Legislature(2005 - 2006)CAPITOL 17
03/31/2006 03:15 PM House LABOR & COMMERCE
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* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HB 29-HEALTH CARE INSUR./COMP HEALTH INS. ASSN 3:36:11 PM CHAIR ANDERSON announced that the final order of business would be HOUSE BILL NO. 29, "An Act relating to health care insurance and to the Comprehensive Health Insurance Association; and providing for an effective date." 3:36:27 PM REPRESENTATIVE ROKEBERG made a motion to adopt CSHB 29, Version 24-LS0191\R, Bailey, 3/22/06, for discussion purposes. There being no objection, Version R was before the committee. 3:37:01 PM REPRESENTATIVE ROKEBERG said that when the bill was previously heard, objections were raised regarding the assessments. He stated that Version R removes the sections of the bill which were of concern in addition to changing the funding source. Furthermore, Version R relies on the current assessments to the health insurance industry for the additional monies needed to keep the Alaska Comprehensive Health Insurance Association (ACHIA) pool alive. He explained that it would entitle the insurer to a premium tax credit equal to 50 percent of the assessment. He added that currently, the assessments are about $3.5 million. He noted a letter of support from ACHIA, which is included in members' packets. 3:39:51 PM KATIE CAMPBELL, Actuary-Life and Health, Juneau Office, Division of Insurance, Department of Commerce, Community, & Economic Development (DCCED), explained the changes made by Version R. Section 4, she said, clarifies that the insurers' membership is based on the major medical premium. She said that Section 5 amends the process with which ACHIA determines liability for unpaid assessments. She stated that this section clarifies that the insurer must cease to do business in the state before it is no longer assessed. Section 6, she said, is the premium tax off-set. She went on to say that Section 7 redefines "major medical". 3:41:52 PM JOHN GEORGE, Lobbyist, American Family Life Assurance Company of Columbus (AFLAC), informed the committee that AFLAC is a member of ACHIA, which is federally mandated. He stated that while the state had the option of using general funds to cover the costs of the program, it chose to assess the insurance industry. He said that anytime the insurance industry is required to pay, the cost "trickles down" to the policy holders. In this case, he said, the policy holders are small businesses or individuals. He said that the intent of HB 29 is to help small businesses and individual policy holders who are "shouldering 100 percent of the burden." He remarked that it is beneficial to have health insurance because unless a [business or individual] is a member of a major self-insured group, insurance is unaffordable, which can be due to add-ons or paying to subsidize the aforementioned program. He expressed strong support of HB 29. 3:44:05 PM REPRESENTATIVE ROKEBERG asked if the definition of "major medical" adopted in HB 29 would affect AFLAC. He also asked if AFLAC would still be a participant [in ACHIA]. MR. GEORGE replied that AFLAC would still be a participant, as it is a major writer of [the types of insurance which are not considered "major medical" by the legislation]. He stated that currently, AFLAC's assessment costs are in excess of its total "major medical" premium. 3:44:51 PM REPRESENTATIVE ROKEBERG pointed out that AFLAC has been very forthcoming in it's participation in the ACHIA program. He noted that Mr. George was previously the Director of the Division of Insurance, and asked if he considers the potential rising amount of the assessments as a "barrier to entry" for health insurance underwriters in the state. MR. GEORGE replied that Alaska has never had enough health insurers, adding that any efforts made to remove a portion of the burden will be of assistance. He opined that while these efforts may not cause insurance companies to "rush to the state," it would encourage any companies considering business in Alaska. He said that this is "the right thing to do." 3:46:24 PM REPRESENTATIVE ROKEBERG noted a drafting error and offered the following conceptual amendment: Page 3, line 29 Delete "January 1, 2007" Insert "March 1, 2008" REPRESENTATIVE ROKEBERG explained that the amendment would allow zero fiscal impact in 2007. He said that this is a "backward looking assessment." There being no objection, Conceptual Amendment 1 was adopted. 3:47:41 PM REPRESENTATIVE LYNN moved to report CSHB 29, Version 24- LS0191\R, Bailey, 3/22/06, as amended, out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, CSHB 29(L&C) was reported from the House Labor and Commerce Standing Committee.