Legislature(2007 - 2008)CAPITOL 106
04/03/2007 03:00 PM House HEALTH, EDUCATION & SOCIAL SERVICES
| Audio | Topic |
|---|---|
| Start | |
| SJR1 | |
| HB181 | |
| HB100 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 181 | TELECONFERENCED | |
| += | HB 100 | TELECONFERENCED | |
| *+ | HB 207 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SJR 1 | TELECONFERENCED | |
HB 100-AIR AMBULANCE SERVICES 4:14:27 PM CHAIR WILSON announced that the next order of business would be SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 100, "An Act relating to exempting certain air ambulance services from insurance regulation and requiring certain air ambulance services to provide services." 4:14:47 PM KAREN LIDSTER, staff to Representative John Coghill, Alaska State Legislature, prime sponsor, informed the committee that there is a CS for SSHB 100, the legislation to exempt air ambulance services from insurance regulations under AS 21.03. Two amendments were passed at the previous hearing; Amendment 1 gave the definition of an air ambulance service and Amendment 2 limited the subscription period to not greater than two years. Ms. Lidster introduced Linda Hall to answer questions regarding the insurance code. 4:16:23 PM LINDA HALL, Director, Anchorage Office, Division of Insurance, Department of Commerce, Community, & Economic Development (DCCED), stated that she was available to answer questions. 4:16:52 PM REPRESENTATIVE FAIRCLOUGH asked whether the amendments to SSHB 100 are de facto insurance regulation. She pointed out that, if passed, the Division of Insurance will be responsible for complaints and compliance relating to this legislation. MS. HALL answered that an agency is always needed to enforce any statute and to provide opinions thereof; however, the enforcing agency for this issue may not need to be the Division of Insurance. She recalled that the bill relates to consumer protection, and her conversation with Clyde (Ed) Sniffen, Jr., Senior Assistant Attorney General, Commercial/Fair Business Section, Department of Law (DOL), who heads the consumer protection unit, indicated that if there is no other state agency that has oversight, the consumer protection unit will take on the responsibility for oversight. The consumer protection unit of DOL investigates reports of unfair or deceptive conduct, or sales practices, and fraud. Ms. Hall advised that the terms of subscriptions sold, and related issues, will fall under the jurisdiction of the consumer protection unit. 4:19:59 PM REPRESENTATIVE GARDNER asked whether the sale of product memberships, by air ambulance services and through a non profit organization, is selling insurance. MS. HALL said that is correct. 4:20:34 PM REPRESENTATIVE NEUMAN said: ... like here in the [bill] title it says "requiring certain air ambulance services to provide services", so this states, that's actually saying that the state is telling a private industry that you have to do this? MS. LIDSTER answered: Representative Neuman, it is not telling air ambulance services that they have to do this, it also states that there are designations on qualifying as an air ambulance service, but they do not have to offer these memberships. No, sir. 4:21:43 PM CHAIR WILSON offered that the service is optional. REPRESENTATIVE NEUMAN repeated his statement: ... it says requiring air ambulance services to provide those services. It's ... confusing there. MS. LIDSTER remarked: The question would be that the requirement is that you cannot deny ... medical service in an emergency to, to someone whether or not they have a subscription or membership with you, that was the requirement there. 4:22:27 PM REPRESENTATIVE FAIRCLOUGH expressed her belief that this is an insurance product that needs to be regulated. She read the title and asked Ms. Hall to explain why this is not insurance. MS. HALL explained that Title 21.03 gives the Division of Insurance a list of items that are specifically excluded from the definition of insurance. For example; certain kinds of service contracts, that are low cost products and not a serious source of financial harm to a consumer. The Division of Insurance regulates home warranties, but not a service contract for a toaster. Ms. Hall stated that a public policy decision needs to be made to determine whether the legislature wants subscription services, such as mentioned in SSHB 100, to be sold in the state. If so, policy will need to be written instructing the Division of Insurance on how they are to be regulated. Ms. Hall described division requirements that are imposed on an insurance company such as; deposits in the bank, proof of capital and surplus, annual audits, and tri-annual financial exams. She opined that air ambulance companies would not qualify; therefore, an unique and new regulatory mechanism may need to be created. Ms. Hall stated her support for this bill, but that she does not believe that the Division of Insurance should regulate these subscriptions as insurance. 4:26:40 PM CHAIR WILSON described her experience with Medivacs, as a nurse, and opined that this type of coverage for a person could be a comfort. 4:28:03 PM REPRESENTATIVE GARDNER remarked: ... I just want to be certain I absolutely understand. Basically, it is an insurance product that they're selling, and they've been selling it illegally, but we've chosen to be somewhat sympathetic to ... and not pursue it, and instead what we're going to do is legislatively say the product isn't insurance and make it a consumer protection issue. So it would be monitored and the interests of Alaskans would be protected by Ed Sniffen and the people in his department. MS. HALL said that there are differing opinions within the division about whether this product is insurance. Although the question surfaced years ago, and the division has advised consumers that the product is insurance, a formal legal opinion from DOL has not been solicited. She declined to say whether the product is insurance. 4:29:42 PM REPRESENTATIVE CISSNA expressed her belief that life in small communities is becoming more expensive and residents are leaving because of that. How the state deals with health care costs is possibly the single most important issue of livability in rural areas. She opined that regulation should only occur when the need arises; to do otherwise will shape the products available to the public from the private sector. Representative Cissna then said: We need a future for experimentation in bringing down health care costs. We need to put the safety pieces in place, I agree, but not before we have a problem and ... I'm with this bill. 4:32:30 PM MS. HALL stated that the one of the considerations on this issue is that resources are based on consumer complaints. She noted that there has never been a complaint about Medivac services in Alaska or 27 other states; this is indicative of a product that has not created an issue. 4:33:36 PM REPRESENTATIVE ROSES clarified that this bill states that if a subscription is sold for air ambulance services, the state is saying that you are not selling an insurance policy, regardless of the statement in the bill title. He asked: If I came to you and I wanted to, if I came to the state and wanted to get a business license to run an air ambulance service, am I be required to have certain insurance for my company in place when I go to get that license and operate within the parameters of the state? Worker's compensation insurance, liability insurance, so on and so on. MS. HALL responded yes. She added that previous testimony spoke to the clear requirements of insurance. REPRESENTATIVE ROSES then asked: As the commissioner for the department that regulates insurance, if I were to read this and it says this is an act relating to the exempting [of] air ambulance services from insurance regulations, does that mean I don't have to have any insurance any more? MS. HALL replied, "I would not read it that way ... I clearly would not support that." 4:35:13 PM REPRESENTATIVE ROSES repeated his question and said: ... I just want it on the record that it's not the intent of this individual sitting here that's voting on this bill, that that's what this means. MS. HALL agreed that it is important to establish legislative intent. 4:35:51 PM REPRESENTATIVE SEATON asked whether amendments to the bill have been adopted. CHAIR WILSON confirmed that Amendments 1 and 2 have been adopted. 4:36:20 PM REPRESENTATIVE GARDNER offered Amendment 3, that read: Page 1, line 1, following "regulation": Insert ", prohibiting sale of air ambulance services to persons already covered," Page 1, line 5, following "services.": Insert "(a)" Page 1, following line 7: Insert a new subsection to read: "(b) An air ambulance service may not sell a subscription to a person who has full coverage for air ambulance services from another source, including the Indian Health Service, Medicaid, or private insurance." 4:36:32 PM CHAIR WILSON objected for discussion. 4:36:39 PM REPRESENTATIVE GARDNER said that many people have health insurance that will cover the cost of an air ambulance. Therefore, the sale of a subscription for additional coverage would be taking advantage of the buyer. Amendment 3 will prevent the sale of a subscription to persons already covered. 4:37:06 PM CHAIR WILSON offered Amendment 1 to Amendment 3 that adds to line 11 "or" between "Health Service" and "Medicaid", and strikes out "or private insurance". She opined that private insurance may not totally cover the cost of air ambulance transportation. 4:37:54 PM REPRESENTATIVE GARDNER said: The sentence actually reads, "An air ambulance service may not sell a subscription to a person who has full coverage for air ambulance services from another source." So, if you have private insurance that may pick up part of it, then you could still buy this policy.... 4:38:40 PM REPRESENTATIVE ROSES remarked: As a person that has about three coverage's, I maybe don't have 100 percent insurance ... we continue to keep talking about how this isn't insurance, but this amendment ties it directly to insurance ... you keep arguing that it's [not] an insurance policy but you want to those exempt people that have insurance from buying it if you're already covered... 4:39:21 PM REPRESENTATIVE CISSNA stated her personal desire for "emotional insurance" rather than to look at this as a commercial insurance product. She said that an individual living in a rural area may want to keep his/her bases covered regarding transportation sources and should be able to choose to purchase what he/she wants. Representative Cissna recalled that her constituents on Prince of Wales Island complained about their lack of choice. She opined that this is an issue of choice. 4:40:56 PM CHAIR WILSON added that, even with 100 percent coverage, insurance may not allow full payment because the air ambulance charges are beyond the allowable cost limit for the service. 4:41:41 PM REPRESENTATIVE ROSES noted that the need for air ambulance services is not limited to rural areas. He recalled that witnesses have stated that the bill will have a direct negative impact on their businesses. He cautioned that the amendment ties the bill to insurance, and may not stand a legal challenge. 4:43:13 PM CHAIR WILSON commented that for three years this has been an issue, and no one has gone out of business. The sponsors are trying to help people in rural areas. 4:43:45 PM REPRESENTATIVE SEATON opined that requiring the air ambulance service to determine an individual's private insurance coverage is extremely problematic. He stated his support for the amendment to the amendment. 4:45:09 PM There being no further objection, Amendment 1 to Amendment 3 was adopted. 4:45:23 PM REPRESENTATIVE SEATON asked whether "prohibiting the sale of air ambulance services to persons already covered" pertains to the sale of membership subscriptions service only and not to air ambulance services in general. 4:46:22 PM CHAIR WILSON suggested that the same terminology as read in line l1 could be added to the amendment. REPRESENTATIVE GARDNER observed that adding verbiage to the title would be cumbersome. 4:47:10 PM REPRESENTATIVE CISSNA stated her objection and said that people have the right to choice. 4:47:32 PM MS. LIDSTER commented that, to insure the intent of the amendment, the title may need to reflect Representative Gardner's addition. CHAIR WILSON suggested the addition of the word "certain" in front of "persons." REPRESENTATIVE GARDNER disagreed. She stated that her intent is to prevent a situation similar to one where a person sells an elderly person a new roof that they do not need. 4:49:31 PM REPRESENTATIVE ROSES asked whether the intent is to [prohibit] air ambulance services or the subscription services. REPRESENTATIVE GARDNER replied, "The sale of subscription services." 4:50:04 PM REPRESENTATIVE GARDNER then offered Amendment 2 to Amendment 3, that inserted the word "subscription" between "ambulance" and "services". There being no objection, Amendment 2 to Amendment 3 was adopted. 4:50:43 PM REPRESENTATIVE CISSNA expressed her concern that decisions are being made without the perspective of the people who will be using this service. 4:51:39 PM CHAIR WILSON removed her objection to Amendment 3, as amended. 4:51:59 PM CHAIR WILSON announced that Amendment 3, as amended, is before the committee. 4:52:47 PM REPRESENTATIVE CISSNA sustained her objection. 4:52:54 PM A roll call vote was taken. Representatives Gardner, Roses, Fairclough, Neuman, and Seaton voted in favor of Amendment 3, as amended. Representatives Cissna and Wilson voted against it. Therefore, the Amendment 3, as amended, passed by a vote of 5-2. 4:53:59 PM REPRESENTATIVE SEATON noted that the Division of Insurance questioned whether the legislature wants to make a policy decision on the sale of subscriptions in Alaska and the regulation thereof. He recalled the testimony offered opposing this bill, and other testimony that spoke to a huge marketing scheme of air ambulance services subscriptions that would generate $2.5 million for one company. He stated that the existing system of air ambulance services is working in Alaska and a competitive marketing venture is not necessary. In addition, he opined that testimony did not convince him that patient care would be improved by the passage of SSHB 100. Representative Seaton said he will not support this bill. 4:56:37 PM REPRESENTATIVE ROSES stated his concern about the testimony of an individual whose air ambulance company serves 75 percent of the state. He described how medical care may be delayed while a patient waits for his subscribed service, and observed that this bill will not provide an added level of comfort or confidence to subscribers. Representative Roses said that the value of the bill goes to the one business that wants to sell subscriptions. He stated his opposition to the bill. 4:58:41 PM CHAIR WILSON described how difficult Medivac transportation can be with the current services that are available. She expressed her disappointment at the opposition to SSHB 100. 5:00:11 PM REPRESENTATIVE CISSNA stated that the cost of health care in the United States and in rural Alaska is a problem. Communities need to have to find ways to economize; in fact, in the Yukon Flats area, health care professionals are flying in on a regular basis. The number of emergencies is being reduced by this preventive health care. Economic solutions that allow people to live in their villages, in a healthy way are called for. She said that unhealthy products are being flown in to these villages instead of bringing in health care. Representative Cissna stressed that the bill should be given a chance to work. 5:03:38 PM The committee took an at-ease from 5:03 p.m. to 5:04 p.m. 5:04:29 PM CHAIR WILSON cancelled the hearing on HB 207. 5:04:47 PM REPRESENTATIVE ROSES observed that SSHB 100 does not state that if a subscription is purchased that the Medivac flight is paid for. He then remarked: All I heard the person that spoke of subscriptions [say] ... "Well we would cover, we wouldn't go after them for ... the co-pay." [They] didn't say they wouldn't be going after payment. Nor anywhere in here does it, do we have a sample of what the subscription would look like if somebody sold it. How do we know we're not letting them sell a membership and then they're going to have to go after them to collect the fees anyway. There's no guarantee of that in this bill. 5:05:39 PM CHAIR WILSON announced that SSHB 100 would be held over.
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