Legislature(1993 - 1994)

03/23/1993 01:40 PM L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
  SENATOR  KELLY announced SB  40 GROUP HEALTH  INS. FOR SMALL                 
  EMPLOYERS to be up for consideration.                                        
                                                                               
  KEN  ERICKSON, Aide to  Senator Pearce, said  SB 40 promotes                 
  availability  of   health  insurance   coverage  for   small                 
  employers and  reforms the  small employer health  insurance                 
  market.    It  provides  guaranteed  availability of  health                 
  insurance  regardless  of  health  risk  and  without  added                 
  expense to the state.                                                        
                                                                               
                                                                               
  Number 458                                                                   
                                                                               
  JAN MEISELS,  Health Insurance Association of  America, said                 
  the reason  this bill focuses on small  employers is because                 
  they have some unique problems. One of them is the high turn                 
  over rate of  employees; 90%  of Alaskan are  employed by  a                 
  small  employer with 2  - 25 employees.   She said this bill                 
  does not mandate anything, but allows an employer who wishes                 
  to provide  insurance  to be  able  to get  that  insurance.                 
  Insurance companies will  no longer  "cherry pick."   Groups                 
  will be guaranteed renewed coverage, even with high risk and                 
  high  health claims.   The  pre-existing 12-month  exclusion                 
  period  goes  with  the  employee  if  he  changes  jobs  or                 
  companies.                                                                   
                                                                               
  Number 396                                                                   
                                                                               
  There are also  premium pricing  limits, which doesn't  mean                 
  the  state is  setting insurance  company rates.    It means                 
  there is a limit  for every carrier who sets  their premiums                 
  on what they can charge from their best group to their worst                 
  group.                                                                       
                                                                               
  She then  did a sectional  analysis of the  bill.   She said                 
  there   are  provisions   for   reinsurance  of   high  risk                 
  individuals.   The insurance company  has to  pay the  first                 
  $5,000  claim  before the  reinsurance  board goes  into it.                 
  There is a  premium for the  reinsurance that the  insurance                 
  company  pays.    They are  constrained  within  the premium                 
  pricing limits  in  how much  they  recoup from  the  policy                 
  holders.                                                                     
                                                                               
  MS. MEISELS  explained SB  40 established  a Health  Benefit                 
  Committee that would recommend to the Reinsurance Board what                 
  benefits should be included in the basic and standard plan.                  
                                                                               
  This bill sets  up a fair  marketing standard by  preventing                 
  "gaming" by insurance companies who may  want to drop a high                 
  risk group for  a year.  It also prevents  agents from being                 
  rewarded for not bringing in a "bad group."                                  
                                                                               
  Number 232                                                                   
                                                                               
  MS. MEISELS reviewed the proposed amendments which were pro-                 
  consumer and technical (see attachment).  She said they were                 
  from the  National Association of  Insurance Carriers (NAIC)                 
  model.                                                                       
                                                                               
  She explained  that "capitation" means per-head.   So an HMO                 
  would pay a physician  a certain amount a month  whether you                 
  see the physician or not.                                                    
                                                                               
  SENATOR SALO asked her to further  explain the 12 month pre-                 
  existing  clause.   MS.  MEISELS  said  this  meant that  an                 
                                                                               
                                                                               
  insurance company  could exclude coverage for a pre-existing                 
  condition  for  up to  12 months,  but  would have  to cover                 
  everything else  and would  have to  cover the  pre-existing                 
  condition after the 12 months and this exclusion is portable                 
  to another job and another insurance company.                                
                                                                               
  TAPE 93-23, SIDE A                                                           
  Number 001                                                                   
                                                                               
  JAY FRANK,  representing State  Farm and  Allstate Insurance                 
  Companies, supported SB 40 wholeheartedly.                                   
                                                                               
  SENATOR KELLY  noted  that  John  George,  representing  the                 
  American Council of Life Insurers, supported SB 40.                          
                                                                               
  JOE  POOR, Executive Director,  Juneau Chamber  of Commerce,                 
  supported SB 40 and encouraged it's passage.                                 
                                                                               
  Number 62                                                                    
                                                                               
  REED STOOPS, representing AETNA Insurance Company, supported                 
  SB 40.                                                                       
                                                                               
  SENATOR SALO  asked what you  could anticipate as  a premium                 
  for some sort of basic coverage.                                             
                                                                               
  MS.  MEISELS said  she didn't  have  a specific  figure, but                 
  referred her to the  "Market Test Report" which lead  her to                 
  believe the cost was not going to be as high as assumed.                     

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