Legislature(1999 - 2000)
03/02/2000 01:40 PM Senate L&C
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 276-REQUIRE HEALTH INS COVERAGE FOR DIABETES
CHAIRMAN MACKIE announced SB 276 to be up for consideration.
SENATOR MIKE MILLER, sponsor of SB 276, stated that he was asked by
members of the American Diabetes Association (ADA), in his role as
Chairman of the Senate HESS Committee, to introduce SB 276. The
bill requires health care insurers to provide coverage for
treatment of diabetes. He noted it is rare for a Republican
legislator to offer legislation that requires insurers to provide
coverage, but he believes the lack of coverage for diabetes
treatment affects over 30,000 Alaskans and that people with
diabetes must take many actions to control their disease. He
admitted that he was taken aback to learn that diabetes treatment
coverage is not required. He noted his sponsor statement was in
members' packets and that he and others were available to answer
questions.
SENATOR LEMAN commented that the issue of mandatory coverage versus
mandatory offering may not be as obvious on this issue as it has
been on others, but he believes people should be allowed the
flexibility to choose their own health plans and the amount of
coverage they want. He asked Senator Miller why he chose the
approach of mandatory coverage.
SENATOR MILLER replied that the legislature has mandated coverage
for other things, some which he did not agree with, but he feels
the legislature should go in that direction on coverage for
diabetes. He personally feels that mandatory coverage is the right
thing to do in this case.
SENATOR LEMAN asked if early detection and education will result in
decreased expenditures and save lives.
TAPE 00-07, SIDE B
Number 2300
SENATOR MILLER indicated that an ADA study shows an annual savings
of $917 per person with diabetes when they have insurance coverage.
He asked that further questions on the ADA study be directed to
representatives from the ADA members. He said, as with all
diseases, an early diagnosis and treatment can save more money
later on.
SENATOR LEMAN remarked that he saw a proposal yesterday for an
upper cap on outpatient education costs and that he was told that
education could take as many as six hours per year. He said he can
understand why insurance companies might want to make sure that the
outpatient education coverage is limited. He asked Senator Miller
whether he believes that a time or dollar limit on outpatient
education is a reasonable approach.
SENATOR MILLER said he hopes the health care providers would be
self-limiting and that he does not favor a cap because each
individual is different; one may need 15 hours of education while
another may need 30 hours.
SENATOR LEMAN asked whether it would be reasonable for the insurers
to require a person who exceeds the 90th percentile amount for
education to provide documentation as to why the additional
education is necessary.
SENATOR MILLER replied, that on the face, that request sounds
reasonable because it would only apply to the top ten percent and
because requiring documentation is different than requiring a cap.
He asked that those questions be addressed to the medical
professionals who work with diabetics on a daily basis because they
are better able to provide answers.
SENATOR LEMAN noted that these issues are important to work through
and that others who want to testify may want to give them some
thought.
CHAIRMAN MACKIE asked participants who wish to testify to limit
their testimony to a few minutes so that everyone can be heard.
Number 2167
CHAIRMAN MACKIE declared, for the record, that he supports this
legislation but that he has a conflict of interest because his
father is diabetic.
MS. BETSY TURNER BOGREN, the Fairbanks District Manager for the
ADA, urged committee members to support SB 276 for the following
reasons. SB 276 will ensure that Alaskans have access to the
medicines, supplies, and patient education that is necessary to
properly manage diabetes by requiring reimbursement from insurance
companies for these expenses. Regarding the concern expressed
about the effect of a mandate, she is confident, after listening to
testimony and reviewing the material and data provided to committee
members, that legislators will be persuaded and conclude that
diabetes management is different from other diseases and that this
type of insurance does require a special look.
MS. BOGREN said diabetes is a very serious disease that affects
over 30,000 Alaskans. It is the leading cause of kidney disease,
blindness, nerve damage, and lower limb amputations. It is a major
risk in heart disease and stroke. The management of diabetes is
substantially different from that of other diseases. Proper
management is done by the patients themselves. Patients,
therefore, must have access to supplies and medicines, but more
importantly, to good patient education when they are going through
a steeper learning curve.
MS. BOGREN addressed three concerns that have been expressed about
SB 276. The first relates to why the state should mandate private
industry to provide coverage. She believes the answer to that
concern is that the insurance industry does not behave like other
industries. The patient is not the consumer. In most cases, when
a patient has diabetes insurance coverage, that coverage is
purchased by the employer. A patient does not have direct buying
power when purchasing insurance. Also, not every employer is able
or interested in learning what the needs of employees with diabetes
are.
Diabetes mandates have been passed in 37 states, by both Democratic
and Republican legislatures, and signed by Democratic and
Republican governors. No effort to repeal the law has been made in
any state, suggesting that in all cases, the law has had the
anticipated effect. The State of Wisconsin determined that
premiums did increase by about one-tenth of one percent as the
result of passing similar legislation.
Another concern is that mandated coverage would raise costs and be
a special burden to the small business owner in Alaska and
therefore cause a disenrollment from insurance. Studies in other
larger states have concluded that there has been no evidence that
would result.
MS. BOGREN noted committee members' packets contain copies of
studies showing the cost savings associated with preventive
medicine. In a study done in Maine, diabetes control resulted in
32 percent fewer hospitalizations and shorter hospital stays. In
Maryland, hospitalizations and stays declined 50 percent after
coverage was mandated. She correlated that when patients are able
to make the daily decisions, they can respond to the ups and downs
of diabetes control. They do not have to wait until they are in
crisis to see a doctor and they do not visit doctors as often.
Acute care is expensive and can be minimized. A Maryland study
suggests that about $917 per patient per year will be saved if
patients are able to manage their disease. She asked committee
members to consider that if the private sector decides not to cover
these costs, it may not see the benefits of long term savings from
long term health care. When people with Type 2 diabetes, which
accounts for about 95 percent of the patients, have health
complications, they are generally in their 60's, so they qualify
for Medicare and Medicaid. If the private sector will not provide
coverage, the patient pays the price in the human toll, and the
state pays the price in the form of Medicaid or Medicare.
MS. BOGREN said the ADA is strongly opposed to capping the amount
allowed for diabetes education. First, education is the foundation
of this bill. Patients can receive unlimited supplies and
medicine, but it will be useless unless they know how to use it.
Second, the American Diabetes Association is not aware of any other
legislation that caps the amount of outpatient health care that can
be provided. She suggested that the insurance companies share
statistics with legislators showing that there is widespread
overuse of outpatient education services, if that is what they are
saying. The ADA is not aware of any demonstrated overuse of the
patient education system.
Finally, the amount of $250 has been suggested for patient
education. That amount is minimal, especially in light of the fact
that the national standards for diabetes education recommend 12
hours of outpatient care. When her son was diagnosed with
diabetes, it took her family about 20 hours per week for two months
to learn what carbohydrate management was about. Her family needed
support from occupational educators, and the people she sees in
support groups need more than that. If the legislature is
considering setting a cap, she hopes the cap will be no lower than
the amount established by the state as the minimum standard of
care. The ADA set a minimum standard at 16 hours.
Number 1741
MAX BOGREN, the 11-year old son of Ms. Turner Bogren, read the
following testimony.
Mr. Chairman and committee members:
My name is Max Bogren and I am 12 years old and I have had
diabetes five and one-half years. I have to work hard to keep
my blood sugar in control and manage my diabetes. Every day
I test my blood sugar at least five times and I give myself
three shots of insulin. I can't vary the amount of food I eat
from day to day and I have to eat at the same time every day.
Exercise has to be a big part of my life. Luckily for me, I
was already an active kid so it's easy to just keep [indisc.]
with exercise.
MAX then gave a demonstration of how he tests his blood sugar and
injects himself with insulin.
MAX continued with his testimony as follows.
On sick days, everything gets more complicated. My blood
sugar is high and I need to test my urine for keytones. A
couple of days ago, I saw my doctor and she thought I might
want to use an insulin pump. That will take a lot of new
learning. My entire life will change around and it will
probably improve my blood sugar. Without all of this, I'd
probably spend a lot of time in the hospital. With this
expensive equipment, I'm probably going to need good insurance
for the rest of my life. Please support SB 276. Thank you.
CHAIRMAN MACKIE thanked Ms. Turner Bogren and Max for their
testimony. He then took teleconference testimony.
MS. MICHELLE CASSANO, Executive Director of the American Diabetes
Association, thanked the Chairman for scheduling this vital bill.
She commented that the cost of diabetes education varies with each
patient. The American Diabetes Association feels there is no need
for a cap on the annual education costs as there is no evidence
that any abuse has been reported in that area. She pointed out
that what Max Bogren demonstrated to the committee, is something
that he must do many times per day. Diabetes has no cure - it is
a lifelong disease and nobody gets a day off. She offered to
answer questions.
MS. JANEL WRIGHT told the committee she has had diabetes for 25
years. She asked each member to support SB 276. This bill will
ensure that Alaskans have access to the medication, equipment,
supplies and education necessary to treat and control diabetes.
When people with diabetes have access to those things, they are
able to self-manage their disease. Then, the complication of
diabetes can be minimized and consequently health care costs for
those people are greatly reduced.
MS. WRIGHT illustrated the importance of access to effective
treatment for diabetes with her own story. Many years ago, she
entered college, eager to get her education and make something of
herself. Several weeks after school started and after several
trips to the emergency room, the health clinic doctor contacted her
parents and recommended that she go home because her diabetes was
not under control. She begged her parents to let her stay while
she worked with her biology professor to control her diabetes. At
that time, diabetes education was not available. She had a
headache throughout her college years and did not know why. She
graduated from college and went on to law school. The headaches
and her vision got worse. Law school was stressful and she still
did not know how to control her diabetes. The insurance plan she
had did not cover the cost of syringes, a blood test machine, test
strips, or education. It covered only the cost of insulin. Being
a poor student, she scraped together funds to buy syringes. In
1988 she moved to Alaska. At that time, she obtained insurance
that covered the cost of controlling her diabetes. She was able to
get the supplies and medicine she needed.
MS. WRIGHT explained to committee members that a test, named
Hemoglobin A1C, shows a person's blood sugar levels for the
previous three months. Right before she was able to get her blood
test machine and other supplies, her hemoglobin A1C was 8.5, which
means her blood sugars were about 250 or higher. Ideally, her
blood sugars should be between 90 and 120. The doctor explained
that is why she could not see and needed glasses. Studies show
that when blood sugars are as high as hers were, the costly
complications of diabetes, such as impaired vision and blindness,
kidney disease, nerve damage, amputations, heart disease and stroke
are much more likely to occur. She has been using a pump for
twelve years and has had access to supplies and education for 12
years. The results of her latest Hemoglobin test was 5.4. This
means that her blood sugar average over the past three months was
94. She attributes that level to the insurance coverage she has
that allows access to those supplies necessary to control her
diabetes. She no longer has to wear glasses.
As a staff attorney for the Disability Law Center of Alaska, she
advocates and protects the rights of Alaskans with disabilities.
Many individuals with diabetes come to her office seeking
assistance in obtaining social security. Due to uncontrolled
diabetes, these individuals are unable to work. Many worked at one
time but had no health insurance or had insurance that did not
cover diabetes treatment. She believes if her insurance company
did not cover the cost of diabetes treatment, she would be unable
to work and would be seeking social security benefits herself.
MS. WRIGHT said that 37 states have passed legislation similar to
SB 276. Wisconsin was the first state to enact diabetes insurance
coverage and did so in 1987. Studies in Wisconsin have shown there
was no rise in insurance premiums after the law was passed. New
Mexico passed its legislation in 1997, and Maine in 1996. Each of
those states has reported no expected premium increases. She urged
legislators to help Alaskans with diabetes to lead healthier and
more productive lives by supporting SB 276.
Number 1196
SENATOR LEMAN asked Ms. Wright how much it costs per year to manage
her diabetes.
MS. WRIGHT estimated that last year her expenses were close to
$5,000 but that she also got a new pump which cost $5,595. She
does not need a new pump every year. The national average is
$3,500 and a lot of people cannot afford that amount.
MS. BOGREN told Senator Leman that Max's expenses vary each year,
but they are running about $3,000 right now. She noted that
syringes are not as expensive as the pumps, but that the test
strips cost about 75 cents a piece and he uses five per day.
SENATOR LEMAN asked how people will pay the $600 per month for a
health insurance premium if they cannot afford $3,000 per year for
supplies and medicine.
MS. WRIGHT said that her employer pays for her health insurance.
MS. BOGREN said that is a great answer to the question Senator
Leman asked earlier about the difference between offerings and
mandated coverage. She noted in the states who have a mandated
offering, all of the costs are reduced to the pool of people who
have diabetes. For that pool, folks save by paying out-of-pocket
rather than paying the high premiums. That is why the American
Diabetes Association is advocating for mandated coverage rather
than a mandated offering.
CHAIRMAN MACKIE mentioned that Max has insurance coverage through
his father's employer, but that part of Ms. Turner Bogren's mission
is to look out for the people who do not have coverage.
MS. BOGREN said that part of her mission is to watch out for
children like Max who, when they are no longer covered by their
families, will be looking for good health insurance. Her son does
not want to have to move to another state that has mandated
coverage when he turns 23 or 24. She pointed out that her husband
asks to review his employer's coverage plans when they are up for
renegotiation which occurs about every five years.
Number 995
MR. HOWARD HEDGES, a resident of Homer, recounted his experience
with the diagnosis and management of his diabetes. He was
diagnosed as diabetic in 1991. Without knowing the symptoms, he
went through the previous ten years with diabetes without being
diagnosed. When he finally got to a doctor, his blood sugar was
totally out of control. He was able to work with a COBRA plan for
six months, but once that expired, he could not afford insurance
coverage as a self employed person. While covered, he got a test
machine, syringes, test strips, and insulin. After he lost the
coverage, he tried to control his diabetes for two years with diet,
by cutting test strips in half and by getting outdated bottles of
insulin from friends. In 1993, the progression continued and he
had a heart attack. Two weeks later he had a stroke that paralyzed
his left side. His blood sugars were over 900 at the time of the
stroke. With no health insurance, he went to Providence for five
weeks of rehabilitation at a cost of $160,000. He and his health
care providers are convinced that had he been able to continue to
tighten down on his blood sugars, he could have avoided the stroke.
Now, at the age of 44, he is on Medicaid, Medicare and Social
Security. He feels fortunate to have that coverage and reminded
committee members that many people do not have the desire to have
a stroke so that they can have insurance coverage. He asked
committee members to support SB 276 so that the advances in
diabetes treatment can be taught to people.
SENATOR HOFFMAN told Mr. Hedges that he was researching diabetes on
the Internet and learned that only one out of three people know
they have diabetes. He asked Mr. Hedges if he thought that number
sounded accurate.
MR. HEDGES said it does. He noted he had all of the symptoms but
thought he was not feeling right because he was working hard and
"burning the midnight oil."
MS. DAISY LEE BITTER, a resident of Homer, related her personal
experience. For 25 years, she was a teacher and principal in the
Anchorage School District. She has lived with diabetes for 53
years and had insulin not been discovered, she would have died over
50 years ago. Alaska is only one of 13 states without diabetes
coverage legislation. She does not like to use the word
"mandatory" because she sees the legislation as a cost saving
measure, as studies in other states have shown. She knows that
some insurance companies are smart enough to know that if they
cover supplies and medicines, they are unlikely to have to pay the
high cost of emergencies, hospitalizations, and the many
complications associated with diabetes.
Number 658
CHAIRMAN MACKIE noted his intention to move this bill today.
GORDON EVANS, Health Insurance Association of America (HIAA),
stated the HIAA has opposed mandatory insurance because it does and
will raise costs. Cost increases are affected by a series of
mandates. Alaska has seven mandates for coverage and two mandated
offerings at this time, while Wisconsin has over 40. HIAA will
support the bill if it is amended to include a cap on patient
education. HIAA came up with the cap amount of $250 because three
states have caps: one at $100, one at $250, and one at $500. He
pointed out the cap only applies to outpatient management education
and training, and not to the cost of supplies and medicine. He
asked how many of the estimated 36,000 Alaskans with diabetes will
be affected by passage of SB 276, since many of those people may
already be covered. He repeated that HIAA is opposed to government
mandates but HIAA will support SB 276 if it is amended.
SENATOR HOFFMAN asked when HIAA last recommended that it provide
coverage.
MR. EVANS replied in the 15 years that he has represented HIAA in
Alaska, he has been pro-active on one major piece of legislation
that passed: small employer health insurance coverage for 2 to 50
employees. He has worked with the acupuncturists to get a mandated
offering, and he has worked with the chiropractors, and on the
dental/vision/auditory portion of state insurance. In general, the
health insurance industry supports bills when they do not mandate
coverage, and that he has appeared before the legislature when such
bills were being considered.
TAPE 00-08, SIDE A
Number 001
CHAIRMAN MACKIE said he has also opposed mandates that go up
against people like Max. He personally is willing to pay more on
his insurance premium if it means that other folks would have the
opportunity for coverage.
MR. EVANS added that the mammogram bill that passed in recent
years, the prostate cancer screening bill, the 48-hour birth
control - all have passed in the last five years. He had testified
that the only opposition they had to the bills was because it was
mandated; then they backed off and supported them. When major
problems (diabetes is probably one of those) come up, it's good
that they are insured so that everyone shares the cost of it, not
just those who have to bear the expense.
CHAIRMAN MACKIE noted that Ms. Bogren said the insurance premiums
would go up around a tenth of a percent and asked if the industry
had analyzed what it would do to Alaskans.
MR. EVANS replied no they had not. Anytime a coverage is mandated,
the insurers figure that into their underwriting. They don't use
the same figures. He didn't think there was any study that would
show how much a premium increases because of it.
CHAIRMAN MACKIE asked the committee to review the amendment from
Mr. Evans in their packets. It's on page 1, line 14, after
diabetes insert, "and the insurer shall pay up to $250 for such
covered out patient expenses per person per year."
MR. EVANS said if there is a cap, that is only applied to the
education and/or training and not to the coverage of the materials
which are the most expensive.
Number 250
SENATOR KELLY said he was nervous about the breadth of the language
in this bill, because every time they add or mandate additional
coverages, premiums do go up. It's inevitable. He is nervous
about their being no caps at all and about the concept of
"nutrition therapy." He didn't really know what that meant.
SENATOR MILLER responded that those were valid concerns, but he had
a lot of confidence in the health providers in the state and
believed they would not overcharge on these issues. A couple might
push the envelope, but unfortunately that happens in any
profession. He thought the $250 was entirely too low. He had
heard testimony of roughly around 15 hours at $100 per hour which
is $1,500. This is an average and he is uncomfortable trying to
stick everyone into the same box.
SENATOR KELLY said he agreed that the $250 was too low, but he
thought they should study the issue. Every week you read about
some provider who is pulling some shenanigans like Medicaid. He
thought they had some responsibility to define what is unnecessary
medication and not put them in the position of billing and billing
and billing.
SENATOR LEMAN concurred with what Senators Kelly and Miller are
saying. They ought to be concerned about costs and one of the
things he's concerned about is why does an insulin pump have to
cost $5,600? Why does a wheel chair have to cost $20,000? These
are questions we ought to be asking. Consumers ought to be asking
that rather than saying that's the price; someone should pay for
it. There ought to be cost and utilization review.
CHAIRMAN MACKIE called an at ease for one minute.
CHAIRMAN MACKIE said there was some feelings about looking at the
number more and asked Mr. Evans to continue to work with the
sponsor as the bill moves through the legislature.
MR. EVANS said that the language about what constitutes education
and training needs to be clarified.
CHAIRMAN MACKIE said that the members concurred and they would try
to work and tighten it up without defeating the purpose. He asked
if there was anyone with objections to the bill.
SENATOR LEMAN moved to pass SB 276 from committee with individual
recommendations. There were no objections and it was so ordered.
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