter from the National Federation  of Independent                                                                    
Business  (NFIB) (copy  on file)  that opposed  the mandate.                                                                    
She offered  that every  time more  mandates were  placed on                                                                    
private   companies   to   cover  conditions   their   costs                                                                    
increased. She reiterated the intent of the amendment.                                                                          
                                                                                                                                
1:53:26 PM                                                                                                                    
                                                                                                                                
Representative Wilson provided  final comments regarding the                                                                    
intent of the amendment.                                                                                                        
                                                                                                                                
Co-Chair Seaton MAINTAINED his OBJECTION.                                                                                       
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Ortiz, Pruitt, Neuman, Tilton, Wilson                                                                                 
OPPOSED: Kawasaki, Gara, Grenn, Guttenberg, Seaton, Foster                                                                      
                                                                                                                                
The MOTION to adopt Amendment 2 FAILED (5/6).                                                                                   
                                                                                                                                
Representative  Wilson WITHDREW  Amendment 3,  30-LS0261\0.2                                                                    
(Wallace, 4/18/17) (copy on file).                                                                                              
                                                                                                                                
1:55:21 PM                                                                                                                    
                                                                                                                                
Vice-Chair Gara reviewed  the fiscal notes: FN  1 (CED) zero                                                                    
from  the Department  of  Commerce,  Community and  Economic                                                                    
Development, one  new zero fiscal  note from  the Department                                                                    
of  Administration, and  FN 3  (DHS)  showing fiscal  impact                                                                    
from the Department of Health  and Social Services, Medicaid                                                                    
Services that  reported an anticipated cost  savings of $678                                                                    
thousand in FY 18 and $1.3  million in the out years through                                                                    
the reduction in unintended pregnancies.                                                                                        
                                                                                                                                
Representative  Wilson  was  trying  to  determine  how  the                                                                    
savings was  derived. She wondered  how many women  were not                                                                    
currently "taking  the pill that should  be." She understood                                                                    
that the  department already could provide  the prescription                                                                    
for twelve  months but do not  because a women might  not be                                                                    
eligible for  Medicaid for the  entire twelve  month period.                                                                    
She was  uncertain the  bill would  allow the  department to                                                                    
change its prescribing practices.                                                                                               
                                                                                                                                
1:57:55 PM                                                                                                                    
                                                                                                                                
MARGARET  BRODIE, DIVISION  DIRECTOR  HEALTH CARE  SERVICES,                                                                    
ANCHORAGE  (via  teleconference),  answered  that  based  on                                                                    
national  studies  there  was   a  6  percent  contraceptive                                                                    
failure rate  utilizing a  twelve month  prescription period                                                                    
as opposed  to a  9 percent  failure rate  based on  3 month                                                                    
prescriptions.  She  added that  the  department  chose a  7                                                                    
percent  failure rate.  The  fiscal note  was  based on  the                                                                    
difference  between  the  lower  and  higher  failure  rate.                                                                    
Representative  Wilson  countered  that the  department  had                                                                    
testified    that   it    could   have    been   prescribing                                                                    
contraceptives for  12 months  without the  legislation. She                                                                    
wondered  why  the  extended   prescriptions  had  not  been                                                                    
implemented. Ms.  Brodie answered that the  Medicaid program                                                                    
was  "under constant  pressure to  contain costs"  and often                                                                    
the  contraceptive prescriptions  were  not  issued at  all.                                                                    
She related  that the contraceptive  failure rate  study was                                                                    
new.  In addition,  savings would  be realized  from reduced                                                                    
dispensing  fees  the department  was  required  to pay  for                                                                    
prescriptions. Representative Wilson  cited the $1.4 million                                                                    
in  savings and  wondered  how many  individuals the  figure                                                                    
represented.  She  asked  why  DHSS  used  national  figures                                                                    
versus   Alaskan  numbers   because  the   state's  Medicaid                                                                    
standards were  much higher than  the federal  poverty rate.                                                                    
Ms.  Brodie  responded  that   the  national  averages  were                                                                    
employed  to determine  the contraceptive  failure rate  but                                                                    
Alaskan data was used to  determine the number of unintended                                                                    
pregnancies   (120).   Representative  Wilson   asked   what                                                                    
happened if  a woman became  ineligible within the  year but                                                                    
was  issued a  12  month prescription.  Ms. Brodie  answered                                                                    
that  initially   the  situation   was  factored   into  the                                                                    
analysis. However,  after further research,  DHSS discovered                                                                    
that the state did not  have to repay the ineligible portion                                                                    
as long as  the individual was eligible for  Medicaid at the                                                                    
time  of dispensing  the  medication. Representative  Wilson                                                                    
still  believed the  numbers in  the DHSS  fiscal note  were                                                                    
"skewed"  but did  not  have  access to  data  to prove  her                                                                    
assumption.                                                                                                                     
                                                                                                                                
Vice-Chair Gara remarked that the  all of the data discussed                                                                    
was located on  page 2 of the DHSS fiscal  note analysis. He                                                                    
relayed the following:                                                                                                          
                                                                                                                                
     A report by  Foster et. al. (2011)  projects a decrease                                                                    
     in failure  rate of approximately 30  percent when oral                                                                    
     contraceptives  are dispensed  in  12month  quantities,                                                                    
     which  would result  in an  oral contraceptive  failure                                                                    
     rate of 6 percent.                                                                                                         
     … Applying this differential, we estimate that                                                                             
     approximately 5.28 of the avoided 120 unintended                                                                           
     pregnancies would have been complicated births …                                                                           
                                                                                                                                
Vice-Chair Gara  noted that the  data was the basis  for the                                                                    
projected  savings. He  wanted  to  help prevent  unintended                                                                    
pregnancies.                                                                                                                    
                                                                                                                                
Co-Chair  Seaton  addressed  the  question  of  whether  the                                                                    
state's  Medicaid  program  currently  had  the  ability  to                                                                    
provide  12 month  prescriptions. He  related that  the bill                                                                    
contained  conditional  language   that  was  not  effective                                                                    
unless  the federal  Medicaid program  approved the  state's                                                                    
plan amendment adopting the 12 month requirement.                                                                               
                                                                                                                                
2:04:38 PM                                                                                                                    
                                                                                                                                
Representative  Wilson asked  whether Ms.  Brodie's previous                                                                    
testimony  regarding  the  issue  had  been  incorrect.  Ms.                                                                    
Brodie responded that regulations  allowed it, but the state                                                                    
had to  file a state  plan amendment that  required approval                                                                    
from  the federal  government.  Representative Wilson  asked                                                                    
whether legislation  was required  to amend the  state plan.                                                                    
Ms.  Brodie answered  that the  commissioner  of DHSS  could                                                                    
make the determination and  request the federal government's                                                                    
approval.                                                                                                                       
                                                                                                                                
2:05:54 PM                                                                                                                    
                                                                                                                                
Co-Chair  Seaton  MOVED  to  REPORT   CSHB  25(FIN)  out  of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal notes.                                                                                                      
                                                                                                                                
Representative Wilson  OBJECTED. She  remarked on  the usage                                                                    
of  the  words  "unintended  and  unwanted"  in  a  negative                                                                    
context.  She  reasoned that  "everything  in  life was  not                                                                    
always  intended"  but  could  be  welcomed.  She  expressed                                                                    
concern that the  bill carried a mandate in  addition to the                                                                    
12-month coverage.  She opposed additional mandates  and the                                                                    
problems  she felt  they created  for small  businesses. She                                                                    
appreciated  that Co-Chair  Seaton mentioned  issues due  to                                                                    
Medicaid expansion. She did not  know what the overall costs                                                                    
to  the  state  were  due  to the  uncertainty  of  ACA  and                                                                    
Medicaid  expansion.   She  reiterated  her   opposition  to                                                                    
mandates  because of  the "pressure"  they  placed on  small                                                                    
businesses.                                                                                                                     
                                                                                                                                
2:08:22 PM                                                                                                                    
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Ortiz, Gara, Grenn,  Guttenberg, Kawasaki, Foster,                                                                    
Seaton                                                                                                                          
OPPOSED: Pruitt, Neuman, Tilton, Wilson                                                                                         
                                                                                                                                
The MOTION PASSED (7/4).                                                                                                        
                                                                                                                                
There being NO further  OBJECTION, CSHB 25(FIN) was REPORTED                                                                    
out of  committee with a  "do pass" recommendation  and with                                                                    
one   new  zero   fiscal  note   from   the  Department   of                                                                    
Administration; one  previously published zero  fiscal note:                                                                    
FN1 (CED); and one  previously published fiscal impact note:                                                                    
FN3 (DHS).                                                                                                                      
                                                                                                                                

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SB 28 LOS Petersburg Economic Development Council 1.26.17.pdf HFIN 5/12/2017 1:30:00 PM
SB 28
HJR23 Additional Documents-Ak Perm Fund financial history and projections 5.9.17.pdf HFIN 5/12/2017 1:30:00 PM
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HJR23 Additional Documents-Presentation AK Perm Fund Corp 5.9.17.pdf HFIN 5/12/2017 1:30:00 PM
HJR 23
HJR23 Sponsor Statement.pdf HFIN 5/12/2017 1:30:00 PM
HJR 23
HJR23 Supporting Document-APRN - PFD cuts 5.9.17.pdf HFIN 5/12/2017 1:30:00 PM
HJR 23
HJR23 Supporting Document-ISER How PFDs reduce poverty 5.9.17.pdf HFIN 5/12/2017 1:30:00 PM
HJR 23
HJR23 Supporting Document-Leg Research Effect of PFD Reductions 5.9.17.pdf HFIN 5/12/2017 1:30:00 PM
HJR 23
SB 6 - Amendment 5.12.17.pdf HFIN 5/12/2017 1:30:00 PM
SB 6
SB6_Support_051217.pdf HFIN 5/12/2017 1:30:00 PM
SB 6
HB25_Support_051217.pdf HFIN 5/12/2017 1:30:00 PM
HB 25