Legislature(1999 - 2000)
02/24/1999 01:32 PM Senate HES
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
SENATE HEALTH, EDUCATION AND SOCIAL SERVICES COMMITTEE
February 24, 1999
1:32 p.m.
MEMBERS PRESENT
Senator Mike Miller, Chairman
Senator Pete Kelly, Vice-Chairman
Senator Gary Wilken
Senator Drue Pearce
Senator Kim Elton
MEMBERS ABSENT
All members were present
COMMITTEE CALENDAR
CS FOR SENATE BILL NO. 48(HES)
"An Act relating to health insurance provided by and provisions
relating to the Comprehensive Health Insurance Association."
-MOVED OUT OF COMMITTEE
CS FOR SENATE BILL NO. 27(HES)
"An Act relating to school records and driver license records of
certain children."
-MOVED OUT OF COMMITTEE
PREVIOUS SENATE COMMITTEE ACTION
SB 48 - No previous action to report
SB 27 - See HESS Committee Minutes 2/22/99
WITNESS REGISTER
Senator Jerry Mackie
Alaska State Capitol
Juneau, AK 99811-1182
POSITION STATEMENT: Presented SB 48
Mr. Cecil Vykerk, Executive Vice President
Mutual of Omaha Insurance Companies
Omaha, Nebraska
POSITION STATEMENT: Commented on SB 48
Ms. Sandra Cole, Public Advocate
Comprehensive Health Insurance
Association
Wasilla, AK
POSITION STATEMENT: Commented on SB 48
Ms. Marianne Burke, Director
Division of Insurance
Department of Commerce & Economic Development
PO Box 110805
Juneau, AK 99811-0805
POSITION STATEMENT: Supported SB 48
Mr. Mike Pauley, Staff Aide
Senator Loren Leman
Alaska State Capital
Juneau, AK 99801-1182
POSITION STATEMENT: Commented on SB 27
Ms. Beth Lape, Special Assistant
Department of Education
801 W. 10th St. Ste. 200
Juneau, AK 99801-1894
POSITION STATEMENT: Commented on SB 27
ACTION NARRATIVE
TAPE 99-07, SIDE A
Number 001
SB 48-STATE HEALTH INSURANCE
CHAIRMAN MILLER called the Senate Health, Education and Social
Services (HESS) Committee to order at 1:32 p.m. and announced that
SB 48 would be the first order of business, with Senator Jerry
Mackie speaking on the bill. CHAIRMAN MILLER noted a proposed
committee substitute in the packets, and SENATOR MACKIE stated that
all of his testimony would address the draft CS.
CHAIRMAN MILLER asked for a motion to adopt CSSB 48(HES). SENATOR
PEARCE so moved, and without objection it was adopted.
Number 019
SENATOR MACKIE thanked the committee for hearing the bill, and
stated that Marianne Burke and others would comment on the details
of the legislation. He introduced the bill at the request of the
Board of Directors of The Comprehensive Health Insurance
Association(CHIA). The association makes individual health
insurance available to residents who are high risks or are
federally-defined eligible individuals. The directors represent
the principle providers of health insurance in Alaska. He said the
legislation has the support of the Division of Insurance. The CHIA
was created by statute, with copies in the committee packets.
The legislation amends AS 21.55 to (1) allow the board greater
flexibility to design more cost-effective health insurance plans
for individuals eligible for coverage under the CHIA plan; (2)
increase the number of potential administrators of the CHIA by
eliminating the requirement that the administrator be an insurer;
(3) allow greater flexibility in evaluating an administrator and in
setting the terms of the administrative contract; (4) simplify
administration by decreasing the number of declinations required
for eligibility; (5) make technical corrections relating to the
determination of premium rates, terminology, premium payment modes,
board member terms and voting at board meetings; and (6) give the
director of insurance a more effective and appropriate mechanism to
enforce the requirement that members pay their share of the CHIA
assessments on a timely basis.
SENATOR MACKIE continued, saying the legislation will allow the
board to manage CHIA in a more cost-effective and efficient manner.
It also is particularly important in light of the new federal
requirements, and the use of CHIA as the mechanism to guarantee
portability of health insurance coverage to federally eligible
individuals. He pointed out the zero fiscal note from the Division
of Insurance and a detailed sectional analysis in the packets.
Number 065
SENATOR ELTON questioned why in Section 7 100% for medical can be
paid, but only 50% for the treatment of mental and nervous
conditions when some mental conditions like schizophrenia and
bipolar need continuous medication. SENATOR MACKIE deferred to Ms.
Burke for an answer.
CHAIRMAN MILLER asked Senator Mackie if any groups are opposed to
the bill. SENATOR MACKIE replied there are none. A lot of these
are technical changes.
CHAIRMAN MILLER invited the on-line witnesses to testify.
Number 100
MR. CECIL VYKERK, Executive Vice President and Chief Actuary for
Mutual of Omaha insurance companies, Omaha Nebraska, stated he's
been involved with the CHIA board since its inception in 1992. The
legislation in Alaska passed in 1992 and they began insuring the
first policyholders in 1993. The board is composed of five insurer
representatives that currently include Blue Cross Alaska, Aetna,
and Mutual of Omaha; and two consumer representatives from Wasilla,
including Sandra Cole who is on-line today.
MR. VYKERK continued, it's a very important plan for Alaskans who
are unable to purchase health insurance through the private market
due to preexisting conditions and other factors. It's also
important to meet the requirements of the HIP legislation passed by
the federal government several years ago. A group that included
the Division of Insurance worked hard to make the legislation
successful. The bill is largely a collection of technical
adjustments to make it easier to manage the pool in a cost-
efficient manner.
Number 141
MS. SANDRA COLE, Public Representative on CHIA, stated she has been
on the board for two years. She spoke to the changes in the bill,
noting the one vote for the public advocates. She asserted that to
change the $200 deductible to a $500 minimum is not a problem for
the public. She said there is a need to keep the premiums at the
current high insurance rates in Alaska. In order for people to
afford this program, which many including herself cannot, there
must be changes in other areas to decrease the cost of the program.
She discussed hospitalization, competition, and language changes
including the use of age as a definition for premiums and the
elimination of vague wording such as "excessive" and "inadequate"
which are impossible to define. MS. COLE said in summary that the
program is vital to the people of Alaska.
Number 209
CHAIRMAN MILLER announced to the Close Up students present in the
audience that the committee is considering SB 48. SENATOR WILKEN
asked where the students were from. They each stood and introduced
themselves, and they were all from Akiak and Akiachuk.
SENATOR KELLY stated that he is unsure what the bill does, and he
wondered if it creates a board which develops policy with money
appropriated in the bill passed by the legislature last year.
Number 232
MS. MARIANNE BURKE, Director, Division of Insurance, stated this
company was created by the legislature in 1993, separate from state
government without state subsidy. She said it is critical for the
many people who cannot get health insurance, no matter the cost,
and gives them a chance to participate in the cost of their own
insurance. The board only collects about 20% of the total cost,
the remainder of the cost being assessed against the writers of
insurance in the state. As a condition for doing business in the
state, the insurance writers agree to assist in funding this
mechanism. Without it, most of these people would be on Medicaid.
They aren't paying much, but for many it's a point of pride and
personal dignity that they are participating. They include people
with incurable or terminal diseases such as AIDS, cancer, or
hemophilia who cannot get insurance. It is not a perfect program,
but it provides the care and allows individuals to participate, and
it spreads the cost over all the insureds in the state of Alaska.
SENATOR KELLY stated that it creates a catastrophic policy, and he
asked about the deductibles.
MS. BURKE replied there are a variety of deductibles ranging from
$500 to $10,000 which the individual selects according to what he
can afford to pay. It is also geared to age. There is no other
underwriting. She clarified that the individual pays a premium but
it only covers about 20% of the total cost incurred. The CHIA is
the insurance company, funded in part by the premiums and in part
by the writers of insurance in Alaska.
SENATOR KELLY asked if the cost spread to the insurance companies
is an equal distribution. MS. BURKE answered that it is based on
the pro-rata share of the premiums they write on any health policy
in the state. The company writing more premiums than any other
would get the biggest share of the assessment.
SENATOR KELLY asked how much this is going to cost and how much
each company is going to be assessed. MS. BURKE responded since
the inception of CHIA in 1993, approximately $7 million has been
assessed. In 1993, $250.0 was assessed for seed money. Originally
there were very few participants. The assessment is always made
based on the cost of the plan which is monitored by the board.
Within its statutory constraints the board tries to control those
costs, like hiring a case manager to help negotiate discounts with
the hospitals. The assessments have been as high as $1.5 million,
and currently Blue Cross is the largest writer in the state,
covering about 38% of that. Back when the state was insured, Blue
Cross and Aetna covered roughly 70% of the cost.
Number 311
SENATOR KELLY discussed Senator Murkowski's Medicaid bill that
passed last year, with millions accruing to the state to cover
people at 200% of the poverty level, depending on the number of
children. If you made in excess of $37,000, you were eligible for
Medicaid. He asked if that provision makes this legislation
obsolete.
MS. BURKE replied no, because it was specifically directed at
uninsured children. They may be uninsured for many reasons, but
seldom because they can't be insured because of a medical
condition. This plan, on the other hand, is set up for individuals
-not families or groups - who have a medical condition that
precludes them from buying a policy on the open market. They are
two separate programs.
SENATOR MACKIE clarified that the legislature in 1992 determined
that insurance companies, as part of doing business here,
contribute back to those folks who cannot get insurance for medical
conditions, to take care of catastrophic illnesses.
SENATOR ELTON asked why in the existing language in Section 7 there
is a differentiation between physical health and mental health,
with only 50% coverage of mental health disorders which may be
physically based.
MS. BURKE replied that she cannot explain that. It was written
back when it was the norm in writing and structuring a policy, and
the coverage has not been changed since that time.
SENATOR ELTON noted that Representative Gary Davis and Senator
Torgerson have some recommendations for the Mental Health Parity
Task Force. CHAIRMAN MILLER also noted that the bill has a
referral to Labor & Commerce after it leaves HESS.
MS. BURKE stated that the division supports the bill. The board is
charged with running the plan as cost-effectively as they can and
it's to their advantage to do so because their companies foot the
bill. Right now the board pays the highest administrative cost in
the country. Only one company has been willing to act as
administrator. If the division can help them have more choices in
that area to lower the cost of the plan, more people will benefit
from it.
SENATOR WILKEN moved CSSB 48(HES) out with individual
recommendations and the attached zero fiscal note. CHAIRMAN MILLER
asked for objection, and hearing none, CSSB 48(HES) passed from
committee with individual recommendations.
SB 27-ACCESS TO DRIVING/SCHOOL RECORDS OF CHILD
CHAIRMAN MILLER brought up SB 27 and asked Mike Pauley to join the
committee at the table.
Number 367
MR. MIKE PAULEY, Staff to Senator Leman, stated he worked with
Legal Services at the chairman's request to draft a committee
substitute. He then highlighted the page and line numbers of the
changes as follows.
On Page 1, lines 10-12, new language regarding releasing school
records states that the school district has the discretion to
decline releasing information that consists of the child's address
if there is reason to believe its release would pose a threat to
the health or safety of the child. In reference to the last
hearing on the bill, this amended language tries to address the
concern expressed by the Council on Domestic Violence & Sexual
Assault that there could be some circumstances of a non-custodial
parent with a restraining order because of child abuse being able
to locate the child by accessing this address information from the
school district.
The second change is on Page 2, line 2, where language was removed
that provided for DMV to charge a fee for the driving abstract,
thus making it consistent with Senator Wilken's amendment.
The third change is on Page 2, lines 4-6 which similarly adds an
exception that the DMV can refuse to release this address
information if it has reason to believe that its release might
jeopardize the health or safety of the driver. It is consistent
with the language in the bill that relates to school records.
Number 398
CHAIRMAN MILLER asked for a motion to adopt the committee
substitute. SENATOR WILKEN moved to adopt CSSB 27 Version D as a
working document, and there being no objection, it was so ordered.
Number 405
MS. BETH LAPE, Special Assistant to the Department of Education,
briefly stated that the department feels that the 53 school
districts in the state are currently in compliance with the federal
law relating to family educational and privacy rights, so it
believes that the first section of the bill is not necessary.
SENATOR ELTON asked Ms. Lape if the bill passed, could she give an
estimate of how many school districts would be out of compliance
with state law. He said he's thinking of Anchorage and Juneau which
currently exclude medical and psychological records in their local
policies. MS. LAPE answered she does not know.
Number 416
MS. MONA MAEHARA thanked the bill sponsor for working with the
council in drafting language that addressed their concerns.
MR. MIKE PAULEY addressed Senator Elton's earlier question, stating
the Anchorage school district policy excludes release of medical
and psychological records of a past or present student who is 18
years of age or older, but it does not exclude that information for
students under 18. Since this proposed legislation only applies to
children under the age of 18, it would not put Anchorage school
district in violation of the federal law. The federal law gives a
student, on becoming an adult, the right to consent to the release
of medical information. The sponsor's view is that prior to that
age, it's the parent's right to know medical information about
their child.
SENATOR ELTON asked if he knows the policies of other school
districts. MR. PAULEY replied he hasn't researched all 56
districts, although Ms. Lape stated the department feels they are
all in compliance with federal law. If that is the case, they
wouldn't release that information after the student turns 18.
Number 440
SENATOR WILKEN asked Ms. Lape if leaving Section 1 in the bill,
which the department feels is unnecessary, would create problems
for school districts.
MS. LAPE replied it's a good legal question. The federal law
refers to withholding funds to any local or state agency that has
a policy of not releasing records to parents. As far as the
department knows, no education agencies in the state are out of
compliance. This state law would bring different consequences and
a different set of liability.
SENATOR WILKEN asked Mr. Pauley how that squares with what Senator
Leman is trying to do with the bill. The department seems to be
suggesting it doesn't need fixing, and this is duplicative
language.
MR. PAULEY replied that it's not exactly duplicative language. The
federal law says in order to be eligible for funding you need to do
this, while the state law says you shall do it. That's the legal
difference. The language was added by the sponsor to clarify the
statute relating to the records a custodial parent can access.
SENATOR WILKEN asked Ms. Lape if she recommends leaving Section 1
as it is, or removing it. She replied that she recommends taking
the first section out.
CHAIRMAN MILLER stated the committee is at the mark up stage and
there are some proposed amendments.
SENATOR WILKEN asked if Mr. Pauley could take it back to Senator
Leman and advise him of this discussion, because it started out as
a driver's license bill.
Number 476
SENATOR KELLY asked Ms. Lape to explain her statement that a
different set of circumstances would apply if the Section 1
language is in the bill. He asked why there would be ramifications
from the federal government if we put in state law that which is in
federal law.
MS. LAPE replied that if it's in state law, there are liability
issues with school districts that don't currently exist with
federal law.
MR. PAULEY responded to a question from Senator Kelly regarding
what that liability would be. He said that under state law, if a
parent tried to get school records and was denied, they could
theoretically file an action in court saying this is illegal.
Senator Leman is strongly committed to having the first section in
the bill, and part of his concern is that it adds clarity to the
statute. He added that the state statutes are a lot more
accessible than the federal law.
SENATOR KELLY stated there are no unintended consequences of having
Section 1 beyond what the sponsor wanted to do. He said he would
prefer to keep Section 1 in the bill.
Number 508
SENATOR ELTON said he could not agree with Senator Kelly because
the committee had already found one unintended consequence that the
CS has remedied. He reiterated he would like to know the
consequences of this addition to statute. He feels that if a
student knew that medical records would be open to the custodial or
non-custodial parent, it would be a disincentive to the student to
be treated, as an example, for a sexually-transmitted disease.
He'd like to know the experiences in other school districts.
He asserted that the problem with the driver's record which led to
the drafting of this bill could have been solved by the parent
revoking permission to drive if DMV doesn't release that
information and the child is under 18. Instead, SENATOR ELTON
stated, we've fashioned a law that addresses one instance that
happened in the past and expanded it to include school records
without really understanding the net effect on the current
practices of school districts. He stated he is bothered by that.
SENATOR KELLY said he didn't have strong feelings about this bill
until Senator Elton talked him into it.
Number 530
CHAIRMAN MILLER asked the wish of the committee.
MR. PAULEY addressed Senator Kelly's and Senator Elton's comments.
The Anchorage school district policy does include some health-
related information in the records such as speech pathology reports
and a cumulative health card. This is a standard part of an
academic record disclosed to parents. He cannot explain their
policies regarding what is recorded on the health card.
Number 538
SENATOR ELTON stated he's tempted to offer an amendment to remove
Section 1, but there is a compelling reason to work with parents
and release these records.
SENATOR ELTON offered an amendment as follows:
on Page 1, Line 9: add a new "(1) medical records; or"
and
Renumber the existing (1) and (2).
The intent is to add an exemption of medical records from release.
He stated he's not sure he wants to preclude medical records if a
school district wants to release them, but to keep it an option for
the school district instead of a state mandate.
MS. LAPE expressed concern over becoming an educational agency
setting up policies in opposition to federal law. Not giving
certain records to parents would lead to ineligibility for federal
funds. She said that this section is subject to the federal law
which has three exceptions to accessing records, in addition to
those students over 18.
CHAIRMAN MILLER stated the bill goes to Finance, and of course, to
the Senate Floor. He recommended that Senator Elton work with the
department and the sponsor to come up with an amendment that would
do what he wants without making it mandatory for the school
district.
SENATOR ELTON withdrew his Amendment #1. He then offered a new
amendment to strike Section 1.
CHAIRMAN MILLER asked for objection. There was objection to the
amendment. Hearing no discussion, a roll call vote was taken with
Senator Elton voting "yea," and Senators Kelly, Wilken and Chairman
Miller voting "nay." The amendment failed.
SENATOR WILKEN moved CS SB 27(HES) out of committee with individual
recommendations and the zero fiscal note. Hearing no objection, it
was so ordered.
CHAIRMAN MILLER noted that the committee would not meet Monday,
March 1 because of the four-day recess. On Wednesday, March 3 the
committee will take up Senate Bills 56, 57, 58 and 59, the
legislation resulting from the Long-Term Care Task Force. His
intent would be to do as much work as possible on the bills next
week as he will be gone the following week when Senator Wilken and
Vice-Chairman Kelly will continue the work on the bills. With no
further business to come before the committee, Chairman Miller
adjourned at 2:30 p.m.
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