Legislature(2011 - 2012)SENATE FINANCE 532
03/28/2011 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB102 | |
| SB70 | |
| SB87 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 102 | TELECONFERENCED | |
| + | SB 70 | TELECONFERENCED | |
| + | SB 87 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE FINANCE COMMITTEE
March 28, 2011
9:02 a.m.
9:02:21 AM
CALL TO ORDER
Co-Chair Stedman called the Senate Finance Committee
meeting to order at 9:02 a.m.
MEMBERS PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Lesil McGuire, Vice-Chair
Senator Johnny Ellis
Senator Dennis Egan
Senator Donny Olson
Senator Joe Thomas
MEMBERS ABSENT
None
ALSO PRESENT
Senator Hollis French; Andy Moderow, Staff, Senator Hollis
French; John Sherwood, Department of Health and Social
Services; Denise Daniello, Alaska Commission on Aging; Bob
Doll, Retired Public Employees of Alaska, Director;
PRESENT VIA TELECONFERENCE
Pat Luby, AARP; Mark Regan, Disability Law Center of
Alaska, Anchorage;
SUMMARY
SB 70 Alaska Health Benefit Exchange
SB 70 was HEARD and HELD in committee for further
consideration.
SB 87 Grants for Seniors' Medical Care
SB 87 was HEARD and HELD in committee for further
consideration.
SB 102 AK Affordable Heating Payment Program
SB 102 was REPORTED out of committee with a "do
pass" recommendation and with the accompanying
zero fiscal note.
9:02:44 AM
SENATE BILL NO. 102
"An Act relating to certain payments made under the
Alaska affordable heating program."
9:03:27 AM
Co-Chair Hoffman stated that the legislation amends a bill
passed in the previous session, which combines the low
income heating and energy assistance programs to form the
Affordable Heating Assistance Program. The legislation
would allow the department to pro-rate the appropriation in
times of low payments.
Co-Chair Stedman stated that public testimony was taken at
a prior hearing, and asked if there were any concerns from
committee members. There were no concerns by members.
9:04:03 AM
Co-Chair Hoffman MOVED to report SB 102 out of committee
with individual recommendations and the accompanying fiscal
note. There being NO OBJECTION, it was so ordered.
SB 102 was REPORTED out of committee with a "do pass"
recommendation and with the accompanying zero fiscal note.
SENATE BILL NO. 70
"An Act establishing the Alaska Health Benefit
Exchange; and providing for an effective date."
9:05:06 AM
SENATOR HOLLIS FRENCH, SPONSOR, explained that SB 70 was
designed to set up a health benefit exchange in Alaska. The
legislation would create a website that would allow the
115,000 Alaskans who do not have health insurance to make
informed decisions on health insurance when the Affordable
Care Act comes into effect in 2014.
Senator French stated that the Affordable Care Act was
designed to bring an affordable health insurance policy to
the 40 million Americans who are without health insurance.
He stressed that the intent of the program was to foster
competition, and to subsidize the choice of a private
insurance policy. He stressed that competition among
insurance companies, might foster lower prices in
traditional capitalism. He stated that the model of the
program would be constructed in Alaska, by Alaskans, for
Alaskans. He explained that the program would allow
Alaskans to go to a website, and analyze a policy that best
meets their needs. Eligible individuals could also apply
for Denali Kid Care and Medicaid through the site. He
acknowledged that the bill was complicated and long, but
stressed that it is essentially a website run by a board.
The board would have approximately 30 powers and duties to
implement.
9:07:39 AM
Senator Ellis noted his dismay when the administration
chose to miss the deadline for application to the federal
government for the million dollars being offered to states.
He observed that some governors, who opposed health care
reform, took the money to set up their own health
exchanges. He maintained that "the last thing Alaskans want
is for the federal government to impose a health exchange
on us when we can design our own". He wondered if there
would be other ramifications from the missed deadline in
terms of future monies. Senator French thought that the
state would miss out on subsequent grants relating to the
health care exchange as a result of having missed out on
the initial round of grants. He emphasized that other
states that opposed the Affordable Care Act took advantage
of the initial grant.
Senator Ellis reiterated his concern with the loss of
federal funds and the need to address the possibility of
further loss of funding.
9:10:58 AM
ANDY MODEROW, STAFF, SENATOR HOLLIS FRENCH, provided a
sectional analysis of the legislation:
· Section 1 provides intent language for the
legislation. It highlights the importance of
connecting individuals and small businesses with
quality health insurance policies, to reduce the
number of uninsured Alaskans
· Section 2 of the legislation, establishes the Alaska
Health Benefit Exchange:
o Section 21.54.200 sets up the health benefit
exchange as a public corporation of the state,
much like the permanent fund corporation.
o Section 21.51.210 establishes the board, which
will manage the Alaska Health Benefit Exchange.
The board consists of 8 members, with 7 voting
members. The Commissioner of Health and Social
Services, or their designee, will serve on the
committee ex officio, and the Director of the
Division of Insurance will hold a non-voting
seat.
Mr. Moderow clarified that the remaining language in
Section 2 sets out disclosure requirements, procedures in
case of a vacancy, and other technical aspects of the
board. In addition, it authorizes the board to hire an
Executive Director, who can hire staff to fulfill
obligations under the legislation.
Mr. Moderow outlined the provisions of Section 21.54.220,
contained in Section 2, which outlines the powers and
duties of the Alaska Health Benefit exchange:
· Subsection (a) (1) outlines the primary duty of the
exchange, which is to facilitate the purchase and sale
of qualified health plans.
· Subsection (a) (2) and (a) (12) establish the Small
Business Health Options Program (SHOP), which is the
small business equivalent to individuals connected
through the exchange. Small businesses pool together
to reduce variation in premiums from year to year and
to connect small businesses with generous tax benefits
should they decide to provide health insurance.
· Subsection (a) (3) provides for a telephone call
center to assist individuals in case they are not able
to access the internet portal.
· Subsection (a) (4) establishes enrollment periods that
are held annually to facilitate changing health
insurance policies. Enrollment periods reduce adverse
selection, which occur when people with high risk seek
generous benefits at times when they need them and
chose low risk benefits when the risks are reduced.
This would allow individuals to move from one plan to
another while reducing the potential for adverse
selection.
· Subsection (a) (5) provides for the creation of an
internet marketplace to connect individuals with
health insurance coverage.
· Subsection (a) (6) provides for certification and
decertification of health plans sold through the
exchange.
· Subsection (a) (7) and (a) (8) requires the exchange
to compare health plans on metrics of quality and
price. He observed that the Senate and Labor Commerce
reviewed metrics used by other states such as consumer
satisfaction, types of benefits, covered procedures,
deductible amounts, and etc… All easy ways for
consumers to make their decisions.
Mr. Moderow did not discuss Subsection (a) (9). He went on
to explain that:
· Subsection (a) (10) requires the exchange to determine
eligibility for state or local medical assistance
programs, such as Medicaid and Denali KidCare. If
qualified, the exchange will assist with the
enrollment process.
· Subsection (a) (11) establishes a tax credit
calculator to help individuals know the cost of health
coverage, after federal assistance is applied. This
allows individuals to understand their eligible
benefits.
· Subsection (a) (13) requires that the exchange exempts
Alaskans from the requirement to retain health
insurance if certain criteria is met. Individuals can
apply for exemptions if an insurance policy is not
affordable. He observed that IHS recipients can apply
for an exemption, or they can chose to participate at
a generous no cost sharing provisions if they are
under a certain income level.
· Subsection (a) (14) shares information about
individuals exempted from the health insurance
requirement. Subsection (a) (14) (B) shares
information about employees who aren't offered
affordable health coverage through employment.
Subsection (a) (14) (C) shares information about
employees who cease to have employer coverage due to a
change in employment.
· Subsection (a) (15) notifies an employer when an
employee receives premium assistance from the
government, either because the employer doesn't offer
a plan, or offers a plan which doesn't meet minimum
standards.
· Subsection (a) (16) explicitly states that the
exchange will assist consumers by determining
eligibility for premium tax credits, reduced-cost
sharing, or exemptions from the insurance mandate.
· Subsection (a) (17) establishes a framework for
Navigator Grants. These grants can be pursued by most
organizations or trade groups for the purposes of
helping the exchange fulfill its goals. Navigator
duties include enrollment assistance, information
sharing, and assistance with dispute resolution. He
observed that commercial fishing trade groups are
eligible to be navigators to help individuals find
health coverage that meets their needs.
9:17:07 AM
Mr. Moderow continued with his presentation of the
sectional analysis:
· Subsection (a) (18) requires the Division of Insurance
to consider the rate of premium growth within and
outside the exchange, in an effort to evaluate the
effect and benefit of incorporating larger employers
within the SHOP exchange. Currently, employers with 50
or less employees are eligible, but the program could
be expanded in the future.
· Subsection (a) (19) asks the Division of Insurance to
develop policy and procedures that minimize adverse
selection, both inside the exchange and between plans
sold within and outside the exchange. Nothing changes
the current insurance market place as it exists today.
Plans can still be purchased and sold in small group
markets or individual markets under reform, which
makes certain the exchange functions well within the
existing market place.
· Subsection (a) (20) requires the exchange to provide
credit for any 'free choice voucher' that an employer
provides an employee for the purpose of covering
premium costs. These set up a framework where an
employer can offer to pay $100 for an employee's
health coverage and the employee can find a plan that
meets their needs through the exchange.
Mr. Moderow did not discuss Subsection (a) (21) or (a)
(22).
· Subsection (a) (23) outlines accounting requirements.
· Subsection (a) (24) requires an annual accounting
report to be submitted to federal and state
stakeholders.
· Subsection (a) (25) allows for cooperation with any
investigation or audit by the Division of Insurance or
Secretary of Health and Human Services.
· Subsection (a) (26) allows a health insurer to offer a
limited dental plan as part of a qualified health
plan, so long as pediatric dental benefits are
included.
· Subsection (a) (27) requires the exchange to apply for
planning and establishment grants for the Exchange,
which addresses the question asked by Senator Ellis.
Mr. Moderow noted that grants of $1 million had been
awarded to 49 other states dollars for planning purposes.
The language in Subsection (a) (27) was retained in the
legislation in case future openings exist.
· Subsection (a) (28) requests that the Division of
Insurance offer recommendations about potential
interstate compacts that would permit the sale and
purchase of health insurance across state lines.
Mr. Moderow acknowledged the small pool of individuals to
insure in Alaska. Buying and selling health insurance over
state lines has been under discussion for a long time as a
way for the free market to deal with rising premiums and a
means to find low cost options. Legislation would probably
be required to enact any recommended compact.
· Subsection (a) (29) requires that the Exchange board
establish a plan of operation, and submit it to the
director of the Division of Insurance for approval.
· Subsection (b) (1), page 9 line 30, allows the
exchange to contract out some of the responsibilities
outlined in the legislation.
· Subsection (b) (2) allows the exchange to share
information with federal and state agencies, provided
that confidentiality protections consistent with state
and federal laws are protected.
· Subsection (b) (3) allows the exchange to receive
grants to finance operations, and requires prompt
disclosure of any financial contributions, whether
they are applied for or received to ensure
transparency.
· Subsection (c) prohibits certain expenses to keep
costs down for consumers.
· Subsection (d) ensures individuals won't be penalized
if they change coverage because they are newly
eligible for that coverage, or if employer sponsored
coverage becomes affordable.
9:21:23 AM
Mr. Moderow continued to present the sectional analysis.
He discussed Section 21.54.230 of the legislation, found in
Section 2 beginning on page 10, line 22, which relates to
health plan certification.
· Subsection (a) outlines requirements of a qualified
health plan, and the insurers offering such plans.
· Subsection (a) (1) allows flexibility for an insurer
to include or not include adult dental benefits, so
long as one supplemental dental plan is included
within the exchange.
· Subsection (a) (2) requires that premium rates and
plan language are approved. This minimizes change to
our current market place. The director of the Division
of Insurance will still review policies to make sure
they line up with existing state law.
· Subsection (a) (3) requires plans to meet certain
quality guidelines in terms of the actuarial value to
a consumer, except in instances where catastrophic
plans are sufficient to protect an individual from
financial hardship.
· Subsection (a) (4) meets cost sharing and deductible
assistance requirements that protect consumers.
· Subsection (a) (5) and (a) (6) require that an insurer
in the exchange offer plans that meet certain quality
metrics, and that they charge the same rates for
similar policies sold inside and outside in the
traditional insurance market place.
· Subsection (a) (7) requires the exchange to determine
that making the plan available through the exchange is
in the interest of employers and individuals.
· Subsection (b) specifies that an exchange cannot
exclude a plan because it is fee-for-service, through
price controls, or because a plan pays for lifesaving
treatments.
· Subsection (c) (1) requires an insurer to justify any
premium increase prior to implementing the premium
increase. This justification must be shared with the
public, and the exchange will consider these premium
increases when determining whether to certify plans.
· Subsection (c) (2) and (c) (3) requires insurers to
provide the public with fiscal, claim, rating, and
enrollment data, in instances when disclosure is
consistent with privacy laws. It requires insurers to
release cost data, including cost sharing paid by the
consumer, for a specific item or service under a
health insurance policy. This enables individuals to
question how a plan would help them historically, or
in the future.
· Subsection (d) makes it clear that state insurance
laws regarding solvency and licensing are still
applicable to plans within the exchange, and that
insurers are treated equally.
· Subsection (e) relates to dental benefits under the
law, and the flexibility of plans under reform in this
area.
Mr. Moderow discussed Section 21.54.240, found in Section 2
on page 14, which relates to exchange funding. It requires
the exchange to finance itself after being established. The
grants available to the state were only for the
establishment portion; afterwards an exchange has to be
self-financing. It requires this funding to come from
insurers who offer health benefit plans through the
exchange. In addition, the cost of this financing must be
disclosed to the public on the exchange website.
Mr. Moderow observed that Section 21.54.250, Section 2,
page 14, allows the exchange board and Division of
Insurance to adopt regulations to fulfill the purposes of
the legislation.
Mr. Moderow noted that Section 21.54.260, Section 2, page
14, requires insurers to honor state health insurance laws
as established; and Section 21.54.270, Section 2, page 15,
provides definitions of some terms used in this act.
Mr. Moderow continued to outline the final sections of SB
70:
· Section 3 adds employees of the exchange to the list
of partially exempt service.
· Section 4 defines the Executive Director of the
exchange as a public official.
· Section 5 adds the Alaska Health Benefit Exchange
Board to the list of state commissions or boards.
· Section 6 of the legislation, outlines transitional
provisions relating to board terms.
· Section 7 gives the ability to draft regulations and
clarifies that regulations will not take effect until
the effective date of statutory changes.
· Sections 8 provides for a July 1, 2011 effective date
for the exchange board, the duties of the board, and
the board's ability to make regulations.
· Section 9 makes certain transitional provisions
effective immediately.
· Section 10 makes the remainder of the act effective on
July 1, 2012. This is when health plan certification
would begin under the legislation.
9:26:17 AM
Co-Chair Stedman asked for further background on the
legislation's history. Senator French explained that a
federal model was created in Washington, D.C. to help
states with implementation. The idea is to create a website
where consumers could make a complex financial choice as
simply as possible. The legislation would create a
framework shaped to Alaska.
9:27:27 AM
Co-Chair Hoffman wondered how natives who are eligible for
Alaska Native Health Care would be affected. He questioned
if they would be able to participate in the program to
obtain additional coverage. Senator French affirmed and
explained that Indian Health Service (IHS) beneficiaries
would be given the option of seeking additional coverage or
maintaining their existing coverage.
9:28:25 AM
Co-Chair Stedman wondered what was necessary under the
federal requirements and what was optional. Senator French
emphasized that it was important to remember that there are
a set of federal guidelines that must be maintained. He
noted that there would be two exchanges if the state
exchange falls too far outside of federal guidelines.
Consumers must have a place where they can make an
intelligent choice at a minimum, rating of policies where
consumers can look at how many claims are denied, costs and
benefits.
Mr. Moderow agreed to provide more detailed information
regarding federal regulations. He stressed that the tax
benefits would only be available through the federally
sanctioned exchange that meets federal guidelines.
9:30:29 AM
Senator Olson wondered if IHS beneficiaries could chose a
different primary insurance coverage and retain their IHS
policy as their secondary. Mr. Moderow replied that there
was an elimination of cost sharing, and agreed to provide
more detailed information.
9:31:35 AM
Senator Olson wondered if there was support from health
care providers. Mr. Moderow explained that IHS
beneficiaries can take advantage of eliminated cost
sharing. He thought that IHS was the payer of last resort.
Senator Olson wondered if there was support from health
care providers. Mr. Moderow explained that IHS
beneficiaries can take advantage of eliminated cost
sharing. He thought that IHS was the payer of last resort.
Senator Olson wondered if there was support from healthcare
providers. Mr. Moderow noted a letterd of support from the
Small Business Majority and the Anchorage Disability Law
Center.
Senator Olson referred to the fiscal note and ongoing
costs. Mr. Moderow noted the department could discuss the
fiscal note.
9:32:55 AM
Senator McGuire stressed the high costs associated with
dental disease and questioned if dental care was included
in the program. Mr. Moderow replied that pediatric dental
programs were included in the options. He agreed to provide
a more detailed response.
9:34:29 AM
Senator McGuire asked if there is an opt-out provision for
Alaskans that don't want to participate based on a
philosophical right of freedom to choose. She noted that
mandatory health insurance essentially exists in Alaska
since emergency medical care is not refused. "We will treat
you at a hospital; we are not going to let you die on the
road; and we will pay for it as Alaskans." She noted that
one admission to an emergency room can cost $10 thousand.
Senator French explained that the bill does not exempt
anyone based on their right to choose to participate. He
acknowledged that there is a free rider problem in the
state and nation, where people can seek free medical care
in emergency rooms that the bill seeks to end. The bill
seeks to get "every single person paying something into the
system in exchange for the benefits they receive through
emergency rooms, or other places they get, in essence, free
medical care." He stressed that it is more efficient to
have a health insurance policy that allows individuals to
see a primary care physician instead of waiting until a
crisis occurs that requires an emergency room visit. He
maintained that as long as there is a system that "will not
let you die in the road; will not let you sort of expire in
the gutter; that is going to take you to the emergency
room," everyone should pay. He maintained the legislation
errs on the side of health and wellbeing.
9:38:04 AM
Co-Chair Stedman asked Senator French to give more detail
on why the exchange was structured as a public corporation
with an independent legal existence. Senator French
explained that the exchange was set up with independent
bodies to operate as free as it can from political
influence, yet be bound by the guidelines in the bill. The
exchange could be housed in the department as a division.
9:39:08 AM
Co-Chair Hoffman referred to discussions between the Senate
Finance co-chairs and the Division of Insurance. The
division expressed concern that Alaska does not have a
large enough pool to economically administer an exchange
and alluded to the fact Alaska would be better served by
joining another state such as Washington State. He asked if
the sponsor considered the possibility of a multi-state
exchange. Senator French responded that a multi-state
exchange was not considered in drafting the legislation.
However, pooling in respect to buying across state lines
was addressed in subsection 28, page 9. Insurance policies
are largely a creation of state law and regulated by state
regulators. A multi-state pool would have to be created to
buy across state lines.
9:41:22 AM
Co-Chair Hoffman stressed that perhaps a large pool would
lower administrative costs. Co-Chair Stedman observed that
pooling with smaller populated states such as Montana and
Idaho were discussed.
9:41:50 AM
Senator Thomas referred to education and prevention.
Senator French pointed to the intent language on page 1:
(3) to provide consumer education and assist
individuals with access to programs, credits, and
cost-sharing reductions; and subsection (4) to reduce
the number of uninsured Alaskans by creating an
organized, transparent, and easy-to-navigate health
insurance marketplace that offers a choice of high
value health plans with low administrative costs for
individuals and employers;
Senator French acknowledged that there are no health
initiatives or education programs. The ability to obtain a
check-up is implicit. He maintained that it is easy to
forget how daunting it is to those without insurance to
have to pay out of pocket for every cost. He stressed that
"lower income folks just don't go see a doctor to their
great detriment".
9:44:07 AM
Senator Thomas wondered if the board could devise plans
that would require annual physicals, which could result in
a savings in terms of heart disease and cancer prevention.
Senator French observed that the federal debate centered on
the role of government in people's lives. He shared the
concerns about preventative care. However, the laissez fare
approach won.
9:46:14 AM
JOHN SHERWOOD, DEPARTMENT OF HEALTH AND SOCIAL SERVICES,
noted that the administration believes they have the
authority to begin the planning and implementation process
without state legislation and do not support SB 70. The
Department of Health and Social Services and Department of
Commerce, Community and Economic Development are working to
analyze the federal legislation and requirements to begin
the implementation process.
Co-Chair Stedman observed that the commissioner was in
Washington, D.C. He asked Mr. Sherwood to elaborate and
questioned how the administration would resolve the issue
that SB 70 attempts to address.
Mr. Sherwood was unable to elaborate and emphasized that
the department was still in the planning process. He
clarified that the administration was looking at a multi-
state exchange. The federal government released seven
grants to early adopters (states taking different
approaches to developing exchanges). One of the grants went
to a consortium of New England states for a New England
regional exchange.
9:50:34 AM
Co-Chair Stedman asked for guidance on the legislative
timeframe and a response to Senator Ellis' question. Mr.
Sherwood clarified that the federal legislation requires
that the exchanges be operational by January 1, 2014. The
federal government will move in to implement an exchange if
it determines by January 1, 2013 that a state will not have
a functioning exchange by that date. The state will need to
move forward by 2012.
9:51:29 AM
Co-Chair Stedman queried the denial of the million dollar
grant. Mr. Sherwood acknowledged that the administration
did not apply for the grant, because the administration did
not want to have federal entanglement and obligation. He
acknowledged that most of the development money is
contingent on having received the planning money. He noted
that federal policies can change. The state is eligible for
some funding for related activities such as developing the
new required Medicare coverage. The exchange would become
self-funding once it is developed.
9:53:12 AM
Co-Chair Hoffman maintained that it is a major public
policy issue that is worthy of a legislative discussion. He
noted the lack of legislative involvement and asked if the
intent was to avoid a legislative decision. Mr. Sherwood
replied that the administration was interested in a
dialogue about whether the legislation was needed in the
current year. Mr. Sherwood replied that there was a
willingness to have a dialogue.
9:55:00 AM
Senator McGuire understood the administration's broader
goal for rejecting the grant money attached to the creation
of universal health care, but questioned the rejection of
the $1 million that could have been used for planning and
state control of the exchange. She queried the rationale.
Mr. Sherwood replied that the money was rejected to
minimize federal entanglement and avoid obligation as part
of an overall strategy.
9:56:50 AM
Senator McGuire stated that she wished that the decision
had not been made and stressed that "you don't have to
throw the baby out with the bathwater". She felt that the
decision should be made collectively with the legislature.
She referred to page 2, which puts the commission selection
in the hands of the governor. She pointed out that the
commission would be made up of Alaskan small business
employers and health care insurance companies and
emphasized the uniqueness of Alaska. She cautioned that
Alaska doesn't get absorbed into bigger pools that may not
pay attention to Alaska's needs. She asked if there is a
representative pointing out the unique aspects of diabetes
or obesity in Alaska and wondered how Alaskan health care
needs are being communicated in the exchange network. Mr.
Sherwood clarified that Alaska was not planning to join the
New England exchange. He explained that there are different
models. States must share their experience with other
states as part of the criteria for federal funds. Alaska is
looking at different models including a multi-state
exchange pool. He acknowledged the task of keeping Alaska's
unique characteristics in mind when looking at the
different models.
10:00:35 AM
Senator McGuire referred to her experience when Alaska
joined Washington State's organ and tissue donation model.
Not only did Alaska loose money, but lives were lost as
well when Washingtonians became a priority. Washington
medical departments and insurers were in the driver's seat.
She expressed concern that Alaskans could suffer in a
multi-state exchange. Alaskans should come out healthier
from an exchange.
10:02:31 AM
Senator Thomas wondered if there were statistics on the
cost to those that can pay from uncollectible or unpaid
medical bills from those that cannot pay. Mr. Sherwood
replied that he did not know, but stated that there was
some data on uncompensated care for hospitals.
Co-Chair Stedman requested more data on uncollectible
hospital debt being absorbed into the system. Mr. Sherwood
indicated he would provide that information.
10:03:46 AM
Co-Chair Stedman addressed the four proposed fiscal notes:
$3 million GF from the Department of Administration for
band width, hardware and software and maintenance of the
system; $1,662,100 GF from the Department of Commerce,
Community and Economic Development for 12 new positions to
manage the program, as well as board costs and supplies;
$230.2 thousand GF and $230.2 thousand matching federal
funds from the Department of Health and Social Services for
five new analyst positions; and a zero fiscal note from the
Division of insurance.
10:04:35 AM
PAT LUBY, AARP (via teleconference), testified in support
of SB 70. He emphasized that the federal government will
impose an exchange if the state does not create one. He
maintained that an exchange is the easiest way for an
individual or small business to find adequate affordable
health coverage. Two-thirds of America's small businesses
offered some form of health insurance, but had to rely on
brokers for advice on the best coverage at the least cost.
Web based exchanges make it easier for the individual or
small business to compare coverage and cost as well as to
find out what subsidies might be available. He noted that
Medicare Part D allows clients to choose their prescription
drug coverage by going on line, typing in their medications
and finding out what the best policy and cost is for each.
Mr. Luby referred to recent conversations with the Alaska
Association of Insurance Underwriters (AAIU) and noted that
AAIU cautioned against looking to multi-state pooling due
to the high health care costs in Alaska.
Mr. Luby noted that AARP supports SB 70 and believes it
will help all Alaskans to find the best coverage at the
lowest cost; and will be Alaskan designed and not imposed
by the federal government.
10:06:45 AM
MARK REGAN, LEGAL DIRECTOR, DISABILITY LAW CENTER OF
ALASKA, ANCHORAGE (via teleconference), testified in
support of SB 70. He emphasized that the exchange system
puts people with disabilities into the pool with everyone
else and includes federal safeguards to insure that people
with disabilities are not charged excessive premiums.
Overall costs could be reduced since everyone would
participate. He noted that most people that want to opt out
would do so not to evoke their rights to freedom, but
because they think participation will cost them money. He
emphasized that social security and Medicare Part A are
mandatory programs and that exchanges would help people
establish their exemptions due to the lack of affordable
coverage or other reasons, without penalty.
Mr. Regan did not believe the state could establish an
exchange without detailed legislation. The proposed
legislation is an adaptation of the model legislation
proposed by the National Association of Insurance
Commissioners. States have the ability to setup how the
exchange is managed and operated. He stressed that while
the exchange's function is laid out in federal legislation,
there will need to be additional state legislation that
lays out what the exchange does and there is room for the
legislature and administration to dialog.
10:12:20 AM
Senator Olson wondered why the private sector had not
stepped up to develop the exchange. Senator French observed
that insurance companies are not interested in being
compared to other companies; a consumer group is needed to
put companies' side-by-side for comparison.
SB 70 was HEARD and HELD in committee for further
consideration.
SENATE BILL NO. 87
"An Act establishing a program in the Department of
Commerce, Community, and Economic Development for
payment of grants to health care providers for care of
patients who are 65 years of age or older."
10:14:03 AM
Senator French, Sponsor, explained the bill. He maintained
that Alaska's Medicare system is not working well.
Too many seniors cannot find a primary care doctor.
Physicians who do accept Medicare patients are losing
money with each visit, as the cost of providing care
exceeds the federal reimbursement rate.
We can't wait for the federal government to fix
Medicare; instead, we need to act today. This
legislation will immediately improve seniors' access
to primary care services in Alaska.
The bill establishes a grant fund for health care
providers serving Alaskans who are sixty-five years of
age or over. The grants will be paid to medical
providers that increase primary care access to
Alaska's seniors. All health care providers -
including physicians, nurse practitioners, and
physician assistants - would be eligible for grants.
Access to primary care, as you know Mr. Chariman,
improves health outcomes and reduces medical costs.
Instead of waiting for small ailments to become major,
primary care prevents expensive medical treatments.
Instead of requiring an emergency room visit, primary
care keeps our seniors healthy.
Senator French observed that a new Medicare clinic opened
in Alaska. The clinic hopes to serve five to six thousand
citizens, which is only half of the 13,000 seniors on
Medicare in Anchorage that do not have a primary care
provider. While the Medicare clinic is a good step forward,
Senator French did not feel that one solution could be
relied on to solve the entire problem. He observed that the
Institute of Social and Economic Research (ISER) estimates
that Alaska will have 86,000 non-native Alaskans eligible
for Medicare by 2020.
Senator French estimated that the supplemental cost of one
primary care visit for those that don't have a primary care
doctor would cost the state $1.2 million. He stressed that
costs would be reduced by the coverage of nurses and
physician assistants.
10:17:51 AM
In response to a question by Senator Olson, Senator French
clarified that the Medicare clinic was put together by
Providence Hospital.
Senator Olson wondered if there were provisions to cover
dental costs. Mr. Moderow agreed to provide that
information.
10:18:24 AM
Senator Olson stressed concern with high pharmaceutical
costs. Senator French observed that Medicare Part D and the
Affordable Care Act shrunk the "donut whole" that affected
so many seniors that had to pick up costs of
pharmaceuticals. The legislation primarily addresses
primary care; pharmacy costs are not addressed.
10:19:23 AM
Co-Chair Stedman wondered if there were some areas of the
state that are underserved. Senator French stated that the
south central region held the biggest issue.
10:20:43 AM
JOHN SHERWOOD, DEPARTMENT OF HEALTH AND SOCIAL SERVICES,
stated that the responsibility of the program would fall
under the Department of Commerce, Community and Economic
Development. Federal legislation allowing state grants
without Medicare payment issues precludes the state's
Medicare agency from operating the grant program. The
Department of Health and Social Services is the state
agency.
Co-Chair Stedman queried the position of the
administration. Mr. Sherwood replied that the
administration had not taken a position.
10:22:04 AM
Co-Chair Stedman highlighted the fiscal note: $234,100 GF
from the Department of Commerce, Community and Economic
Development for two new positions and supplies. The fiscal
note does not make assumptions on the possible number of
grants or provide grant funding.
10:22:38 AM
PAT LUBY, AARP (via teleconference), testified in support
of SB 87. The legislation would enable a grant program to
help providers that see a significant number of Medicare
patients. He pointed to access problems faced by many
Medicare patients, primarily in urban areas. He stressed
that older Alaskans will leave the state if they cannot
find a health provider.
10:23:37 AM
DENISE DANIELLO, EXECUTIVE DIRECTOR, ALASKA COMMISSION ON
AGING, spoke in support of SB 87. Alaska continues to lead
all states with the growth of its senior population.
Currently, there are 53,200 Alaskans age 65 or older. Older
Alaskans, growing in number and living longer, are
experiencing chronic medical health conditions and physical
disabilities. Alaska is, at the same time, experiencing a
shortage of primary care providers. In recent years,
seniors have been unable to access primary health care as
doctors refuse them due to low Medicare reimbursement
rates. A statewide survey by the Commission found that 16
percent of respondents had difficulty finding a doctor. In
2005, a similar survey found that 24 percent of seniors
experienced a health care problem. Today 31 percent of
seniors experience a health care problem.
10:26:23 AM
BOB DOLL, PRESIDENT, RETIRED PUBLIC EMPLOYEES OF ALASKA,
testified in support of SB 87. Medicare appears as the
state sanctioned method for providing post-retirement age
medical coverage that was part of employment for retirees.
He observed that the retirees look to the plan creators
(legislature) for remedy to problems. He maintained that
that SB 87 provides a remedy and acknowledged the work of
the Alaskan congressional delegation in making
supplementary payments to Medicare providers legal. He
maintained that thousands of Alaskan seniors pass through
the Medicare window every year and some will find that
their health care is jeopardized.
10:27:55 AM
Co-Chair Hoffman wondered why there was a proposal to set
up the program without recommendations for individual
grants. Senator French replied that there was a
recommendation of $1.2 million, which would satisfy the
problem for a year.
10:28:46 AM
SB 87 was HEARD and HELD in committee for further
consideration.
ADJOURNMENT
10:29:18 AM
The meeting was adjourned at 10:29 AM.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 87 - 2010 Letter to Governor.pdf |
SFIN 3/28/2011 9:00:00 AM |
SB 87 |
| SB 87 Sponsor Statement.PDF |
SFIN 3/28/2011 9:00:00 AM SL&C 3/1/2011 2:00:00 PM |
SB 87 |
| SB 87 - Letter of Support AARP.pdf |
SFIN 3/28/2011 9:00:00 AM |
SB 87 |
| SB 87 - Explanation of Changes.pdf |
SFIN 3/28/2011 9:00:00 AM |
SB 87 |
| SB 87 - Letter of Support ACoA.pdf |
SFIN 3/28/2011 9:00:00 AM |
SB 87 |
| SB 87 - ISER Medicare Report.pdf |
SFIN 3/28/2011 9:00:00 AM |
SB 87 |
| SB 70 - ADN Article.pdf |
SFIN 3/28/2011 9:00:00 AM |
SB 70 |
| SB 70 - Explanation of Changes.pdf |
SFIN 3/28/2011 9:00:00 AM |
SB 70 |
| SB 70 - Houston Chronicle Article.pdf |
SFIN 3/28/2011 9:00:00 AM |
SB 70 |
| SB 70 - Letters Of Support.pdf |
SFIN 3/28/2011 9:00:00 AM |
SB 70 |
| SB 70 - NCSL Article.pdf |
SFIN 3/28/2011 9:00:00 AM |
SB 70 |
| SB 70 - Sectional.pdf |
SFIN 3/28/2011 9:00:00 AM |
SB 70 |
| SB 102 Sponsor Statement.docx |
SFIN 3/28/2011 9:00:00 AM |
SB 102 |
| SB 70 Sen. French Response to Questions 040111.pdf |
SFIN 3/28/2011 9:00:00 AM |
SB 70 |
| SB 87 Sen. French Response to Questions 040111.pdf |
SFIN 3/28/2011 9:00:00 AM |
SB 87 |