Legislature(1999 - 2000)

04/10/1999 10:07 AM 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                                                                                         
                   April 10, 1999                                                                                               
                     10:07 a.m.                                                                                                 
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                                 
                                                                                                                                
Representative Fred Dyson, Co-Chair                                                                                             
Representative John Coghill, Co-Chair                                                                                           
Representative Jim Whitaker                                                                                                     
Representative Joe Green                                                                                                        
Representative Carl Morgan                                                                                                      
Representative Tom Brice (via teleconference)                                                                                   
                                                                                                                                
MEMBERS ABSENT                                                                                                                  
                                                                                                                                
Representative Allen Kemplen                                                                                                    
                                                                                                                                
COMMITTEE CALENDAR                                                                                                              
                                                                                                                                
HOUSE BILL NO. 175                                                                                                              
"An Act requiring the Department of Health and Social Services to                                                               
provide notice to a community council on receipt of an application                                                              
for a license to operate a certain kind of foster group home."                                                                  
                                                                                                                                
     - HEARD AND HELD; ASSIGNED TO SUBCOMMITTEE                                                                                 
                                                                                                                                
HOUSE BILL NO. 149                                                                                                              
"An Act relating to insurance coverage for treatment of mental                                                                  
illness and substance abuse; repealing provisions of ch. 8, SLA                                                                 
1997, that terminates required mental health benefit coverage; and                                                              
providing for an effective date."                                                                                               
                                                                                                                                
     - HEARD AND HELD; ASSIGNED TO SUBCOMMITTEE                                                                                 
                                                                                                                                
HOUSE BILL NO. 142                                                                                                              
"An Act relating to the education credit for the fisheries business                                                             
tax and the fisheries resource landing tax; and providing for an                                                                
effective date."                                                                                                                
                                                                                                                                
     - MOVED CSHB 142(HES) OUT OF COMMITTEE                                                                                     
                                                                                                                                
HOUSE JOINT RESOLUTION NO. 6                                                                                                    
Proposing amendments to the Constitution of the State of Alaska                                                                 
relating to state aid for education.                                                                                            
                                                                                                                                
     - MOVED HJR 6 OUT OF COMMITTEE                                                                                             
                                                                                                                                
(* First public hearing)                                                                                                        
                                                                                                                                
PREVIOUS ACTION                                                                                                                 
                                                                                                                                
BILL: HB 175                                                                                                                    
SHORT TITLE: LICENSING OF FOSTER GROUP HOMES                                                                                    
SPONSOR(S): REPRESENTATIVES(S) GREEN, Dyson, Halcro                                                                             
                                                                                                                                
Jrn-Date    Jrn-Page           Action                                                                                           
 3/31/99       628     (H)  READ THE FIRST TIME - REFERRAL(S)                                                                   
 3/31/99       628     (H)  HES, CRA                                                                                            
 4/06/99       661     (H)  COSPONSOR(S): HALCRO                                                                                
 4/08/99               (H)  HES AT  3:00 PM CAPITOL 106                                                                         
 4/08/99               (H)  HEARD AND HELD                                                                                      
 4/10/99               (H)  HES AT 10:00 AM CAPITOL 106                                                                         
                                                                                                                                
BILL: HB 149                                                                                                                    
SHORT TITLE: INSURANCE: MENTAL HEALTH & SUBSTANCE ABUSE                                                                         
SPONSOR(S): REPRESENTATIVES(S) DAVIS BY REQUEST                                                                                 
                                                                                                                                
Jrn-Date    Jrn-Page           Action                                                                                           
 3/19/99       516     (H)  READ THE FIRST TIME - REFERRAL(S)                                                                   
 3/19/99       516     (H)  HES, L&C, FIN                                                                                       
 4/08/99               (H)  HES AT  3:00 PM CAPITOL 106                                                                         
 4/08/99               (H)  HEARD AND HELD                                                                                      
 4/10/99               (H)  HES AT 10:00 AM CAPITOL 106                                                                         
                                                                                                                                
BILL: HB 142                                                                                                                    
SHORT TITLE: EDUCATION CREDIT FOR FISHERY TAXES                                                                                 
SPONSOR(S): REPRESENTATIVES(S) DAVIS                                                                                            
                                                                                                                                
Jrn-Date    Jrn-Page           Action                                                                                           
 3/19/99       514     (H)  READ THE FIRST TIME - REFERRAL(S)                                                                   
 3/19/99       514     (H)  HES, FINANCE                                                                                        
 4/08/99               (H)  HES AT  3:00 PM CAPITOL 106                                                                         
 4/08/99               (H)  HEARD AND HELD                                                                                      
 4/10/99               (H)  HES AT 10:00 AM CAPITOL 106                                                                         
                                                                                                                                
BILL: HJR  6                                                                                                                    
SHORT TITLE: CONST. AM: EDUCATION FUNDING                                                                                       
SPONSOR(S): REPRESENTATIVES(S) KOHRING, Coghill                                                                                 
                                                                                                                                
Jrn-Date    Jrn-Page           Action                                                                                           
 1/19/99        17     (H)  PREFILE RELEASED 1/15/99                                                                            
 1/19/99        17     (H)  READ THE FIRST TIME - REFERRAL(S)                                                                   
 1/19/99        17     (H)  HES, JUDICIARY, FINANCE                                                                             
 2/05/99       146     (H)  COSPONSOR(S): COGHILL                                                                               
 3/16/99               (H)  HES AT  3:00 PM CAPITOL 106                                                                         
 3/16/99               (H)  SCHEDULED BUT NOT HEARD                                                                             
 3/23/99               (H)  HES AT  3:00 PM CAPITOL 106                                                                         
 3/23/99               (H)  HEARD AND HELD                                                                                      
 3/23/99               (H)  MINUTE(HES)                                                                                         
 4/01/99               (H)  HES AT  3:00 PM CAPITOL 106                                                                         
 4/01/99               (H)  MEETING CANCELED                                                                                    
 4/10/99               (H)  HES AT 10:00 AM CAPITOL 106                                                                         
                                                                                                                                
WITNESS REGISTER                                                                                                                
                                                                                                                                
JEFF LOGAN, Legislative Assistant                                                                                               
   to Representative Joe Green                                                                                                  
Alaska State Legislature                                                                                                        
Capitol Building, Room 214                                                                                                      
Juneau, Alaska  99801                                                                                                           
Telephone:  (907) 465-3727                                                                                                      
POSITION STATEMENT:  Testified on HB 175.                                                                                       
                                                                                                                                
RUSS WEBB, Deputy Commissioner                                                                                                  
Department of Health, Education and Social Services                                                                             
P.O. Box 110601                                                                                                                 
Juneau, Alaska  99811                                                                                                           
Telephone:  (907) 465-3030                                                                                                      
POSITION STATEMENT:  Testified on HB 175.                                                                                       
                                                                                                                                
ROBERT BUTTCANE, Juvenile Probation Officer                                                                                     
Youth Corrections                                                                                                               
Division of Family and Youth Services                                                                                           
Department of Health and Social Services                                                                                        
P.O. Box 110630                                                                                                                 
Juneau, Alaska  99811                                                                                                           
Telephone:  (907) 465-3228                                                                                                      
POSITION STATEMENT:  Provided information on HB 175.                                                                            
                                                                                                                                
SHANNON O'FALLON, Assistant Attorney General                                                                                    
Human Services Section                                                                                                          
Civil Division (Juneau)                                                                                                         
Department of Law                                                                                                               
P.O. Box 110300                                                                                                                 
Juneau, Alaska  99811                                                                                                           
Telephone:  (907) 465-3600                                                                                                      
POSITION STATEMENT:  Provided information on HB 175.                                                                            
                                                                                                                                
REPRESENTATIVE GARY DAVIS, Alaska State Legislature                                                                             
Capitol Building, Room 513                                                                                                      
Juneau, Alaska  99801                                                                                                           
Telephone:  (907) 465-2693                                                                                                      
POSITION STATEMENT:  Testified as sponsor of HB 149 and HB 142.                                                                 
DEB DAVIDSON, Legislative Administrative Assistant                                                                              
   to Representative Gary Davis                                                                                                 
Alaska State Legislature                                                                                                        
Capitol Building, Room 513                                                                                                      
Juneau, Alaska  99801                                                                                                           
Telephone:  (907) 465-2693                                                                                                      
POSITION STATEMENT:  Presented sponsor statement on HB 149.                                                                     
                                                                                                                                
WALTER MAJOROS, Executive Director                                                                                              
Alaska Mental Health Board                                                                                                      
Office of the Commissioner                                                                                                      
Department of Health and Social Services                                                                                        
P.O. Box 110601                                                                                                                 
Juneau, Alaska  99811                                                                                                           
Telephone:  (907) 465-3071                                                                                                      
POSITION STATEMENT:  Testified in support of HB 149.                                                                            
                                                                                                                                
GENE GRASTO                                                                                                                     
National Alliance for the Mentally Ill, Fairbanks                                                                               
1369 Ballaine Road                                                                                                              
Fairbanks, Alaska  99709                                                                                                        
Telephone:  (907) 455-6263                                                                                                      
POSITION STATEMENT:  Testified in support of HB 149.                                                                            
                                                                                                                                
JEANETTE GRASTO, President                                                                                                      
National Alliance for the Mentally Ill, Fairbanks                                                                               
1369 Ballaine Road                                                                                                              
Fairbanks, Alaska  99709                                                                                                        
Telephone:  (907) 455-6263                                                                                                      
POSITION STATEMENT:  Testified on HB 149.                                                                                       
                                                                                                                                
VICKI TURNER MALONE, Owner,                                                                                                     
Malone and Company, Inc., Independent Insurance Agents                                                                          
P.O. Box 2178                                                                                                                   
Bethel, Alaska  99559                                                                                                           
Telephone:  (907) 543-2934                                                                                                      
POSITION STATEMENT:  Testified on HB 149.                                                                                       
                                                                                                                                
                                                                                                                                
NANCY CAUGHELL                                                                                                                  
Parents Incorporated                                                                                                            
P.O. Box 232786                                                                                                                 
Anchorage, Alaska  99523                                                                                                        
Telephone:  (907) 344-7158                                                                                                      
POSITION STATEMENT:  Testified on HB 149.                                                                                       
                                                                                                                                
SCOT WHEAT                                                                                                                      
National Alliance for the Mentally Ill                                                                                          
P.O. Box 2353                                                                                                                   
Homer, Alaska  99603                                                                                                            
Telephone:  (907) 235-6840                                                                                                      
POSITION STATEMENT:  Testified on HB 149.                                                                                       
                                                                                                                                
ELIZABETH LaCROSSE, Vice President                                                                                              
National Alliance for the Mentally Ill, Alaska;                                                                                 
Member, Alaska Mental Health Board;                                                                                             
Member, Governor's Committee on Employment and Rehabilitation of                                                                
   People With Disabilities                                                                                                     
P.O. Box 8552                                                                                                                   
Ketchikan, Alaska  99901                                                                                                        
Telephone:  (907) 225-8552                                                                                                      
POSITION STATEMENT:  Testified in support of HB 149.                                                                            
                                                                                                                                
JEFF JESSEE, Executive Director                                                                                                 
Alaska Mental Health Trust Authority Board of Trustees                                                                          
13030 Back Road                                                                                                                 
Anchorage, Alaska  99515                                                                                                        
Telephone:  (907) 269-7960                                                                                                      
POSITION STATEMENT:  Testified in support of HB 149.                                                                            
                                                                                                                                
ROBYN HENRY, Executive Director                                                                                                 
National Alliance for the Mentally Ill, Alaska                                                                                  
P.O. Box 1143205                                                                                                                
Anchorage, Alaska  99514                                                                                                        
Telephone:  (907) 522-3152                                                                                                      
POSITION STATEMENT:  Testified in support of HB 149.                                                                            
                                                                                                                                
JOHN GEORGE, Lobbyist                                                                                                           
   for American Council of Life Insurance                                                                                       
3328 Fritz Cove Road                                                                                                            
Juneau, Alaska  99801                                                                                                           
Telephone:  (907) 789-0172                                                                                                      
POSITION STATEMENT:  Testified on HB 149.                                                                                       
                                                                                                                                
DONALD DAPCEVICH, Executive Director                                                                                            
Governor's Advisory Board on Alcoholism and Drug Abuse                                                                          
P.O. Box 110608                                                                                                                 
Juneau, Alaska  99811                                                                                                           
Telephone:  (907) 465-8920                                                                                                      
POSITION STATEMENT:  Testified in support of HB 149.                                                                            
                                                                                                                                
GORDAN EVANS, Lobbyist                                                                                                          
   for Health Insurance Association of America                                                                                  
211 Fourth Street, Suite 305                                                                                                    
Juneau, Alaska  99801                                                                                                           
Telephone:  (907) 526-3210                                                                                                      
POSITION STATEMENT:  Testified on HB 149.                                                                                       
                                                                                                                                
PAMELA LaBOLLE, President                                                                                                       
Alaska State Chamber of Commerce                                                                                                
217 Second Street, Suite 201                                                                                                    
Juneau, Alaska  99801                                                                                                           
Telephone:  (907) 586-2323                                                                                                      
POSITION STATEMENT:  Testified on HB 149.                                                                                       
                                                                                                                                
PAT CLASBY                                                                                                                      
Alaska State Hospital and Nursing Home Association                                                                              
211 Fourth Avenue, Suite 114                                                                                                    
Juneau, Alaska  99801                                                                                                           
Telephone:  (907) 463-6753                                                                                                      
POSITION STATEMENT:  Testified in support of HB 149.                                                                            
                                                                                                                                
PATRICIA ARNOLD                                                                                                                 
3479 Landing, Number 1                                                                                                          
Homer, Alaska  99603                                                                                                            
Telephone:  (907) 235-7423                                                                                                      
POSITION STATEMENT:  Testified on HB 149.                                                                                       
                                                                                                                                
DEBORAH VOGT, Deputy Commissioner                                                                                               
Department of Revenue                                                                                                           
P.O. Box 110400                                                                                                                 
Juneau, Alaska  99811                                                                                                           
Telephone:  (907) 465-2300                                                                                                      
POSITION STATEMENT:  Provided information on HB 142.                                                                            
                                                                                                                                
DIANE BARRANS, Executive Director                                                                                               
Postsecondary Education Commission                                                                                              
Department of Education                                                                                                         
3030 Vintage Boulevard                                                                                                          
Juneau, Alaska  99801                                                                                                           
Telephone:  (907) 465-6740                                                                                                      
POSITION STATEMENT:  Provided information on HB 142.                                                                            
                                                                                                                                
ACTION NARRATIVE                                                                                                                
                                                                                                                                
TAPE 99-33, SIDE A                                                                                                              
                                                                                                                                
Number 0001                                                                                                                     
                                                                                                                                
CO-CHAIRMAN DYSON reconvened the House Health, Education and Social                                                             
Services Standing Committee meeting at 10:07 a.m.  Members present                                                              
at the call to order were Representatives Dyson, Coghill, Whitaker,                                                             
Morgan and Brice (via teleconference).  Representative Green joined                                                             
the meeting at 10:18 a.m.                                                                                                       
                                                                                                                                
HB 175 - LICENSING OF FOSTER GROUP HOMES                                                                                        
                                                                                                                                
Number 0035                                                                                                                     
                                                                                                                                
CO-CHAIRMAN DYSON announced the first order of business as House                                                                
Bill No. 175, "An Act requiring the Department of Health and Social                                                             
Services to provide notice to a community council on receipt of an                                                              
application for a license to operate a certain kind of foster group                                                             
home."                                                                                                                          
                                                                                                                                
Number 0238                                                                                                                     
                                                                                                                                
JEFF LOGAN, Legislative Assistant to Representative Joe Green, came                                                             
forward to make corrections on some testimony heard on April 8,                                                                 
1999.  He stated, "Not to debate anyone in absentia, but there are                                                              
a few points that were made during testimony on Thursday that I                                                                 
would like to either correct, complete or clear up.  Mr. Jessee,                                                                
who is also a constituent of Representative Green, testified that                                                               
'hard cases make bad law' and inferred that the sponsor got angry                                                               
in a situation and jumped up and drafted the bill.  For the record,                                                             
Mr. Chairman, when the scope of this problem became apparent about                                                              
a year ago, I advised the sponsor to amend a bill that he had at                                                                
that time in the Judiciary Committee, HB 375, which had a title                                                                 
that clearly encompassed solutions to the problems we saw here, and                                                             
he decided no, to wait to ... collect a paper trail and see if we                                                               
could work the problem through the department.  That didn't happen.                                                             
So I would like the record to be clear that this is not any angry                                                               
reaction to a problem; we've been working it for over a year."                                                                  
                                                                                                                                
MR. LOGAN referred to inferences about the bill being a violation                                                               
of the fair housing act.  He asked the drafter about this and on                                                                
the face of it, it appears it is not a violation of the fair                                                                    
housing act.  He is continuing research on that point.  There were                                                              
statements about how the bill would burden foster parents and                                                                   
operators.  The sponsor may choose to speak later about the gift of                                                             
foster parenthood, but in drafting the measure, they very                                                                       
specifically avoided burdening foster parents in any way.  The bill                                                             
does not require anything of foster parents.  The only performance                                                              
required in the bill is by the department.  It is a notice from the                                                             
department to the community council, similar to the statutory                                                                   
required notice for a liquor license.                                                                                           
                                                                                                                                
MR. LOGAN went on to say that there were some statements that this                                                              
bill would only apply to Anchorage because community councils are                                                               
only organized in Anchorage.  The Kenai borough has three community                                                             
councils, the Matanuska-Susitna borough has 24 community councils,                                                              
and Anchorage has 37 community councils.  Mr. Vote testified that                                                               
he felt harassed when people stopped in front of his home and wrote                                                             
down license plate numbers.  For the record, Mr. Logan noted, he                                                                
may have been responsible for that.  When the neighbors called                                                                  
their state representative to complain about vehicles with state                                                                
license plates speeding on their street, he called the Division of                                                              
Family and Youth Services (DFYS) and was told to have people write                                                              
down license plate numbers, and they would take care of it.                                                                     
                                                                                                                                
MR. LOGAN noted there was a statement made that Mr. Vote was forced                                                             
to sell his home at a loss.  Mr. Vote purchased his home for                                                                    
$450,000, and the selling price listed in the classified of the                                                                 
Anchorage Daily News is $489,900.  The ad also states the house has                                                             
nine bedrooms.  There are motels in this state that do not have                                                                 
nine bedrooms.  There was a question from someone asking what if                                                                
they, as a neighbor, wanted to take in foster children.  The phrase                                                             
"as a neighbor" is key; if it is a neighbor, that person is already                                                             
known.  That is a far cry from an unknown person, a single man,                                                                 
coming in and filling a nine-bedroom house with emotionally                                                                     
disturbed teenagers.  That was the cause of the problem in this                                                                 
case.  There was some talk about big brother; the bill provides too                                                             
much information.  The government already has this information.                                                                 
They are not collecting any more information; they are simply                                                                   
notifying the community council that an application has been                                                                    
received.                                                                                                                       
                                                                                                                                
MR. LOGAN stated that in the sponsor's and his opinions, there was                                                              
a breathtaking gap between what Mr. Webb testified and what                                                                     
actually happened.  Yes, they got information, but it took a year.                                                              
The information that Mr. Webb indicated to the committee that is                                                                
readily available, was not readily available.  He quoted from a                                                                 
letter Representative Green wrote last May which said, "A few                                                                   
minutes from the Deputy Commissioner or the Commissioner with a                                                                 
group of local citizens would clear the whole thing up."  The                                                                   
department wrote back and said "No it wouldn't."                                                                                
                                                                                                                                
CO-CHAIRMAN DYSON asked Mr. Logan for copies of the series of                                                                   
letters.                                                                                                                        
                                                                                                                                
Number 0630                                                                                                                     
                                                                                                                                
REPRESENTATIVE WHITAKER asked who makes notification to whom in HB                                                              
175.                                                                                                                            
                                                                                                                                
MR. LOGAN answered that notification would be made by DFYS to the                                                               
community councils, and the list of their addresses is readily                                                                  
available.                                                                                                                      
                                                                                                                                
REPRESENTATIVE WHITAKER asked if that is where the process stops.                                                               
                                                                                                                                
MR. LOGAN replied that it is up to the community council.  There                                                                
was some discussion about how the bill might not fix the problem;                                                               
it wasn't intended to be an overall systems approach because there                                                              
might not be a problem.  It might be that once citizens are                                                                     
informed an application has been received, they will say "No                                                                    
problem."  It could be that the home is for some developmentally                                                                
disabled toddlers or someone who would posed no threat.  They could                                                             
put their arms around that and say, "That is great."  It could be                                                               
that the home is for a group of emotionally distressed teenagers,                                                               
and they might want to know more about that.  Whether the process                                                               
stops there depends on the community council or the neighbors.                                                                  
                                                                                                                                
Number 0776                                                                                                                     
                                                                                                                                
REPRESENTATIVE WHITAKER said that was his concern.  The bill says                                                               
there will be notification; it doesn't say anything about a                                                                     
continuing process.  Yet that continuing process has been inferred                                                              
by what Mr. Logan has said.  Representative Whitaker believes that,                                                             
by intent, there is a continuing process, and it needs to be                                                                    
identified.  He sees this bill putting something out that provides                                                              
a number of questions that are unanswered.  He asked Mr. Logan what                                                             
would be the next step if the community council says "No, we don't                                                              
want this."                                                                                                                     
                                                                                                                                
Number 0819                                                                                                                     
                                                                                                                                
MR. LOGAN said the next step would be whatever steps they have                                                                  
available to them now.  There is no empowerment in this legislation                                                             
to stop a home.  The worst-case scenario is at least people will                                                                
know what is going on in their neighborhood.  He compared the bill                                                              
to a bear bell.  "As you are hiking through the woods in territory                                                              
that might have bears, you have two ways to let the bear know                                                                   
you're coming.  You can wear a bell to let the bear know you're                                                                 
coming so the bear can adjust its spatial requirements, become                                                                  
acclimated to the fact that you are there, and everybody's OK.  Or                                                              
you can surprise the bear, in which case, the bear becomes                                                                      
irritated and might react in a way that people might react if all                                                               
of a sudden, right next to them, is an institution with a bunch of                                                              
people that they know nothing about."  This bill simply notifies                                                                
people so they can make their internal adjustments.                                                                             
                                                                                                                                
REPRESENTATIVE WHITAKER asked Mr. Logan to describe the                                                                         
neighborhood in question.                                                                                                       
                                                                                                                                
MR. LOGAN answered that it is mid- to upper-price level homes; not                                                              
affluent but upscale. There is an undeveloped park with a small                                                                 
playground on one side and a sea bluff on the backside.                                                                         
                                                                                                                                
Number 0941                                                                                                                     
                                                                                                                                
REPRESENTATIVE WHITAKER commented that there may be a stigma                                                                    
attached to foster group homes.  They are not considered upscale                                                                
nor affluent.  He is concerned that those in the neighborhood may                                                               
think that foster group homes are just fine--in somebody else's                                                                 
neighborhood, perhaps a less upscale neighborhood, "Not in my                                                                   
backyard (NIMBY)."  He asked Mr. Logan to comment on that.                                                                      
                                                                                                                                
MR. LOGAN deferred that question to the sponsor, Representative                                                                 
Green.                                                                                                                          
                                                                                                                                
Number 1035                                                                                                                     
                                                                                                                                
CO-CHAIRMAN DYSON indicated that his cursory analysis of this                                                                   
situation is everything that could go wrong, did; almost every                                                                  
reaction that could have been better, wasn't; and he wants to do                                                                
everything possible to de-escalate the intensity of the discussion                                                              
and focus on what went wrong, if anything.  He wants to know if                                                                 
there is a generic problem that needs to be addressed, what they                                                                
learned from it, and what can they do better in the future.  Even                                                               
though he is listed as a sponsor, he believes that HB 175 is not                                                                
the best solution.                                                                                                              
                                                                                                                                
REPRESENTATIVE WHITAKER concurred with Co-Chairman Dyson's analysis                                                             
and intent; he is not trying to put Representative Green or anyone                                                              
on the spot.                                                                                                                    
                                                                                                                                
REPRESENTATIVE GREEN appreciated Representative Whitaker's                                                                      
comments.  He guaranteed that in this particular neighborhood,                                                                  
NIMBY is not an issue.  If that were a safe home for children or                                                                
younger children, it wouldn't matter.  That neighborhood has                                                                    
children of its own and loves children; they would welcome such an                                                              
institution.  They are concerned about the safety of their own                                                                  
children.  It would be acceptable to have notification only when                                                                
the children are above certain ages.  The spokesperson for the                                                                  
community said she would have no problem with that and would                                                                    
welcome such a situation.                                                                                                       
                                                                                                                                
CO-CHAIRMAN DYSON told the people at the Kenai Legislative                                                                      
Information Office the committee is under a time constraint, and if                                                             
they don't get to their testimony, he would like them to leave                                                                  
their phone numbers so they can get back to them if this goes to a                                                              
subcommittee.  The committee does want their input.                                                                             
                                                                                                                                
Number 1254                                                                                                                     
                                                                                                                                
CO-CHAIRMAN DYSON asked Mr. Webb to summarize from his perception                                                               
what went wrong in this particular situation, what if any problems                                                              
or mistakes the department made, what they learned from it, and                                                                 
what would be different in the future.                                                                                          
                                                                                                                                
Number 1280                                                                                                                     
                                                                                                                                
RUSS WEBB, Deputy Commissioner, Department of Health, Education and                                                             
Social Services (DHSS), came forward to testify. He stated that                                                                 
there was a good bit of information the community council and the                                                               
neighborhood wanted from the department; they tried to make a good                                                              
faith effort by meeting with the community council and neighborhood                                                             
on at least three occasions to provide them with information.  One                                                              
thing the DHSS encountered was the desire from the neighborhood for                                                             
information that they cannot provide.  If they failed, what they                                                                
failed to do is help people really understand the legal framework                                                               
within which they work, and the impeding interests that drive that                                                              
legal framework.                                                                                                                
                                                                                                                                
CO-CHAIRMAN DYSON asked Mr. Webb what the time lag was between the                                                              
time the people called for the information and the first meeting.                                                               
                                                                                                                                
Number 1341                                                                                                                     
                                                                                                                                
MR. WEBB responded that his first indication was when                                                                           
Representative Green contacted him last May at the end of session.                                                              
After that teleconference, they established within a week a meeting                                                             
with the DFYS licensing staff, regional manager, and several other                                                              
DFYS staff, in the neighborhood to discuss the issues.                                                                          
                                                                                                                                
CO-CHAIRMAN DYSON asked when was the first time the neighbors                                                                   
started trying to get the information and didn't.  He also asked                                                                
Mr. Webb to document the other two meetings he had in the                                                                       
neighborhood.                                                                                                                   
                                                                                                                                
MR. WEBB said he didn't have the date of the second meeting off the                                                             
top of his head, but he believed the licensing staff and regional                                                               
manager had a second meeting in the neighborhood a month or two                                                                 
after the initial meeting.  He met with the community council                                                                   
November 11, 1998.  Within the time available at that meeting,                                                                  
there was not enough time to answer all the neighbors' questions.                                                               
It was suggested the neighbors submit their written questions to                                                                
the DHSS, and the DHSS received two separate submissions over a                                                                 
month's time.  They answered the 64 questions in January 1999                                                                   
attempting to provide detailed answers and information.                                                                         
                                                                                                                                
Number 1453                                                                                                                     
                                                                                                                                
CO-CHAIRMAN DYSON asked Mr. Webb if he knows how the initial phone                                                              
calls from the neighborhood got handled.                                                                                        
                                                                                                                                
MR. WEBB answered he essentially knows nothing about questions the                                                              
neighborhood may have raised.                                                                                                   
                                                                                                                                
CO-CHAIRMAN DYSON asked what the policy is for the staffers who                                                                 
would have responded for those calls.                                                                                           
                                                                                                                                
MR. WEBB told him when someone calls, the staff try to give out the                                                             
public information.  He understands that much of the information                                                                
people asked for was information on the children's conditions,                                                                  
diagnoses, treatment histories and other things that are not public                                                             
information.  The department does not give out information that                                                                 
they are legally bound not to.                                                                                                  
                                                                                                                                
REPRESENTATIVE GREEN recommended that someone from DFYS attend the                                                              
subcommittee meeting.  Obviously, there is disparity in what people                                                             
on both sides of this issue agree as facts.  He pointed out there                                                               
should never had been a need for him to be involved in the first                                                                
place.  There is a seven-month hiatus between the end of session                                                                
and November.  It seems like it is pulling teeth to try to get                                                                  
information from the DHSS.  He believes that breeds an attitude                                                                 
which creates animosity, and therein lies the problem.  Lack of                                                                 
information and an adversarial appearance, even if it is not true                                                               
but appears that way, is a problem.  The DHSS needs to mend some                                                                
fences.  They have been able to make inroads in release of                                                                      
information where it is absolutely necessary.  He contends that                                                                 
when a foster group home is being established in a neighborhood, a                                                              
certain amount of public information could be released.  He wants                                                               
government to cooperate with its people.  That is all he is after,                                                              
and that is all the people in his neighborhood are after.                                                                       
                                                                                                                                
CO-CHAIRMAN DYSON asked Mr. Webb if there were activities in the                                                                
house that required the police to come.                                                                                         
                                                                                                                                
MR. WEBB replied that he believed Mr. Vote answered that question                                                               
the other day in the affirmative; the police had been called and                                                                
Mr. Vote called Mr. Webb.                                                                                                       
                                                                                                                                
CO-CHAIRMAN DYSON asked if the police record was available from                                                                 
that incident or was it confidential.                                                                                           
                                                                                                                                
MR. WEBB explained that with passage of HB 6 several years ago,                                                                 
there is information available about an offense committed by a                                                                  
youth which includes the youth's name and the type of offense.  He                                                              
asked Mr. Buttcane to answer the question.                                                                                      
                                                                                                                                
ROBERT BUTTCANE, Juvenile Probation Officer, Youth Corrections,                                                                 
Division of Family and Youth Services, Department of Health and                                                                 
Social Services, responded that HB 6, known as the juvenile                                                                     
disclosure law, requires that the records related to juvenile                                                                   
offenses involving weapons be made public.  He believes that the                                                                
case described would be subject to the juvenile disclosure law, but                                                             
he doesn't know if that incident occurred prior to the enactment of                                                             
HB 6.  If that type of incident happened today, there would be a                                                                
public record available to anyone who asked for it.                                                                             
                                                                                                                                
CO-CHAIRMAN DYSON asked how would someone go about getting that                                                                 
information.                                                                                                                    
                                                                                                                                
Number 1773                                                                                                                     
                                                                                                                                
MR. BUTTCANE answered they would contact the local juvenile                                                                     
probation office.  Those records are available en masse to anyone                                                               
who comes in the front doors so they can look at a flip board and                                                               
see any or all of the juvenile disclosure records.                                                                              
                                                                                                                                
CO-CHAIRMAN DYSON asked if there is a geographical sort on the list                                                             
if people don't know the name.                                                                                                  
                                                                                                                                
MR. BUTTCANE answered that they are not structured in such a way to                                                             
do exhaustive searches with bits of information, but if they can't                                                              
find the information, they would invite the person to look at the                                                               
file to see if he/she can find the one they want.  The probation                                                                
office tries to be as cooperative and helpful as possible.                                                                      
                                                                                                                                
CO-CHAIRMAN DYSON asked if that information would ever be on-line.                                                              
                                                                                                                                
MR. BUTTCANE said they are not in the process now of putting                                                                    
information on line, but there is nothing that money can't solve.                                                               
                                                                                                                                
MR. WEBB told them they are attempting to develop a juvenile                                                                    
offender management information system, but they are a long way                                                                 
from getting there.  Once they get there, this may very well be                                                                 
information that is available to the public on-line.                                                                            
                                                                                                                                
CO-CHAIRMAN DYSON asked if HB 6 only involved crimes with a weapon.                                                             
                                                                                                                                
MR. BUTTCANE answered no, there are a number of offenses:  felony                                                               
assaults against persons (which include sexual assaults), burglary                                                              
in the first degree, and violations of court orders could result in                                                             
disclosure of original offense referrals.                                                                                       
                                                                                                                                
CO-CHAIRMAN DYSON asked Mr. Webb if he foresaw the day when he will                                                             
have a data base where anyone can know if there has been a serious                                                              
offense.                                                                                                                        
                                                                                                                                
MR. WEBB responded certainly at some point in the future.  As Mr.                                                               
Buttcane said, the information is available now; it is the sorting                                                              
that is a bit difficult.  However, the numbers are relatively small                                                             
in many communities, so information is more readily available.                                                                  
There is a process that needs to be undertaken before that                                                                      
information can be put out, but down the line, it should be more                                                                
readily available to the public.                                                                                                
                                                                                                                                
Number 1956                                                                                                                     
                                                                                                                                
REPRESENTATIVE GREEN reiterated his concern of an attitude about                                                                
releasing information to help the community understand.  He pointed                                                             
out that HB 6 went into effect in 1997, but they didn't know about                                                              
this situation until 1998, and they found out about it through a                                                                
newspaper article.  "Can you imagine somebody with two little girls                                                             
that play across the street or in this park area, and they're                                                                   
having their morning coffee, and they read that there is a knife                                                                
wielder in a group foster home two doors away."  There is a huge                                                                
tidal wave of animosity that should never have happened.  If the                                                                
neighbors had known that this might happen, or there could be                                                                   
arrangements made, as there were subsequently.  DFYS did agree they                                                             
would not put that kind of person in this particular home again.                                                                
He believes the department would have never heard from them if all                                                              
of that had been handled up-front.                                                                                              
                                                                                                                                
Number 2028                                                                                                                     
                                                                                                                                
MR. WEBB understands the issues that have been raised.  They didn't                                                             
have, and currently don't have, a mechanism for identifying all the                                                             
people who would be interested in knowing whether a particular                                                                  
foster home exists in their community.  He believes a limit in this                                                             
bill would be on the type, the size.  It would be difficult for the                                                             
DHSS to promise, in every instance, that no child with a particular                                                             
history or background would ever be placed in a community-based                                                                 
setting.  If that were the case, all children who ever committed                                                                
offenses would be in institutional settings until they turned 18.                                                               
They have tried to be sensitive to the issues raised.  There are                                                                
only 44 delinquent children in foster homes today statewide, and                                                                
the children with histories of sexual offenses are in specific,                                                                 
highly trained and specialized placements; however, those                                                                       
placements are in communities.                                                                                                  
                                                                                                                                
CO-CHAIRMAN DYSON asked for the criteria of whether a child goes in                                                             
a foster home or a foster group home.                                                                                           
                                                                                                                                
MR. WEBB indicated it is the needs of the child, the ability of the                                                             
foster parent to meet those needs, to provide supervision, care,                                                                
follow through with treatment needs, and support the plan for the                                                               
child.                                                                                                                          
                                                                                                                                
CO-CHAIRMAN DYSON asked if it was fair to say these are the                                                                     
children who need more intensive support and services and have                                                                  
greater needs than children put with nuclear families.                                                                          
                                                                                                                                
MR. WEBB said yes.                                                                                                              
                                                                                                                                
CO-CHAIRMAN DYSON asked why foster homes didn't have to deal with                                                               
municipal zoning and planning restrictions.                                                                                     
                                                                                                                                
MR. WEBB believes that each municipality can set its own zoning                                                                 
regulations, and presumably they can establish zoning regulations                                                               
that would impact foster homes.  Perhaps Shannon O'Fallon from the                                                              
Department of Law can answer that.  He doesn't know of a state law                                                              
that says that foster homes are not subject to municipal zoning                                                                 
ordinances.                                                                                                                     
                                                                                                                                
CO-CHAIRMAN DYSON clarified that this legislation is talking only                                                               
about group foster homes, not foster homes.                                                                                     
                                                                                                                                
SHANNON O'FALLON, Assistant Attorney General, Human Services                                                                    
Section, Civil Division (Juneau), Department of Law, answered that                                                              
she was not aware of any state law or regulation that says that a                                                               
foster home or a foster group home wouldn't have to comply with any                                                             
local zoning ordinances, but she would do some research.                                                                        
                                                                                                                                
MR. WEBB noted that the community council did research on specific                                                              
zoning ordinances in Anchorage in this case, and he believes they                                                               
have some plans to address ordinances for the specific concerns.                                                                
He knows that the larger facilities do have some zoning                                                                         
restrictions in some communities.                                                                                               
                                                                                                                                
CO-CHAIRMAN DYSON agreed he was surprised on Thursday when somebody                                                             
said the state doesn't have to abide by municipal codes.  He asked                                                              
Representative Green or Mr. Logan why they didn't deal with this on                                                             
a municipal level.                                                                                                              
                                                                                                                                
REPRESENTATIVE GREEN answered that was the first way they went                                                                  
through assembly members Mr. Bell and Ms. Abney.  Mr. Bell checked                                                              
with an Anchorage attorney and was told that the state's needs                                                                  
superseded local zoning ordinances.  They took that as a fact and                                                               
didn't pursue it any further; obviously, they will now.                                                                         
                                                                                                                                
REPRESENTATIVE BRICE told them the larger institutions for                                                                      
residential care providers are held to planning and zoning                                                                      
requirements in Fairbanks.  He agreed they should pursue that.                                                                  
                                                                                                                                
CO-CHAIRMAN COGHILL recommended that the subcommittee will need to                                                              
take up the definition of a foster group home because it is not in                                                              
statute now.                                                                                                                    
                                                                                                                                
REPRESENTATIVE GREEN noted they got a description from DFYS and                                                                 
presumed it was part of their regulations.                                                                                      
                                                                                                                                
TAPE 99-33, SIDE B                                                                                                              
                                                                                                                                
REPRESENTATIVE GREEN added it is not the intent of the legislation                                                              
nor the neighborhood to exclude foster homes or even foster group                                                               
homes.  They just want to know beforehand.                                                                                      
                                                                                                                                
REPRESENTATIVE WHITAKER pointed out that the only concern he has to                                                             
this bill is that they not create an impediment to the furtherance                                                              
of the foster care program.  It is there because there is great                                                                 
need.  They need to recognize the neighborhood's need to know what                                                              
is happening in their neighborhood as well as the need of the                                                                   
foster care program.  He hopes this can be done through the                                                                     
subcommittee.  He didn't want his concerns to be misconstrued as                                                                
opposition to the bill.  He believes there is a way to bring both                                                               
needs together.                                                                                                                 
                                                                                                                                
REPRESENTATIVE BRICE asked if someone from the DHSS could answer                                                                
whether there is a regulatory definition of foster group homes.                                                                 
                                                                                                                                
MR. WEBB reported there is a definition of foster group homes in                                                                
regulations.  A foster group home is defined in 7AAC 50.990 as a                                                                
home having not more than eight children.                                                                                       
                                                                                                                                
Number 2275                                                                                                                     
                                                                                                                                
CO-CHAIRMAN DYSON commented that the focus of the debate is group                                                               
homes where there is a demonstrated risk from violence and sexual                                                               
offenses.  That is all the neighbors are concerned about, and there                                                             
is some legitimacy to that.  He asked Mr. Webb if they could post                                                               
the addresses and locations of group homes on their web page.                                                                   
                                                                                                                                
MR. WEBB answered they certainly could with enough time and                                                                     
resources.  Given that there are very few foster group homes, it                                                                
should not be a huge burden.                                                                                                    
                                                                                                                                
CO-CHAIRMAN DYSON said they will need to talk about the mechanics                                                               
about the information that can be disclosed and the limitations.                                                                
He announced the committee would hold HB 175, and he assigned it to                                                             
a subcommittee made up of Representatives Green, Brice and Dyson.                                                               
He requested that the subcommittee meet in the next seven to ten                                                                
days.  Co-Chairman Dyson will be the chair of the subcommittee.                                                                 
[HB 175 was held over.]                                                                                                         
                                                                                                                                
The committee took an at-ease from 11:04 - 11:08 a.m.                                                                           
                                                                                                                                
CO-CHAIRMAN DYSON handed the gavel to Co-Chairman Coghill.                                                                      
                                                                                                                                
HB 149 - INSURANCE: MENTAL HEALTH & SUBSTANCE ABUSE                                                                             
                                                                                                                                
Number 2077                                                                                                                     
                                                                                                                                
CO-CHAIRMAN COGHILL announced the next order of business as House                                                               
Bill No. 149, "An Act relating to insurance coverage for treatment                                                              
of mental illness and substance abuse; repealing provisions of ch.                                                              
8, SLA 1997, that terminates required mental health benefit                                                                     
coverage; and providing for an effective date."                                                                                 
                                                                                                                                
REPRESENTATIVE GARY DAVIS, Alaska State Legislature, sponsor of HB                                                              
149, came forward to present it.  He stated that HB 149, the mental                                                             
health parity bill, is an issue that affects every state because of                                                             
federal legislation passed three or four years ago.  He finds it                                                                
interesting that insurance treats mental health differently.  A                                                                 
task force was put together to study the issue, and the result is                                                               
the "Mental Health Parity Task Force Report" and HB 149.                                                                        
                                                                                                                                
DEB DAVIDSON, Legislative Administrative Assistant to                                                                           
Representative Gary Davis, presented the sponsor statement for HB                                                               
149.  Briefly, HB 149 affects businesses with 20 or more employees                                                              
who already provide health insurance benefits to their employees.                                                               
It requires these businesses to provide mental health substance                                                                 
abuse benefits that are equal to those that they provide for                                                                    
physical health.  It specifically says that in providing health                                                                 
insurance regarding mental health benefits, a plan cannot require                                                               
different deductibles, coinsurance ,or copayments, than they                                                                    
require for physical health.  They cannot impose different lifetime                                                             
benefit limits and cannot use different maximum out-of-pocket                                                                   
expenses.  Additionally, it requires they use the same claim                                                                    
payment methodologies for mental and physical health.  They cannot                                                              
apply different limits for treatment services or general coverage                                                               
such as pre-notification requirements for second opinions of                                                                    
existing conditions.  The different claim payment methodologies and                                                             
different limits for treatment services are criteria that are                                                                   
currently in statute in the substance abuse statute, and they just                                                              
incorporated that into HB 149.  The bill was drafted to allow                                                                   
insurance plans to implement these two things as either a part of                                                               
the existing limits, or as "separate but equal."  For example, if                                                               
there is a $250 deductible, they can say that the deductible is met                                                             
when both physical and mental health bills reach that amount, or                                                                
they can have a $250 deductible for each.  They leave it up to the                                                              
individual plans and employers.                                                                                                 
                                                                                                                                
MS. DAVIDSON continued that recognizing that a lot of the costs can                                                             
be contained through managed care, HB 149 does not prohibit the                                                                 
involvement of a managed care organization to provide mental health                                                             
and substance abuse treatment.  But it does state however, that                                                                 
involvement cannot diminish or negate the requirements and intents                                                              
of the bill itself.  It also says the organization may not use                                                                  
administrative or clinical protocols that reduce the access to                                                                  
treatment.  Additionally, the managed care organization must still                                                              
provide timely and appropriate access to and adequate quantity of                                                               
location and specialty distribution for the providers.                                                                          
                                                                                                                                
MS. DAVIDSON explained that the task force determined that the                                                                  
types of mental illness to be covered would be those disorders that                                                             
are described in the Diagnostic and Statistical Manual of Mental                                                                
Disorders (DSM-IV) which is published by the American Psychiatric                                                               
Association.  These include the mental disorders that have a                                                                    
biological or chemical cause for the onset.  It excludes the                                                                    
disorders classified with a "V" code--these types of disorders                                                                  
related normally to a relationship or workplace problems.                                                                       
                                                                                                                                
MS. DAVIDSON stated that they also decided to require the coverage                                                              
for substance abuse under the legislation because it is very common                                                             
for individuals diagnosed with mental illness to also suffer from                                                               
substance abuse or vice versa.  It has been shown that in many                                                                  
cases, one ailment cannot be controlled without also treating the                                                               
other.  The primary concerns are who is affected by this                                                                        
legislation and how much is it going to cost; how much will claims                                                              
to insurance companies increase; and how much will the health                                                                   
insurance premiums increase.                                                                                                    
                                                                                                                                
MS. DAVIDSON reported that preliminary estimates provided by the                                                                
task force's consultant shows that there are approximately 2,000                                                                
Alaska businesses employing more than 20 individuals.  These                                                                    
businesses have an estimated 218,000 employees.  There are a number                                                             
of businesses that are self-insured or otherwise fall under federal                                                             
Employees Retirement and Income Security Act (ERISA), and thus                                                                  
would be exempt.  The legislation cannot mandate this type of                                                                   
coverage to a company that self insures.  Additionally, businesses                                                              
that do not currently provide health insurance are not affected.                                                                
This legislation affects only those businesses who do not fall                                                                  
under ERISA and who do offer health insurance benefits.  Taking                                                                 
those things into account, the task force consultant and C & S                                                                  
Management Associates estimated that somewhere between 103,000 and                                                              
127,000 individuals would have this coverage which is about 17 to                                                               
20 percent of the state's population.                                                                                           
                                                                                                                                
MS. DAVIDSON reported that according to Ron Bachman, the actuarial                                                              
consultant, he estimated that insurance premiums could increase                                                                 
between $31 and $79 per year, per person.  This would depend on the                                                             
amount of managed care involved in it.  The costs to companies that                                                             
currently provide mental health coverage would not increase as much                                                             
as perhaps companies that provide no mental health coverage.  He                                                                
also estimated the cost of claims filed with insurance could                                                                    
increase between 1.7 and 4.3 percent.  There are a lot of                                                                       
unanswered questions regarding this legislation as to the impact on                                                             
the employers as well as the individuals who need the benefits.                                                                 
The task force decided it was an important issue to get on the                                                                  
table to discuss the best solution.                                                                                             
                                                                                                                                
REPRESENTATIVE DAVIS handed out the Mental Health Parity Task Force                                                             
report.  He explained that this legislation was drafted around the                                                              
recommendations after lengthy debate and discussion.   Some of the                                                              
provisions may seem questionable, but they were thought out, and                                                                
there are reasons why the bill was drafted as it is.                                                                            
                                                                                                                                
WALTER MAJOROS, Executive Director, Alaska Mental Health Board                                                                  
(AMHB), Office of the Commissioner, Department of Health and Social                                                             
Services, came forward to testify.  He pointed out that the                                                                     
composition of the Alaska Mental Health Board must include, by                                                                  
statute, mental health consumers or family members of mental health                                                             
consumers.  They are in touch with those who experience mental                                                                  
illnesses.  Mental health parity is AMHB's number one legislative                                                               
priority this year.  The reason they need advocacy for mental                                                                   
health parity is because there is serious discrimination now.  The                                                              
fact is 90 percent of insurance policies treat mental illness                                                                   
differently than physical illness.  Their goal is to achieve                                                                    
equality and end discrimination through this legislation.  They                                                                 
believe there isn't much debate on this.  The issue is medical                                                                  
necessity.  Anyone who meets the definition should have access to                                                               
the treatment, regardless whether the ailment has a physical base,                                                              
a mental base or a substance or chemical base.   He indicated they                                                              
can debate about how quickly they get there, the cost, and the size                                                             
of the risk pool, but there should be no debate on the issues of                                                                
discrimination and equality.  They should consider mental health                                                                
parity now because of the prevalence of mental illness and                                                                      
substance abuse in Alaska.                                                                                                      
                                                                                                                                
MR. MAJOROS mentioned that the AMHB is responsible for estimating                                                               
the number of people in Alaska who experience mental illness and                                                                
serious emotional disturbances.  They do the estimate in                                                                        
conjunction with the Center for Mental Health Services.  They                                                                   
estimate that there are 44,500 adults and children who experience                                                               
serious mental illness and serious emotional disturbances in                                                                    
Alaska.  The prevalence of mental illness is shown by the fact that                                                             
six out of ten of the leading medications prescribed by general                                                                 
practitioners (not psychiatrists) at Providence Hospital are                                                                    
psychotropic medications for mental illness.                                                                                    
                                                                                                                                
Number 1444                                                                                                                     
                                                                                                                                
MR. MAJOROS reported there is data based on a 1997-1998 Gallup Poll                                                             
that indicates that 18.5 percent of Alaskan men and 8.6 percent of                                                              
Alaskan women meet the definition of alcohol abuse.  For drug                                                                   
abuse, it is 2.9 percent of Alaskan men and 1.1 percent of Alaskan                                                              
women.  He noted that prevalence alone is not the important factor,                                                             
but the fact that treatment works for both mental illness and                                                                   
substance abuse.  There is a tremendous recognition now that mental                                                             
illnesses are brain disorders caused by chemical imbalances that                                                                
can be treated successfully through neuropsychology and                                                                         
psychotropic medication.  Not only is there success, the mental                                                                 
illnesses are being treated more effectively and less expensively                                                               
than treating major physical illnesses.  For example, treatment of                                                              
bipolar disorders and schizophrenia is less expensive and more                                                                  
effective than treating physical ailments such as diabetes and                                                                  
heart disease.  A report from 1995-1998 showed that 34 percent of                                                               
Alaskans going through residential treatment for substance abuse                                                                
abstained from substances for one year of post-treatment.  For                                                                  
those that participated in outpatient treatment, 59 percent                                                                     
abstained from substance abuse for an entire year.  He reiterated                                                               
that there is strong evidence that treatment works.                                                                             
                                                                                                                                
MR. MAJOROS pointed out that parity increases consumer self-                                                                    
reliance.  The AMHB hears from people who want to work but cannot                                                               
work.  One of the reasons they cannot work is they cannot afford to                                                             
pay for their medications.  Private insurance does not pay for                                                                  
these medications, and they are the same medications that prevent                                                               
these people from being institutionalized and causes them to be                                                                 
successful in society.  These people with mental illnesses revert                                                               
to the public system.  So instead of being productive citizens,                                                                 
they are dependant on the public welfare system.  He stated that                                                                
parity can help reverse that trend.                                                                                             
                                                                                                                                
Number 1319                                                                                                                     
                                                                                                                                
MR. MAJOROS believes that parity is cost-effective, not expensive,                                                              
and this is demonstrated by the actuarial study done by Ron Bachman                                                             
of Price Waterhouse Coopers.  He is the leading expert in the                                                                   
nation of actuarial studies on the impact of mental health parity.                                                              
Mr. Bachman estimates that the cost of implementing this                                                                        
legislation would average about $2.62 per person, per month.  That                                                              
is the equivalent of giving someone a 3.5 cent per hour raise.                                                                  
There is demonstrated evidence from other states with mental health                                                             
parity that the costs are not high in terms of the increases.  He                                                               
told the committee they will hear different information from                                                                    
different parties today, but the AMHB can quote many studies that                                                               
have indicated that the cost of implementing mental health parity                                                               
has been very small.  In many cases combined with managed care, the                                                             
costs of these services have gone down.  Mental health parity will                                                              
help give access to treatment earlier, and this will result in                                                                  
higher productivity and lower absenteeism for employees.  Early                                                                 
access will also prevent more serious and costly conditions from                                                                
developing.  It will prevent more people from being                                                                             
institutionalized and allow people to receive services in the                                                                   
community.                                                                                                                      
                                                                                                                                
MR. MAJOROS acknowledged that there will be some impact on small                                                                
businesses, although they don't see it as an enormous hardship; the                                                             
legislation does include an exemption for businesses with under 20                                                              
employees.                                                                                                                      
                                                                                                                                
MR. MAJOROS stated from the AMHB's perspective, they are not a big                                                              
fan of mandates, but they understand what a risk pool means, and                                                                
they understand that Alaska does not have a huge population.  In                                                                
order for the risk pool to be large enough to keep the costs down,                                                              
it is critical that these services be mandated.  If it is left as                                                               
a total voluntary situation, the risk pool will shrink because                                                                  
employers do not choose this coverage, and then the costs will                                                                  
skyrocket.  It is economics that brings them to this conclusion.                                                                
                                                                                                                                
MR. MAJOROS indicated they are estimating 115,000 plus or minus 10                                                              
percent as the size of the risk pool.  This is a soft number                                                                    
because there is no uniform data base.  They drew some information                                                              
from the Department of Labor, from other states and insurance                                                                   
companies, and Mr. Bachman also validated their estimates.  They                                                                
all come to the same conclusion of 115,000 people.  They would be                                                               
willing to look at other information if someone can provide it.                                                                 
                                                                                                                                
MR. MAJOROS summarized that the very technical issues involving                                                                 
mental health parity, size of the risk pool, mandates, and cost                                                                 
implications can be debated at the Labor and Commerce Committee.                                                                
He believes the important policy issue at the HESS committee is                                                                 
whether or not they should move towards equality and away from                                                                  
discrimination.  He urged the committee's support conceptually for                                                              
this legislation.                                                                                                               
                                                                                                                                
Number 1104                                                                                                                     
                                                                                                                                
CO-CHAIRMAN DYSON declared on the record that he has an obvious                                                                 
conflict of interest, in that his wife is a mental health provider.                                                             
She derives much of their income from insurance payments and                                                                    
copayments.  He has not been able to find anything in the code that                                                             
would allow him to excuse himself from the vote.  He requested that                                                             
he not be a part of any subcommittee that may come out of this.                                                                 
                                                                                                                                
Number 1041                                                                                                                     
                                                                                                                                
REPRESENTATIVE GREEN said they had been told there are some 44,000                                                              
mentally ill patients in the state, and that the risk pool, because                                                             
of exemptions, would be somewhere around 110,00 to 125,000.  That                                                               
seems to indicate that two out of those in the risk pool would be                                                               
paying for the third one.  Mr. Majoros indicated about $2 to $3 per                                                             
month and earlier Ms. Davidson said it would be between $30 and $79                                                             
per month, he wondered how they can address the cost of mental                                                                  
illness among what would then be some 80,000 people to pay for                                                                  
44,000 patient's treatments at only $79 or $2-$3 per month.                                                                     
                                                                                                                                
Number 0993                                                                                                                     
                                                                                                                                
MR. MAJOROS believes there is no contradiction there; he was giving                                                             
the average cost per month while Ms. Davidson was talking about the                                                             
cost per year.  Most of the 44,000 people now receive services                                                                  
through the public mental health system.  Part of the issue is that                                                             
the burden for providing mental health services lies almost                                                                     
exclusively on the public system.  They are trying to shift that                                                                
balance and put some of the responsibility within the private                                                                   
sector.                                                                                                                         
                                                                                                                                
REPRESENTATIVE GREEN asked about the majority of the 44,000 being                                                               
handled by the state who are probably on medication of some sort.                                                               
                                                                                                                                
MR. MAJOROS explained that figure includes some of those people                                                                 
would be receiving medication.  Mental illness is episodic; people                                                              
may be successfully existing with the community for a long period                                                               
of time, sometimes with or without the assistance of medication,                                                                
and then there may be the need for short-term hospitalization.  The                                                             
figure does not mean that 44,000 people are receiving mental health                                                             
services every day during that year.  It may mean at some time                                                                  
during that year that they would require some sort of mental health                                                             
service.                                                                                                                        
                                                                                                                                
REPRESENTATIVE GREEN asked for clarification on the denominator                                                                 
used to reach the figure of $35 to $70 per month for those in the                                                               
risk pool.  He also asked if it is then borne by the private sector                                                             
and what assurance do they have that it will not escalate quite                                                                 
rapidly.                                                                                                                        
                                                                                                                                
MR. MAJOROS mentioned there are two primary mechanisms on that.                                                                 
One is the issue of medical necessity which insurance companies use                                                             
as a standard by which they make decisions about whether a person                                                               
should receive service or not.  If someone comes and wants to                                                                   
receive relationship counseling, they are not going to get it under                                                             
this coverage.  That is one way costs would be controlled and                                                                   
monitored and have been successful in many other states.  The other                                                             
is the issue of managed care.  There are many methods insurance                                                                 
companies do use, including prior authorization and continued                                                                   
utilization to manage costs and benefits, to keep them from                                                                     
escalating.                                                                                                                     
                                                                                                                                
Number 0673                                                                                                                     
                                                                                                                                
REPRESENTATIVE GREEN asked why haven't some of the industry come                                                                
forward to offer mental health coverage if it is only going to cost                                                             
about $30 or $40 per year.                                                                                                      
                                                                                                                                
MR. MAJOROS commented that there have been incredible advances in                                                               
the fields of mental illness and substance abuse, and there are                                                                 
more successful treatment methodologies available today than there                                                              
were a few years ago.  Some of this is a new mind set; they are                                                                 
seeing treatment effectiveness that they didn't see 10 to 20 years                                                              
ago.  They also need to educate the insurance companies so they are                                                             
more aware of the effectiveness of preventive techniques and                                                                    
earlier interventions that can lower costs in the long run.                                                                     
                                                                                                                                
REPRESENTATIVE DAVIS responded that the perception of mental                                                                    
illness for a majority of Americans is "One Flew Over the Cuckoo's                                                              
Nest," and that it is handled in institutions.  A lot of other                                                                  
options haven't gotten a lot of consideration.                                                                                  
                                                                                                                                
MR. MAJOROS thanked Representative Davis for co-chairing the task                                                               
force and introducing the legislation.                                                                                          
                                                                                                                                
Number 0409                                                                                                                     
                                                                                                                                
GENE GRASTO, National Alliance for the Mentally Ill, Fairbanks,                                                                 
testified via teleconference from Fairbanks.  He stated that over                                                               
the course of a year, many millions of Americans, including many                                                                
Alaskans, experience severe mental illness.  Today most insurance                                                               
plans put restrictions on care for severe mental illness that                                                                   
include higher copayments, additional deductibles, stricter limits                                                              
on the length of hospital stays and the number of outpatient                                                                    
visits.  He believes that insurance companies are more concerned                                                                
about making money than mental health patients getting the care                                                                 
they need.  It reinforces the stigma when insurance companies                                                                   
discriminate against mental health patients and refuse to give them                                                             
equal coverage.  They don't take emotional pain or mental suffering                                                             
as seriously as physical pain.  When a person suffering from the                                                                
flu or a fever and is incoherent, they work to stabilize the                                                                    
patient, but a mentally ill patient who needs to be stabilized, is                                                              
thrown in jail.  It is the only illness he knows of that people get                                                             
thrown in jail for.                                                                                                             
                                                                                                                                
MR. GRASTO continued saying the constitution of the state of Alaska                                                             
in Article I says, "All persons are equal and entitled to equal                                                                 
rights, opportunities, and protection under the law."  Since                                                                    
insurance companies operate under the rules of state law, it is                                                                 
wrong to treat mentally ill people in a discriminatory way.  It is                                                              
time to fix it and make it right.  Please support mental health                                                                 
parity.                                                                                                                         
                                                                                                                                
JEANETTE GRASTO, President, National Alliance for the Mentally Ill,                                                             
Fairbanks, testified via teleconference from Fairbanks.  She stated                                                             
it is important to remember that severe mental illness is                                                                       
biological and can be diagnosed and treated as effectively as other                                                             
physical conditions.  The cost of treating mental illness is                                                                    
comparable to the costs of treating other medical conditions.  The                                                              
direct costs in 1990 for treating a person with diabetes was $7,725                                                             
compared with $7,158 for treating a person with schizophrenia.  She                                                             
researched insurance companies for her son, who suffers from                                                                    
bipolar disorder, after he was no longer covered under his father's                                                             
insurance and discovered that Blue Cross would not take him because                                                             
he had bipolar disorder.  He finally got insurance through his                                                                  
employer, but that plan did not cover mental health for the first                                                               
year of employment.  After the first year he will be given 50                                                                   
percent coverage.  A large portion of his wages have gone to                                                                    
medical costs including his deductible and copayments.  He is                                                                   
qualified to go on disability, but he doesn't want to; he wants to                                                              
work.  He needs adequate treatment, including his doctor visits and                                                             
his medication, to be able to work.  It is a Catch-22 situation.                                                                
She knows another young man with bipolar disorder who puts himself                                                              
in the hospital and gets medication, but when he is released, he                                                                
cannot afford the medication.  He goes without treatment and gets                                                               
worse.                                                                                                                          
                                                                                                                                
TAPE 99-34, SIDE A                                                                                                              
                                                                                                                                
Number 0047                                                                                                                     
                                                                                                                                
VICKI TURNER MALONE, Owner, Malone and Company, Inc., Independent                                                               
Insurance Agents, testified via teleconference from Bethel.  She                                                                
stated she has become an advocate for mental illness.  She shared                                                               
an article she read in the National Insurance Underwriter, a                                                                    
mainstream trade journal focusing on life and health issues.  In                                                                
this article they were advocating parity in mental health.  Their                                                               
logic was that mental illness left untreated becomes severe and                                                                 
chronic; it was much more effective to treat it earlier than later.                                                             
They don't blatantly mention cost-effectiveness, but obviously,                                                                 
they have competent actuarial people helping them develop this                                                                  
position.  She pointed out that if mainstream insurance industry is                                                             
supporting parity in mental illness, then it is certainly time for                                                              
Alaska to do it.  She faxed the article to the committee.                                                                       
                                                                                                                                
Number 0198                                                                                                                     
                                                                                                                                
NANCY CAUGHELL, Parents Incorporated., testified via teleconference                                                             
from Anchorage.  She pointed out that most insurance covers mental                                                              
health at a lower rate than physical health.  Families are unable                                                               
to get their mental health issues covered; this causes a great                                                                  
financial burden and conditions go untreated.  These conditions can                                                             
be treated, and family health and well-being can be restored if                                                                 
more coverage were provided.  Treatments are stopped because                                                                    
families cannot afford to continue, or they reach the maximum                                                                   
amount of mental health coverage.  Parents Incorporated believes                                                                
that the whole person needs to be treated.  A family's mental                                                                   
health is the key to happiness and a productive life.                                                                           
                                                                                                                                
Number 0333                                                                                                                     
                                                                                                                                
SCOT WHEAT, National Alliance for the Mentally Ill, testified via                                                               
teleconference from Homer.  He is a public member on the Alaska                                                                 
Psychiatric Institute board so he is very aware of the issues                                                                   
surrounding hospitalization and utilization and community support                                                               
or the lack thereof.  He is a mental health consumer with an Access                                                             
I diagnosis.  In his experience, it is the untreated mental illness                                                             
that is expensive.  There are drugs available within the past five                                                              
years that have allowed people to go back to work, at least part-                                                               
time.  He believes it is necessary to keep people involved in the                                                               
work force.  He has only been able to get help in the last few                                                                  
years, out of 45 years, that has been effective.  In the first six                                                              
years of his involvement with the state's Medicaid program, there                                                               
was a bill for $193,000; it was paid at $143,000 for his various                                                                
medical treatments.  He believes most of this would have been                                                                   
unnecessary, including three hospitalizations, if he had been                                                                   
getting treatment and medication through the years .  He concluded                                                              
that untreated mental illness is the problem; mental health                                                                     
treatment is very cost effective.                                                                                               
                                                                                                                                
Number 0527                                                                                                                     
                                                                                                                                
REPRESENTATIVE DAVIS asked Mr. Wheat how old he was when he was                                                                 
initially diagnosed.                                                                                                            
                                                                                                                                
MR. WHEAT answered that the first real diagnosis was in 1985 when                                                               
he was 31.                                                                                                                      
                                                                                                                                
Number 0562                                                                                                                     
                                                                                                                                
ELIZABETH LaCROSSE, Vice President, National Alliance for the                                                                   
Mentally Ill, Alaska; Member, Alaska Mental Health Board; Member,                                                               
Governor's Committee on Employment and Rehabilitation of People                                                                 
With Disabilities, testified via teleconference from Ketchikan.                                                                 
She has a psychiatric disability and has good and bad experiences                                                               
with the mental health system in Alaska.  She has been receiving                                                                
services from Medicaid since 1992, including mental health                                                                      
services.  It is through these services that she is able to                                                                     
function at a higher level of awareness since the onset of her                                                                  
illness.  Prior to that she was in debt for her medical care                                                                    
including psychiatric prescription medication.  She worked two jobs                                                             
at the time, yet received no health insurance benefits for her                                                                  
mental illness.  Once her bills were too large, her providers began                                                             
demanding payment up-front for mental health services.  She often                                                               
had to borrow money for her medication and went without food.  Had                                                              
she been eligible for mental health services through her                                                                        
employment, she may have been able to recover faster.  She urged                                                                
the committee to support HB 149 to make sure every Alaskan has                                                                  
equal opportunity to health insurance benefits, regardless whether                                                              
it is a physical or mental disorder.                                                                                            
                                                                                                                                
Number 0703                                                                                                                     
                                                                                                                                
JEFF JESSEE, Executive Director, Alaska Mental Health Trust                                                                     
Authority Board of Trustees, testified via teleconference from                                                                  
Anchorage.  He expressed the support of the trustees for HB 149.                                                                
They believe it is a positive step forward in providing a continuum                                                             
of services and funding mechanisms for mental health services for                                                               
all Alaskans.  In response to the question "Why aren't the                                                                      
insurance companies coming forward with support," he believes it is                                                             
because there still is a misunderstanding about mental health                                                                   
issues.                                                                                                                         
                                                                                                                                
MR. JESSEE pointed out that many mental illnesses are, in fact,                                                                 
brain chemistry disorders; they are physical.  The manifestations                                                               
of those physical difficulties in behavior and thought processes,                                                               
historically, have been very scary to people, particularly when                                                                 
there wasn't medications and treatments to help improve situations.                                                             
If businesses and insurance companies were coming forward today and                                                             
saying, "We no longer want to cover diabetes," or "AIDS is                                                                      
expensive, and we don't want to cover that under health policy," he                                                             
believes the legislature would be justly concerned about the cost                                                               
shifting that would occur as the insurance industry pulled back out                                                             
of covering some of those health conditions.  The difference is                                                                 
mental health hasn't been covered in the past.  There should be no                                                              
distinction.  It is imperative that the state incorporate this                                                                  
funding mechanism as a part of the public/private partnership to                                                                
provide care to all Alaskans; the trustees support this                                                                         
legislation.                                                                                                                    
                                                                                                                                
Number 0857                                                                                                                     
                                                                                                                                
REPRESENTATIVE GREEN asked Mr. Jessee if he knew what the cost                                                                  
would be statewide for those that would qualify for services.                                                                   
                                                                                                                                
MR. JESSEE suggested that he ask the people who were on the task                                                                
force to answer that.                                                                                                           
                                                                                                                                
Number 0906                                                                                                                     
                                                                                                                                
ROBYN HENRY, Executive Director, National Alliance for the Mentally                                                             
Ill, Alaska, testified via teleconference from Anchorage.  She has                                                              
the privilege of working daily with a group of very courageous                                                                  
people.  A group of people who, through no fault of their own,                                                                  
struggle daily with the devastating affects of the debilitating and                                                             
biologically based diseases that fall under the category of mental                                                              
illness.  It is a group of people who, far too often, are first and                                                             
foremost seen as their illness, and not as the valuable individuals                                                             
and the contributions that they can make as individuals.  They have                                                             
a great deal to contribute to society.  Far too often these                                                                     
contributions are not able to be made, not because of lack of                                                                   
talent or ability, but because of lack of accessibility to                                                                      
effective treatment that can help open the door for peace of mind                                                               
and pave the way for creativity, entrepreneurship and self-                                                                     
actualization.                                                                                                                  
                                                                                                                                
MS. HENRY indicated that the committee had all the data and                                                                     
information, and she urged the legislators to see this as an issue                                                              
to be rectified.  It may be a leap of faith, but with the                                                                       
information they have, it is not a large leap of faith.  Many                                                                   
states have made the decision to end discrimination with less                                                                   
information, and she urged them to support the legislation.                                                                     
                                                                                                                                
JOHN GEORGE, Lobbyist for American Council of Life Insurance, came                                                              
forward to testify.  He commented that they have heard some                                                                     
interesting testimony today and many of the things he concurred                                                                 
with.  The problem the insurance industry has is that health                                                                    
insurance is not mandatory.  Employers can go under a self-insured                                                              
program under ERISA, and they wouldn't be subject to these                                                                      
requirements.  He described three choices:                                                                                      
                                                                                                                                
     You can buy insurance with a number of mandated                                                                            
     coverages; you can become self-insured, partially, and                                                                     
     not have to meet the mandates, that's cheaper; or you can                                                                  
     not provide insurance to your employees at all, and                                                                        
     that's certainly cheaper.  So, trying to compete with                                                                      
     self-insurance and no insurance at all, you've got one                                                                     
     faction that you're saying 'We're going to increase the                                                                    
     cost for and make your product much less attractive than                                                                   
     the others.'                                                                                                               
                                                                                                                                
     We heard someone way that they can't work because they                                                                     
     can't afford their medication so they need a job so they                                                                   
     be covered by insurance to afford the medications.  Well,                                                                  
     by definition then, you're assuming that that's going to                                                                   
     be an insured program, not a self-insured program, and                                                                     
     that the insurance company is going to pay.  But I'll                                                                      
     tell you, these are not unfunded mandates.  These are                                                                      
     funded mandates.  Insurance companies are in business to                                                                   
     make a profit.  Someone said "The insurance companies                                                                      
     have more interest in making a profit than taking care of                                                                  
     people's mental illness.  Well, I guess that's true                                                                        
     because they are a profit-making organization, and the                                                                     
     way they do that is by charging a premium to the policy                                                                    
     holders.  If you mandate a coverage, that means if it                                                                      
     costs more, they pass that on to their customers.  The                                                                     
     small employers in the state who then have to make a                                                                       
     decision:  'Do I pay the extra money, or do we become                                                                      
     uninsured.' So you may actually find that fewer people                                                                     
     will be covered by insurance if you increase the costs                                                                     
     incrementally.                                                                                                             
                                                                                                                                
     You heard ... several people testify that by actually                                                                      
     providing this mandated coverage, the overall cost of                                                                      
     insurance should go down because people won't have other                                                                   
     physical ailments or whatever.  If in fact that's true,                                                                    
     the insurance companies would, I believe, have already                                                                     
     subscribed to this, and I think this group needs to do a                                                                   
     better job of selling the insurance industry on the fact                                                                   
     that that is true, rather than coming in through the                                                                       
     legislature and mandating the coverage.                                                                                    
                                                                                                                                
     In my former life as the director of insurance, I used to                                                                  
     hear a lot of complaints about health insurance is too                                                                     
     expensive.  We can't afford health insurance.  But in                                                                      
     fact, every time you turn around there's someone                                                                           
     mandating a coverage and you look at the list of                                                                           
     mandates:  chiropractors, nurse-midwives, advanced                                                                         
     practitioners, naturopaths, physical therapists,                                                                           
     occupational therapists, marital and family therapists,                                                                    
     clinical social workers, the list goes on, those are all                                                                   
     increments that have to be added to insurance that small                                                                   
     employers have to pay and they have to decide whether or                                                                   
     not to buy insurance if they only have, say, $200 a month                                                                  
     per employee to contribute to insurance, and the least                                                                     
     expensive insurance is $250 because of these mandated                                                                      
     coverages, they become uninsured employees rather than                                                                     
     insured employees.                                                                                                         
                                                                                                                                
     Really, insurance companies are trying to provide an                                                                       
     affordable product, and by doing so, they can be                                                                           
     competitive with self-insurance, and hopefully the moral                                                                   
     aspects of providing insurance for employees ... is on                                                                     
     their side, and if they can keep the product relatively                                                                    
     affordable they will sell that product.                                                                                    
                                                                                                                                
     I often heard also that small employers compete with                                                                       
     government and with large employers for employees.  Your                                                                   
     small employer in Juneau, for instance, and you want to                                                                    
     hire a clerk typist for your small business.  You go over                                                                  
     and get the state pay scale, and that's pretty much what                                                                   
     you have to pay because that's the option the employee                                                                     
     has.  ...You're paying the same, but they have better                                                                      
     benefits.  Well, now as a small employer, I have to                                                                        
     provide more benefits as well.  So ... people have to                                                                      
     compete in a small business with major employers for                                                                       
     employees and the employee benefits to health insurance                                                                    
     is certainly one aspect they have to compete on.                                                                           
     Government and self-insured major employers are not                                                                        
     required to provide this benefit.  So you're really                                                                        
     loading against the small employer who has to provide                                                                      
     insurance to compete, and now they have to provide                                                                         
     benefits greater than the other major entities have to                                                                     
     provide.                                                                                                                   
                                                                                                                                
Number 1400                                                                                                                     
                                                                                                                                
CO-CHAIRMAN DYSON indicated that they have gotten charts from                                                                   
California that show for every increment going up in the cost of                                                                
health insurance, a group of folks opt out of the pool.  He asked                                                               
Mr. George if there is anyone in the industry here who can advise                                                               
what that ratio of price participation would be like in Alaska.                                                                 
                                                                                                                                
MR. GEORGE said he could not tell them that today, but he could see                                                             
if he could find it.  Alaska is unique in that there are so many                                                                
people covered under government systems and others.  It could well                                                              
be different than other states.  He can try to find the answer.                                                                 
                                                                                                                                
CO-CHAIRMAN DYSON asked Mr. George how many people now have health                                                              
insurance but don't have mental health parity.  He commented that                                                               
is an important piece of information for the committee and asked                                                                
Mr. George to try to get that for them.                                                                                         
                                                                                                                                
MR. GEORGE said he will certainly try to get that information.                                                                  
                                                                                                                                
REPRESENTATIVE BRICE asked Mr. George when he had been director of                                                              
insurance.                                                                                                                      
                                                                                                                                
MR. GEORGE replied that he left in 1988.                                                                                        
                                                                                                                                
Number 1497                                                                                                                     
                                                                                                                                
REPRESENTATIVE BRICE noted that it was right around the time the                                                                
legislature passed mandated mammography.  He asked Mr. George if                                                                
there was a noticeable drop in health insurance coverage for                                                                    
employees when the legislature mandated mammography and substance                                                               
abuse parity.                                                                                                                   
                                                                                                                                
MR. GEORGE said he didn't have the answer, but he could try and get                                                             
an answer.                                                                                                                      
                                                                                                                                
REPRESENTATIVE BRICE commented that would be interesting                                                                        
information to have.                                                                                                            
                                                                                                                                
Number 1614                                                                                                                     
                                                                                                                                
DON DAPCEVICH, Executive Director, Governor's Advisory Board on                                                                 
Alcoholism and Drug Abuse, came forward to testify in support of HB                                                             
149.  A year and a half ago the advisory board did a key informant                                                              
survey around the state of Alaska.  One of the results of that                                                                  
survey was nine out of ten Alaskans felt that alcoholism was the                                                                
number one health problem in this state.  To significantly alter                                                                
the way they administer one health problem over other health                                                                    
problems seems to be irresponsible.  He agreed there is cost                                                                    
involved in parity for substance abuse and mental health services,                                                              
however, the savings received will far outweigh those costs.                                                                    
Recent studies have been done in California that indicate there is                                                              
a seven for one return for every one dollar that is spent on                                                                    
substance abuse treatment; society recoups seven dollars in savings                                                             
in other areas.                                                                                                                 
                                                                                                                                
MR. DAPCEVICH believes that insurers don't opt to buy insurance on                                                              
their own because the risk pool is so small.  If there were a                                                                   
mandate, the risk pool is larger and the costs go down.  Most                                                                   
states' experience has been that the cost does not go up that high;                                                             
less than $3 per month per person is the cost other states have                                                                 
experienced.  Some have found there are appreciable savings.  He                                                                
believes that as the state moves from the public dole to individual                                                             
responsibility, they will accrue some savings if they pass this                                                                 
legislation.  He urged the committee to give it serious                                                                         
consideration.                                                                                                                  
                                                                                                                                
REPRESENTATIVE GREEN asked Mr. Dapcevich if he knew what a                                                                      
reasonable size of the risk pool would be.                                                                                      
                                                                                                                                
MR. DAPCEVICH answered he was not part of the task force or the                                                                 
actuarial studies that were done, but it appears that it is less                                                                
than $3 per person, per month with a pool of 110,000, so they would                                                             
be over that threshold.                                                                                                         
                                                                                                                                
GORDAN EVANS, Lobbyist for Health Insurance Association of America                                                              
(HIAA), came forward to testify.  He agreed with the comments made                                                              
by Mr. George and told the committee they have his written                                                                      
statement and the HIAA's statement in the task force report.  They                                                              
have sent the committee lengthy facts of some statistical                                                                       
information.  He pointed out by mandating this type of legislation                                                              
in Alaska, they are really getting to the smaller employers.  The                                                               
state government isn't covered by mandates, although they have on                                                               
some occasions voluntarily followed mandates.  The Municipality of                                                              
Anchorage, Carr's supermarkets, British Petroleum Company and Exxon                                                             
Company are not covered.  They are getting down to the smaller                                                                  
employers.                                                                                                                      
                                                                                                                                
MR. EVANS noted that this bill differentiates between what is a                                                                 
small employer and what the small employer group health insurance                                                               
bill calls for.  That says a small employer is one who employs 2 to                                                             
50 employees.  Most of the federal legislation is based on that                                                                 
level, 50 people or less.  This bill says under 20, which means 19                                                              
or less.  He believes they have to get some equality out of this,                                                               
but also any time they start mandating coverages, employers do drop                                                             
coverage.  It is cheaper for them to raise their employees' wages                                                               
by $10 per month than to continue to pay for health insurance; so                                                               
then there are more people uninsured.  A pool of 115,000 is not a                                                               
very good-sized pool when they are looking at coverage like this.                                                               
He offered to get some of the same information they asked from Mr.                                                              
George, but he is not too confident that they can come up with                                                                  
precise information, but they will see what they can do.                                                                        
                                                                                                                                
Number 1887                                                                                                                     
                                                                                                                                
PAMELA LaBOLLE, President, Alaska State Chamber of Commerce, came                                                               
forward to testify.  She handed out a sheet that shows the                                                                      
difference between the Federal Mental Health Parity Act (MHPA) and                                                              
the provisions called for in HB 149.  Most of the larger employers                                                              
within Alaska would be exempt; they are really targeting the small                                                              
business people.  She has heard from several small employers who                                                                
have said this would be the difference of them offering any health                                                              
insurance; they couldn't afford it.  Many have said the costs have                                                              
been continually rising for what they offer now.  It is imperative                                                              
for them to offer some benefits, if they are to compete with the                                                                
state and local governments who offer very good benefits.  The                                                                  
state and local governments are exempt under this law.  Because of                                                              
the generous benefit package they already offer, the problem of                                                                 
mandating coverage puts a hidden tax on employers.  It is taking a                                                              
public problem and transferring it to small businesses.  It is an                                                               
unfunded mandate, and they are against unfunded mandates.  The                                                                  
state has continually complained to the federal government about                                                                
the unfunded mandates that are passed down to the state.  Only now                                                              
the state is passing them down to small business.  Yes, the savings                                                             
would be to the state but at the cost of the employers.                                                                         
                                                                                                                                
MS. LaBOLLE indicated that it also forces employees who pay part of                                                             
their health insurance, pay for something they may not want.  They                                                              
are very sorry that there are people who need mental health care                                                                
coverage.  There are people who need dental or vision coverage, but                                                             
in general medical policies those things aren't covered; it is an                                                               
option of the employer to buy them as another benefit.  These are                                                               
market-place driven options, and they oppose the mandate aspect of                                                              
this.  If mental health care coverage is offered as it is in the                                                                
federal law, then it should be at a level of parity with the                                                                    
medical coverage that is offered.  That is not a problem, but to                                                                
force them to offer, pay for it and pick up the costs that society                                                              
now picks up, is not acceptable.  Furthermore, the people who no                                                                
longer are covered because the small employers have to drop their                                                               
insurance, their catastrophic illnesses are going to fall to the                                                                
state, or they will fall to the rest of the consumers who because                                                               
the hospitals and health care providers will pick it up and pass it                                                             
on to the consumers.  There is no such thing as a free program.                                                                 
                                                                                                                                
Number 2095                                                                                                                     
                                                                                                                                
CO-CHAIRMAN DYSON asked Ms. LaBolle if she has a mechanism to find                                                              
out how many people have health insurance that doesn't cover mental                                                             
illness.                                                                                                                        
                                                                                                                                
MS. LaBOLLE answered only through a survey of her membership, which                                                             
would be doable but time consuming.                                                                                             
                                                                                                                                
CO-CHAIRMAN DYSON believes this bill will not get through this year                                                             
and it sunsets in 2001.  If she does a survey for other reasons in                                                              
the next few months, he asked her if she could get them some                                                                    
information.                                                                                                                    
                                                                                                                                
MS. LaBOLLE said she would consider that.                                                                                       
                                                                                                                                
REPRESENTATIVE GREEN asked how many small employers might be either                                                             
factually or perceptually wanting to drop their health insurance                                                                
coverage.                                                                                                                       
                                                                                                                                
MS. LaBOLLE indicated that the most common response she has had                                                                 
from her members is that they would drop it.                                                                                    
                                                                                                                                
Number 2175                                                                                                                     
                                                                                                                                
CO-CHAIRMAN COGHILL said it might be more helpful to know if a                                                                  
business were to drop coverage, how many employees it has, whether                                                              
is has under 20 or under 50 because this law is asking them to draw                                                             
a line there, and then the pool changes.  Because of that, there                                                                
might be added pressure for people to opt out.                                                                                  
                                                                                                                                
MS. LaBOLLE concluded that decisions about what types of health                                                                 
care to offer, if it is mandated, becomes based on the preferences                                                              
of politics and interest groups, rather than on the needs and                                                                   
desires of small business owners and their employees.  They oppose                                                              
mandating of this.                                                                                                              
                                                                                                                                
CO-CHAIRMAN COGHILL said there is a philosophical difference on the                                                             
mandate, and even mental health people recognize the problem of a                                                               
mandate.  He will offer some information to the state on how they                                                               
can encourage insurance companies to draw them into insurance,                                                                  
rather than mandate them into insurance.  There may be ways that                                                                
the state and the mental health trust might be able to induce                                                                   
insurance companies to facilitate that.  He believes the                                                                        
subcommittee should look at that area.                                                                                          
                                                                                                                                
MS. LaBOLLE stated that it is a matter of cost.  Employers would                                                                
like to offer mental health care coverage if it is affordable, and                                                              
she is sure if they offered it, they would like it to be at a level                                                             
of parity.                                                                                                                      
                                                                                                                                
CO-CHAIRMAN COGHILL understands that there are people out there in                                                              
need.  The policy makers don't want to slight them because of                                                                   
economics, but at the same time, they could inadvertently do that                                                               
by mandating something that would have an adverse affect.  It is                                                                
worthy of study.                                                                                                                
                                                                                                                                
TAPE 99-34, SIDE B                                                                                                              
                                                                                                                                
Number 2322                                                                                                                     
                                                                                                                                
REPRESENTATIVE GREEN asked if the subcommittee could find out the                                                               
sliding scale to see how much more it costs the small employer than                                                             
large employer.                                                                                                                 
                                                                                                                                
Number 2283                                                                                                                     
                                                                                                                                
PAT CLASBY, Alaska State Hospital and Nursing Home Association,                                                                 
came forward to testify in support of mental health parity as                                                                   
designed in HB 149.  The Association has followed this along and                                                                
participated in the task force meetings providing information.                                                                  
This is a complex and difficult issue and impacts all of their                                                                  
health care facilities in Alaska.  She agreed there will be a cost                                                              
to individuals who have the opportunity under a mandated health                                                                 
insurance policy that allows them to buy into adequate mental                                                                   
health insurance.  Part of it will be borne by the employees that                                                               
is passed on by the employers, and part of it will be borne by the                                                              
employers.  It will also cost the state, the health care                                                                        
facilities, and the  communities that end up supporting health care                                                             
facilities.                                                                                                                     
                                                                                                                                
MS. CLASBY went on to say when there isn't adequate insurance for                                                               
some of the primary social problems in Alaska, whether it is                                                                    
alcohol, drug abuse, mental illness, sexual abuse, the                                                                          
victimization, and the resulting emotional problems those Alaskans                                                              
feel throughout their lives, they all experience them.  She agreed                                                              
that there are unanswered questions.  She sat through the testimony                                                             
of the national expert that did the actuarial studies, and she                                                                  
learned a great deal.  She hopes that he speaks not only to the                                                                 
subcommittee, but to all of the HES Committee members the Labor and                                                             
Commerce Committee members, so that they fully understand.                                                                      
                                                                                                                                
MS. CLASBY noted that Mr. Bachman indicated that the risk pool has                                                              
to be approximately 100,000, or if it goes below that, the cost to                                                              
the individuals that opt in to it becomes much higher because then                                                              
they are self-selecting.  They take it because they know they have                                                              
a problem and will need it.  The whole point of insurance is                                                                    
spreading the risk so that everyone who goes in will have the                                                                   
benefit at the time of need.                                                                                                    
                                                                                                                                
MS. CLASBY told the committee that they support HB 149 and will                                                                 
work with the subcommittee.  She has some data from several years                                                               
ago from their facilities that showed that the mental health                                                                    
admissions in the state were a much higher percentage charged to                                                                
the public health sector than to the private sector versus the                                                                  
other physical illnesses.  She will provide that information to the                                                             
committee.                                                                                                                      
                                                                                                                                
Number 2130                                                                                                                     
                                                                                                                                
PATRICIA ARNOLD testified via teleconference from Homer.  She was                                                               
formerly married to a small employer and knows the difficulty of                                                                
providing insurance for a small business.  Since then she has                                                                   
separated and has used mental health services that are covered by                                                               
Medicaid.  It is a two-edged sword in terms of her own life                                                                     
experience.  (indisc--simult. speech).                                                                                          
                                                                                                                                
The Committee took an at-ease from 12:41 p.m. to 12:42 p.m.                                                                     
                                                                                                                                
CO-CHAIRMAN DYSON asked if there is an immediate time crisis on                                                                 
this bill.  They want to have the best and right thing in place                                                                 
before the 2001 date.                                                                                                           
                                                                                                                                
REPRESENTATIVE DAVIS agreed the task force understands the                                                                      
difficulty of informing different committees and the public of the                                                              
issue.  Because of the complexity of the issue and the numbers                                                                  
crunching they are looking for, probably a subcommittee is the                                                                  
place to do it.                                                                                                                 
                                                                                                                                
Number 2008                                                                                                                     
                                                                                                                                
MR. MAJOROS offered that the AMHB would be happy to work with the                                                               
subcommittee.  He noted the task force did deal with many of these                                                              
issues through a lengthy six-month process, and they used all the                                                               
available data they were aware of to address the issues that came                                                               
forward.  He is somewhat concerned about reinventing the wheel.                                                                 
Another concern is that the issues of cost and business analysis                                                                
will be debated and addressed in the Labor and Commerce Committee,                                                              
so he is concerned about having multiple debates on that issue.  He                                                             
suggested that perhaps this subcommittee may not be the appropriate                                                             
venue to debate some of those business issues.  He suggested that                                                               
the subcommittee deal with the policy issues and perhaps save some                                                              
of the business issues for debate at the Labor and Commerce                                                                     
Committee.                                                                                                                      
                                                                                                                                
CO-CHAIRMAN DYSON understood the 2001 date as where they start                                                                  
running into people being harmed.                                                                                               
                                                                                                                                
MR. MAJOROS believes that the date 2001 is the sunset date under                                                                
federal legislation.  He is not sure if there is an exact                                                                       
correlation between that process and this process.                                                                              
                                                                                                                                
CO-CHAIRMAN DYSON stated that he doesn't intend that their lack of                                                              
action today would make things worse for people.  One question he                                                               
does have is should they have started with covering everything in                                                               
DSM-IV, or should they start with a more incremental approach.                                                                  
                                                                                                                                
CO-CHAIRMAN COGHILL appointed Representatives Brice, Whitaker and                                                               
Morgan to serve on the subcommittee to deal with this insurance                                                                 
issue. He noted that the information will be collected for the                                                                  
subcommittee, and he intends to be active in reviewing what is                                                                  
going on in the subcommittee.  The policy issue is part of the                                                                  
question of getting the answer so they can make a worthwhile                                                                    
policy.  He is not comfortable in mandating it without exploring                                                                
some of these questions.  [HB 149 was held over and assigned to a                                                               
subcommittee.]                                                                                                                  
                                                                                                                                
The Committee took an at-ease from 12:47 p.m. to 12:48 p.m.                                                                     
                                                                                                                                
HB 142 - EDUCATION CREDIT FOR FISHERY TAXES                                                                                     
                                                                                                                                
Number 1830                                                                                                                     
                                                                                                                                
CO-CHAIRMAN COGHILL announced the next order of business as House                                                               
Bill No. 142, "An Act relating to the education credit for the                                                                  
fisheries business tax and the fisheries resource landing tax; and                                                              
providing for an effective date."  He passed the gavel back to Co-                                                              
Chairman Dyson.                                                                                                                 
                                                                                                                                
Number 1824                                                                                                                     
                                                                                                                                
REPRESENTATIVE GARY DAVIS, sponsor, told the committee that HB 142                                                              
is housekeeping legislation.  Currently there is legislation                                                                    
allowing tax credits for certain fisheries businesses to make                                                                   
donations and get credit for the donations.  It allows donations to                                                             
Alaska two-year and four-year colleges accredited by a regional                                                                 
accrediting association.  Most of those business that are allowed                                                               
the tax credit relate to vocational professions.  The Alaska                                                                    
Vocational Technical Center (AVTEC) in Seward does not fall under                                                               
the current legislation, but this legislation makes AVTEC eligible                                                              
for some of those donations.  They have been forced to turn down                                                                
over $100,000 worth of donations because they don't fall under                                                                  
current legislation.  They are accredited by a national                                                                         
accreditation association, and the current legislation addresses                                                                
regional accreditation.                                                                                                         
                                                                                                                                
REPRESENTATIVE GREEN asked if $100,000 is donated, do the                                                                       
institutions reduce their budget requests for general fund dollars                                                              
for the amount of the contribution.                                                                                             
                                                                                                                                
REPRESENTATIVE DAVIS explained, with his experience on the Finance                                                              
Committee as they review individual budgets, that they are aware of                                                             
donations and dollars institutions have received.  Even if they                                                                 
know there is an opportunity of some of the donations coming in,                                                                
they eyeball the general fund dollars and replace them with the                                                                 
donated dollars if they are there.  They do have that flexibility                                                               
but Representative Green is correct, in that without keeping a keen                                                             
eye on some of these transactions, there could be some impacts to                                                               
the revenue.                                                                                                                    
                                                                                                                                
REPRESENTATIVE GREEN asked if they do watch that.                                                                               
                                                                                                                                
REPRESENTATIVE DAVIS replied yes they do.                                                                                       
                                                                                                                                
REPRESENTATIVE DAVIS offered an amendment to tighten up the wording                                                             
which the Department of Education wanted.                                                                                       
                                                                                                                                
CO-CHAIRMAN DYSON asked if Representative Davis preferred a sponsor                                                             
substitute or committee substitute.                                                                                             
                                                                                                                                
REPRESENTATIVE DAVIS answered that an amended version of the                                                                    
legislation would be fine.                                                                                                      
                                                                                                                                
Number 1608                                                                                                                     
                                                                                                                                
DEBORAH VOGT, Deputy Commissioner, Department of Revenue, came                                                                  
forward to answer any tax questions.  The taxpayer can deduct 50                                                                
percent of the amount he donates up to $100,000 and then 100                                                                    
percent of the next $100,000.  At least for the first $100,000,                                                                 
they might replace the donation with general funds, but there is an                                                             
extra $50,000 that comes into the educational institution that they                                                             
can't look at as general fund monies.  It does bring some extra                                                                 
money in even if they balance out the budget dollar for dollar from                                                             
the donations.                                                                                                                  
                                                                                                                                
CO-CHAIRMAN DYSON suggested they stick with the educational issues.                                                             
                                                                                                                                
Number 1526                                                                                                                     
                                                                                                                                
DIANE BARRANS, Executive Director, Postsecondary Education                                                                      
Commission, Department of Education, informed the committee that                                                                
she had suggested the amendment.  It is to insure that the                                                                      
institutions, in the future that may fall under this provision, are                                                             
actually accredited by a recognized accrediting association rather                                                              
than simply some peer group that forms an association, calls itself                                                             
an accrediting body, and issues certificates.                                                                                   
                                                                                                                                
CO-CHAIRMAN DYSON asked who wins under this legislation.                                                                        
                                                                                                                                
MS. BARRANS clarified that the only institution that would be added                                                             
would be AVTEC.  Currently, the University of Alaska, Sheldon                                                                   
Jackson College and Alaska Pacific University benefit.  If in the                                                               
future, the Alaska Technical Center in Kotzebue became nationally                                                               
accredited, then it too might benefit from this.                                                                                
                                                                                                                                
Number 1423                                                                                                                     
                                                                                                                                
REPRESENTATIVE Green made a motion to adopt Amendment 1, which                                                                  
read:                                                                                                                           
                                                                                                                                
     Page 1, line 10, following "association":                                                                                  
          Insert "that is recognized by the Council for Higher                                                                  
          Education Accreditation"                                                                                              
                                                                                                                                
     Page 2, line 12, following "association":                                                                                  
          Insert "that is recognized by the Council for Higher                                                                  
          Education Accreditation"                                                                                              
                                                                                                                                
CO-CHAIRMAN DYSON asked whether there was any objection.  There                                                                 
being none, Amendment 1 was adopted.                                                                                            
                                                                                                                                
Number 1404                                                                                                                     
                                                                                                                                
REPRESENTATIVE WHITAKER made a motion to move HB 142, as amended,                                                               
from the committee with individual recommendations and zero fiscal                                                              
note.  There being no objection, CSHB 142(HES) moved from the House                                                             
Health, Education and Social Services Standing Committee.                                                                       
                                                                                                                                
REPRESENTATIVE GREEN asked why HB 142 has a Finance Committee                                                                   
referral with a zero fiscal note.                                                                                               
                                                                                                                                
MS. VOGT answered that it has a revenue impact; it doesn't have an                                                              
operating cost.                                                                                                                 
                                                                                                                                
HJR 6 - CONST. AM: EDUCATION FUNDING                                                                                            
                                                                                                                                
Number 1356                                                                                                                     
                                                                                                                                
CO-CHAIRMAN DYSON announced the next order of business as House                                                                 
Joint Resolution No. 6, Proposing amendments to the Constitution of                                                             
the State of Alaska relating to state aid for education.                                                                        
                                                                                                                                
CO-CHAIRMAN COGHILL made a motion to move HJR 6 from the committee                                                              
with individual recommendations and zero fiscal note.  There being                                                              
no objection, HJR 6 moved from the House Health, Education and                                                                  
Social Services Standing Committee.                                                                                             
                                                                                                                                
ADJOURNMENT                                                                                                                     
                                                                                                                                
Number 1315                                                                                                                     
                                                                                                                                
There being no further business before the committee, the House                                                                 
Health, Education and Social Services Committee meeting was                                                                     
adjourned at 1:00 p.m.                                                                                                          

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