Legislature(2017 - 2018)ADAMS ROOM 519

04/09/2018 01:30 PM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Delayed to 2:00 pm --
+= HB 233 EDUCATION TAX CREDITS; SUNSET; REPEALS TELECONFERENCED
Moved CSHB 233(FIN) Out of Committee
+ SB 165 COMPREHENSIVE HEALTH INSURANCE FUND TELECONFERENCED
Moved SB 165 Out of Committee
-- Public Testimony --
+ HB 306 PERS/TERS DISTRIBUTIONS TELECONFERENCED
Heard & Held
-- Public Testimony --
+= HB 399 CORP. TAX: REMOVE EXEMPTIONS/CREDITS TELECONFERENCED
Heard & Held
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 129 FISH & GAME: OFFENSES;LICENSES;PENALTIES TELECONFERENCED
Moved CSHB 129(FIN) Out of Committee
SENATE BILL NO. 165                                                                                                           
                                                                                                                                
     "An  Act relating  to the  Alaska comprehensive  health                                                                    
     insurance fund; and providing for an effective date."                                                                      
                                                                                                                                
4:02:03 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster  invited Senator MacKinnon and  her staff to                                                                    
the table.                                                                                                                      
                                                                                                                                
SENATOR  ANNA  MCKINNON,  SPONSOR,  read  the  bill  sponsor                                                                    
statement:                                                                                                                      
                                                                                                                                
     In 2015,  the individual  health care market  in Alaska                                                                    
     was  in  a  precarious   state.  There  were  only  two                                                                    
     insurers   with   current   enrollees   in   individual                                                                    
     healthcare  plans  in  Alaska,  and  each  insurer  was                                                                    
     experiencing significant  losses. Average  premium rate                                                                    
     increases  in 2015  were 38.7  percent for  one insurer                                                                    
     and  39.9  percent  for  the other.  In  2016,  one  of                                                                    
     Alaska's only  two remaining insurers gave  notice that                                                                    
     they would  be withdrawing  from the  Alaska individual                                                                    
     market effective January 2017.                                                                                             
                                                                                                                                
Senator  MacKinnon  noted  that  at  the  time  the  state's                                                                    
insurance  division came  up with  a suggestion  - a  way to                                                                    
address  folks  that  were  driving  up  the  costs  of  the                                                                    
insurance market in Alaska. They  were looking at those high                                                                    
utilizers  and   trying  to  do  something   different.  She                                                                    
continued reading the sponsor statement:                                                                                        
                                                                                                                                
     The  29th  Legislature passed  HB  374  in 2016,  which                                                                    
     created  the Alaska  Reinsurance  Program, and  allowed                                                                    
     the  Division  of  Insurance to  apply  for  a  federal                                                                    
     Section   1332  state   innovation  waiver   under  the                                                                    
     Affordable Care Act (ACA).  That legislation included a                                                                    
     sunset  date  of  June  30, 2018  to  ensure  that  the                                                                    
     diversion of  insurance premium taxes from  the general                                                                    
     fund  was  not  relied  upon  as  a  long-term  funding                                                                    
     mechanism.  In July  2017, the  waiver was  approved by                                                                    
     both the  Department of Health and  Social Services and                                                                    
     the  Department of  Treasury based  on the  application                                                                    
     submitted  by  the   division,  which  requested  pass-                                                                    
    through funding for the Alaska Reinsurance Program.                                                                         
                                                                                                                                
     The  federal award  for this  waiver was  approximately                                                                    
     $322 million over five years.  The award is to be used,                                                                    
     in conjunction with the  Alaska Reinsurance Program, to                                                                    
     continue to stabilize  the individual healthcare market                                                                    
     in Alaska.                                                                                                                 
                                                                                                                                
     This legislation  extends the  sunset provision  on the                                                                    
     Alaska  comprehensive  health  insurance  fund  by  six                                                                    
     years, from  June 30,  2018 to June  30, 2024  to allow                                                                    
     for the continuation of  the Alaska Reinsurance Program                                                                    
     and receipt of the federal funding.                                                                                        
                                                                                                                                
Senator MacKinnon  reported that  the federal money  and the                                                                    
approval  was  contingent on  the  passage  of SB  165.  The                                                                    
federal  funds were  guaranteed  for 5  years. However,  the                                                                    
bill  requested a  6-year extension.  It would  provide time                                                                    
for the  state to true  up all  claims that might  remain in                                                                    
the  system  should  the  state not  have  the  1332  waiver                                                                    
extended and  because the center  for Medicaid  and Medicare                                                                    
Services  had  indicated that  they  might  extend the  1332                                                                    
waiver  for  another  year.   Other  states  were  following                                                                    
Alaska's  lead  in providing  cost  savings  to the  federal                                                                    
government.  The bill  would reroute  or  take the  diverted                                                                    
insurance premium taxes that  were currently being deposited                                                                    
in the Alaska Comprehensive  Health Insurance Fund and place                                                                    
them back  where they were  into the general fund.  It would                                                                    
create $63  million of general  fund revenue in  the current                                                                    
year. She  reminded the  body that  the program  had already                                                                    
brought to  the state,  through the supplemental  process, a                                                                    
return of $205 million from Premera  Blue Cross - one of the                                                                    
insurers  experiencing  significant  losses  in  the  Alaska                                                                    
market.                                                                                                                         
                                                                                                                                
     The  bill  also  removes  the  requirement  that  funds                                                                    
     collected  under AS  21.09.210  (tax  on insurers),  AS                                                                    
     21.33.055  (unauthorized  insurance  premium  tax),  AS                                                                    
     21.34.180 (surplus lines tax)  and AS 21.66.110 (annual                                                                    
     tax on  title insurance  premiums) are to  be deposited                                                                    
     into  the Alaska  comprehensive  health insurance  fund                                                                    
     within the general fund.                                                                                                   
                                                                                                                                
     Passage of  HB374 by the 29th  Legislature has resulted                                                                    
     in  stabilization of  the individual  insurance market.                                                                    
     The  Section  1332  state  innovation  waiver  provides                                                                    
     funding  for the  Alaska  Reinsurance Program,  through                                                                    
     the  Alaska comprehensive  health  insurance fund.  Now                                                                    
     this legislation  is necessary to ensure  the continued                                                                    
     effectiveness of the Alaska Reinsurance Program, meet                                                                      
     the intent of the waiver, and receive the federal                                                                          
     funding.                                                                                                                   
                                                                                                                                
Co-Chair MacKinnon was open to questions.                                                                                       
                                                                                                                                
Representative Guttenberg  asked if the bill  simply kept it                                                                    
extending   with  no   other  changes.   Co-Chair  MacKinnon                                                                    
responded that it also diverted  the insurance premiums from                                                                    
the  insurance fund  to the  general  fund. Co-Chair  Foster                                                                    
indicated that  the director of  the Division  of insurance,                                                                    
Ms. Wing-Heier, was available for questions.                                                                                    
                                                                                                                                
4:07:14 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster OPENED and CLOSED public testimony.                                                                             
                                                                                                                                
Representative   Guttenberg  had   been  at   a  legislative                                                                    
conference   and  had   received   positive  feedback   from                                                                    
legislators of other states about Alaska's program.                                                                             
                                                                                                                                
Co-Chair  Foster asked  Co-Chair Seaton  to read  the fiscal                                                                    
notes into the record.                                                                                                          
                                                                                                                                
Co-Chair  Seaton reviewed  the  first fiscal  note from  DOA                                                                    
which  had an  appropriation  of Centralized  Administrative                                                                    
Services  and an  allocation of  Finance. The  OMB component                                                                    
number  was  59.  The  second   fiscal  note  was  from  the                                                                    
Department of  Commerce, Community and  Economic Development                                                                    
(DCCED).  It   had  an   appropriation  and   allocation  of                                                                    
Insurance  Operations. The  component  number  was 354.  The                                                                    
note  reflected  no  expenditures  and  a  change  in  other                                                                    
revenues  of  $61.537  million   in  FY  19.  Revenues  were                                                                    
expected to increase to $75.859 million in FY 22.                                                                               
                                                                                                                                
Representative Wilson  asked if  there was anything  tied to                                                                    
the money  that would  be going into  the general  fund. She                                                                    
wondered  if  the money  could  be  used  in the  budget  as                                                                    
needed.  Co-Chair  MacKinnon replied  that  it  went to  the                                                                    
general  fund and  could be  allocated  at the  will of  the                                                                    
legislature.                                                                                                                    
                                                                                                                                
MS.  LORI  WING-HEIER,   DIRECTOR,  DIVISION  OF  INSURANCE,                                                                    
DEPARTMENT OF COMMERCE,  COMMUNITY AND ECONOMIC DEVELOPMENT,                                                                    
offered thanks  for the waiver.  There had  been significant                                                                    
support  of  the  bill  from both  bodies.  There  had  been                                                                    
significant thought  given to it  because the state  did not                                                                    
want  it to  become a  permanent reinsurance  program unless                                                                    
the waiver could be obtained.  She was happy the waiver went                                                                    
through and  thought it  was showing  the benefits  that had                                                                    
been discussed in 2016.                                                                                                         
                                                                                                                                
Co-Chair  Seaton MOVED  to report  SB 165  out of  Committee                                                                    
with individual recommendations  and the accompanying fiscal                                                                    
notes.                                                                                                                          
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
SB  165 was  REPORTED  out  of committee  with  a "do  pass"                                                                    
recommendation  and  with  two previously  published  fiscal                                                                    
notes,  one zero  fiscal  note: FN1  (ADM);  and one  fiscal                                                                    
impact note: FN3 (CED).                                                                                                         
                                                                                                                                
4:11:00 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
4:11:46 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair  Foster indicated  the committee  would be  hearing                                                                    
HB 306. It  was the committee's  first hearing on  the bill.                                                                    
He invited DOA's representatives to the table.                                                                                  
                                                                                                                                

Document Name Date/Time Subjects
HB 233 Northrim AK Education Tax Credits Legislation Letter.pdf HFIN 4/9/2018 1:30:00 PM
HB 233
SB 165 Additional Documents CMS Letter Approving Alaska's State Innovation Waiver 4.3.18.pdf HFIN 4/9/2018 1:30:00 PM
SB 165
SB165 Additional Documents ACHI Fund 4.3.18.pdf HFIN 4/9/2018 1:30:00 PM
SB 165
SB165 Sectional Analysis ver A 4.3.18.pdf HFIN 4/9/2018 1:30:00 PM
SB 165
SB165 Sponsor Statement 4.3.18.pdf HFIN 4/9/2018 1:30:00 PM
SB 165
SB165 Supporting Document - Alaska Commission on Aging 4.3.18.pdf HFIN 4/9/2018 1:30:00 PM
SB 165
01.23.18 Speaker Edgmon Transmittal Letter PERS & TRS.PDF HFIN 4/9/2018 1:30:00 PM
HB 306
HB 306 Sectional Analysis.pdf HFIN 4/9/2018 1:30:00 PM
HB 306
HB 399 Additional Documents - Federal Codes, 26 USC Sections 21 to 54AA.PDF HFIN 4/9/2018 1:30:00 PM
HB 399
HB 399 Additional Documents - Indirect Expenditure Report Federal Credits.pdf HFIN 4/9/2018 1:30:00 PM
HB 399
HB 399 Additional Documents - Indirect Expenditure Report Stranded Gas.pdf HFIN 4/9/2018 1:30:00 PM
HB 399
HB 399 Additional Documents - Indirect Expenditure Report Foreign Royalty.pdf HFIN 4/9/2018 1:30:00 PM
HB 399
HB 399 Additional Documents - Indirect Expenditure Report Reduced Rate Capital Gains.pdf HFIN 4/9/2018 1:30:00 PM
HB 399
HB 399 Additional Documents CIT Sector Report FY 2017 3.26.18.pdf HFIN 4/9/2018 1:30:00 PM
HB 399
HB 399 Additional Documents DOR Letter 3.26.18.pdf HFIN 4/9/2018 1:30:00 PM
HB 399
HB 399 Sponsor Statement 3.26.18.pdf HFIN 4/9/2018 1:30:00 PM
HB 399
HB 399 Sectional Sectional Analysis ver O 3.26.18.pdf HFIN 4/9/2018 1:30:00 PM
HB 399
HB 233 - Amendment #2.pdf HFIN 4/9/2018 1:30:00 PM
HB 233
HB 233 - Amendment #1.pdf HFIN 4/9/2018 1:30:00 PM
HB 233
HB 129 - Amendment #3.pdf HFIN 4/9/2018 1:30:00 PM
HB 129
HB 399 - AOGA Comments - 4.9.2018.pdf HFIN 4/9/2018 1:30:00 PM
HB 399
HB 399 RDC letter opposing HB 399.pdf HFIN 4/9/2018 1:30:00 PM
HB 399
HB 233 2018 03 29 UAF CFOS ETC HB 233.pdf HFIN 4/9/2018 1:30:00 PM
HB 233
HB233 SB116 PWSSC support.pdf HFIN 4/9/2018 1:30:00 PM
HB 233
SB 116
HB 233 Support Letter Sitnasuak 2018 (005).pdf HFIN 4/9/2018 1:30:00 PM
HB 233
HB 233 Support.pdf HFIN 4/9/2018 1:30:00 PM
HB 233