Legislature(2017 - 2018)BARNES 124

03/26/2018 03:15 PM LABOR & COMMERCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 165 COMPREHENSIVE HEALTH INSURANCE FUND TELECONFERENCED
Heard & Held
-- Public Testimony --
+= HB 379 COMM FISHERMEN'S FUND:VESSEL OWNER CLAIMS TELECONFERENCED
Scheduled but Not Heard
-- Public Testimony --
+= SB 4 BARBERS/HAIRDRESSERS;CHEMICALS;BRAIDING TELECONFERENCED
Moved HCS CSSSSB 4(L&C) AM Out of Committee
-- Public Testimony --
+= HB 374 ON-BILL FINANCING OF ENERGY IMPROVEMENTS TELECONFERENCED
Scheduled but Not Heard
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
+ SB 45 EXEMPTION: LICENSING OF CONTRACTORS TELECONFERENCED
Heard & Held
           SB 165-COMPREHENSIVE HEALTH INSURANCE FUND                                                                       
                                                                                                                                
3:19:36 PM                                                                                                                    
                                                                                                                                
CHAIR KITO  announced that  the first order  of business  would be                                                              
SENATE   BILL  NO.   165,   "An  Act   relating   to  the   Alaska                                                              
comprehensive  health   insurance  fund;  and  providing   for  an                                                              
effective date."                                                                                                                
                                                                                                                                
3:19:54 PM                                                                                                                    
                                                                                                                                
SENATOR ANNA  MACKINNON, Alaska  State Legislature,  introduced SB                                                              
165  as prime  sponsor.   She  paraphrased  the sponsor  statement                                                              
[included in committee  packet], which reads as  follows [original                                                              
punctuation provided]:                                                                                                          
                                                                                                                                
     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% for one insurer  and 39.9%                                                                   
     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.                                                                                                    
                                                                                                                                
     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.                                                                                        
                                                                                                                                
     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.                                                                                                                   
                                                                                                                                
3:22:21 PM                                                                                                                    
                                                                                                                                
CHAIR KITO asked Senator Mackinnon to explain the funding that                                                                  
will go back into the general fund (GF).                                                                                        
                                                                                                                                
SENATOR  MACKINNON corrected  the  amount was  $63  million.   She                                                              
stated  $55 million  was  done several  years  ago  to create  the                                                              
reinsurance pool.   She said  high-risk insurance  recipients were                                                              
paid for  outside of  the regular insurance.   She explained  that                                                              
$63 million represents  current insurance premiums  that are being                                                              
deposited and moved back into GF.                                                                                               
                                                                                                                                
REPRESENTATIVE  WOOL asked  how many  people were  moved from  the                                                              
general pool to the high-risk pool.                                                                                             
                                                                                                                                
SENATOR MACKINNON  answered that  500 individuals were  driving 95                                                              
percent of  the high-risk costs.   She deferred to Ms.  Lori Wing-                                                              
Heier.                                                                                                                          
                                                                                                                                
3:24:04 PM                                                                                                                    
                                                                                                                                
CHAIR  KITO  opened public  testimony  on  SB  165. [He  moved  to                                                              
invited testimony and did not close public testimony.]                                                                          
                                                                                                                                
3:25:01 PM                                                                                                                    
                                                                                                                                
MICAELA  FOWLER,  Legislative  Liaison,  Department  of  Commerce,                                                              
Community &  Economic Development  (DCCED), answered  questions in                                                              
the  hearing  on SB  165.    She  stated that  when  the  original                                                              
legislation  passed,  it directed  premium  tax dollars  into  the                                                              
Alaska  Comprehensive  Health  Insurance  Fund.    She  added  the                                                              
legislation  had a  sunset date  which  would be  extended in  the                                                              
proposed  bill.   The  original  legislation stipulated  that  the                                                              
department  would seek  additional funding.     She said that  was                                                              
carried out  through a 1332  Waiver.  She  added that  because the                                                              
federal government  pays a  portion of  premiums, the  amount that                                                              
is suppressed  is being given back  to the state for the  fund for                                                              
the next four years.                                                                                                            
                                                                                                                                
CHAIR KITO asked about the 1332 Waiver.                                                                                         
                                                                                                                                
3:27:04 PM                                                                                                                    
                                                                                                                                
ANNA LATHAM,  Deputy Director,  Division of Insurance,  Department                                                              
of Commerce,  Community &  Economic Development (DCCED),  answered                                                              
questions in  the hearing on SB  165.  She stated the  fiscal note                                                              
(FN) reflects the federal funds from the 1332 Waiver award.                                                                     
                                                                                                                                
REPRESENTATIVE  BIRCH  asked how  many  beneficiaries  are in  the                                                              
insurance pool.                                                                                                                 
                                                                                                                                
MS.  LATHAM  answered there  are  around  18,000 Alaskans  in  the                                                              
individual market.   She added the state fully  funded the program                                                              
in 2017.   She said  there had been  a $55 million  appropriation.                                                              
She  said the  Division of  Insurance  had applied  for a  federal                                                              
waiver  which  was  awarded  in  2018.   She  added  that  because                                                              
Alaska's  market  is highly  subsidized,  90  percent  of the  re-                                                              
insurance program  for the 5  years of the  waiver is going  to be                                                              
federally funded                                                                                                                
                                                                                                                                
REPRESENTATIVE  BIRCH  asked  whether   the  Alaska  Comprehensive                                                              
Health  Insurance Association  (ACHIA)  program  is expanded  from                                                              
hundreds to thousands over the years.                                                                                           
                                                                                                                                
MS.  LATHAM   spoke  to   the  Alaska   Reinsurance  Program   for                                                              
individuals with  high cost qualifying  conditions.   When Primera                                                              
see these qualifying  conditions, it lowers rates  for everyone in                                                              
the individual  market. She added  the individual market  has been                                                              
dropping in enrollment in recent years.                                                                                         
                                                                                                                                
REPRESENTATIVE  WOOL asked  whether ACHIA  has "morphed"  into the                                                              
fund or whether they are separate things.                                                                                       
                                                                                                                                
MS. LATHAM answered  the small population in the  ACHIA program is                                                              
stable,  and  the reinsurance  program  from  2016 is  a  separate                                                              
program.                                                                                                                        
                                                                                                                                
REPRESENTATIVE  WOOL  surmised  that  a few  people  remaining  on                                                              
ACHIA might  qualify for the  high-risk designation that  would be                                                              
taken out of the pool.                                                                                                          
                                                                                                                                
MS.  LATHAM said  the division  has not  seen a  migration to  the                                                              
reinsurance program.                                                                                                            
                                                                                                                                
REPRESENTATIVE WOOL  suggested the program was started  before the                                                              
division knew it was going to get a federal reimbursement.                                                                      
                                                                                                                                
MS.  LATHAM answered  that is  correct.   She  added the  division                                                              
knew it had to find an alternate funding source.                                                                                
                                                                                                                                
3:33:44 PM                                                                                                                    
                                                                                                                                
CHAIR KITO held over SB 165.                                                                                                    
                                                                                                                                

Document Name Date/Time Subjects
SB004 Sectional Analysis ver. N 3.19.2018.pdf HL&C 3/26/2018 3:15:00 PM
SB 4
SB004 ver N.pdf HL&C 3/26/2018 3:15:00 PM
SB 4
SB004 Explanation of Changes ver. U.A to ver. N 3.19.2018.pdf HL&C 3/26/2018 3:15:00 PM
SB 4
SB004 Legal Memo Tattooing.pdf HL&C 3/26/2018 3:15:00 PM
SB 4
SB045 Sectional Analysis.pdf HL&C 3/26/2018 3:15:00 PM
SB 45
SB045 Sponsor Statement.pdf HL&C 3/26/2018 3:15:00 PM
SB 45
SB045 Support Letters 3.22.18.pdf HL&C 3/26/2018 3:15:00 PM
SB 45
SB045 Ver. O.PDF HL&C 3/26/2018 3:15:00 PM
SB 45
SB45 Opposition Letter 3.23.18.pdf HL&C 3/26/2018 3:15:00 PM
SB 45
SB045 Fiscal Note DCCED-CBPL 2.3.17.pdf HL&C 3/26/2018 3:15:00 PM
SB 45
SB045 Fiscal Note DCCED-CBPL 3.15.18.pdf HL&C 3/26/2018 3:15:00 PM
SB 45
SB004 ver N.pdf HL&C 3/26/2018 3:15:00 PM
SB 4