Legislature(2009 - 2010)HOUSE FINANCE 519
04/14/2009 08:30 AM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB204 | |
| HB222 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 204 | TELECONFERENCED | |
| + | HB 222 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
April 14, 2009
9:17 a.m.
9:17:02 AM
CALL TO ORDER
Co-Chair Stoltze called the House Finance Committee meeting
to order at 9:17 a.m.
MEMBERS PRESENT
Representative Mike Hawker, Co-Chair
Representative Bill Stoltze, Co-Chair
Representative Bill Thomas, Jr., Vice-Chair
Representative Allan Austerman
Representative Harry Crawford
Representative Anna Fairclough
Representative Les Gara
Representative Reggie Joule
Representative Mike Kelly
Representative Woodie Salmon
MEMBERS ABSENT
Representative Richard Foster
ALSO PRESENT
Representative Nancy Dahlstrom, Sponsor; Sam Dix, Staff,
Representative Nancy Dahlstrom; Diane Barrans, Executive
Director, Postsecondary Education Commission, Department of
Education; Representative Lindsey Holmes, Sponsor; Linda
Hall, Director, Division of Insurance, Department of
Commerce, Community and Economic Development; Jeff Jessee,
Chief Executive Officer, Alaska Mental Health Trust
Authority
PRESENT VIA TELECONFERENCE
Dennis Valenzeno, Director and Professor, WWAMI Program,
University of Alaska, Anchorage; Suzanne Tripp, Director,
Regional Programs, University of Washington School of
Medicine
SUMMARY
HB 204 "An Act increasing the number of students pursuing
a medical education who are provided postsecondary
educational services and programs; and providing
for an effective date."
HB 204 was heard and HELD in Committee for further
consideration.
HB 222 "An Act prohibiting discrimination by health care
insurers based on genetic information; requiring a
health care insurer to offer coverage for the
treatment of alcoholism or drug abuse; providing
continuity of coverage for college students during
medically necessary leaves of absence from
college; requiring health care insurers in the
group market to provide parity in the application
of mental health and substance abuse benefits that
comply with federal requirements; amending the
definition of 'dentist' to include out-of-state
dentists for purposes of certain dental insurance
requirements; and providing for an effective
date."
HB 222 was REPORTED out of Committee with a "do
pass" recommendation and with two new zero fiscal
notes by the Department of Health and Social
Services and fiscal note #1 by the Department of
Commerce, Community and Economic Development.
9:17:56 AM
HOUSE BILL NO. 204
"An Act increasing the number of students pursuing a
medical education who are provided postsecondary
educational services and programs; and providing for an
effective date."
REPRESENTATIVE NANCY DAHLSTROM, SPONSOR, related that the
bill would add four students to the medical education
program.
9:19:22 AM
SAM DIX, STAFF, REPRESENTATIVE NANCY DAHLSTROM, explained
that the purpose of the bill is to add four more medical
students and eventually establish a 30-student program. It
is an attempt to maximize the facilities at the University
of Alaska - Anchorage.
Vice-Chair Thomas asked if the bill pertains only to medical
doctors. Mr. Dix said that was correct. Vice-Chair Thomas
hoped to see the bill expanded to include dentists. He
asked if the administration supports the bill.
Representative Dahlstrom reported that the administration
does support the bill. She offered to work on expanding the
bill to include other areas.
Vice-Chair Thomas expressed frustration and thought he might
not support the bill.
9:21:38 AM
Representative Dahlstrom offered to work on that problem.
Representative Austerman inquired about the cost of the
program. He wondered, since it is a loan program, why
general fund dollars would be needed. Representative
Dahlstrom stated that it was a loan forgiveness program.
9:23:02 AM
DIANE BARRANS, EXECUTIVE DIRECTOR, POSTSECONDARY EDUCATION
COMMISSION, DEPARTMENT OF EDUCATION, agreed with
Representative Austerman that the program is funded with
state general funds. The existing program operates in
excess of $2 million a year. She reported that it is a work
obligation program with a trigger if someone in the program
fails to return to Alaska.
Representative Austerman asked how long the obligation was.
Ms. Barrans replied that students have 15 years to pay if
they fail to return to the state and provide three to five
years of service.
Representative Austerman presented an example of a doctor
who returns to the state, provides service, and has the loan
forgiven. Ms. Barrans agreed with his analysis. She
clarified that the service obligation is in lieu of
repayment.
9:24:38 AM
Representative Fairclough reported that she followed the
bill last year and the discussions in the HESS committee.
She asked about the dismal return rates and wondered if a
residency program would help solve the program.
Ms. Barrans explained that past return rates proceeded the
loan obligation period of the program. The actual return
rate of Alaskans varied between 45 and 55 percent and should
now increase. Out of state WWAMI students also chose to
participate in Alaska. She explained how the residency
requirements work. It takes about seven years to complete
the program. The cohort of students that would have
completed a three-year residency in the fall of 2008 was the
first group with the contractual service obligation.
9:27:27 AM
Co-Chair Hawker asked for more information about return
rates.
DENNIS VALENZENO, DIRECTOR AND PROFESSOR, WWAMI PROGRAM,
UNIVERSITY OF ALASKA, ANCHORAGE, via teleconference, related
that the return rate of Alaskans is actually quite good
compared to outside programs. About 50 percent come back to
the state to practice. Students coming to the state from
other states to do short clinical experiences impact the
statistics. The overall return on the investment is about
88 percent since the beginning of the program in 1971. It
takes about seven years to complete the program. Residency
is the most important factor as to where doctors choose to
practice. Where students go to school is the second most
important factor. Through WWAMI Alaska is able to offer
three of the four years of medical school.
9:30:39 AM
Representative Fairclough had heard a different scenario.
She wished to research the statistics further.
Co-Chair Hawker asked if the state would benefit more by
increased residency programs or by more students in the
WWAMI program.
SUZANNE TRIPP, DIRECTOR, REGIONAL PROGRAMS, UNIVERSITY OF
WASHINGTON SCHOOL OF MEDICINE, via teleconference, first
addressed Vice-Chair Thomas's concerns about dentists. She
related that through the University of Washington, there was
an option for developing dental programs in Alaska based on
the WWAMI model.
Ms. Tripp turned to the issue of residency training. She
maintained that it was a huge factor in WWAMI. Residency
programs are being developed currently. She spoke of
overcoming obstacles related to developing residency
programs in Alaska. There needs to be sufficient technical
expertise, adequate finances - based on Medicare bed rates,
and enough case volume in order to qualify to take on
residents. Branch programs in pediatrics and in psychiatry
are currently being developed. Internal medicine programs
will be next.
9:33:11 AM
Representative Fairclough summarized that residency is the
number one factor. She wished to check further.
Representative Gara agreed with the expansion of family
practice residency. He voiced support for the bill. He
mentioned a concern about an acute shortage of internists,
family care physicians, and gerontologists. He suggested
focusing scholarships in those areas.
Representative Dahlstrom offered to meet to discuss this
issue and to include the Committee's concerns. She added
that she has concerns with lack of medical care in parts of
the state.
9:36:22 AM
Representative Gara said he was open to a conversation.
Co-Chair Hawker asked for an opinion of Representative
Gara's comments.
Mr. Valenzeno agreed that targeting an area of medical
practice was a good idea. He thought it would be difficult
to hold a student to that choice. Representative Gara hoped
there was a way to make it work.
9:38:10 AM
Representative Austerman wondered whether returning doctors
are required to serve high-need areas or rural areas.
Ms. Barrans reported that there is an incentive to
accelerate the discharge of the financial obligation by
choosing a rural area.
9:39:12 AM
Vice-Chair Thomas asked what the average obligation to the
state was. Ms. Barrans said it was $90,000, which would
increase by about 4 to 6 percent per year. That amount is
in addition to about $100,000 of education debt the student
has already incurred. Vice-Chair Thomas asked if $190,000
was the amount forgiven. Ms. Barrans explained that the
$100,000 was owed to the federal government or other
lenders.
Vice-Chair Thomas wondered why 15 years was allowed for
paybacks. He suggested the payback be accelerated if the
student does not return to the state. Ms. Barrans observed
that collectability must be considered. It is difficulty to
leverage an accelerated repayment on such a large amount
without collateral.
9:41:56 AM
Representative Fairclough inquired about the delinquency
rate of the loans. Ms. Barrans reported that currently
there is zero delinquency.
Representative Austerman asked about the forgiveness period
and amount collected. Ms. Barrans reported that $170,000 is
the amount collected with interest by the state if they
don't return and work in the state.
Representative Austerman asked if the $90,000 original loan
was forgiven if the student returns to the state to work for
five years. Ms. Barrans said that was correct.
9:43:37 AM
Representative Salmon asked about incentives to bring
physicians to come to Alaska to work. Ms. Barrans was not
aware of such a program.
Co-Chair Hawker opened public testimony.
9:44:27 AM
Ms. Tripp clarified that the average amount of debt for an
Alaska WWAMI graduate is about $130,000 because they pay
tuition in addition to state support. The amount of money
the state sends to the University of Washington is
equivalent in context, not amount, to the amount of general
fund used by the University of Alaska. It makes the
partnership of the University of Washington and the state's
medical school, similar to any publically funded medical
school. The money the state pays is not a scholarship or a
grant; it is the state's support for medical education. In
addition, students may receive scholarships or loans and pay
tuition to the University of Washington and the University
of Alaska. Students usually have more than $200,000 worth
of obligation upon completion of their education. In Alaska
there is a need for primary care physicians. There is a
correlation between debt and the type of medicine practiced.
9:46:39 AM
Co-Chair Hawker closed public testimony.
Co-Chair Hawker requested information about the fiscal note.
Mr. Dix explained that in 2012 the total operating budget
would be $210,300. For 2013 it would be $425,200. For 2014
it would be $550,300 and for 2015 it would be for $557,400.
Co-Chair Hawker asked why it accelerates over the years.
Ms. Tripp related that it accelerates because there are more
students in the program every year. Co-Chair Hawker
concluded that it was a cumulative bill.
9:48:37 AM
Representative Gara asked if the WWAMI subsidy was for four
years of medical school, but not for the residency because
the students would be getting paid. Ms. Tripp said that was
correct.
Representative Austerman inquired if the amount was for four
new students. He asked if there was already $2 million in
the program. Ms. Tripp said that was correct.
Vice-Chair Thomas asked if the fiscal note covers the
student that has an assistant. Ms. Tripp stated that it
does include all expenses. Vice-Chair Thomas asked how many
more teachers would be added. Ms. Tripp explained the
apprenticeship program and how sites are found. Additional
persons are then brought on, however, she did not know how
many.
9:50:57 AM
Vice-Chair Thomas thought extra individuals were hired to
supervise the students. Ms. Tripp recalled that there was a
coordinator who would help students navigate through medical
school, as well as career counselors. In the third and
fourth year additional supervisors are involved. Vice-Chair
Thomas wanted to know the costs in addition to funding the
students.
9:52:04 AM
Representative Joule wondered what the shortage of doctors
would look like without this program. He asked where
residencies take place. Ms. Tripp reported that residency
training can happen in a number of sites, determined by the
population of the town and type of residency. One of the
requirements for pediatricians is that a doctor be available
on site for training. In Bethel the residents go out to
various rural sites for one month.
Ms. Tripp addressed the issue of physician training and the
physician shortage in Alaska. There is a need for 30 more
physicians a year in order to address the shortage of
doctors in the state. There are currently 260 WWAMI doctors
in the state. A primary care physician has about 3,000
patient visits a year.
Representative Joule thought that was a "pretty good
picture" of the situation.
9:54:58 AM
HB 204 was heard and HELD in Committee for further
consideration.
9:55:47 AM
HOUSE BILL NO. 222
"An Act prohibiting discrimination by health care
insurers based on genetic information; requiring a
health care insurer to offer coverage for the treatment
of alcoholism or drug abuse; providing continuity of
coverage for college students during medically
necessary leaves of absence from college; requiring
health care insurers in the group market to provide
parity in the application of mental health and
substance abuse benefits that comply with federal
requirements; amending the definition of 'dentist' to
include out-of-state dentists for purposes of certain
dental insurance requirements; and providing for an
effective date."
REPRESENTATIVE LINDSEY HOLMES, SPONSOR, explained that the
bill implements federal law. It gives the Division of
Insurance the ability to implement new federal laws that
will kick in this summer. She summarized the sections of
the bill:
Section 1: This section incorporates requirements in 42
U.S.C. 300gg-53 into state law. 42 U.S.C. 300gg-54
prohibits health care insurers from discriminating
against individuals on the basis of genetic
information. It prohibits health care insurers from
requiring individuals to undergo genetic testing as a
condition of insurance.
Section 2: This section changes the requirements for
insurance coverage for treatment of alcoholism or drug
abuse. Currently, insurers are mandated to provide
coverage for treatment of alcoholism and drug abuse to
employer groups with 20 or more employees and mandates
that insurers offer such coverage to employer groups
with fewer than 20 employees. This section would
replace that mandate and only require insurers to offer
coverage for substance abuse to all employer groups.
Under the mental health parity provisions in Section 6
of the bill insurers are prohibited from placing limits
on substance abuse coverage that are not placed on the
general medical coverage of the plan.
Section 3: This section amends the definition of
dentist for insurance purposes to cover dentists who
are not licensed in Alaska.
Section 4: This section incorporates requirements in 42
U.S.C. 300gg-54 and 42 U.S.C. 300gg-7 into state law.
Those sections of federal statute require that health
care insurers continue to cover college students under
their parent's health insurance coverage when the
students take leave from school for medical reasons.
Section 5: This section has two changes to enrollment
requirements for employees who are eligible for their
employer's health insurance plans but have previously
chosen to not enroll in that plan. The first change
allows a person who was covered by Medicaid or similar
plan and loses eligibility for that plan, to enroll in
their employer's health insurance plan. The second
change allows a person to enroll in their employer's
health insurance plan if they become eligible for
assistance to help pay for their employer's health
insurance plan from Medicaid or a similar plan.
Section 6: This section incorporates requirements in 42
U.S.C. 300gg-5 to apply to state law. The federal
requirements are that a health care insurer may not
place restrictions on mental health and substance use
coverage in an insurance plan that are not placed on
the general medical coverage of that plan.
Section 7: This section provides an effective date for
section 1 of the bill.
Section 8: This section provides an effective date for
sections 4 and 6 of the bill.
9:59:48 AM
Co-Chair Hawker inquired why Representative Holmes chose to
sponsor this legislation. Representative Holmes reported
that Linda Hall, the Director of the Division of Insurance
in the Department of Commerce, Community and Economic
Development, requested the bill.
Representative Kelly voiced concern about the lack of
doctors who will see Medicare patients. He pointed out that
the Division of Insurance will now be required to expand
services. He was concerned about senior medical coverage
under a "leveling" program.
10:04:13 AM
Co-Chair Hawker shared those concerns. He requested more
information.
LINDA HALL, DIRECTOR, DIVISION OF INSURANCE, DEPARTMENT OF
COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT, observed that
all items in the bill, with the exception of the dental
definition, are federal mandates that will be adopted and
enforced on a federal level. The request is to incorporate
them into Alaska law for enforcement reasons and to prevent
conflicts, particularly in the mental health area. The
federal laws will preempt state laws and will present
conflicts. She emphasized that the federal mandates are
geared to larger employees and, if coverage is offered, then
it will be on parity with the other health plan.
10:06:58 AM
Representative Kelly did not want the seniors to buy their
insurance in the same category with drug abusers and mental
health patients. He maintained that the bill is not going
to help seniors obtain health insurance. He called it
discrimination.
Co-Chair Hawker concurred that it was an unfunded federal
mandate. He asked if the Division of Insurance supports the
bill.
Ms. Hall reported that the Division of Insurance supports
the legislation. Co-Chair Hawker asked if the governor
supports the bill. Ms. Hall replied that the governor
authorized the bill.
Co-Chair Hawker spoke of the problematic issue of holding
the legislature responsible for the outcome of the bill.
Ms. Hall reported that she is looking at the ability to
enforce health insurance provisions.
10:10:00 AM
Representative Kelly asked if Ms. Hall requested the bill.
Ms. Hall said she did.
Representative Gara thought Ms. Hall was in a difficult
position. Ms. Hall said she had listened to previous
discussions and implied that she was aware of the situation.
Representative Gara understood Representative Kelly's
concerns. He shared his understanding of the bill. He
thought it was a constituent service bill. He described a
scenario of what would happen if the bill does pass. Ms.
Hall agreed. He thought the bill was needed.
10:12:51 AM
Co-Chair Hawker didn't see that the legislature had any
choice but to adopt the legislation.
Representative Fairclough wanted to know the effective date
of the change. Ms. Hall reported that there were different
effective dates. The genetic information nondiscrimination
section is effective May 21, 2009; the coverage of dependent
students section is effective October 9, 2009; the special
enrollment for Medicaid and Denali Kid Care-type programs
are effective April 1, 2009; and the mental health parity
section is effective January 1, 2010.
Representative Fairclough asked when the federal government
passed the changes. Ms. Hall reported on enrollment dates,
which were recent. Representative Fairclough reported on
another bill which contained a good faith effort for
extensions for implementation. She wondered if that was
included in this bill. Ms. Hall thought it was not.
Representative Fairclough commented that some state might
not be meeting in time to address these changes, so she
assumed there was an extension provision.
10:15:47 AM
Co-Chair Hawker reported that the same situation occurred
with the Federal Stimulus Act.
Representative Holmes summarized that the federal rules
would go into effect, but the Director of Insurance would
have no ability to act in the event that a constituent had a
problem.
Representative Fairclough related that the Committee has had
many conversations about the federal government overstepping
into state rights.
10:17:03 AM
Representative Kelly asked for information about the
consequences if the legislation is not passed. Ms. Hall did
not have that information, but thought that the provisions
of the bill would be enforced through the Department of
Labor.
Representative Kelly wished to know the exact consequences.
Representative Crawford commented that he does not feel
pressured by the federal government at all. He thought all
requests were the right thing to do.
Co-Chair Hawker opened public testimony.
10:19:45 AM
JEFF JESSEE, CHIEF EXECUTIVE OFFICER, ALASKA MENTAL HEALTH
TRUST AUTHORITY, testified in favor of HB 222. He responded
to Representative Kelly's concerns. One of the concerns in
the health care system is that insurance companies can
dictate the rules. They would rather have the private
sector - government - have the primary responsibility for
providing the services. When people can't get coverage
through private insurance for mental health and substance
abuse problems, the state government ends up paying. The
idea behind health insurance is to spread the risk across a
group of people for their medical needs. Currently,
insurance companies have decided not to meet certain groups'
needs. He thought the bill was headed in the right
direction.
10:22:17 AM
Representative Kelly asked if Mr. Jessee was happy with the
Medicare situation in Alaska. Mr. Jessee related that he
was not. He thought it was imperative to deal with health
care costs. Representative Kelly talked about what has
crippled the Medicare system. He commented on the problems
with the social security system.
Mr. Jessee shared some of Representative Kelly's concern.
He spoke of needing to keep the boat from sinking.
Representative Kelly commented that the problem remains
unsolved.
10:25:37 AM
Co-Chair Stoltze preferred to move the bill out of Committee
unless there was more testimony.
Co-Chair Hawker closed public testimony.
10:26:38 AM
Co-Chair Hawker pointed out the zero fiscal notes.
Co-Chair Stoltze MOVED to report HB 222 out of Committee
with individual recommendations and the accompanying fiscal
notes. There being NO OBJECTION, it was so ordered.
HB 222 was REPORTED out of Committee with a "do pass"
recommendation and with two new zero fiscal notes by the
Department of Health and Social Services, and fiscal note #1
by the Department of Commerce, Community and Economic
Development.
ADJOURNMENT
The meeting was adjourned at 10:27 AM.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Frequently Asked Questions.pdf |
HFIN 4/14/2009 8:30:00 AM |
HB 204 |
| AARP.pdf |
HFIN 4/14/2009 8:30:00 AM |
HB 204 |
| HB222-DHSS-MS-04-11-09NEW.pdf |
HFIN 4/14/2009 8:30:00 AM |
HB 222 |
| HB222-DHSS-BHMS-04-11-09NEW.pdf |
HFIN 4/14/2009 8:30:00 AM |
HB 222 |
| HB 222 Sectional.pdf |
HFIN 4/14/2009 8:30:00 AM |
HB 222 |
| HB 222 Sponsor Statement.pdf |
HFIN 4/14/2009 8:30:00 AM |
HB 222 |
| Stateof AlaskaDeptHSS.pdf |
HFIN 4/14/2009 8:30:00 AM |
HB 204 |
| Sponsor Statement WWAMI (3).pdf |
HFIN 4/14/2009 8:30:00 AM |
HB 204 |
| Physician Shortage Fact Sheet Header.pdf |
HFIN 4/14/2009 8:30:00 AM |
HB 204 |
| HB 204 - Increase WWAMI Class Size.pdf |
HFIN 4/14/2009 8:30:00 AM |
HB 204 |