Legislature(1999 - 2000)
04/10/1999 10:07 AM House HES
| Audio | Topic |
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* 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
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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