Legislature(2007 - 2008)BUTROVICH 205
01/30/2008 01:30 PM Senate HEALTH, EDUCATION & SOCIAL SERVICES
| Audio | Topic |
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| Start | |
| SB160 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 160 | TELECONFERENCED | |
SB 160-MANDATORY UNIVERSAL HEALTH CARE
CHAIR DAVIS announced SB 160 to be up for consideration.
1:33:48 PM
SENATOR HOLLIS FRENCH, sponsor of SB 160, said this bill
represents the culmination of a dream of finding a way to
provide affordable health insurance to all citizens. He went on
to say that a majority of the 100,000 Alaskans without insurance
are working but either do not get benefits through their
employer, or cannot afford the benefits provided; this bill was
designed to correct that. SB 160 represents a compromise between
two warring factions in the health insurance debates. The left
gave up on the idea of "single payer," and the right gave up on
keeping folks uninsured. This breakthrough occurred when people
realized the American values of competition and a free market
could be preserved without sacrificing health coverage for every
citizen.
1:36:26 PM
SENATOR FRENCH said the overall plan is to set up a health care
board to certify private healthcare plans and place them in a
healthcare clearinghouse, then let citizens purchase coverage
from the clearinghouse using a voucher, the amount of which
would be determined on a sliding scale based on income.
Competition between private plans would maintain a free market,
with the government involved only as a facilitator.
1:37:50 PM
He noted that there was a blank CS before the committee.
CHAIR DAVIS said it had not been adopted, but the committee
could address that at a later time. She recognized that Senators
Wielechowski and Ellis were co-sponsors of the bill, and then
returned the floor to Senator French.
1:38:43 PM
SENATOR FRENCH confirmed that he was working from version V, and
provided an overview of the bill by section.
Section 1 sets out the initial findings: primarily that the
healthcare system needs work, that the goal of the bill is to
improve and protect the health of all Alaskans, that all
Alaskans should have access to essential healthcare, and that
has an economic interest in insuring equitable financing of
essential healthcare for Alaskans who do not have access to
basic healthcare.
Section 2 lays out what the legislation would accomplish and the
mechanics of implementation.
SB 160 would: ensure that all state residents can afford quality
health care coverage appropriate to their needs, require that
healthcare coverage be "meaningful" as discussed later in the
bill, reduce unsustainable healthcare cost increases through
encouraging primary care and prevention, center on consumer
choice by providing a framework for competition where insurance
plans must compete to acquire and retain customers.
SENATOR FRENCH continued to Section 21.54.210, which deals with
the creation of the Health Care Board. The board would be set up
under the Department of Health and Social Services (DHSS) and
comprise 13 members: 2 representatives from the insurance
industry, 1 representing large business, 1 representing small
business, 2 from Alaska's hospitals, 1 from a labor
organization, 2 licensed Alaska physicians, 2 consumer
advocates, a registered nurse, and the Commissioner of Health
and Human Services. Each member would be appointed by the
governor for a three year term. Members would be entitled to
standard per diem and transportation charges and costs under AS
39.21.80. The board would select a chair and vice chair; a
majority would be considered a quorum for transacting business.
The board would have six members whose focus would be on the
business side of health and six who would focus on the patient
side of health, with a commissioner serving as tie-breaker.
1:41:39 PM
Section 21.54.220 presents two main elements of the bill: the
healthcare clearing house and the healthcare fund. Senator
French said the function of the fund would be described later in
the bill. The board would ensure a variety of plans would be
made available through the clearinghouse, help educate the
public about different plan options and ensure enrollment. He
added parenthetically that he saw an opportunity here for some
synergy with the governor's plan for a web-based information
system. The board would also establish enrollment criteria and
provide for an annual "open season" when customers could change
their plan selections. He felt the open season was important to
prevent what he called "moral hazard", or waiting to enroll in a
plan until it was needed.
The board would hear complaints or objections to decisions made
by the plan. Customers who objected to a board decision would be
entitled to a hearing. The board would also be responsible to
implement the voucher system.
1:44:03 PM
He explained that the idea as set out in Section 21.54.230 is
not to create a new bureaucracy; it [the clearinghouse] would
more likely be a web site where customers with healthcare
vouchers would make their plan selections and be connected with
quality insurance products.
Section 21.54.240 establishes the voucher system and includes an
individual responsibility clause requiring all Alaskans to have
health coverage that would provide essential healthcare
services. The state would be responsible to ensure that
affordable healthcare was made available, but it would be the
responsibility of the individual to go to the clearinghouse and
get that coverage.
1:46:23 PM
SENATOR FRENCH emphasized that there were 70,000 visits last
year to the Providence Hospital emergency room and many of the
those treated were not insured. The individual responsibility
clause is a necessary first step to getting everyone in the pool
and keeping the costs down.
Sections 1 through 7 [AS 21.54.240] outline who would not be
subject to the individual responsibility requirement. People
enrolled in Medicare or Medicaid, people with existing insurance
coverage including those covered by the Indian Health Service,
and those who have been in the state less than a year would be
exempt from participation in the program.
1:48:03 PM
Vouchers would be issued to households and individuals based on
the federal government's federal poverty level (FPL) criteria.
In Alaska, the FPL for 2008 was set at $13,000 annual gross
income for an individual or $26,500 for a family of four.
Subsection (c) provides that anyone falling below the FPL would
get free health coverage. Those people would probably qualify
for Medicaid, but if they fell through a loophole in that
program, coverage would be paid for by the state. Subsection (d)
provides that vouchers would be issued to persons earning
between 100 and 300 percent of the FPL. Subsection (e) would
require individuals or families earning over 300 percent of the
FPL to acquire their own coverage. They would not receive needs-
based vouchers, but would be eligible to receive one of the
specified beneficiary vouchers described in 21.54.280.
1:50:25 PM
Subsection (b) provides for larger vouchers to individuals
qualifying for coverage under the Alaska Comprehensive Health
Insurance Association (ACHIA) plan. Because ACHIA's high-risk
coverage can be extremely expensive, the sliding income scale
was adjusted to allow an income of up to 450 percent of the FPL.
Subsection (f) specifies that only legal Alaskan residents would
be eligible to receive vouchers.
All plans sold through the clearinghouse would have to provide,
certain minimum benefits as defined in Section 21.54.250 to
include: coverage for preventative and primary care, emergency
services, in-patient hospital charges, prescription drug
coverage, mental health services. Section 21.54.260 relates to
employer-provided health coverage requirements. Subsections (a)
and (b) in that section make clear that nothing in the
legislation would change employer-paid insurance if provided.
Subsections (c) and (d) ensure that all employers contribute
something to the public health by imposing a tax levy based on
size, on businesses without health insurance plans.
1:53:21 PM
SENATOR FRENCH added that if an employer offered to pay 33
percent of its employees' premium costs, successfully enrolled
at least 25 percent of its employees in an employer sponsored
plan, or established a Section 125 cafeteria plan, the employer
would be exempt from the levy.
Insurance plans offered through the Alaska Healthcare
Clearinghouse would have to meet Section 21.54.270 requirements,
including a mandate in subsection (b) that an insurance plan
offered through the clearinghouse may not deny enrollment to an
eligible individual.
1:55:00 PM
SENATOR FRENCH emphasized that such a mandate is only possible
because of the individual responsibility clause that requires
everyone to have coverage. Subsection (c) allows companies to
offer varied levels of deductibles, co pays, coinsurance and
out-of-pocket maximums, include high-deductible healthcare
plans, and offer different benefit levels for in-network and
out-of-network providers. The subsection also encourages
specialized plans for young adults 18 to 30 that have different
terms than normal plans. The idea was to let the marketplace
respond to the needs of the customers.
Subsection (d) would increase the length of time that a child
must be covered under a clearinghouse plan to 25 years of age or
until two years after the dependent no longer resides with the
family.
The Alaska Health Fund and Specified Beneficiary Vouchers are
explained in Section 21.54.280. The health fund would be
established as a separate trust fund of the state and would
include appropriations from the state and federal governments,
the employer levy, healthcare premiums, and other sources.
Specified Beneficiary Vouchers [Subsection (b)] would give
employers the ability to contribute to employee health premiums
through a voucher. If a person's income exceeded 300 percent of
FPL, an employer that could not afford to provide health
insurance would still be able to help by providing some of the
cost in the form of a voucher in the employee's name. That would
work especially well for individuals with more than one
employer.
1:58:37 PM
SENATOR FRENCH stated that a weakness of earlier reform efforts
was that they forced employers to offer employee insurance,
which was too great a financial burden and the business
community pushed back against that. In the modern economy people
change jobs frequently or work multiple jobs that come together
to provide a living, but often don't offer insurance. This plan
would provide portable insurance policies that people could take
with them as they change jobs.
Section 21.54.290 grants individuals the right to a hearing if
denied health coverage by a certified plan, if a plan fails to
deliver essential healthcare services, or if they were aggrieved
by a decision of the board.
1:59:36 PM
Section 21.54.300 requires a comprehensive annual performance
report by the board. The board would also give an evaluation and
recommendation on a number of health reform topics such as the
use of electronic health records, State Children's Health
Insurance Program (SCHIP), the effect of mandated benefits,
prescription drug bargaining and more.
SENATOR FRENCH said section 21.54.210 requires the board to
establish regulations under the Administrative Procedures Act.
The remaining parts of the bill include definitions and
transitional provisions.
2:00:38 PM
He offered to take questions.
SENATOR DYSON said he was impressed with the scope and depth of
the bill. He asked what would happen if a person chose not to
enroll.
SENATOR FRENCH reiterated that the individual responsibility
clause requires it. In Massachusetts a person would lose the
ability to take a standard deduction on his or her state income
tax return. Alaska would not have that mechanism available, so
one of the policy decisions that needs to be addressed is some
form of soft enforcement of the individual mandate. It will
never be a crime not to have health insurance and he would
prefer not to tie it to the permanent fund, he would rather tie
it to an individual's ability to qualify for other financial
benefits such as in-state tuition at University of Alaska.
2:03:18 PM
SENATOR DYSON said that government has created a suboptimal
situation that forces hospitals to take anyone who walks into an
emergency room without any assurance of cost recovery, which
results in spreading the costs to everyone. This proposal
appears to correct that. However, he wants to discuss the civil
liberties aspect of coercing citizens to participate in
something for their own good, but tramples on the right of free
citizens in order to accomplish the greater good.
2:04:52 PM
SENATOR FRENCH said the immediate comparison is probably most
apt to education. Every citizen deserves some basic level of
education in order to fulfill his or her potential for a
meaningful life. He opined that the same applies to health care.
Human bodies break down and at some point in life every person
will need medical care. For that care to be meaningful, one
needs an insurance policy. Some people exempt themselves from
public education by taking steps to prove that they are
homeschooling or providing that education in some other way.
There are also mechanisms for exempting oneself from this
requirement, like posting a bond for example. He maintained that
it is not fair for a person to expect everyone else to pick up
the bill when something happens.
2:06:10 PM
SENATOR THOMAS appreciated that the bill would create
competition in the insurance industry, but wondered how the
payment schedule would be structured. He asked if the [Health
and Human Services] commission would be charged with the
responsibility to review what was paid and determine what
reasonable and customary charges were. He feared that providers
might increase rates knowing that everyone had coverage.
SENATOR FRENCH answered that the same market forces that keep
payment schedules from getting out of line now would continue
under this program. He pointed out that doctors don't triple the
price of a procedure when they treat a patient who has an
insurance policy. He would actually expect costs to come down,
because 15 percent of health insurance premiums now cover the
uninsured.
2:08:37 PM
SENATOR THOMAS asked if there would be any limitation on what
facilities might be used.
SENATOR FRENCH said the plan would allow for a difference in
payment for in and out-of-network providers, but would not
restrict where an individual could go for medical care.
2:09:43 PM
SENATOR THOMAS asked about the 450 percent of FPL for Specified
Beneficiary Vouchers.
SENATOR FRENCH clarified that the upper limit for a standard
voucher for a family of four would be 300 percent. The 450
percent voucher would apply only those individuals who would now
be enrolled in the ACHIA high risk pool. The idea is that we'd
have to offer a better voucher to avoid pricing those people out
of the system.
SENATOR THOMAS asked if drug and alcohol treatment would be
considered mental health disorders.
SENATOR FRENCH agreed that they would.
2:11:14 PM
SENATOR ELTON asked how the definition of an employer applied to
franchises. For example, he wondered whether Macdonald
Corporation would be considered the employer, or the franchise
holder for a particular restaurant.
SENATOR FRENCH answered that it would be the entity that signs
the paycheck.
SENATOR ELTON noted that the fiscal note said 20 percent of
uninsured have Indian Health care and wondered why they are
included.
2:12:30 PM
SENATOR FRENCH answered that the fiscal note referred to an
earlier version of the bill and those people would be exempt
under the current version.
SENATOR DYSON asked how this bill would encourage healthcare
savings accounts.
2:13:46 PM
SENATOR FRENCH said the current draft of the bill had no
provision for them and encouraged Senator Dyson to bring a
provision that would incorporate healthcare savings accounts. He
suggested those accounts could, if meaningful and set up
correctly, serve as healthcare policies.
2:14:38 PM
SENATOR DYSON took exception to Senator French's statement that
a person who does not have insurance really doesn't have access
to care. He asserted that people who can afford it have taken
responsibility for their health and paid their own bills for 300
or 400 years quite successfully. He didn't see anything to
prevent people from doing so now and further stated that those
who can pay their own bills are charged more.
SENATOR FRENCH said it seemed fairly clear that, while there may
be a very small number of people in the United States who have
enough money to pay the going rate for healthcare, that is not
the case for the majority of Americans. He felt that he could
show clearly that those who do not have insurance do not get the
same quality of medical care as those who do. They don't get all
of the medical tests or follow-up care and they don't enjoy the
lifespan of people who do have insurance.
SENATOR DYSON said that if they have the money and don't get the
care, it is their choice and not government's job to fix.
2:16:33 PM
CHAIR DAVIS said that healthcare savings accounts were discussed
by the Healthcare Strategies Planning Council, which was looking
for ways to encourage their use, and she felt they might be part
of the answer for people who can afford them. She went on to say
that they could not expect everyone to be covered under this
plan, although that is the goal, and thought it would be helpful
if Senator French would bring back some numbers from the
Massachusetts plan on how many are covered, how many are not,
and what Massachusetts is doing to ensure that they do get
insurance.
2:17:43 PM
CHAIR DAVIS said there are other states, including California
and Vermont, which have similar plans she would like to hear
about. She stated that they would do the fiscal notes
separately.
SENATOR FRENCH said he had completed the overview and that he
would provide the committee with a recent report on the
Massachusetts program key indicators.
CHAIR DAVIS said she would also like to see additional
information on how this would integrate existing plans such as
Medicaid, Medicare and Denali Kid Care.
2:20:03 PM
CHAIR DAVIS said it would not be possible to hear from all of
the witnesses who had signed up to testify on the bill, but she
would continue public testimony the next time the bill was
scheduled.
BEVERLY SMITH, Christian Science Committee on Publication,
Anchorage AK, said her role was to ensure that proposed
legislation preserves the choice for Alaskans to pursue
spiritual means for the prevention and cure of disease,
including Christian Science treatment and care. She also wanted
to ensure that the committee had accurate information concerning
spiritual healing as practiced in Christian Science, so that...
"this cost-effective, reliable and effective form of care"...
would not be overlooked or restricted in the state's healthcare
reform efforts. She said that to meet the healthcare needs of
all Alaskan residents, this legislation should include coverage
for spiritual care similar to the coverage offered by the
federal government and some other state plans. She described
Christian Science as a religious, non-medical form of treatment
available to anyone, not just members of the Christian Science
church and explained that it involves reliance on spiritual
means through prayer to heal illness, injuries and other
conditions.
She stated that she would not take a position on whether
healthcare should be mandated, but pointed out that
Massachusetts and some other states were considering allowing
people to opt out on the basis of religious belief. She
emphasized however, that any reform discussion should include an
acknowledgement of spiritual care and that costs associated with
it should be included in healthcare reform. She requested that a
specific reference be included in SB 160 under section 21.54.250
to spiritual care services as a category of essential healthcare
services.
2:24:14 PM
MS. SMITH referred to the "Request for Amendment" she had
provided to the committee members and said she would be happy to
work with them on language to ensure that insurance coverage
would be provided for those Alaskans choosing spiritual care.
2:25:16 PM
CHAIR DAVIS commented that anyone can use spiritual care whether
or not it is included in this bill, and cautioned that it would
not be possible to include a reference to every religious
organization that offered healing services. She assured Ms.
Smith however, that she wanted to ensure that her needs were met
and would discuss it with her further when the committee took up
amendments.
SENATOR DYSON said he also comes from a tradition that includes
spiritual healing, but respectfully questioned what charges
would be involved in the services Ms. Smith was referring to.
MS. SMITH answered that Christian Science practitioners devote
their full time to healing prayer and charge a small amount to
support themselves and their families. Christian Science nurses
also charge to provide physical care for those undergoing
spiritual treatment.
2:27:33 PM
JAMES SHILL, CEO, North Star Behavioral Health, Anchorage AK,
said he supported SB 160. North Star employs 500 people who
provide hospitalization and residential care for children and
adolescents, with over 1100 admissions to their hospitals and
treatment centers annually. They are the primary psychiatric
provider for youth experiencing serious mental health issues
that make them a danger to themselves or others. A hospital
cannot turn people away for treatment, nor do they want to, but
physicians have high liability insurance payments, student loans
and other expenses that make it difficult for them to provide
pro bono care or negotiate for payment from people without
health insurance. That makes it difficult for a hospital to
recruit physicians, who know they could work for an out-patient
facility that has no requirement to take patients who cannot
pay. He said he supports the bill because it takes affordability
of insurance into account.
2:31:04 PM
SENATOR ELTON asked how many people have insurance plans that
cover mental health services.
MR. SHILL responded that Denali Kid Care helped a great deal to
cover most of the low-income children. The bigger problem was
families that make too much for Medicaid but cannot afford
insurance, or who have insurance that doesn't provide for mental
health services. He said the largest payor in their hospitals is
traditionally Medicaid, although Tri-Care was increasing due to
the war and currently accounted for 20 to 30 percent of the
patients.
2:32:35 PM
BONNIE NELSON, representing herself from Chugiak, AK, thanked
Chair Davis for bringing up what is being done about healthcare
in other states. She felt the information should be debated
before the legislature and aired on gavel to gavel like AGIA
was, instead of being dealt with by a council or committee.
She was not convinced that the Mitt Romney approach was the
answer, because Massachusetts has many supplemental programs
that Alaska does not, that allow the program to work there. For
example, Alaska does not have a way for the disabled or elderly
to stay on Medicaid and still save some money when they can
work, as they are able to do in Massachusetts. She thought the
bill should deal with Medicare and Medicaid problems and
suggested that the legislature look at California and Colorado's
"One Care for All" programs.
Ms. Nelson added that Massachusetts does not have a high risk
pool like ACHIA. She suggested that insurance companies use
"community rating" to spread the cost and that people pay
premiums based on their income rather than their disability. She
also supported a supplemental program to assist people who are
turned away from Medicare or Medicaid.
2:36:31 PM
DARYL WAYNE NELSON, Chugiak AK, thanked the committee and said
this is an important topic to him. He has cerebral palsy but had
not been on Medicaid for over a year because he spent eight
years working to save money and putting the money in other
people's names to hide it so he could get his long-term care
services. He asserted that he would not break the law or
encourage others do so but felt that people, no matter how
disabled, should be allowed to be productive citizens and have
the right to save some money. He said it is "immoral and wrong"
that the Medicaid IM program allows participants to get up to
$5000 per month but requires them to spend down to the federal
poverty level (FPL) of $2000 to maintain eligibility. Seniors
who develop disabilities late in life have to give up everything
they worked for or sign it over to their children when they have
to go into a nursing facility or home care. He also felt
strongly that Medicaid and Medicare should allow greater freedom
in the choice of providers and types of medical services
covered.
2:40:49 PM
MR. NELSON said he was born in Alaska but might have to leave
the state in order to get the care he needs. He was pleased that
the legislature has finally started talking about the issue in a
meaningful way and hopes it will result in a healthcare system
that includes everyone.
2:43:01 PM
CHAIR DAVIS said she appreciated Mr. Nelson's comments, although
he strayed quite a bit from discussion of the bill, and that it
would go on record that he was pleased there is a bill under
discussion to deal with some of Alaska's healthcare issues. She
assured him that it would come before the public again and she
would welcome suggestions on how to make it a better bill.
SENATOR THOMAS moved to adopt the proposed committee substitute
to SB 160, labeled 25-LS0728, Version V, as the working draft
for the committee with attached fiscal notes. There being no
objection, the motion carried.
2:44:59 PM
SENATOR FRENCH closed by saying that his staff had put together
a detailed bill packet that should answer a lot of the questions
that came up during the meeting. He offered to work with the
committee to put the bill into a form that would please them and
stressed that, while this isn't the final answer, it is a way to
begin the conversation and move toward their goal to lower the
number of uninsured and provide better healthcare and access to
everyone in the state.
CHAIR DAVIS said she also appreciated Senator French's staff for
the hard work they put into the bill packet. She said the
administration still had to "weigh in" on the bill and, if they
didn't come on their own she would invite them to the next
meeting.
SENATOR DYSON asked for a rough idea of when Chair Davis
expected to finish work on SB 160.
CHAIR DAVIS responded that she couldn't say when they would
finish, but she planned to bring it back up in two weeks. She
admonished the committee to get their ideas to her office so
they could work on them before the next meeting. She held SB 160
in committee.
There being no further business to come before the committee,
CHAIR DAVIS adjourned the meeting at 2:47:34 PM.
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