Legislature(1993 - 1994)

03/12/1994 01:00 PM House HES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                                                                               
           HOUSE HEALTH, EDUCATION AND SOCIAL SERVICES                         
                       STANDING COMMITTEE                                      
                         March 12, 1994                                        
                            1:00 p.m.                                          
                                                                               
                                                                               
  MEMBERS PRESENT                                                              
                                                                               
  Rep. Cynthia Toohey, Co-Chair                                                
  Rep. Con Bunde, Co-Chair                                                     
  Rep. Gary Davis, Vice Chair                                                  
  Rep. Al Vezey                                                                
  Rep. Pete Kott                                                               
  Rep. Harley Olberg                                                           
  Rep. Bettye Davis                                                            
  Rep. Irene Nicholia                                                          
                                                                               
  MEMBERS ABSENT                                                               
                                                                               
  Rep. Tom Brice (Excused)                                                     
                                                                               
  OTHER LEGISLATORS PRESENT                                                    
                                                                               
  Rep. Ed Willis                                                               
  Rep. Jim Nordlund                                                            
                                                                               
  COMMITTEE CALENDAR                                                           
                                                                               
  HB 414:   "An Act creating the Alaska Health Commission;                     
            relating to the delivery, quality, access, and                     
            financing of health care; relating to review and                   
            approval of rates and charges of health insurers;                  
            relating to certain civil actions against health                   
            care providers and health insurers; repealing                      
            Alaska Rule of Civil Procedure 72.1; and providing                 
            for an effective date."                                            
                                                                               
            HEARD AND HELD                                                     
                                                                               
  WITNESS REGISTER                                                             
                                                                               
  NANCY USERA, Commissioner                                                    
  Department of Administration                                                 
  P.O. Box 110200                                                              
  Juneau, Alaska 99811-0200                                                    
  Phone:  (907) 465-2200                                                       
  Position Statement:  Testified on CSHB 414                                   
                                                                               
  LYNNE SMITH, Committee Aide                                                  
  House HESS Committee                                                         
  Alaska State Legislature                                                     
  State Capitol, Room 106                                                      
  Juneau, Alaska 99801                                                         
  Phone:  (907) 465-6825                                                       
  Position Statement:  Clarified questions regarding the CS                    
                       for HB 414                                              
                                                                               
  JACK HEESCH, Lobbyist                                                        
  Alaska Nurses Association                                                    
  P.O. Box 201608                                                              
  Anchorage, Alaska 99520                                                      
  463-3257                                                                     
  Position Statement:  Answered questions on CSHB 414                          
                                                                               
  REED STOOPS, Lobbyist                                                        
  Aetna Life Insurance Company                                                 
  240 Main St., Ste. 600                                                       
  Juneau, Alaska 99801                                                         
  Phone:  (907) 463-3223                                                       
  Position Statement:  Testified on CSHB 414                                   
                                                                               
  JAY LIVEY, Deputy Commissioner                                               
  Department of Health and Social Services                                     
  P.O. Box 110601                                                              
  Juneau, Alaska 99811-0601                                                    
  Phone:  (907) 465-3068                                                       
  Position Statement:  Answered questions on CSHB 414                          
                                                                               
  JERRY REINWAND, Lobbyist                                                     
  Blue Cross of Washington & Alaska                                            
  2 Marine Way, #219                                                           
  Juneau, Alaska 99801                                                         
  Phone:  (907) 586-8966                                                       
  Position Statement:  Testified on Amendment 5 for CSHB 414                   
                                                                               
  BONNIE NELSON, Representative                                                
  Alaska Public Interest Research Group                                        
  20615 White Birch Rd.                                                        
  Chugiak, Alaska 99567                                                        
  Phone:  (907) 688-3017                                                       
  Position Statement:  Testified on HB 414                                     
                       (spoke via teleconference)                              
                                                                               
  GORDAN EVANS, Lobbyist                                                       
  Health Insurance Association of America                                      
  318 4th St.                                                                  
  Juneau, Alaska 99801                                                         
  Phone:  (907) 586-3210                                                       
  Position Statement:  Testified on Amendment 5 for CSHB 414                   
                                                                               
  JACK PHELPS, Legislative Aide                                                
  Rep. Pete Kott                                                               
  Alaska State Legislature                                                     
  State Capitol                                                                
  Juneau, Alaska 99801                                                         
  Phone:  (907) 465-3777                                                       
  Position Statement:  Offered opinion on Amendment 6 for                      
                       CSHB 414                                                
                                                                               
  PREVIOUS ACTION                                                              
                                                                               
  BILL:  HB 414                                                                
  SHORT TITLE: COMPREHENSIVE HEALTH CARE                                       
  SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR                                 
                                                                               
  JRN-DATE    JRN-PG                     ACTION                                
  01/28/94      2182    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  01/28/94      2182    (H)   HES, JUDICIARY, FINANCE                          
  01/28/94      2182    (H)   -2 FISCAL NOTES (GOV, DCED)                      
                              1/28/94                                          
  01/28/94      2183    (H)   GOVERNOR'S TRANSMITTAL LETTER                    
  02/15/94              (H)   HES AT 03:00 PM CAPITOL 106                      
  02/15/94              (H)   MINUTE(HES)                                      
  03/04/94              (H)   HES AT 03:00 PM CAPITOL 106                      
  03/04/94              (H)   MINUTE(HES)                                      
  03/09/94              (H)   HES AT 03:00 PM CAPITOL 106                      
  03/09/94              (H)   MINUTE(HES)                                      
  03/10/94              (H)   MINUTE(L&C)                                      
  03/12/94              (H)   HES AT 01:00 PM CAPITOL 106                      
                                                                               
  ACTION NARRATIVE                                                             
  TAPE 94-46, SIDE A                                                           
  Number 000                                                                   
                                                                               
  CHAIR BUNDE called the meeting to order at 1:10 p.m., noted                  
  members present and announced the calendar.  He brought HB
  414 to the table.                                                            
                                                                               
  HB 414 - COMPREHENSIVE HEALTH CARE                                           
                                                                               
  CS FOR HOUSE BILL NO. 414(HES):  "An Act creating the Alaska                 
  Health Commission; relating to the delivery, quality,                        
  access, and financing of health care; relating to health                     
  insurers, health maintenance organizations, and medical                      
  service corporations; relating to certain civil actions                      
  against health care providers and health insurers; amending                  
  Alaska Rules of Civil Procedure 26 and 27 and Alaska Rules                   
  of Evidence 802, 803, and 804; repealing Alaska Rule of                      
  Civil Procedure 72.1; and providing for an effective date."                  
                                                                               
  CHAIR BUNDE said the committee substitute (CS) for HB 414                    
  (version 8-GH2024\E) was before the committee.  He asked                     
  Commissioner Usera to address the CS.                                        
                                                                               
  Number 005                                                                   
                                                                               
  NANCY USERA, Commissioner, Department of Administration,                     
  testified on the proposed CS for HB 414.  She stated that                    
  she had just received the CS and had not had time to review                  
  it.  She said she assumed that it included the five                          
  amendments that were adopted last week.  She then said it                    
  appeared that there were a number of other provisions in the                 
  bill that she was unaware of.                                                
                                                                               
  (Chair Bunde indicated for the record that Rep. Pete Kott                    
  arrived at 1:12 p.m.)                                                        
                                                                               
  CHAIR BUNDE asked Commissioner Usera to take some time to                    
  review the bill.  He then indicated that there was one                       
  person who would be testifying via teleconference.                           
                                                                               
  Number 083                                                                   
                                                                               
  REP. TOOHEY said Commissioner Usera seemed to think that                     
  there were additional provisions in the proposal and asked                   
  if the CS was not her amendment packet through legal                         
  services.                                                                    
                                                                               
  COMMISSIONER USERA said she had in her possession the CS for                 
  HB 414.                                                                      
                                                                               
  REP. OLBERG indicated that the new CS was five pages longer.                 
                                                                               
  Number 086                                                                   
                                                                               
  LYNNE SMITH, Committee Aide, House HESS Committee, stated                    
  that the CS contained the amendments that were adopted on                    
  the Wednesday prior and that it was also reorganized.                        
                                                                               
  COMMISSIONER USERA said that she did not recall the language                 
  on page 2, line 10:  GROUNDS FOR IMPOSITION OF DISCIPLINARY                  
  SANCTIONS.                                                                   
                                                                               
  REP. TOOHEY asked if there was anyone present from the                       
  Division of Legal Services.                                                  
                                                                               
  COMMISSIONER USERA continued to read the unfamiliar language                 
  and said she could still not recall its origin.                              
                                                                               
  CHAIR BUNDE offered that it was discussed previously what                    
  should be done if health providers did not post their rates.                 
                                                                               
                                                                               
  COMMISSIONER USERA again stated that the language was                        
  unfamiliar.                                                                  
                                                                               
  CHAIR BUNDE suggested that the committee address the                         
  amendments and then look at the CS in the near future.                       
                                                                               
  COMMISSIONER USERA said again there were unfamiliar                          
  provisions.                                                                  
                                                                               
  Number 172                                                                   
                                                                               
  JACK HEESCH, Lobbyist, Alaska Nurses Association, offered an                 
  answer as to the origin of the provisions in the CS for HB
  414.  He stated that the provisions specified that the board                 
  should impose sanctions for the subsequent infractions.                      
                                                                               
  REP. VEZEY asked if the proposal had been completely                         
  reorganized.                                                                 
                                                                               
  REP. TOOHEY said yes.                                                        
                                                                               
  CHAIR BUNDE stated that Mr. Heesch had provided the                          
  committee with a statute that was relative to the provision                  
  that requires sanctions to be imposed if health care                         
  providers fail to comply with the proposed law.  He then                     
  said that the CS more than likely reflects the inclusion of                  
  amendments that were adopted and also the reorganization of                  
  language.                                                                    
                                                                               
  COMMISSIONER USERA agreed.                                                   
                                                                               
  REP. TOOHEY asked Ms. Smith if the added provisions and the                  
  reorganization was at the discretion of the drafter of the                   
  bill.                                                                        
                                                                               
  MS. SMITH said yes.  She indicated that the drafter                          
  addressed some problems that he saw within the language of                   
  the bill.                                                                    
                                                                               
  Number 239                                                                   
                                                                               
  CHAIR BUNDE said again that the provision addresses                          
  sanctions and what they will be.  He asked to move on to the                 
  amendments.  He stated that Amendment 5 was before the                       
  committee.                                                                   
                                                                               
  COMMISSIONER USERA indicated that Deputy Commissioner Jay                    
  Livey was present also to answer any questions.                              
                                                                               
  CHAIR BUNDE called on Reed Stoops to address Amendment 5.                    
                                                                               
  REP. OLBERG asked if Amendment 5 would amend the CS or the                   
  original bill.                                                               
                                                                               
  CHAIR BUNDE replied that it was aimed at the CS.                             
                                                                               
  REP. TOOHEY asked if the there should be a motion to adopt                   
  the CS.                                                                      
                                                                               
  CHAIR BUNDE indicated that amendments cannot be adopted if                   
  the CS is not adopted.  He assumed the CS was reflective of                  
  the committee's wishes and also indicated that there is                      
  nothing that restricts the committee from reversing their                    
  decisions regarding the CS at a later date.                                  
                                                                               
  REP. OLBERG made a motion to adopt the CS for HB 414.                        
                                                                               
  CHAIR BUNDE, hearing no objections, stated that the CS was                   
  so moved.  He further stated that Amendment 5 was before the                 
  committee.  He asked Reed Stoops to address the amendment.                   
                                                                               
  Number 380                                                                   
                                                                               
  REED STOOPS, Lobbyist, Aetna Life Insurance Company,                         
  addressed Amendment 5 to CSHB 414.  He stated that he would                  
  like to address an issue regarding Section 6 of the                          
  legislation that provides for arbitration of insurance                       
  claims.  He said Aetna had reviewed the provision and                        
  recommended that a binding arbitration provision would be                    
  more effective.  He maintained that there would be no                        
  incentive to accept the results of arbitration and it would                  
  be preferable to allow someone who has a claim the option of                 
  either going into binding arbitration or to go to the                        
  courts.  He felt the subject was more of a judicial issue                    
  and said he had no proposed amendments.                                      
                                                                               
  Number 403                                                                   
                                                                               
  CHAIR BUNDE reminded the committee that there was discussion                 
  pertaining to voluntary and binding arbitration in a                         
  previous meeting that addressed HB 492 and HB 493.  He                       
  maintained that the same concerns that were expressed in                     
  that meeting more than likely were germane to the                            
  arbitration provisions within CSHB 414.                                      
                                                                               
  MR. STOOPS continued with his testimony.  He indicated that                  
  his concern was with insurance rate regulation, which was in                 
  Sections 7,9, and 11 of the bill.  He indicated that Aetna                   
  and other private insurers are addressed in Section 7,                       
  Health Maintenance Organizations (HMO), of which there                       
  currently are none in Alaska, are addressed under Section 9,                 
  and medical hospital service corporations, which refers to                   
  Blue Cross, are treated under Section 11.  He said that Blue                 
  Cross has a nonprofit status.                                                
                                                                               
  MR. STOOPS said the proposed amendment would delete the                      
  aforementioned sections.  He explained that there are two                    
  different types of insurance rates.  One rate is for large                   
  groups which is predominately the market for Aetna in the                    
  state of Alaska, and cited Alyeska and Arco as customers.                    
  He explained that in a large group market, the insurance                     
  rate that is set for an individual customer is based on the                  
  experience of the group from the prior year and also a                       
  medical trend component that estimates the cost of medical                   
  inflation for the upcoming year.  He asserted that with a                    
  large group the odds are that there will be some                             
  comparability on the experience if the benefit package                       
  remains the same.  He then indicated that the medical trend                  
  was based on the Alaska and national market for medical                      
  rates which is subject to some controversy.  He further                      
  explained that the administrative costs are the companies'                   
  proposed rate for processing a large number of claims                        
  throughout the year.                                                         
                                                                               
  MR. STOOPS said if the rate turns out to be too high because                 
  payments made out were less than they were estimated to be,                  
  the customer would benefit from the surplus at the end of                    
  the year.  Aetna would return a check to the state plus                      
  interest.  He then said if the estimates based on prior                      
  experience fall short, it would be the insurer's loss.                       
                                                                               
  Number 532                                                                   
                                                                               
  REP. TOOHEY asked Mr. Stoops what the chances would be of                    
  the state terminating insurance with Aetna because "you've                   
  under charged."                                                              
                                                                               
  MR. STOOPS explained that the state is required to bid every                 
  five years and the situation would arise in a year where                     
  they intend to bid.  He said Aetna would incur losses if the                 
  state did not accept the bid or if claims spiked up in a                     
  year where there were many catastrophic claims.  He then                     
  said, "...for that reason the state decided to change its                    
  policy and there was a bid as a result to that; again the                    
  insurance company would be the loser.  If it's a self-                       
  insured product, if it's the state taking the risk, or Arco                  
  or any other large customer, then it's the company or the                    
  client that's taking the risk instead of the insurance                       
  company."                                                                    
                                                                               
  Number 561                                                                   
                                                                               
  REP. TOOHEY asked Mr. Stoops if it is only the                               
  administrative costs that Aetna is concerned about.                          
                                                                               
  MR. STOOPS said administrative costs are the main variable.                  
                                                                               
  REP. TOOHEY said, "So the rate, give or take, is going to                    
  come back and even itself out."                                              
                                                                               
  MR. STOOPS agreed, but said it is different for the small                    
  group market because if there are only ten people in a                       
  company there is a greater fluctuation, making it difficult                  
  to rate on experience, especially if one person in the group                 
  has a catastrophic loss.  There would not be much of a                       
  difference if there are 5,000 employees.  He said those                      
  rates are developed differently and generally an annual fee                  
  is paid.  If the estimate is low, the company bears the                      
  entire risk and if it's high, the insurance company keeps                    
  the difference.  He further explained that small employers                   
  bid frequently, sometimes every year, and because of the                     
  competitive market, they will take the lowest bid for the                    
  year.                                                                        
                                                                               
  MR. STOOPS stated that Sections 7, 9 and 11 would give power                 
  to the new Alaska Health Commission to regulate rates by                     
  determining whether the rates submitted by the insurance                     
  companies are acceptable.  He asserted that a commission                     
  should not have that type of authority.  He said if the                      
  legislature thinks that it's in the best interest of the                     
  state to grant that type of authority, he recommended giving                 
  it to Director Walsh or whoever the Director of Insurance is                 
  at the time.  He maintained that the commission would not                    
  have the expertise to make those decisions.                                  
                                                                               
  MR. STOOPS further indicated that if the state is trying to                  
  reduce health care costs by regulating insurers, the                         
  providers should also be regulated.  He explained that more                  
  than 90% of quoted rates are based on "the actual pass                       
  through of costs, medical costs..."  He said it is obvious                   
  the bulk of the cost to the system is being generated.  He                   
  said the legislation does not propose to regulate doctors'                   
  rates or hospital rates, only insurers rates.  He stated                     
  that regulating either the insurance company or the                          
  providers won't work and suggested that if disclosure for                    
  provider rates would be required, the disclosure of insurer                  
  rates should also be required so that consumers will know                    
  what rates are available and how they were put together.                     
                                                                               
  MR. STOOPS said, "The other, I guess, concern about rate                     
  regulation is that where you give that power, and you have                   
  an activist commission or an activist director that takes                    
  full advantage of that authority and essentially uses it to                  
  use the insurance company as a way of driving down doctors'                  
  costs.  By saying we're going to cap you at your current                     
  rate, we're not going to allow any increases; therefore,                     
  your only option is to tell the doctors and hospitals that                   
  you're going to get paid less for services, because that's                   
  the only way you can make the system work.  You're going to                  
  create a situation where at some point the insurers,                         
  particularly the smaller ones, aren't going to want to do                    
  the business, because you have a cap on them and there's not                 
  any way for them to pass through any increased cost."  He                    
  indicated that there was a study done by Millen and Roberts                  
  that looks at states with insurance rate regulation and most                 
  states end up with less insurers after a period of time and                  
  also with a greater number of uninsured people as a result                   
  of less competition.                                                         
                                                                               
  Number 703                                                                   
                                                                               
  REP. TOOHEY asked how many competitors there are on the                      
  state level for group insurance.                                             
                                                                               
  COMMISSIONER USERA said the last time the state went out to                  
  bid there was only one bidder.                                               
                                                                               
  REP. TOOHEY said that is dangerous and asked why there was                   
  only one bidder.                                                             
                                                                               
  COMMISSIONER USERA stated that due to the size of the                        
  account for the state of Alaska, there just are not that                     
  many insurance companies making bids.                                        
                                                                               
  REP. TOOHEY asked if Alaskan claims are any higher or if                     
  there is any difference because Alaska is a small state.                     
  She asked what would make the state unattractive to an                       
  insurance company.                                                           
                                                                               
  MR. STOOPS suggested that perhaps it would be better to ask                  
  his competitors.  He said Blue Cross indicated that in one                   
  case they did not bid because the state was not self-insured                 
  and that was an insurance risk they did not want to handle.                  
  He submitted that whether there is competition or not for a                  
  large group, it is not the same situation where there is                     
  lack of competition for a small group.  He offered that                      
  there would be many problems if there was no competition in                  
  small groups and suggested that there should be insurance                    
  rate regulations for that specific situation.                                
                                                                               
  Number 769                                                                   
                                                                               
  REP. TOOHEY asked what would happen if Aetna doesn't bid the                 
  next time.  She asked if the state would be forced into a                    
  single payer system.                                                         
                                                                               
  COMMISSIONER USERA said that alternatives would be explored                  
  and suggested that perhaps self-insuring would be an option.                 
  She mentioned that Alaska is a difficult state to insure                     
  because of the eleven different bargaining units and other                   
  complications.  She also indicated that there are few                        
  insurers that insure large blocks like the state system and                  
  Aetna has done an excellent job and has been very flexible.                  
                                                                               
  Number 817                                                                   
                                                                               
  REP. TOOHEY stressed how unhealthy she felt it was to have                   
  one insurance company bidding on the state contract.                         
                                                                               
  MR. STOOPS, to bring the discussion back to the context of                   
  rate regulation, asked what would happen if Aetna was the                    
  only bidder and quoted a rate to the commission that was                     
  unacceptable to them.  He said in that case the state would                  
  then have no other options except to self-insure.  He felt                   
  that rate regulation would not solve that particular problem                 
  for a large group market.                                                    
                                                                               
  CHAIR BUNDE observed that the free market economy was at                     
  work.                                                                        
  Number 860                                                                   
                                                                               
  MR. STOOPS said if rate regulation authority is granted to                   
  the commission, he suggested that the legislature look to                    
  other states for more mainstream rate regulation, citing                     
  that California's Director of the Division of Insurance                      
  requires the filing of rates, but does not have unlimited                    
  authority to decide that rates are not adequate.  He felt                    
  there are simpler ways to accomplish the same thing.  He                     
  reiterated that Aetna supported HB 414.                                      
                                                                               
  Number 894                                                                   
                                                                               
  CHAIR BUNDE said that everyone must become part of the                       
  solution.                                                                    
                                                                               
  REP. TOOHEY clarified by saying that rates are refigured and                 
  presented to the state each year.  She asked, if and when                    
  the country becomes covered with a socialized, universal                     
  insurance, would the rate being offered to the state be                      
  reduced?  She said she assumes that rates are so high                        
  because people who do pay are also paying for those who are                  
  irresponsible or too poor to pay for insurance.                              
                                                                               
  MR. STOOPS said that is true in respect to the individual                    
  client who pays for a part of uncompensated care that                        
  hospitals provide.  He maintained that hospitals will not                    
  turn a patient away, but they do have to recover the cost                    
  just like any other business.  The way hospitals                             
  traditionally recover costs is to charge differential rates                  
  so privately insured people pay a premium to pay for those                   
  who are not insured.  It's a hidden subsidy that is in the                   
  system.  He felt there would be some other form of                           
  compensation in the form of tax in lieu of the premiums of                   
  those privately insured.                                                     
                                                                               
  Number 968                                                                   
                                                                               
  (Chair Bunde stated for the record that Rep. Nicholia                        
  arrived at 1:30 and welcomed the participation of Rep.                       
  Willis.)                                                                     
                                                                               
  Number 969                                                                   
                                                                               
  CHAIR BUNDE indicated that Amendment 5 was before the                        
  committee.  He asked for testimony from the Department of                    
  Administration (DOA).                                                        
                                                                               
  COMMISSIONER USERA said the administration knew that the                     
  inclusion of rate regulation within the legislation would be                 
  controversial.  She said Alaska is one of few states that                    
  does not use some form of a rate approval process.  She                      
  explained that the DOA felt the final decision should reside                 
  with the commission and not the Division of Insurance so                     
  that the final approval would lie with a board who is seeing                 
  it in the context of the entire health care system.  She                     
  said the legislation is designed to have a public hearing                    
  process associated with it and also to capture information                   
  associated with the rate review process.                                     
                                                                               
  MR. STOOPS further indicated that she personally became                      
  involved with the issue of comprehensive health care because                 
  she represents one of the largest employers in the state and                 
  has been fighting with union organizations for over a year                   
  over health care benefits and their costs.  She said the                     
  state has no official mechanism to validate the accuracy of                  
  the information that was being submitted by the insurance                    
  carriers.                                                                    
                                                                               
  REP. TOOHEY asked if the rate is really a concern if the                     
  state is being reimbursed for being overcharged.                             
                                                                               
  COMMISSIONER USERA said, "In the case of the state of                        
  Alaska, we are for all intents and purposes a self-insured                   
  account and then we pay an administrative fee on top of                      
  that.  The way it works systemically is that the actuaries                   
  get together and they say... based on your most recent                       
  experience, this is what we think the rate would be to even                  
  things out.  And, you're right, the rates are just a way of                  
  providing a level payment."  She said there is a reserve                     
  account for the state that has a minimum of $10 million in                   
  it, much like an over-insured account.  She said over the                    
  past few years there has been some build up and now "we've                   
  been working down on the account."                                           
                                                                               
  REP. TOOHEY said it was her understanding that there is $26                  
  million in that account and that it will supposedly pay for                  
  the proposed legislation.                                                    
                                                                               
  COMMISSIONER USERA said no.  She said premium tax would pay                  
  for the legislation.  She said insurance premiums are based                  
  on experience and what benefits have been utilized over the                  
  prior year.  She said "hard numbers" are needed to indicate                  
  specifically how much each individual person has used of                     
  their benefits.  Currently, the state receives gross                         
  utilization numbers and must take the insurance company's                    
  word that they have exercised the correct level of usage for                 
  those benefits and what the benefits went to pay for.  She                   
  said there is no mechanism to verify the accuracy of the                     
  information upon which the rates are based.                                  
                                                                               
  REP. TOOHEY asked if there was someone in the administration                 
  that collects and analyzes that type of information.                         
                                                                               
  COMMISSIONER USERA said yes, but the DOA is an interested                    
  party.                                                                       
                                                                               
                                                                               
  REP. TOOHEY said, "You don't do it Outside?"                                 
                                                                               
  COMMISSIONER USERA replied that the state has an insurance                   
  consultant, but they also are an interested party.                           
                                                                               
  TAPE 94-46, SIDE B                                                           
  Number 000                                                                   
                                                                               
  REP. TOOHEY asked how much the mechanism will cost.                          
                                                                               
  COMMISSIONER USERA answered that it would be approximately                   
  $157,000, but the fiscal note was being reevaluated because                  
  of some discrepancies that have recently been pointed out.                   
  She indicated that the rate approval system would be one of                  
  the more expensive pieces of the proposal.                                   
                                                                               
  REP. TOOHEY asked if Commissioner Usera would still be as                    
  concerned about rate verification if there were four                         
  insurance companies bidding for the state instead of just                    
  the one.                                                                     
                                                                               
  COMMISSIONER USERA maintained that the state does not feel                   
  that they are being taken advantage.                                         
                                                                               
  Number 045                                                                   
                                                                               
  (Chair Bunde indicated that Rep. Vezey joined the meeting at                 
  1:45 p.m.)                                                                   
                                                                               
  COMMISSIONER USERA said the administration believes in the                   
  accuracy of the numbers that Aetna has presented, but when                   
  dealing with union representatives that represent labor and                  
  management on the other side, the issue is one of a                          
  collective bargaining.  She explained that one of the top                    
  dollar items associated with the collective bargain                          
  agreements is health care benefits and costs.                                
                                                                               
  Number 099                                                                   
                                                                               
  REP. TOOHEY said, "If you put cost caps, then aren't you                     
  doing the same thing that Medicaid is doing?"                                
                                                                               
  COMMISSIONER USERA stated that in some instances the state                   
  has done that and cited the vision program where there are                   
  provisions that will pay up to a certain amount.  She said                   
  the state has been able to negotiate agreements on                           
  prescription drugs and has also explored a number of cost                    
  containment pieces.                                                          
                                                                               
  Number 149                                                                   
                                                                               
  (Chair Bunde indicated that Rep. Nordlund joined the meeting                 
  and welcomed his expertise.)                                                 
                                                                               
  CHAIR BUNDE asserted that Commissioner Usera said she was                    
  satisfied with Aetna as an insurer but had not yet said how                  
  rate regulation would save money.                                            
                                                                               
  COMMISSIONER USERA said for the record, "Let's not for a                     
  second think that the state employee health plan is                          
  representative of what is going on in the health insurance                   
  industry in the rest of the state, for small employers, and                  
  for individuals.  We are an aberration.  Now, we may drive                   
  the market because we cover 65,000 employees because it                      
  includes employees and retirees and their dependents."  She                  
  said the scope of the legislation goes further than the                      
  current state plan.  She then said it was her understanding                  
  that all other lines of insurance in the state are subject                   
  to rate approval.  She further stated that HB 414 was not                    
  put together as a compromise bill and if not rate approval                   
  then rate review makes sense, as an objective third party                    
  would review the rates.  Commissioner Usera further stated                   
  that the administration feels that health insurance rates                    
  should have the same scrutiny as all other insurance                         
  coverages.                                                                   
                                                                               
  Number 251                                                                   
                                                                               
  CHAIR BUNDE clarified that it was not so much a cost saving                  
  measure but more a matter of checks and balances.                            
                                                                               
  COMMISSIONER USERA said yes and it would require                             
  accountability and would also be a way to collect                            
  information on the health care system.                                       
                                                                               
  CHAIR BUNDE asked Commissioner Usera why only health                         
  insurance would be regulated and suggest that perhaps people                 
  be regulated.  He asked why he should have to pay for people                 
  who smoke.                                                                   
                                                                               
  COMMISSIONER USERA indicated that the proposal is not rate                   
  setting or regulating.  It would verify the information upon                 
  which the rates are based and would approve or disapprove of                 
  the basis.                                                                   
                                                                               
  CHAIR BUNDE clarified that it was more of a rate review                      
  process.                                                                     
                                                                               
  REP. TOOHEY asked what items are included in the figuring of                 
  rates.                                                                       
                                                                               
  COMMISSIONER USERA deferred to Deputy Commission Livey.                      
                                                                               
  Number 325                                                                   
                                                                               
  JAY LIVEY, Deputy Commissioner, Department of Health and                     
  Social Services, answered questions on HB 414.  He stated                    
  that the age of the group, the relative mix of males and                     
  females, the size of the group, and many other factors                       
  figure into an insurance rate.                                               
                                                                               
  Number 334                                                                   
                                                                               
  MR. STOOPS said that part of the commission's role would be                  
  in determining the solvency and ability of the insurance                     
  companies involved.  She said the administration's concern                   
  is the pricing of the premium.  There is much more to the                    
  rate process other than cost and utilization.                                
                                                                               
  REP. TOOHEY asked if it would be cheaper to insure with a                    
  nonprofit company.                                                           
                                                                               
  COMMISSIONER USERA said not necessarily.                                     
                                                                               
  CHAIR BUNDE quoted a bumper sticker slogan that said, "If                    
  you enjoy the post office's efficiency, than you'll love                     
  socialized medicine."  He asserted that the profit motive                    
  encourages an improvement in the quality of the product                      
  because the better the product the higher the profit.  He                    
  asked, if it is nonprofit, what would be the motive to                       
  improve?                                                                     
                                                                               
  REP. TOOHEY agreed with Chair Bunde's perspective.                           
                                                                               
  REP. G. DAVIS indicated that there have been requests to                     
  have rate regulation deleted from the legislation and stated                 
  that health insurance, provider fees, and public health and                  
  prevention are key to the proposal.  He said that the                        
  commission should be very knowledgeable in the field of                      
  health insurance and that direction be given through                         
  amendments to public health concerns.  He said the effort                    
  and the work of the commission would be reduced by giving                    
  them such specific directions as to how the issue of                         
  insurance will be addressed.  Rep. G. Davis submitted that                   
  perhaps rate regulation should be deleted from the proposal                  
  to allow the commission to deal with the issue of insurance                  
  themselves.                                                                  
                                                                               
  Number 463                                                                   
                                                                               
  CHAIR BUNDE directed the committee's attention back to                       
  Amendment 5.                                                                 
                                                                               
  REP. NICHOLIA asked why there was no one from the Division                   
  of Insurance to testify.                                                     
                                                                               
  CHAIR BUNDE indicated that they were invited.                                
                                                                               
  REP. TOOHEY said that a representative was unable to attend.                 
                                                                               
  REP. OLBERG asked if the amendment had been moved.                           
                                                                               
  CHAIR BUNDE said it had not.  He reminded the committee that                 
  the amendment would delete Sections 7, 9 and 11.                             
                                                                               
  REP. OLBERG made a motion to adopt Amendment 5 to narrow the                 
  discussion.                                                                  
                                                                               
  CHAIR BUNDE asked for objections.                                            
                                                                               
  REP. B. DAVIS objected to the amendment as written.  She                     
  said "...because the amendment that is written deletes it                    
  out and doesn't say what will happen to it.  And, the only                   
  way that I would be supportive of it, if it's not in here                    
  for the commission to do it, it would have to be in the                      
  Division of Insurance.  Or, I'd be willing to make another                   
  amendment, friendly amendment, to say that it will be done                   
  by the Division of Insurance."                                               
                                                                               
  REP. G. DAVIS said the amendment would have to be an                         
  inclusion under the duties of the commission if it is not                    
  already indicated.                                                           
                                                                               
  COMMISSIONER USERA said she understood Rep. B. Davis to say                  
  that rather than deleting the sections altogether, the final                 
  approval authority would be converted from the commission                    
  over to the Division of Insurance.  She said the DOA did not                 
  find the concept to be optimum; however, it would be                         
  acceptable.                                                                  
                                                                               
  REP. B. DAVIS said she would not vote for the amendment if                   
  everything is deleted and the final approval decision is not                 
  addressed.                                                                   
                                                                               
  CHAIR BUNDE indicated that the amendment was before the                      
  committee for discussion.  He then asked for further                         
  testimony.                                                                   
                                                                               
  Number 537                                                                   
                                                                               
  JERRY REINWAND, Lobbyist, Blue Cross of Washington & Alaska,                 
  testified on Amendment 5.  He stated that the thrust of the                  
  bill is to have a commission review and access health care                   
  reform.  The only part of the bill that is a vehicle for                     
  reform is the insurance rate review.  He said, "...it ought                  
  to be part of the commission's job to include as part of the                 
  total package and come back... and I don't know how you can                  
  jump to the conclusion that that's needed now, if this is                    
  really a reform bill.  If it's the insurance rate reform                     
  issue, put it in a separate bill and let's talk about that,                  
  number one.  Number two, the way this is structured, for                     
  what ever it's worth, is our view, the way it's structured                   
  in the bill, we got to answer to two masters.  We have a                     
  commission that has some or all the authority and a division                 
  that has some of the authority.  And finally we really do                    
  think that having rate approval or the semantics that the                    
  commissioner mentioned is the same thing as saying yes or no                 
  to rates.  So, we must look, but right now the way it is                     
  it's the worst of all worlds.  We have two masters instead                   
  of one.  We still suggest that if the issue before the                       
  committee is health care reform, then insurance, and there                   
  are lots of other insurance related issues, not just the                     
  rates, should be part of the commission's task to look at it                 
  and report back to the legislature."                                         
                                                                               
  Number 585                                                                   
                                                                               
  CHAIR BUNDE asked for further testimony.                                     
                                                                               
  Number 587                                                                   
                                                                               
  BONNIE NELSON, Representative, Alaska Public Interest                        
  Research Group (AKPIRG), testified via teleconference on                     
  Amendment 5 for CSHB 414.  She indicated that the                            
  Legislative Information Office (LIO) had not yet received                    
  copies of the CS or the amendments.  She stated that rate                    
  regulation should be included in the legislation and that                    
  AKPIRG preferred the language as written in the original                     
  bill.  She indicated that there should be a public process                   
  within the Division of Insurance and suggested that perhaps                  
  the commission could take an active part in rate regulation.                 
                                                                               
  CHAIR BUNDE stated that Amendment 5 refers to language that                  
  is the same in the original bill and the CS.  He then                        
  indicated that his intention was not to move the bill out of                 
  committee.                                                                   
                                                                               
  REP. G. DAVIS suggested that the administration has decided                  
  from the plans that have come forth to date that the bill                    
  and its inclusions (Sections 7, 9 and 11) are workable and                   
  should be included in statute now.                                           
                                                                               
  DEPUTY COMMISSIONER LIVEY indicated that the original Health                 
  Resources Access Task Force recommended that the Division of                 
  Insurance should be given rate approval so that health                       
  insurance is treated like all other lines of insurance in                    
  the state.  He indicated that the concept has been around                    
  for quite some time.                                                         
                                                                               
  CHAIR BUNDE said if the amendment does not achieve its                       
  purpose, there are other options available and cited a rate                  
  review process that is used in California.                                   
                                                                               
  Number 703                                                                   
                                                                               
  GORDAN EVANS, Lobbyist, Health Insurance Association of                      
  America, testified on Amendment 5.  He stated that the                       
  Director of Insurance testified in the Senate that there are                 
  four levels of rate approval, no regulation which is what                    
  Alaska has, use and file, file and use (there's a difference                 
  in those terminologies), and rate approval.  He indicated                    
  that the most stringent level is rate approval.  He asserted                 
  that the proposal would take Alaska from the least amount of                 
  coverage to the most stringent.  He said of the companies                    
  that he works with, most would not object to some                            
  regulation, perhaps file and use, and offered to submit                      
  language to specify that in the bill.  He further indicated                  
  that rate approval has been attempted but has continually                    
  been opposed.                                                                
                                                                               
  Number 750                                                                   
                                                                               
  CHAIR BUNDE agreed with Mr. Evans that the state is at zero                  
  and the legislation would bring it to ten as far as the                      
  degree of regulation on rates.  He said the committee can                    
  decide if there is some step that would allow for a happy                    
  medium and asked that the committee be furnished with more                   
  information regarding rate review and the process that                       
  California uses.                                                             
                                                                               
  REP. TOOHEY suggested that decisions be postponed until the                  
  committee has had time to study the CS, the submitted                        
  amendments, and to talk to other people about the                            
  implications of any changes.  She cautioned that the                         
  committee not act hastily.                                                   
                                                                               
  CHAIR BUNDE reiterated that Amendment 5 was before the                       
  committee, which would delete Sections 7, 9 and 11 and would                 
  delete any type of regulation of health insurance within the                 
  bill.  There being no further testimony, Chair Bunde closed                  
  public testimony and asked the pleasure of the committee.                    
                                                                               
  REP. B. DAVIS associated herself with Rep. Toohey and asked                  
  that all decisions be delayed until more could be learned                    
  about the CS and the proposed amendments.                                    
                                                                               
  REP. VEZEY made a motion to adopt Amendment 5.                               
                                                                               
  CHAIR BUNDE indicated that the amendment had already been                    
  moved.                                                                       
                                                                               
  REP. TOOHEY objected and asked that the amendment be tabled                  
  until the next meeting.                                                      
                                                                               
  Number 803                                                                   
                                                                               
  CHAIR BUNDE called for the vote.  Representatives G. Davis,                  
  Vezey and Olberg voted Yea; and Representatives Toohey,                      
  Bunde, Kott, B. Davis and Nicholia voted Nay.  Chair Bunde                   
  indicated that Amendment 5 failed.  He then indicated that                   
  it was his intent to further discuss and perhaps address                     
  future potential amendments regarding the issue of rate                      
  regulation/review.                                                           
                                                                               
  COMMISSIONER USERA said she would ensure that someone from                   
  the Division of Insurance would be present for those                         
  discussions.                                                                 
                                                                               
  Number 833                                                                   
                                                                               
  REP. OLBERG asked Commissioner Usera the meaning of the                      
  phrase "Upon review and recommendation by the Division of                    
  Insurance, the commission can approve changes to health                      
  insurance premiums."                                                         
                                                                               
  COMMISSIONER USERA replied that the final authority for the                  
  approval would lie with the commission rather than the                       
  Director of Insurance.                                                       
                                                                               
  REP. OLBERG asked if the commission was whom she was                         
  purporting to be a disinterested third party.                                
                                                                               
  COMMISSIONER USERA said yes, the Division of Insurance would                 
  do the actuarial and investigatory work, and the commission                  
  would be the final decision maker.                                           
                                                                               
  CHAIR BUNDE asked the committee to number the amendment                      
  before them as Amendment 6, as submitted by Rep. Kott.                       
                                                                               
  Number 859                                                                   
                                                                               
  REP. KOTT made a motion to adopt Amendment 6 and also                        
  objected for purposes of discussion.                                         
                                                                               
  CHAIR BUNDE asked Rep. Kott to speak to his amendment.                       
                                                                               
  REP. KOTT referred to page 14, line 9, of the CS and said                    
  the amendment would ensure that the commission is not                        
  dominated by certain occupational groups.  He further                        
  indicated that the amendment offers three combinations that                  
  would be afforded as options.  He said one member would be a                 
  provider and the remaining two would neither be providers or                 
  employed by an insurance company.  The second option would                   
  allow for one member to be a member of an insurance company                  
  and the two remaining members would neither be employed by                   
  an insurance company or a provider.  He indicated that the                   
  third option would be that none of the members would be                      
  members of an insurance company or the health care field.                    
  He maintained that the amendment would allow for balance and                 
  would ensure that one group could not be dominate.                           
                                                                               
  Number 888                                                                   
                                                                               
  REP. TOOHEY asked if past health care providers could be on                  
  the commission; i.e., retired doctor, retired nurse, or a                    
  retired occupational therapist.                                              
                                                                               
  REP. KOTT said that by law a licensed doctor who is not                      
  practicing would satisfy the requirements within the                         
  amendment.  There could be a current practicing physician                    
  and one retired physician on the commission.                                 
                                                                               
  REP. TOOHEY asked if the retired doctor or nurse must have                   
  an active license.                                                           
                                                                               
  REP. KOTT said yes.                                                          
                                                                               
  Number 922                                                                   
                                                                               
  CHAIR BUNDE suggested that the word current be included in                   
  the language to ensure that those members would not be                       
  current health providers or currently employed by health                     
  insurance companies.                                                         
                                                                               
  TAPE 94-47, SIDE A                                                           
  Number 000                                                                   
                                                                               
  COMMISSIONER USERA maintained that those people appointed to                 
  the commission will be full time state employees that will                   
  not be employed elsewhere.  She clarified that the amendment                 
  addresses specifically the time at which the person is                       
  appointed that they cannot be actively providing health care                 
  and\or employed by an insurance company.  She also indicated                 
  that the commission requires legislative confirmation and                    
  suggested that the legislature would make the ultimate                       
  decision of who is on the commission.                                        
                                                                               
  Number 079                                                                   
                                                                               
  CHAIR BUNDE explained that there could be a person who quit                  
  their job yesterday and would not be currently employed.  He                 
  then suggested that the legislative confirmation process                     
  would perhaps deter those types of "games."                                  
                                                                               
  REP. KOTT said he agreed with the confirmation process but                   
  pointed out that the confirmation process generally occurs                   
  quite late in the session and that there would be very                       
  little time for a new nominee to be appointed and have a                     
  hearing.  He said a situation would be created where the                     
  appointee would be nonconfirmed for perhaps as long as eight                 
  months.                                                                      
                                                                               
  Number 118                                                                   
                                                                               
  REP. VEZEY said that the amendment would eliminate all the                   
  people who would have a background to understand the issue.                  
  He assumed that if the commission is a totally neutral                       
  board, it would result in a "totally neutral, bland result."                 
  He felt the legislative confirmation process was sufficient.                 
                                                                               
  REP. OLBERG stated that he felt the amendment had merit and                  
  suggested a friendly amendment that would exclude lawyers                    
  from being on the commission.                                                
                                                                               
  REP. KOTT quipped that he would be most amenable to Rep.                     
  Olberg's muse.                                                               
                                                                               
  CHAIR BUNDE indicated that there was an amendment to the                     
  amendment before the committee if it was not meant in jest.                  
                                                                               
  REP. OLBERG said, "Let's vote it up or down.  That would add                 
  to Rep. Kott's Amendment 6 that in appointing members to the                 
  commission the Governor shall ensure that a majority of the                  
  members are not health care providers or employed by a                       
  health insurance company, nor shall any member of the                        
  commission be an attorney."                                                  
                                                                               
  REP. TOOHEY quipped that she wished to add legislators to                    
  the list.                                                                    
                                                                               
  REP. OLBERG indicated that he would consider Rep. Toohey's                   
  suggestion a friendly amendment to the amendment.                            
                                                                               
  CHAIR BUNDE indicated that before the committee was an                       
  amendment to Amendment 6 that would include the words                        
  attorney or legislator.  He asked for further discussion or                  
  comments.                                                                    
                                                                               
  Number 222                                                                   
                                                                               
  JACK PHELPS, Legislative Aide to Rep. Pete Kott, said that                   
  he was unsure if legislators are already excluded by law to                  
  be members of any commissions.                                               
                                                                               
  CHAIR BUNDE said, "Article 5 of the constitution says you                    
  shall not have two positions of profit with the state...,"                   
  and it would preclude a legislator from being appointed.                     
                                                                               
  DEPUTY COMMISSIONER LIVEY recommended that the Chair may                     
  want to discuss with an attorney as to whether or not an                     
  occupational group can be excluded for no particular public                  
  policy reason.                                                               
                                                                               
  Number 242                                                                   
                                                                               
  CHAIR BUNDE, hearing no further discussion on the amendment                  
  to the amendment, called for the vote to include the                         
  categories of attorneys or legislators.  Representatives                     
  Kott and Olberg voted Yea; and Representatives Bunde, G.                     
  Davis, Vezey, Nicholia and Toohey voted Nay.  The amendment                  
  to the amendment failed.                                                     
                                                                               
  CHAIR BUNDE stated that Amendment 6 was before the                           
  committee.  Hearing no further discussion, he called for the                 
  vote.  Representatives Kott and Olberg voted Yea; and                        
  Representatives G. Davis, Vezey, Nicholia, Toohey and Bunde                  
  voted Nay.  Chair Bunde announced that Amendment 6 failed.                   
                                                                               
  CHAIR BUNDE then asked Rep. Kott to address his Amendment 7.                 
                                                                               
  Number 328                                                                   
                                                                               
  REP. KOTT said the amendment would allow for only one health                 
  care provider and one member from a health insurance company                 
  to serve on the commission.  He said the third member would                  
  be a "user."  He asserted that in many established                           
  commissions the membership is specified by similar                           
  guidelines.                                                                  
                                                                               
  COMMISSIONER USERA said, "As I read this, it's a de facto                    
  designated seat or limiting seats.  I presume if you want                    
  this at the same time that you can't have more than one                      
  provider and more than one insurance person serving on the                   
  commission at the same time."  She said the language would                   
  need to be clarified.  She then indicated that the amendment                 
  was better than the others and she would not have an                         
  objection to it as long as the words "at the same time" are                  
  included.                                                                    
                                                                               
  Number 427                                                                   
                                                                               
  REP. KOTT indicated that the legislative attorney that                       
  drafted the amendment said the language addresses                            
  Commissioner Usera's concern.                                                
                                                                               
  CHAIR BUNDE said it was his understanding that the amendment                 
  does not require any of the members to be health care                        
  providers or insurance people and suggested that they all                    
  could be "civilians."                                                        
                                                                               
  REP. TOOHEY referred to the Alaska Public Utilities                          
  Corporation (APUC) and asked if there are other regulations                  
  similar to the amendment in statute pertaining to other                      
  commissions.                                                                 
                                                                               
  COMMISSIONER USERA explained that other boards have                          
  designated seats; i.e., the APUC which requires that there                   
  be an engineer, an attorney, and a representative of                         
  consumers.  She said, "By naming one or the other, we felt                   
  that that was at the exclusion of people who have a broader                  
  background."  She asserted that the best people to serve on                  
  the commission would be those who are knowledgeable about                    
  the overall system.  Commissioner Usera said she understood                  
  the concept that Rep. Kott was advocating but again reminded                 
  the committee that the appointees would be confirmed by the                  
  legislature.                                                                 
                                                                               
  Number 495                                                                   
                                                                               
  CHAIR BUNDE suggested that the concern is more than that of                  
  the commission being dominated by one interest or another or                 
  even lack of ethics and said it would encourage public                       
  confidence.  He then asked if there was further public                       
  testimony.  There being none, Chair Bunde closed public                      
  testimony and asked the pleasure of the committee regarding                  
  Amendment 7.                                                                 
                                                                               
  REP. KOTT made a motion to adopt Amendment 7.                                
                                                                               
  REP. TOOHEY objected.  She then asked if an employee of a                    
  health insurance company would have to quit his/her job.                     
                                                                               
  CHAIR BUNDE interjected and said once the person becomes a                   
  member of the commission, that will be their only job.                       
                                                                               
  REP. TOOHEY asked if there would be a time frame for them to                 
  quit and suggested that the amendment is moot as they would                  
  no longer be employed.                                                       
                                                                               
  REP. KOTT indicated that the amendment would ensure that                     
  there would not be two members of the medical community or                   
  the insurance industry on the commission.  He said one of                    
  each could be an option.                                                     
                                                                               
  Number 572                                                                   
                                                                               
  REP. OLBERG supposed that it would be theoretically possible                 
  for a person to hold both jobs until they are confirmed and                  
  cited that someone could be on the commission and be on                      
  retainer from an insurance company.                                          
                                                                               
  CHAIR BUNDE said Rep. Olberg made an interesting point.  He                  
  asked for further discussion.  He said, "For the record, I                   
  want it understood that that is concurrently.  That doesn't                  
  say one serves once in the commission's life and then never                  
  again do we have a health... Laura Lee, would you call the                   
  roll?"  Representatives Kott, Olberg, Toohey and Bunde voted                 
  Yea; and Representatives Vezey, Nicholia and G. Davis voted                  
  Nay.  Chair Bunde declared that Amendment 7 was so moved.                    
  He then asked for Rep. Kott's last amendment.                                
                                                                               
  Number 621                                                                   
                                                                               
  REP. KOTT made a motion to adopt Amendment 8.  He then                       
  referred to page 13, line 20.                                                
                                                                               
  CHAIR BUNDE indicated that the amendment was being                           
  distributed to the committee and asked the members to                        
  renumber it accordingly.                                                     
                                                                               
  REP. KOTT explained that the amendment requires that all                     
  persons with preexisting conditions be addressed in whatever                 
  proposal the commission brings forth.                                        
                                                                               
  COMMISSIONER USERA stated that she felt the amendment would                  
  be a fine addition.  She felt the universal coverage should                  
  be portable and should cover those with preexisting                          
  conditions.                                                                  
                                                                               
  REP. TOOHEY said, "I would like to see it reworded somewhat                  
  to say including a benefit package that contains preexisting                 
  conditions."                                                                 
                                                                               
  Number 674                                                                   
                                                                               
  REP. KOTT said he viewed Rep. Toohey's recommendation as a                   
  friendly amendment.                                                          
                                                                               
  CHAIR BUNDE asked Rep. Toohey to suggest the intended                        
  language.                                                                    
                                                                               
  REP. TOOHEY said, "...defining a range of potential benefit                  
  packages for universal health care coverage for residents                    
  including a package that does not omit preexisting                           
  conditions for residents of the state of Alaska."                            
                                                                               
  CHAIR BUNDE stated that the provision says that a benefit                    
  may not limit the covered health services on the basis of                    
  preexisting conditions.                                                      
                                                                               
  REP. TOOHEY said it was her preference to add the word                       
  "including."                                                                 
                                                                               
  CHAIR BUNDE stated that Rep. Toohey wanted to use more                       
  proactive language by adding the words "must include."                       
                                                                               
  REP. TOOHEY said, "Including a benefit package would be                      
  fine..."                                                                     
                                                                               
  Number 714                                                                   
                                                                               
  COMMISSIONER USERA suggested that the phrase read:  "the                     
  benefit package must include coverage for preexisting                        
  conditions."                                                                 
                                                                               
  CHAIR BUNDE reiterated that the verbiage would read:  "a                     
  benefit package must include coverage for preexisting                        
  conditions."                                                                 
                                                                               
  REP. OLBERG said, "Does it say that instead of what the                      
  amendment says?  Have we deleted this...?"                                   
                                                                               
  CHAIR BUNDE explained that the committee is attempting to                    
  amend the amendment and felt that it was becoming too                        
  substantial to be a friendly amendment.  He said it was his                  
  preference to have the exact amendment written out to                        
  clarify what is before the committee.                                        
                                                                               
  REP. NICHOLIA asked Rep. Kott if the proposed language would                 
  be a friendly amendment.                                                     
                                                                               
  REP. KOTT reminded the committee that the original language                  
  would not limit the coverage of health care insurance on the                 
  basis of preexisting conditions.                                             
                                                                               
  CHAIR BUNDE clarified that the intent of the proposed                        
  friendly amendment would make Amendment 8 more proactive by                  
  saying "it will include..."  He then asked if Rep. Kott                      
  would rather have the amendment written up by legal                          
  services.                                                                    
                                                                               
  COMMISSIONER USERA, for clarification said, "That as this                    
  commission is designing benefit packages under this                          
  universal coverage, that your intent is to make sure that                    
  each of those has a component that includes preexisting                      
  conditions.  So that we're not going to say O.K. we end up                   
  with this universal benefit package that the reason we're                    
  keeping the price down is because we've excluded preexisting                 
  conditions."  She said the intent could be achieved with                     
  language that says each benefit package must include                         
  coverage for preexisting conditions.                                         
                                                                               
  REP. TOOHEY agreed.                                                          
                                                                               
  Number 799                                                                   
                                                                               
  CHAIR BUNDE asked if the committee understood the amendment.                 
                                                                               
  REP. KOTT said it was his understanding that the friendly                    
  amendment would delete the words "may not limit" and insert                  
  the words "must include."  He felt that would be the easiest                 
  way to address the concern.  He further stated that he had                   
  no objection to the friendly amendment.                                      
                                                                               
  CHAIR BUNDE indicated that the amendment to Amendment 8 was                  
  before the committee.  He asked for further discussion.                      
  There being none, he then asked the pleasure of the                          
  committee.                                                                   
                                                                               
  REP. OLBERG objected.                                                        
                                                                               
  Number 819                                                                   
                                                                               
  CHAIR BUNDE called for the vote.  Representatives Kott,                      
  Nicholia, Toohey, Bunde and G. Davis voted Yea; and                          
  Representative Olberg voted Nay.  Chair Bunde indicated that                 
  Amendment 8 was so moved.  He then asked if there were any                   
  more amendments to be addressed or for further amendments.                   
                                                                               
  Seeing no further business before the committee, CHAIR BUNDE                 
  ADJOURNED the meeting at 2:50 p.m.                                           

Document Name Date/Time Subjects