Legislature(1993 - 1994)
03/24/1993 03:00 PM House HES
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE HEALTH, EDUCATION AND SOCIAL SERVICES
STANDING COMMITTEE
March 24, 1993
3:00 p.m.
MEMBERS PRESENT
Rep. Cynthia Toohey, Co-Chair
Rep. Con Bunde, Co-Chair
Rep. Gary Davis, Vice Chair
Rep. Al Vezey
Rep. Harley Olberg
Rep. Bettye Davis
Rep. Irene Nicholia
Rep. Tom Brice, arrived later
MEMBERS ABSENT
Rep. Pete Kott
COMMITTEE CALENDAR
*HB 217: "An Act relating to Native corporation dividends
and other distributions due to minors in state
custody."
PASSED WITH INDIVIDUAL RECOMMENDATIONS
*HB 12: "An Act relating to health insurance for small
employers; and providing for an effective date."
PASSED WITH INDIVIDUAL RECOMMENDATIONS
*HB 105: "An Act providing for incarceration for
nonviolent, youthful first offenders in boot camps
operated by the Department of Corrections;
creating the Boot Camp Advisory Board in the
Department of Corrections; amending Alaska Rule of
Criminal Procedure 35; and providing for an
effective date."
HEARD AND HELD
*HB 195: "An Act authorizing youth courts by which to
provide for peer adjudication of minors who have
allegedly committed violations of state or
municipal laws, renaming the community legal
assistance grant fund and amending the purposes
for which grants may be made from that fund in
order to provide financial assistance for
organizations and initial operation of youth
courts, and relating to young adult advisory
panels in the superior court."
NOT HEARD - POSTPONED TO TIME CERTAIN
*HB 22: "An Act establishing the Alaska Children's Health
Corporation and the Alaska Healthy Start Program;
relating to insurance; and providing for an
effective date."
NOT HEARD - POSTPONED TO TIME CERTAIN
(* First public hearing.)
WITNESS REGISTER
RENA BUKOVICH
Aide to Rep. Eileen MacLean
Alaska State Legislature
Room 507 Capitol Building
Juneau, Alaska 99801-1182
Phone: (907) 465-672
Position Statement: Testified in favor of HB 217
RANDALL HINES
Division of Family and Youth Services
Department of Health and Social Services
P.O. Box 110630
Juneau, Alaska 99811-0630
Phone: (907) 465-3187
Position Statement: Testified in favor of HB 217
LARRY CARROLL
Senior Securities Examiner
Division of Banking, Securities and Corporations
Department of Commerce and Economic Development
P.O. Box 110808
Juneau, Alaska 99811-0808
Phone: (907) 465-2521
Position Statement: Answered questions on HB 217
ELLA BENNETT
Shareholder Records Manager
Sealaska Corp.
1 Sealaska Plaza, Suite 400
Juneau, Alaska 99801
Phone: (907) 586-1512
Position Statement: Testified in favor of HB 217
JAN MEISELS, Legislative Director
Health Insurance Association of America
22144 Clarendon St., Suite 220
Woodland Hills, California 91367-6324
Phone: (818) 704-9274
Position Statement: Testified in favor of HB 12
KEN SYKES, Insurance Analyst
Division of Insurance
Department of Commerce and Economic Development
P.O. Box 110805
Juneau, Alaska 99811-0805
Phone: (907) 465-2564
Position Statement: Answered questions on HB 12
JAY FRANK, Lobbyist
State Farm, Allstate insurance companies
431 N. Franklin St.
Juneau, Alaska 99801
Phone: (907) 586-5777
Position Statement: Testified in favor of HB 12
RESA JERREL, State Director
9159 Skywood Lane
Juneau, Alaska 99801
Phone: (907) 789-4278
Position Statement: Testified in favor of HB 12
REED STOOPS
Lobbyist, Aetna Insurance Co.
240 Main St., Suite 600
Juneau, Alaska 99801
Phone: (907) 463-3223
Position Statement: Testified in favor of HB 12
REP. ED WILLIS
Alaska State Legislature
Room 614 Courthouse
Juneau, Alaska 99811
Phone: (907) 465-2199
Position Statement: Prime sponsor of HB 105
LLOYD RUPP, Commissioner
Department of Corrections
P.O. Box 112000
Juneau, Alaska 99811-2000
(907) 465-3376
Position Statement: Testified in favor of HB 105
PREVIOUS ACTION
BILL: HB 217
SHORT TITLE: NATIVE CORPORATION DIVIDENDS TO MINORS
BILL VERSION:
SPONSOR(S): REPRESENTATIVE(S) MACLEAN
TITLE: "An Act relating to Native corporation dividends and
other distribution due to minors in state custody."
JRN-DATE JRN-PG ACTION
03/10/93 592 (H) READ THE FIRST TIME/REFERRAL(S)
03/10/93 592 (H) HES, JUDICIARY
03/24/93 (H) HES AT 03:00 PM CAPITOL 106
BILL: HB 12
SHORT TITLE: GROUP HEALTH INS. FOR SMALL EMPLOYERS
BILL VERSION: SSHB 12
SPONSOR(S): REPRESENTATIVE(S) B.DAVIS,Ulmer,Nordlund,
Brice,Mackie
TITLE: "An Act relating to health insurance for small
employers; and providing for an effective date."
JRN-DATE JRN-PG ACTION
01/04/93 27 (H) PREFILE RELEASED
01/11/93 27 (H) READ THE FIRST TIME/REFERRAL(S)
01/11/93 27 (H) HES,L&C,JUDICIARY,FINANCE
01/27/93 167 (H) COSPONSOR(S): NORDLUND
02/10/93 312 (H) COSPONSOR(S): BRICE
02/18/93 380 (H) SPONSOR SUBSTITUTE
INTRODUCED-REFERRALS
02/18/93 380 (H) HES,L&C,JUDICIARY,FINANCE
03/23/93 (H) HES AT 03:00 PM CAPITOL 106
03/23/93 (H) MINUTE(HES)
03/24/93 (H) HES AT 03:00 PM CAPITOL 106
03/26/93 779 (H) HES RPT 4DP 1DNP 2NR
03/26/93 779 (H) DP:G.DAVIS,B.DAVIS,NICHOLIA,
BRICE
03/26/93 779 (H) DNP: VEZEY
03/26/93 779 (H) NR: BUNDE, TOOHEY
03/26/93 779 (H) -ZERO FISCAL NOTE (DCED)
3/26/93
03/31/93 (H) MINUTE(ECO)
04/06/93 (H) L&C AT 03:00 PM CAPITOL 17
04/07/93 1094 (H) COSPONSOR(S): MACKIE
04/08/93 1103 (H) L&C RPT CSSS(L&C) 2DP 3NR
04/08/93 1103 (H) DP: MACKIE, WILLIAMS
04/08/93 1103 (H) NR: PORTER, GREEN, HUDSON
04/08/93 1103 (H) -PREVIOUS ZERO FN (DCED)
3/26/93
04/08/93 1103 (H) REFERRED TO JUDICIARY
BILL: HB 105
SHORT TITLE: BOOT CAMP FOR NONVIOLENT FIRST OFFENDERS
BILL VERSION:
SPONSOR(S): REPRESENTATIVE(S) WILLIS,Bunde,Sanders
TITLE: "An Act providing for incarceration for nonviolent,
youthful first offenders in boot camps operated by the
Department of Corrections; creating the Boot Camp Advisory
Board in the Department of Corrections; amending Alaska Rule
of Criminal Procedure 35; and providing for an effective
date."
JRN-DATE JRN-PG ACTION
01/29/93 180 (H) READ THE FIRST TIME/REFERRAL(S)
01/29/93 180 (H) HES, JUDICIARY, FINANCE
03/24/93 (H) HES AT 03:00 PM CAPITOL 106
BILL: HB 195
SHORT TITLE: AUTHORIZING YOUTH COURTS
BILL VERSION:
SPONSOR(S): REPRESENTATIVE(S) SITTON,Ulmer,Willis,Foster,
Brown,B.Davis,Olberg
Porter
TITLE: "An Act authorizing youth courts by which to provide
for peer adjudication of minors who have allegedly committed
violations of state or municipal laws, renaming the
community legal assistance grant fund and amending the
purposes for which grants may be made from that fund in
order to provide financial assistance for organization and
initial operation of youth courts, and relating to young
adult advisory panels in the superior court."
JRN-DATE JRN-PG ACTION
03/03/93 519 (H) READ THE FIRST TIME/REFERRAL(S)
03/03/93 519 (H) HES, JUDICIARY, FINANCE
03/12/93 628 (H) COSPONSOR(S): WILLIS, FOSTER,
BROWN
03/12/93 628 (H) COSPONSOR(S): B.DAVIS, OLBERG
03/19/93 716 (H) COSPONSOR(S): PORTER
03/24/93 (H) HES AT 03:00 PM CAPITOL 106
BILL: HB 22
SHORT TITLE: ALASKA HEALTHY START PROGRAM
BILL VERSION:
SPONSOR(S): REPRESENTATIVE(S)
NORDLUND,Brown,B.Davis,Ulmer,Sitton,Finkelstein
Brice
TITLE: "An Act establishing the Alaska Children's Health
Corporation and the Alaska Healthy Start Program; relating
to insurance; and providing for an effective date."
JRN-DATE JRN-PG ACTION
01/04/93 30 (H) PREFILE RELEASED
01/11/93 30 (H) READ THE FIRST TIME/REFERRAL(S)
01/11/93 30 (H) HES, LABOR & COMMERCE, FINANCE
01/15/93 92 (H) COSPONSOR(S): SITTON
01/20/93 117 (H) COSPONSOR(S): FINKELSTEIN, BRICE
03/24/93 (H) HES AT 03:00 PM CAPITOL 106
ACTION NARRATIVE
TAPE 93-44, SIDE A
Number 000
CHAIR TOOHEY called the meeting to order at 3:07 p.m. and
noted members present. She announced the calendar, and
brought HB 217 to the table.
HB 217: NATIVE CORPORATION DIVIDENDS TO MINORS
Number 030
RENA BUKOVICH, LEGISLATIVE AIDE to REP. EILEEN MACLEAN,
testified on HB 217 on behalf of Rep. MacLean, PRIME SPONSOR
of the bill. She read the sponsor statement, which is on
file in the committee room. In summary, the statement said
the bill would require Native corporations to hold in an
interest-bearing account dividends of minor shareholders who
were in state custody. The bill, requested by the
Department of Health and Social Services, is an effort to
ensure that dividends were spent only for the benefit of the
child.
MS. BUKOVICH said a letter from the Cook Inlet Regional
Corp. (CIRI) raised two issues that could be addressed by
HB 217. First, CIRI requested an amendment to the bill that
would allow the state to extend the same benefits to those
Native minors living outside Alaska. She said issues of
jurisdiction might be difficult to address. The second
would be an amendment relating to distribution of funds when
state custody terminates while the child is still a minor
and no new custodian has been appointed. She asked that the
two amendments be referred to the House Judiciary Committee,
the next committee of referral.
Number 090
REP. BUNDE asked whether the zero fiscal note was
appropriate, as there were likely to be some expenses in
administrating the accounts.
Number 100
MS. BUKOVICH answered no, there would be no cost, as the
accounts would be set up and maintained by Native
corporations.
(Rep. Brice arrived at 3:12 p.m.)
Number 106
RANDALL HINES, LEGISLATIVE CONTACT for the DIVISION OF
FAMILY AND YOUTH SERVICES (DFYS) in the DEPARTMENT OF HEALTH
AND SOCIAL SERVICES (DHSS), testified in Juneau in favor of
HB 217. He said the department strongly supported the bill,
which would protect dividends of after-born children
entering or leaving state custody. The bill supports the
department's mission to act in the best interests of
children while enabling self-determination by allowing the
corporations to act as childrens' fiduciaries.
Number 117
REP. BUNDE asked how many children would be affected by
HB 217.
MR. HINES said he did not know how many children were
eligible for dividends from Native corporations.
Number 135
REP. VEZEY asked if any Native corporations had elected to
issue new stock since 1971, the cutoff date for eligibility
to receive stock in Native corporations under the Alaska
Native Claims Settlement Act (ANCSA).
MR. HINES said some corporations had issued new stock, but
Congress had extended the inalienability issue, such that
the question was meaningless around that issue.
Number 151
REP. VEZEY said it appeared that the only class of people
covered by HB 217 would be those who were heir to Native
corporation stock. He asked if there was another class of
people who would be eligible.
MR. HINES referred the question to Mr. Larry Carroll of the
Department of Commerce and Economic Development.
Number 159
REP. VEZEY said it appeared the statute would cover only a
very few people. He asked why the state would want to make
special note of a minor's rights to Native corporation
dividends and not any stock dividends.
MR. HINES said the state already does set up special trust
accounts for the permanent funds of children in state
custody, regardless of their race. He said there were no
trust accounts set up for other stock dividends.
Number 176
REP. VEZEY asked the number of children for whom the state
was acting as fiduciary or custodial officer.
MR. HINES answered that it would be the number of children
in custody under court order at the time of issue of
permanent fund dividend. He said the state set up trust
accounts for such children to hold their dividends, and the
trusts could not be accessed except through a third-party
petition to the court. He said he did not know the number,
but could provide it to the committee.
Number 196
LARRY CARROLL, SENIOR SECURITIES EXAMINER, DIVISION OF
BANKING, SECURITIES AND CORPORATIONS, DEPARTMENT OF COMMERCE
AND ECONOMIC DEVELOPMENT, testified in Juneau on HB 217. He
said about four Native corporations had decided to issue
corporation stock to children born after 1971 who had
previously been ineligible to receive such stock. He said
that while each corporation could decide to do so, the total
number of children affected was not likely to be large. He
said the department's involvement in the issue was limited
and it dealt with regulations governing proxies and voting.
Number 239
ELLA BENNETT, SHAREHOLDER RECORDS MANAGER, SEALASKA CORP.,
testified in Juneau in support of HB 217. She said some
children have shares in Sealaska which they inherited or
received as gifts. She said Sealaska may hold a proxy
election in a year or so to determine whether it will allow
new shareholders. She said there were from 20 to 30 minor
shareholders in 1991 when the corporation had the AK-Ahtna
(???) that would be affected by HB 217, but she did not know
the current number.
Number 261
REP. VEZEY spoke against the bill, saying it was concerned
with such a small number of people that it risked violating
the constitutional prohibition against special-interest
legislation. He said if the state was the custodian for
minors, it should receive any income due those minors,
including permanent fund dividends, to offset the cost of
providing custodial care.
REP. NICHOLIA voiced support for HB 217, saying it would
benefit four Native regional corporations and any others
that might adopt after-born provisions. While only a few
people might benefit, she said, the exact number was
unknown, as four different Native corporations were
involved.
Number 285
REP. B. DAVIS said the House Judiciary Committee might deal
with questions raised about the number of children affected
by the bill. She said protecting the childrens' money was a
good idea.
Number 295
REP. B. DAVIS moved for passage of HB 217 from the HESS
Committee with individual recommendations.
REP. VEZEY objected.
Number 300
CHAIR TOOHEY called for a roll call vote. Those voting yes
were Reps. G. Davis, Olberg, B. Davis, Nicholia, Brice,
Toohey and Bunde. Rep. Vezey voted no. The motion passed
7-1. She brought HB 12 to the table.
HB 12: GROUP INSURANCE FOR SMALL EMPLOYERS
Number 304
REP. BETTYE DAVIS spoke as PRIME SPONSOR of HB 12. She said
it was a great opportunity to improve Alaskans' access to
health care at no cost to the state. She said the bill was
passed by the state Senate in 1992, but died in the House
Rules Committee.
Number 310
REP. B. DAVIS introduced JAN MEISELS, legislative director
of the HEALTH INSURANCE ASSOCIATION OF AMERICA (HIAA), an
association which supported the bill.
(Rep. Olberg departed at 3:27 p.m.)
Number 330
MS. MEISELS testified in support of HB 12. She presented an
overview of the HIAA proposal to adopt reform measures for
small markets. She said HB 12 was based on a National
Association of Insurance Commissioners' (NAIC) prospective
reinsurance model for small employers.
MS. MEISELS went through the bill, outlining its key points.
The information is contained in a document, "Statement of
HIAA on Small Group Market Reform House Bill 12," which is
on file in the committee room. In brief, she said 90
percent of Alaskans work for companies with from two to 25
employees. She said the bill was aimed primarily at
preventing people from being denied access to health
insurance, but it did address some cost issues.
MS. MEISELS said the reforms included guaranteeing access to
health insurance for small groups regardless of their risks;
that there would be no cherry picking (the practice of
insuring healthy people, and rejecting coverage to others);
guaranteed renewal of health insurance policies; and limits
on the range of charges for people with different risk
levels to 35 percent above and below the average rate, but
no limits on the rates themselves.
MS. MEISELS said such reforms would require establishment of
a private, not-for-profit reinsurance pool to which all
insurance companies that sold policies to small employers
would have to contribute up to 5 percent of net premiums
from small employers. Such insurance companies would have
to pay a $5,000 deductible before they could draw on the
pool, she said. The companies would offer a basic standard
set of benefits, the level of which would be made by a nine
member reinsurance board, on the recommendation of a seven
member board comprised of Alaskans. She said HIAA wanted
the director of insurance involved to ensure equity and
fairness.
MS. MEISELS said HB 12 requires the reinsurance board to
report every three years to the legislature and insurance
director on the legislation's effectiveness. The bill would
exempt the reinsurance association, which is a private
nonprofit, from provisions of the Administrative Procedures
Act and from taxes. It would also limit the liability of
individual association members, except in the case of
egregious and willing acts. She said the bill would cover
group plans, but not individual policies.
Number 488
CHAIR TOOHEY invited questions from the committee, but then
decided to delay questions until the end of Ms. Meisels'
presentation.
Number 500
MS. MEISELS provided further, extensive testimony on the
provisions of the bill, an analysis of which is contained in
the report on file in the committee room. She offered to
testify again later by teleconference if the committee so
desired.
Number 560
REP. BUNDE asked Ms. Meisels why the health insurance
industry was proposing voluntary reforms of small employer
insurance in Alaska.
MS. MEISELS said the HIAA had been pushing for national
reforms for four years, and her territory was California,
Nevada, Utah and Alaska, and so far only Alaska had not
passed such reforms.
Number 573
REP. BUNDE asked who funded such an effort to enact such
legislation all over the company.
MS. MEISELS said 270 member insurance companies paid dues to
HIAA, a national lobbying group.
REP. BUNDE asked whether the HIAA and its members believed
that the reform the group advocated was good business for
insurance companies.
Number 578
MS. MEISELS said they believed that the reforms were good
public policy and they were trying to reform bad private
insurance and public policy practices. She said the HIAA
board decided to attempt reform of small employer insurance
to address some of the problems relating to health insurance
access. The insurance industry wants to remain in business,
she said, and believes some reform will assist them to that
end.
Number 590
REP. BUNDE noted that insurance companies have to make a
profit, and the restrictions included in HB 12 might make it
more difficult for them to remain in business. He said he
was suspicious of the insurance industry's motives in
proposing reform that might limit its ability to make a
profit. He said if companies could not raise individual
rates, they would have to raise rates elsewhere. He said
guaranteeing insurance for all would require high rates.
TAPE 93-44, SIDE B
Number 000
MS. MEISELS said that Rep. Bunde was not the first person to
question the insurance industry's motives. She said the
bill included "premium pricing limitations" but no
prohibitions to annual rate increases upon annual renewal to
reflect increases in health care costs. Because the
insurance companies would be accepting higher-risk clients
that had previously been rejected, there was concern that
costs would go up. But she said the good risks would
outweigh the bad risks, and cited an American Academy of
Actuaries study claiming price increases after such reforms
would raise prices by no more than 5 percent. She referred
to a report which showed that insurers in Connecticut had
insured more groups under a similar reform effort and had
experienced price increases of from 4 percent to 10 percent.
She said an HIAA actuary estimated that a set of average
basic insurance plan for five 40-year-old people, based on
Florida rates, might cost $84 per month per employee or $145
per month per employee for a standard plan. She said Alaska
rates would depend on many variables, including benefit
package levels.
Number 074
REP. BUNDE asked whether the restrictions on small employers
and higher prices would make it less likely for small
employers to provide health insurance to their employees.
MS. MEISELS referred to a September 1992 marketplace report,
also on file in the committee room, from the Connecticut
small employer health reinsurance pool. She said reforms in
that state had seen the sale of an additional 4,687
insurance plans, covering from 19,000 to 25,000 previously
uninsured employees. The report said private health
insurance would do more to provide coverage to the uninsured
than would public efforts.
Number 108
CHAIR TOOHEY asked why a small group was defined as more
than two employees.
MS. MEISELS answered that a single person was not a group,
and small groups were from two to 25 employees. She said,
"Some states that have gone to one person do not have an
uninsurable risk pool, that's why they did it at one. This
state enacted legislation last year, SB 74 by Sen. Kertulla,
which is an uninsurable risk pool for those individuals."
Number 123
CHAIR TOOHEY asked how many small insurance companies were
involved in HIAA.
MS. MEISELS made the distinction that the reform bill
concerned itself with insurers of small employers, not small
insurance companies. She said about 15 insurance companies,
including Aetna, Blue Cross, and Great-West sold policies to
small employers in Alaska.
Number 147
CHAIR TOOHEY asked if Aetna would be part of any insurance
group.
Number 150
MS. MEISELS answered that the bill required all companies
selling insurance to small employers in Alaska to join the
group. She said that Reed Stoops, a Juneau lobbyist for
Aetna, said the company supported HB 12 and would join the
group.
Number 155
REP. G. DAVIS asked whether Alaska was unique in the number
of its small businesses.
Number 157
MS. MEISELS answered no, Alaska was similar to Wyoming in
that both were largely rural states with few people and many
small businesses. She said the insurance reform legislation
passed in Wyoming, almost identical to the plan outlined in
HB 12, was working and made provisions for small
entrepreneurial operations.
Number 184
REP. B. DAVIS invited MR. KEN SYKES to testify.
Number 195
KEN SYKES, an INSURANCE ANALYST for the DIVISION OF
INSURANCE in the DEPARTMENT OF COMMERCE AND ECONOMIC
DEVELOPMENT, made himself available to answer questions from
the committee concerning HB 12.
REP. BUNDE said he did not begrudge insurance companies a
fair profit, but said HB 12 places large limits on the
companies. He asked if the bill would force some insurance
companies out of the Alaska market, or discourage some
Alaska small businesses from providing insurance for their
workers.
MR. SYKES answered that he did not believe HB 12 would drive
insurers out of the Alaska buying market. He said the basis
of the plan was risk sharing, which Alaska has not had. He
said insurers would be able to set prices based on a much
larger group. The more people involved in insurance, the
lower the price per person. He said good risks would
balance out bad risks.
Number 217
REP. BUNDE asked how the insurance division would react to
the criticism of an average Alaskan who might not care how
the insurance industry operated Outside.
MR. SYKES answered that the state could be proactive, not
reactive, to insurance problems. He said the bill would
bring rises in group premiums and taxes because it would be
better for small employers to participate in groups.
Number 236
REP. BUNDE asked the position of the Department of Commerce
and Economic Development on HB 12.
MR. SYKES answered that the department's position was
neutral.
Number 242
MS. MEISELS commented that the department supported SB 242,
a similar bill.
REP. B. DAVIS noted that the department was neutral and did
not oppose HB 12. She said the Alaska State Chamber of
Commerce supported the bill as favorable to small businesses
of from two to 25 employees. She said the bill would allow
uninsured employees of small businesses to get health
insurance and would cost the state nothing more than the
price of oversight. While HB 12 is not the answer to all
health care problems, she said, it was an answer.
Number 272
CHAIR TOOHEY asked whether the bill would require small
businesses to offer health insurance.
MS. MEISELS answered no.
CHAIR TOOHEY asked whether an employee insured at one job
could retain his health insurance if he switched jobs to
work for a company that did not offer such insurance.
MS. MEISELS said the answer would be yes, if Alaska state
law addressed conversion of insurance policies, or if the
first employer was covered by COBRA (Comprehensive Omnibus
Budget Reform Act), a federal insurance conversion
requirement for companies employing 20 or more people.
Number 290
REP. VEZEY asked what the bill would do that was new.
MS. MEISELS answered that HB 12 would enable small employers
to obtain insurance, even though they had previously been
denied insurance because they worked in a high-risk field or
because their employees were high risks.
Number 300
REP. VEZEY said he knew of no one who had been denied
insurance coverage, though he knew that insurance companies
demanded high premiums for some high-risk employees or
companies. He said he did not see what the bill would do to
help small business, except even out the pools and rates.
MS. MEISELS disagreed, saying that some small employers had
been denied insurance coverage. She said HIAA was not
trying to establish community rate pools, as outlined in a
column by Jane Bryant Quinn in the Washington Post, dated
March 14, 1993 (on file in the committee room).
Number 327
REP. VEZEY said it was a question of rates, not of
availability. He said he had heard of a $50,000 minimum
premium payment. He said many people were denied insurance
at more typical rates.
Number 340
MS. MEISELS insisted that some people had been denied
coverage, such as those with diabetes or AIDS. She said the
issue was accessibility, not affordability. She said the
bill took some steps to address health care costs, including
waiving mandated benefits for small group policies and
allowing insurers to establish health maintenance
organizations (HMOs) or preferred provider organizations
(PPOs), which could help control medical care costs.
Number 374
REP. VEZEY objected that all employees are obligated to
provide workers workmans' compensation insurance. He said a
miner's health care liability was the same as anyone else's
off the job.
Number 380
MR. SYKES excused himself, saying he had another meeting to
attend. Before departing, he differentiated between
workman's compensation, which was aimed at on the job
injuries, and health care.
Number 386
REP. VEZEY said that the two issues were related from an
employers viewpoint, because they provided 24-hour a day
coverage when combined. He said he should have the right,
as a small business owner, to avoid high risks.
Number 402
MS. MEISELS asked what kind of business Rep. Vezey owned.
REP. VEZEY answered that he was in construction and related
fields.
Number 402
CHAIR TOOHEY interrupted, saying the committee was running
out of time.
Number 414
JAY FRANK, a LOBBYIST representing STATE FARM and ALLSTATE
INSURANCE COMPANIES, testified in Juneau favor of HB 12. He
said both companies are HIAA members, and both helped the
NAIC write its model legislation upon which HB 12 was based.
He said the bill does not answer all insurance problems, but
does address the question of access to insurance for small
employers.
Number 424
RESA JERREL, STATE DIRECTOR of the NATIONAL FEDERATION OF
INDEPENDENT BUSINESSES, testified in Juneau in support of
HB 12. She said she knew of a case in which one proprietor
of a drugstore in Juneau, who had cancer, was unable to
obtain health insurance, a situation which forced the owners
to sell the store and seek a job with health benefits. She
said the bill would help the federation's member small
businesses obtain health insurance for their employees. She
said the waiver from mandated state insurance provisions
would help keep prices lower.
Number 443
REP. BUNDE said he was glad to hear from the business
community.
Number 448
REP. G. DAVIS asked Ms. Meisels if HMOs could buy
reinsurance under HB 12.
Number 450
MS. MEISELS responded, "For the purposes of this act, an
HMO was going to be defined (unintelligible) an insurer, as
is a hospital or medical service plan." She said the bill
calls on the reinsurance board to develop an equation to
equate the HMO rates with the $5,000 deductible to
accommodate HMOs. She said the bill also provides for
federally-qualified HMOs, required to provide a certain
level of benefits. That level of benefits would be
considered the standard and basic plan for the HMOs, which
covers the possibility that Alaska might get an HMO.
REP. G. DAVIS asked if an HMO would have a fee-for-service.
MS. MEISELS answered no, HMOs pay by capitation. A PPO, a
cross between an HMO and a fee-for-service plan, might pay
by capitation or by fee-for-service.
Number 465
REP. BUNDE asked whether Aetna and Blue Cross were part of
Ms. Meisels' organizations.
MS. MEISELS answered that neither were.
REP. BUNDE asked whether each state had a reinsuring agency.
MS. MEISELS answered yes.
REP. BUNDE said it sounded like another level of expensive
bureaucracy.
MS. MEISELS said the cost was borne entirely by the
insurance companies, and it would not be a government
agency.
REP. BUNDE said the insurance companies would pass the cost
along to consumers.
Number 481
MS. MEISELS said the premium price limitations limited how
much of the cost they could pass on to customers, which
would be incentive for efficient operation.
Number 484
REP. G. DAVIS asked if there would be a need for an
actuarial survey in order to establish fees, and asked who
would pay the cost.
MS. MEISELS answered that the reinsurance board would pay
the cost of any actuarial survey. But she said that the
members of the board would probably rely on their own
companies' internal actuarial services to set rates, in an
attempt to save money.
Number 497
REED STOOPS, a LOBBYIST for AETNA, testified in Juneau in
support of HB 12, though his company did not belong to HIAA.
He agreed with Rep. B. Davis' arguments. He said the bill
would help people get insurance, without cost to the state.
He said it would help reduce the number of Alaskans who
lacked health insurance, and was similar to Sen. Kertulla's
plan of 1992. He said it was a less controversial way to
address some problems with insurance service in Alaska.
REP. G. DAVIS asked why insurance companies did not develop
reinsurance pools on their own.
MR. STOOPS answered that he had encouraged Aetna to do so.
He said Aetna dominates the market for large group insurance
and, as a result, has lower administration costs. But, he
said, Alaska was a small market in which Blue Cross led 14
other companies. He said the market was too small to prompt
companies to form their own pools for the state.
Number 538
CHAIR TOOHEY called for additional public testimony and,
hearing none, declared public testimony on HB 12 closed and
called for committee discussion of the bill.
Number 540
REP. B. DAVIS said she had amendments she wanted to offer to
HB 12.
CHAIR TOOHEY called an at-ease, and called the meeting back
to order a few minutes later.
Number 550
REP. BUNDE moved for passage of HB 12 to the House Labor and
Commerce Committee with individual recommendations.
REP. VEZEY objected to the motion.
CHAIR TOOHEY called an at-ease, and called the meeting back
to order a few minutes later. She noted that Rep. B. Davis
had agreed to hold her amendments until HB 12 reached the
next committee.
CHAIR TOOHEY called for a roll call vote on the motion to
pass the bill with individual recommendations. Those voting
yes were Reps. B. Davis, Nicholia, Brice, Toohey, Bunde and
G. Davis. Rep. Vezey voted no. Chair Toohey declared that
HB 12 passed with individual recommendations.
CHAIR TOOHEY called HB 105 to the table.
HB 105: BOOT CAMP FOR NONVIOLENT FIRST OFFENDERS
Number 562
REP. ED WILLIS spoke as PRIME SPONSOR of HB 105, saying it
would both help teach young offenders respect for the law
and give them a second chance, where a jail term might do
them more harm than good. He read a sponsor statement,
which is on file in the committee room. He said the bill
was aimed at nonviolent first offenders and at least 24
states now offer such programs, with various conditions and
age limits.
TAPE 93-45, SIDE A
Number 000
REP. WILLIS said the program could help reduce overcrowding
and recidivism. He said the bill would limit participation
to those under 26 years of age and charged with their first
felony; involve military-style discipline and physical
training, counseling and training; would last for less than
150 days; would refer graduates to sentencing court for
probation; would refer those who failed to complete the
program to other correctional institutions; and would
require the commissioner to report on the program's success
or failure to the legislature.
Number 052
(Chair Toohey noted that Lloyd Rupp, Commissioner of the
Department of Corrections, had arrived.)
REP. CON BUNDE, a CO-SPONSOR of HB 105, spoke in support of
HB 105. He asked where the state would find boot camp
instructors with the proper training and talents to perform
the job well.
Number 072
REP. BRICE jokingly asked if Rep. Bunde were volunteering
for the job.
REP. WILLIS deferred on the question to Commissioner Rupp.
He added that some states send prospective boot camp drill
instructors (DIs) to U.S. Marine Corps training centers.
Number 092
REP. VEZEY asked whether the zero fiscal note was accurate.
REP. WILLIS said he believed it was, but deferred to the
commissioner as a better authority.
Number 110
CHAIR TOOHEY asked rhetorically whether the costs of having
youthful offenders in boot camps might not be offset by
avoiding the costs of placing them in adult prisons.
Number 120
COMMISSIONER LLOYD RUPP, DEPARTMENT OF CORRECTIONS,
testified in Juneau in favor of HB 105. He said he was
familiar with the concept of boot camps, but said that early
boot camps erred by placing instructors in difficult
situations without adequate training. He spoke in favor of
good training for such instructors so they could impart the
lessons of military discipline, including personal
discipline, accountability and responsibility. He referred
to decaying state-owned agricultural properties at Point
MacKenzie, across Cook Inlet from Anchorage, and said the
department anticipated starting July 1 to halt the
deterioration by use of heavy equipment. He asked if the
program could be expanded to cover first-time misdemeanants,
as there were not enough first-time youthful felons to make
the program work well. He asked for language in the bill
that would have the boot camps stress personal
accountability and responsibility, as well as a strong work
ethic. He also said that, lacking a management information
system, the Department of Corrections could not provide an
annual report comparing the recidivism rates for boot camp
inmates and other prisoners.
Number 195
CHAIR TOOHEY expressed support for the concept of boot
camps, but asked if it could be done at less cost than
indicated on the fiscal note by transferring such prisoners
out of Alaska for treatment.
COMMISSIONER RUPP said his department viewed the daily cost
of boot camp treatment as low, compared to the $118 per day
cost for incarceration in a prison. He noted that the
state's prisons were filling to 104 percent of capacity and
it was important to do something to reduce prison occupancy.
He said the department has contracted out community
residential centers (CRCs). He said few states send
prisoners out-of-state for shock incarceration or boot camps
because of the special requirements and liabilities. He
said he would like to start the program on a small scale,
then build it up if successful. He said the daily cost of
boot camps of about $36 would be less than the $50 daily
cost for CRCs. He said the boot camp program would cost
about $1.3 million in operating costs, most of which would
go for personnel and substance abuse programs, which he said
was an essential part of successful programs. Such
substance abuse counseling would be contracted from Outside
firms, he said. The state departments of Labor and
Education would also help boot camp inmates learn to deal
with the problem of alcoholism and the challenge of
employment. He said providing sobriety, marketability and
support to inmates would help the inmates out of the state
corrections system.
Number 257
REP. B. DAVIS asked a clarifying question as to where Point
MacKenzie was located.
COMMISSIONER RUPP said it was located across Cook Inlet from
Anchorage. He described the large dairy farms and the barns
and farm buildings which were in disrepair.
Number 287
REP. BUNDE asked what "prison gratuities" were.
COMMISSIONER RUPP answered that the gratuities referred to
"gate money" given to prisoners upon their release. He also
noted that a Department of Education year-long training
program was available to provide youths with job skills, and
the program might be applied to the boot camp program.
Number 312
REP. VEZEY referred to the fiscal note and asked whether it
assumed 12,500 participants in the boot camp program. He
asked whether the inmates would otherwise be incarcerated.
COMMISSIONER RUPP responded that boot camp inmates would
otherwise have been housed in adult prisons at a cost of
about $100 per day.
REP. VEZEY said he would like to see figures demonstrating
the savings of the boot camp program.
Number 338
COMMISSIONER RUPP noted that the boot camp program would not
include capital expenditures, as the inmates would be housed
in relocatable modular buildings. He noted that prison
cells cost about $110,000 to build the first new prison
cell, plus the cost of operation. He noted that the aim of
the boot camp program was to prevent youths from committing
future crimes, not just incarcerating them as punishment.
Number 352
REP. BUNDE asked Rep. Willis' reaction to the amendments
proposed by Commissioner Rupp.
REP. WILLIS said he was open to any changes to improve his
bill.
REP. BUNDE asked whether it was possible to reduce the
travel budget expenses for the boot camp advisory board
called for in HB 105.
Number 366
COMMISSIONER RUPP said the figure of $14,400 for travel
expenses was a rough estimate, but he could reexamine the
issue.
Number 382
REP. BUNDE asked Rep. Willis to return to the committee with
answers to his questions and those of Rep. Vezey, and with
responses to Commissioner Rupp's proposed amendments, so
that the committee could consider moving the bill out of
committee.
Number 390
REP. NICHOLIA offered a friendly amendment to allow Native
corporations to contract with the state Department of
Corrections to operate boot camps, as about 47 percent of
prisoners in Alaska state prisons were Alaska Natives. She
said the Tanana Chiefs Conference (TCC) supported such an
amendment and she read a letter from the TCC indicating that
support. She read the amendment to HB 105, numbered as
8-LSO467\A.1, dated 3/24/93.
Number 415
REP. WILLIS said he did not object to the amendment.
REP. BUNDE said he appreciated privatization and it might be
worthwhile to have HB 105 returned to the committee with
Rep. Nicholia's amendment included.
Number 426
COMMISSIONER RUPP said he would welcome such an amendment,
and said the department had hoped to find ways to spread the
program out across the state, and in rural areas in
particular.
REP. VEZEY objected to the motion. He said it would be
better to allow for-profit corporations to contract out boot
camp programs, as they would be more motivated than
nonprofits to operate such camps efficiently.
Number 440
CHAIR TOOHEY asked Commissioner Rupp, Rep. Vezey and Rep.
Nicholia to work on the bill and return to the full
committee with the amendments. She said HB 105 would be
placed on the committee's schedule as soon as possible to
consider the amendments. She then ADJOURNED the meeting at
5:10 p.m.
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