Legislature(2009 - 2010)BELTZ 105 (TSBldg)
03/02/2010 01:30 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| SB117 | |
| SB279 | |
| SB258 | |
| SB129 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 279 | TELECONFERENCED | |
| + | SB 258 | TELECONFERENCED | |
| + | SB 129 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| = | SB 117 | ||
SB 258-DENTAL CARE INSURANCE
2:11:45 PM
CHAIR PASKVAN announced SB 258 to be up for consideration.
SHARON LONG, staff to Senator Huggins, sponsor of SB 258, said
it was at the request of the Alaska Dental Society. It prohibits
insurance companies from establishing age limitations on young
children receiving dental care. Currently a fear is emerging, as
evidenced by 20 other states introducing this legislation, that
insurers are moving towards restricting children four years and
older from dental care coverage.
She said that establishing a minimum age requirement leaves a
significant segment of our population already identified as at
risk without dental insurance. It does allow a company to set a
maximum age for a person to receive coverage for dental care as
a dependent child.
MS. LONG said that even though this restriction not covering
those under four is currently in effect in only one state,
Maine, the fear is not unfounded. A non-covered services clause
was inserted in provider contracts first in the northeast, and
within one short year it had spread south and west to finally
include all states - bringing her to the next provision of SB
258: It will prohibit insurance companies from fee capping non-
covered services in Alaska. That is the current practice of
insurance companies - dictating what a dentist can charge for
services the insured does not even cover in a plan.
She said that Senator Huggins became aware of trends surrounding
coverage restrictions and age limitations elsewhere and
introduced this bill in order to start the discussion and get
ahead of the issues before they became a problem here.
Understanding that insurance can raise complex issues among
stakeholders, not the least of which includes federal restraint
of trade restrictions and waivers, Senator Huggins asked for
some experts to be available for the committee this afternoon.
MS. LONG said that Senator Paskvan had raised a question about
mutuality of obligations under contract and Dennis Bailey from
Legal Services was on line and that Linda Hall, Director,
Division of Insurance, was available, as was Pat Shier,
Director, Division of Retirement and Benefits.
2:16:20 PM
CHAIR PASKVAN announced public testimony.
2:16:32 PM
JACK MCRAE, Sr. Vice President, Premera-Blue Cross-Blue Shield
of Alaska, said SB 258 raises several major constitutional and
public policy issues. It would require health insurers who
provide coverage to change their contracts with dentists by
modifying basic terms. The key language regarding the proposed
change is found on page 2, lines 3 and 4 where it raises
constitutional issues as Article 1, Section 15, of the Alaska
Constitution states:
No law impairing the obligation of contracts and no
law making any irrevocable grants of special privilege
or immunities shall be passed.
Although Alaska courts have interpreted this language to permit
passing laws which have changed future contracts, Mr. McRae
said, it would appear that these provisions in legislation run
contrary to the public policy intent.
In addition, Mr. McRae said, language in SB 258 raises a related
and serious public policy question of whether it is in the
state's interest to pass legislation that basically changes
health insurance contracts which benefit one select group of
health care providers. As an alternative, he suggested an
amendment that would avoid the constitutional problem that SB
258 raises and still respond to the concerns that the dentists
have raised.
He added that Premera-Blue Cross-Blue Shield of Alaska doesn't
have age restrictions in any of their dental contracts in Alaska
and haven't for a long period of time.
CHAIR PASKVAN asked if they do not have age restrictions within
their contracts now, how he could raise an impairment of
contract issue.
MR. MCRAE answered the issue that is of most concern for them is
when they have a contract with, for example, a benefit that pays
a maximum of $2500 year for crowns. As their contracts are
presently written, once the cap is reached the dentist would
still have to give the discounted rate which had been agreed to
in the contract to the member. This would move them in the
direction of giving the dentist the ability, once a contract
limit is reached, to charge whatever he wanted to. Other items
outside of the contract, such as teeth whitening, have no
restrictions on what can be charged. They would want the
provider to still allow the discounted rate to their enrollee
once the cap is reached.
2:20:35 PM
CHAIR PASKVAN said he didn't understand the argument he was
advancing within the impairment of contract context.
MR. MCRAE stated that the amendment would say "offers but cannot
require a provision in the contract that would allow discounted
fees for non-covered services." That would allow for dentists to
still give the discounted rate to the Alaskan dental plan
enrollee once the cap had been reached. Without that, dentists
could charge whatever they want.
CHAIR PASKVAN asked if that would be for both covered and non-
covered services.
MR. MCRAE answered yes, but generally speaking, it would be more
in the direction of covered services. Their main concern is that
the enrollee could still get the discounted rate once the cap is
reached, because that is where most of the expensive dental
charges are.
CHAIR PASKVAN asked if he recognized the ability of the
legislature to adopt public policy that prohibits private
parties from going beyond the boundaries established in that
public policy.
MR. MCRAE answered that he did recognize that.
CHAIR PASKVAN asked if the state would or wouldn't be sued for
impairment of contract.
MR. MCRAE responded, "No, I don't believe we would sue the
legislature for impairment of contract, Mr. Chairman."
CHAIR PASKVAN commented, "I was just wondering why it was raised
then."
2:22:55 PM
DAVID LOGAN, DDS, Alaska Dental Society, said he is a Juneau
dentist. He said that SB 258 seeks to correct a couple of things
that are negatively impacting consumers. It sets fee limits on
services that dental insurance plans do not pay a benefit for
and it prohibits setting minimum age requirements for dependents
to receive dental benefits. The protection for consumers by
prohibiting an age restriction is obvious he said, and Alaska
still leads the nation in baby bottle tooth decay.
They are also interested in preserving the progress that has
been made in conjunction with the dental board over the last few
years insuring that medical providers can receive reimbursement
for dental benefits for delivering dental services during well
baby checks for applying fluoride. Frequently children are seen
at that age by medical providers but have yet to see dental
providers. Unfortunately for young children who have severe
cavities at those ages, rehabilitation can cost a lot as well as
be difficult. Sometimes the ability of the parents to receive
coverage under dental managed care plans can be a deciding
factor in the decision to seek care or not.
MR. LOGAN explained that the act of setting the fees on non-
covered services is a fairly recent change and started a couple
of years ago, sweeping quickly across the nation. One state,
Rhode Island, prohibits it, and that is one of the initial
states that started the practice. The net effect on the
remaining states has been for dentists to reexamine their
participation in these plans both for a service that they're not
providing the benefit for and the economic impact on their
practices. The effect is that dentists drop out of these plans
and then consumers have fewer providers to choose from. Many are
being forced to leave their dental home if they want to receive
full, costly or even partial use of their dental benefits. He
said the overall affect is reduced access, and this impact would
sadly be borne disproportionately in rural communities with
fewer providers to choose from.
He said the basic question of fairness needs to be asked. If the
insurance companies are interested in helping dental consumers
receive dental care and lowering overall dental costs, the
dentists' preference would be that the insurance companies
provide the benefit; then at least they are in it together.
MR. LOGAN said his concern has been that as the insurance
companies are taking this approach, they are requiring dentists
to make a sacrifice that is at no cost to themselves, but they
enjoy the benefit of marketing the savings. He said dentists are
sensitive to the cost of health care, but they are also
unfortunately unable to deal with insurance companies on a level
playing field as they are exempt from anti-trust laws while
dentists are not. The best a small trade group of dentists can
do is approach these matters legislatively, because they don't
have the ability to negotiate with the insurers.
CHAIR PASKVAN said he was trying to figure out if a policy
provided a covered service for teeth cleaning once a year and
someone wanted it a second time because they were very health
conscious, what the dentists' ability would be to charge a
different rate for the second teeth cleaning as compared to the
charge that might have been allowed under the first cleaning.
MR. LOGAN replied that some fee differential would likely be
involved. Under managed care plans, the dentist submits a fee
schedule to the dental insurance company and he agrees to charge
a lesser amount for services that are covered by the insurance
company, but on services that aren't covered he agrees to abide
by their normal fee schedule.
2:29:13 PM
CHAIR PASKVAN asked what a person would be charged for his
second teeth cleaning if the first one was insured and set at
$80 ($50 paid by insurance and $30 paid by the insured), but the
second one wasn't covered.
MR. LOGAN answered the dentist would probably charge his normal
fee of $100.
CHAIR PASKVAN asked if he perceived the national movement was
trying to restrict him in charging his office rate for non
covered services.
MR. LOGAN answered that was his understanding.
2:31:59 PM
CHRIS HENRY, Alaska Dental Society, said he is an orthodontist
in Fairbanks, Alaska. He explained that one of the concerns is
about the fairness of the plan and likened a dental practice to
a hotel business that signed up for a program to reduce their
hotel rates so that tourists would come in, but they also
provide meals. They are hoping to bring more patrons into their
hotel. Then they find out that plan they signed up for limited
them on what they could charge for the meal that was not part of
the plan. He said dental practices need to be profitable enough
to support staff and provide for their benefits such as medical
insurance and retirement plans. He said it goes back to what it
takes to run a small business whether it is dentistry or any
other kind of medicine.
2:35:34 PM
LINDA HALL, Director, Division of Insurance, Department of
Commerce, Community and Economic Development (DCCED), said she
was available to answer questions on SB 258.
CHAIR PASKVAN "suspended" public testimony.
MS. LONG remarked that the bill's sponsor did not view the
amendment favorably and urged finding common ground with regard
to the contracts.
2:36:58 PM
SB 258 was heard and held.
2:37:27 PM
CHAIR PASKVAN announced an at ease.
2:41:29 PM
CHAIR PASKVAN called the meeting back to order at 2:41.
| Document Name | Date/Time | Subjects |
|---|---|---|
| CS SB 129 Bill Packet.pdf |
SL&C 3/2/2010 1:30:00 PM SL&C 3/9/2010 1:30:00 PM |
SB 129 |
| SB 279 Bill Packet.pdf |
SL&C 3/2/2010 1:30:00 PM |
SB 279 |
| SB 258 Bill Packet.pdf |
SL&C 3/2/2010 1:30:00 PM |
SB 258 |