Legislature(2011 - 2012)BUTROVICH 205

02/28/2011 01:30 PM HEALTH & SOCIAL SERVICES

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved CSSB 27(HSS) Out of Committee
Heard & Held
Bills Previously Heard/Scheduled
          SB  52-MENTAL HEALTH CARE INSURANCE BENEFIT                                                                       
1:45:29 PM                                                                                                                    
CHAIR DAVIS announced the next order of business would be SB 52.                                                                
TOM OBERMEYER,  Staff to  Senator Davis, said  that SB  52 amends                                                               
several  sections of  Alaska's health  insurance code  to require                                                               
that  health care  insurers provide  full  "parity," i.e.,  equal                                                               
insurance coverage, or the same  financial and treatment coverage                                                               
for  mental health  conditions, including  alcohol and  substance                                                               
abuse, as  other physical illnesses.  This bill expands  on state                                                               
compliance  under  HB 222  in  2009  with newly  enacted  federal                                                               
parity law, the "Paul Wellstone  and Peter Domenici Mental Health                                                               
Parity and Addiction  Equity Act" of 2008. That  Act also applies                                                               
to all children's health insurance  programs and became effective                                                               
April 1, 2009.                                                                                                                  
1:49:30 PM                                                                                                                    
MR. OBERMEYER  said that historically, health  insurers have been                                                               
reluctant to cover mental health  and substance abuse services on                                                               
the same basis  as general medical and  surgical services. During                                                               
the 1980s many  states required insurers to  provide coverage for                                                               
mental  health services  and  to offer  freedom  of choice  among                                                               
providers. However, concerns about  the adequacy of this coverage                                                               
persisted  because insurers  imposed  increased  cost sharing  or                                                               
restrictive benefit  limits. This led  to more federal  and state                                                               
intervention on  behalf of consumers.  While current  federal law                                                               
does  not mandate  that group  plans must  provide mental  health                                                               
coverage, if  they do, they  must provide the same  financial and                                                               
treatment  coverage offered  for other  physical illnesses.  This                                                               
bill differs  from federal law  in that  it does mandate  that "a                                                               
health care insurer which offers,  issues for delivery, delivers,                                                               
or  renews  a  health  care  insurance plan  to  an  employer  or                                                               
individual on a group or  individual basis shall provide coverage                                                               
for treatment of a mental health condition."                                                                                    
CHAIR DAVIS asked if he could provide a sectional analysis.                                                                     
MR.  OBERMEYER  said  that  Section 1  prohibits  a  health  care                                                               
insurer from  placing a  greater financial  burden on  an insured                                                               
for  the treatment  of alcoholism  or drug  abuse than  for other                                                               
medical   care,  including   limits   on  payment,   deductibles,                                                               
copayment,   or  other   cost   sharing  requirements,   methods,                                                               
prenotification requirements,  limiting or excluding  coverage or                                                               
services, or  denying coverage because treatment  was interrupted                                                               
or not completed.  It defines a "health care  insurance plan" and                                                               
"health care insurance."                                                                                                        
Section 2 requires  health care insurers to  provide coverage for                                                               
treatment of  mental health conditions.  It requires  that health                                                               
care insurance provisions are applied  to the treatment of mental                                                               
health conditions in the same  way as those health care insurance                                                               
conditions are applied to other medical care.                                                                                   
Section  3   is  an  editorial   amendment.  Section   4  removes                                                               
limitations  on  mental  health benefits  from  ACHIA  high  risk                                                               
plans. Section 5  removes a 50 percent  copayment requirement for                                                               
mental health services  under an ACHIA plan. Section  6 removes a                                                               
provision under an ACHIA plan  that requires certain expenses for                                                               
the treatment  of mental  and nervous conditions  be paid  at the                                                               
rate of  50 percent. Section  7 removes the exclusion  for mental                                                               
health services  or services for  alcohol or drug abuse  from the                                                               
definition  of  "basic health  care  services"  which applies  to                                                               
health   maintenance  organizations.   Section   8  changes   the                                                               
definition of  medical care and  includes mental health  care and                                                               
care  for alcoholism  and substance  abuse in  the definition  of                                                               
"medical  care" for  insurance purposes.  Section  9 repeals  the                                                               
definition  of  "medical  and surgical  benefits"  applicable  to                                                               
health insurance, which excludes  mental health benefits. It also                                                               
repeals the definition of "mental  health benefits," which allows                                                               
the  term to  be defined  in a  health care  insurance plan,  and                                                               
which  excludes   treatment  of   substance  abuse   or  chemical                                                               
dependency. Section 10  states that the act  applies to insurance                                                               
issued after  the effective  date of the  act. Section  11 states                                                               
that  the act  applies to  insurance issued  after the  effective                                                               
date of the act. Section 11 states an effective date.                                                                           
1:55:00 PM                                                                                                                    
MR.  OBERMEYER  explained that  SB  52  tries to  recognize  that                                                               
mental health conditions  must be defined in the  DSM manual, and                                                               
he asked DSHS to confirm  that those disorders are defined there.                                                               
From a policy standpoint, SB  52 recognizes that these conditions                                                               
should be  treated under health  plans the same as  other medical                                                               
conditions. He  noted that DUI  wellness court clients  have been                                                               
found to be medically (chemically)  dependent. It is only fair to                                                               
treat  these conditions  the same  as other  conditions. Treating                                                               
them otherwise is discriminatory.                                                                                               
SENATOR  MEYER asked  if he  had any  idea what  this would  cost                                                               
small business.                                                                                                                 
MR.  OBERMEYER  answered  that the  fiscal  note  indicates  some                                                               
anticipated costs. He  assumes that if law were  put into effect,                                                               
fewer employers  might offer insurance  or fewer  employees might                                                               
enroll. They don't have good  numbers, but other states have done                                                               
this.  There  must be  some  ability  to justify  the  additional                                                               
costs,  because  46  states  have   some  type  of  parity  laws,                                                               
including  28   that  require  full  parity   for  mental  health                                                               
CHAIR  DAVIS said  we  don't know  how much  it  will cost  small                                                               
business. But  we do know  that parity  is possible. In  the long                                                               
run it  may end  up saving  money. We  should provide  parity for                                                               
people with  mental illness simply  because it's the  right thing                                                               
to do.                                                                                                                          
SENATOR MEYER said he did not disagree with that.                                                                               
CHAIR  DAVIS said  there  is no  way of  knowing  the cost.  Many                                                               
employers who  don't have  to provide  this coverage  are already                                                               
doing it.                                                                                                                       
SENATOR  EGAN  noted  that  if   a  small  business  participates                                                               
already, the bill would not affect them.                                                                                        
MR. OBERMEYER  said if  a private  company has  a plan  in effect                                                               
now, the bill  says they would have to have  full parity. If they                                                               
don't have a plan  now and they elect not to  have one, then they                                                               
are not  required to  have mental health  parity. This  bill says                                                               
you must have full parity for  mental health coverage if you have                                                               
a plan.                                                                                                                         
2:03:09 PM                                                                                                                    
SENATOR  MEYER said  the federal  Mental Health  Parity Addiction                                                               
Act says any employer with fewer  than 50 employees is exempt. SB                                                               
52 says  any employer with more  than 5 must participate,  and he                                                               
wondered why that number was chosen.                                                                                            
MR. OBERMEYR said he was not sure.                                                                                              
DENNIS  BAILEY, Attorney,  Legislative  Legal  Services, said  he                                                               
doesn't  know where  the number  came from  or why  it is  in the                                                               
CHAIR  DAVIS stated,  "We can  see  we have  work to  do on  this                                                               
bill." She said  she was not sure what the  number should be, but                                                               
the issue needs to be addressed.                                                                                                
SENATOR  MEYER asked  if substance  abuse and  mental health  are                                                               
typically lumped together.                                                                                                      
MR. OBERMEYER  said that DSHS  has experts on this  question, and                                                               
the  DSM   manual  defines   these  conditions.   Alcoholism  and                                                               
substance abuse are now considered mental health disorders.                                                                     
SENATOR MEYER  asked if  this bill would  be able  to distinguish                                                               
between mental health claims and substance abuse claims.                                                                        
MR. OBERMEYER  said they  would both be  included under  the same                                                               
DENNIS BAILEY said that he did  not have a definitive answer, but                                                               
looking  at information  on  DSM standards  he  thinks there  are                                                               
separate  designations of  a disorder  that  are alcohol  related                                                               
versus other disorders  that are non-alcohol related.  They are a                                                               
sub-category of mental illness.                                                                                                 
2:09:29 PM                                                                                                                    
CHAIR DAVIS said  there was someone present from  the Division of                                                               
Behavioral Health.                                                                                                              
2:10:32 PM                                                                                                                    
BRENDA  KNAPP,  Treatment  and  Recovery  Program  Administrator,                                                               
Division  of Behavioral  Health (DBH),  Department of  Health and                                                               
Social Services (DSHS)  said her purpose was  to answer questions                                                               
on the  fiscal note. DSHS submitted  a zero fiscal note.  The DBH                                                               
recognizes  the value  of having  insurance  coverage for  mental                                                               
health and substance abuse issues.  Looking at the impact of this                                                               
parity  bill with  regard  to  a fiscal  note,  research did  not                                                               
indicate a significant cost increase or savings.                                                                                
2:11:51 PM                                                                                                                    
SENATOR DYSON joined the meeting.                                                                                               
SENATOR  MEYER asked  if  SB 52  would have  much  impact to  the                                                               
state,  and  noted   that  impacts  would  be   mostly  to  small                                                               
businesses, whether anything under 50 or over 5 employees.                                                                      
MS. KNAPP answered that DSHS would  not track that. They would be                                                               
tracking Medicaid  expenditures, reduced need for  treatment paid                                                               
by DSHS,  increased need for treatment  facilities and oversight.                                                               
The bill would not impact them directly at this time.                                                                           
SENATOR MEYER said you might actually see a decrease.                                                                           
MS. KNAPP answered that she was not an insurance expert.                                                                        
SENATOR  MEYER asked  if the  Division of  Insurance has  taken a                                                               
MS. KNAPP answered she was not aware that they had.                                                                             
CHAIR  DAVIS said  they usually  remain neutral,  but we  can ask                                                               
that they come forward.                                                                                                         
SENATOR MEYER said he was referring to Linda Hall.                                                                              
CHAIR DAVIS said the committee could  ask her to come to the next                                                               
2:15:55 PM                                                                                                                    
SENATOR  EGAN asked  if a  small  business does  not have  health                                                               
insurance for  their employees, would  this bill require  them to                                                               
provide insurance.                                                                                                              
CHAIR DAVIS said  if you have a  plan you have to  do things, but                                                               
the bill is not saying you have to get a plan.                                                                                  
SENATOR DYSON  noted on page 2,  line 19, there would  seem to be                                                               
one factor that makes employers  reluctant to have parity because                                                               
a diagnosis of  mental illness is more subjective.  The bill says                                                               
an  insurer may  not  use  or require  notification  or a  second                                                               
opinion. He  stated he would  enjoy knowing why a  second opinion                                                               
was excluded.                                                                                                                   
CHAIR DAVIS said they could list  this as an area of concern. She                                                               
said they would look into this area.                                                                                            
SENATOR  DYSON  asked  about the  meaning  of  fraternal  benefit                                                               
society as used in SB 52.                                                                                                       
DENNIS BAILEY  said that a  fraternal benefit society is  a group                                                               
that provides benefits  for its members, such as  the Moose Lodge                                                               
or  the Elks  Lodge,  where  they may  give  some insurance  type                                                               
benefits to their members. These  are categorized separately from                                                               
a normal health insurer.                                                                                                        
SENATOR  DYSON said  some  unions,  including those  representing                                                               
public employees, have their own  health benefit plans, and asked                                                               
if they would be required to comply.                                                                                            
MR. BAILEY  said he had some  ideas on the question,  but felt it                                                               
should be directed to the Division of Insurance.                                                                                
CHAIR DAVIS announced  that SB 52 would be held  in committee for                                                               
further consideration.                                                                                                          

Document Name Date/Time Subjects
SB 52 Sectional Summary 2-21-2011.pdf SHSS 2/28/2011 1:30:00 PM
SB 52
SB 52 Sponsor Statement Rev 2-12-2011 docx.pdf SHSS 2/28/2011 1:30:00 PM
SB 52
SB 52 Suport Docs - Legal Svcs Memo 091010.pdf SHSS 2/28/2011 1:30:00 PM
SB 52
SB 52 Support Docs - NCSL State Comparisons 2010.pdf SHSS 2/28/2011 1:30:00 PM
SB 52
SB 52 Support Docs-DSM-IV-TR - Diag Man Mental Disorders.pdf SHSS 2/28/2011 1:30:00 PM
SB 52
SB 52 Support Docs-MH Parity -42 USCS 300gg-23 preemption.pdf SHSS 2/28/2011 1:30:00 PM
SB 52
SB 52 Support Docs-MH Parity-42 USCS 300gg-26-subst abus (3).pdf SHSS 2/28/2011 1:30:00 PM
SB 52
SB 52 Bill.pdf SHSS 2/28/2011 1:30:00 PM
SB 52