Legislature(1993 - 1994)
04/14/1993 01:40 PM HES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE HEALTH, EDUCATION AND SOCIAL SERVICES COMMITTEE April 14, 1993 1:40 p.m. MEMBERS PRESENT Senator Steve Rieger, Chairman Senator Bert Sharp, Vice-Chairman Senator Loren Leman Senator Mike Miller Senator Jim Duncan Senator Johnny Ellis Senator Judy Salo MEMBERS ABSENT All members present COMMITTEE CALENDAR SPONSOR SUBSTITUTE FOR SENATE BILL NO. 114 "An Act establishing the Alaska Health Care Authority; relating to the delivery, quality, access, and financing of health care; requiring the establishment of health care expenditure limits; relating to approval of disability insurance rates; relating to the issuance of certificates of need; relating to health insurance for small employers; and providing for an effective date." SENATE BILL NO. 123 "An Act relating to civil actions; and providing for an effective date." HB 97 (PARENTAL CARE FOR CHILD IN STATE CUSTODY) was scheduled, but not heard this date. HJR 30 (QUARANTINE SERVICES AT PORTS OF ENTRY) was scheduled, but not heard this date. PREVIOUS SENATE COMMITTEE ACTION SB 114 - No previous action to record. SB 123 - No previous action to record. HB 97 - No previous action to record. HJR 30 - No previous action to record. WITNESS REGISTER Senator Jim Duncan State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Prime Sponsor of SSSB 114 Mary Lou Meiners, Chair State Legislative Committee American Association of Retired Persons P.O. Box 20412 Juneau, AK 99802 POSITION STATEMENT: Testified in support of SSSB 114 Karen Perdue Fairbanks, AK POSITION STATEMENT: Supports SSSB 114 Dr. Rodman Wilson 6234 Tanaina Drive Anchorage, AK 99502 POSITION STATEMENT: Supports SSSB 114 ACTION NARRATIVE TAPE 93-36, SIDE A Number 001 CHAIRMAN RIEGER called the Senate Health, Education and Social Services (HESS) Committee to order at 1:40 p.m. He then brought SSSB 114 (STATE HEALTH RESOURCES AUTHORITY) and SB 123 (CIVIL LIABILITY: MEDICAL MALPRACTICE) before the committee, stating that both pieces of legislation were the recommendations of the Health Resources and Access Task Force. SENATOR DUNCAN, prime sponsor of SSSB 114, said the two pieces of legislation are the health care reform proposals recommended by the task force that worked over the past two years. They are designed to bring about a comprehensive reform plan to bring health care costs under control, as well as to provide universal access of health care to Alaskans. The task force made recommendations that centered around cost containment, improvements in the access and service delivery system, as well as medical malpractice reforms. Senator Duncan noted that SSSB 114 contains one provision that does not appear in the task force recommendations, which is the requirement that there be a comprehensive long-term care plan developed. He believes the development of a comprehensive long-term care plan is an important component of comprehensive reform of the state's health care system. Senator Duncan said basic health care is not available to all Alaskans. The task force concluded that there are approximately 76,000 non-elderly, non-native Alaskans who have no health care coverage. About 21,000 of that 76,000 are under the age of 18 and it is a serious problem for these young people. The task force also found that nearly nine out of ten Alaskans without health care coverage are "working uninsured" and their dependents. Senator Duncan said the rising cost of health care and health insurance in Alaska is one of the most critical problems facing the state. It is projected that if the inflationary trends continue unabated, in ten years Alaskans will pay $5.6 billion annually for health care services, up from the $1.5 billion in 1991. Enactment of meaningful health care reform as contained in SB 114 will significantly reduce the rate of increase and provide access to health care for more Alaskans, he stated. Number 100 Senator Duncan explained that SB 114 establishes the Alaska Health Care Authority to manage the health care cost containment and access initiatives proposed by the task force. Some of the specific duties of the Authority will be to: design and establish a statewide health care expenditure limit; establish state sponsored health insurance pooling arrangements; and design a single-payer health care financing, uniform billing and claims system. Senator Duncan outlined the following reasons why the task force concluded that the single payer approach was preferable: (1) The current mix of public, employer, and individual financing inevitable creates coverage gaps for some people, particularly when their employment status changes. (2) Health care financing plans that require all businesses to provide health care benefits, or that levy additional taxes on employers who do not provide benefits, may threaten the economic viability of many small businesses in Alaska. (3) Multiple-payer systems would not necessarily address the problems of cost shifting that exist in our current system, and (4) Systems that are built upon existing public-private financing arrangements can be expected to inherit the inefficiencies of those systems. The task force has recommended that until universal access is attained, interim steps be taken to provide increased health care access to unserved or underserved groups through the following statutory changes which are included in SB 114: (1) General reform of the small employer health insurance market to prevent abusive rating practices, require disclosure of rating practices, regulate policy renewal, and limit exclusion of preexisting medical conditions. (2) Phase in a community rating system for establishing premiums in the small group insurance market, and (3) Implement publicly subsidized coverage of uninsured low-income pregnant women and children who are not eligible for Medicaid. Number 200 Addressing SB 123, Senator Duncan explained that it includes a recommendation made by the task force which reduces the statute of limitations for birth-related injuries from the current law up to the eighth birthday of the child. It also includes the recommendation by the task force that the state's existing pretrial screening process for medical malpractice suits be replaced with a court ordered non-binding arbitration process. Further, it recommends that there be a change in the level of prejudgment interest charged in medical malpractice cases from the 10.5 percent, which is currently in statute, to the prevailing interest rate. Senator Duncan added that as the task force was doing its work there was a lot of interest and concern, especially among the provider community, to try to put everything into one piece of legislation, but the attorneys advised that those two items could not be rolled together because of the violation of the single subject rule. He noted that the effective dates on both bills have been tied together so that they go through as a package and not as individual pieces of legislation. Number 241 CHAIRMAN RIEGER commented that as the committee moves into the health care issue, there are several other approaches that he believes are important for the committee to have before it to have the benefit of seeing what the various approaches are. Number 275 SENATOR LEMAN noted that SB 161 (INTEREST RATES: JUDGMENTS/TAXES/ROYALTIES) also relates to both prejudgment interest and postjudgment interest, and he is hopeful that it will pass this session. Number 307 SENATOR ELLIS, Co-chair of the Health Resources and Access Task Force, commented that one of the most startling things he learned during the approximately 18 months of the task force's work is that competition can be a startling success in some facets of health care reform and can be an incredible nightmare in other areas, that market forces are extremely distorted in this arena. He also noted that so much of what is read about the national debate on health care is not applicable to the State of Alaska and, in the task force work, they found just how different Alaska is from most other states. Number 365 MARY LOU MEINERS, Chairperson for the State Legislative Committee for the American Association of Retired Persons, stated their organization advocates the creation of an Alaska health care plan which includes comprehensive long-term care that provides for a continuum of home, community and institutional services. In the interest of achieving these reforms, AARP advocates: (1) The creation of an authority to manage the access, delivery, quality, planning and financing of health care in Alaska, and establish a voluntary health care procurement and financing tool to maximize the purchasing power for state and local governments and political subdivisions, for state residents who uninsured and underinsured and for public and small employer plans. (2) The collection and analysis of state health care utilization and data cost. (3) The expanding, monitoring and certifying of facilities expansion and substantial equipment technology purchases to assure the need and eliminate duplication of unnecessary expenses which would require certificate of statutes now in place. (4) Promoting health awareness, preventative medicine and quality health care for all state residents. (5) Providing quality, affordable health care access for underinsured and uninsured Alaska residents. (6) Continuing evaluation of the effect of federal program changes and maximizing the use of federal funds. (7) Promoting health care professional training and retention in Alaska, and developing a program for recruitment of health care professionals. (8) Developing a way for the sole proprietor and small employer to provide health coverage to employees and to their dependents. (9) Continuing to evaluate alternative and self-funding as the option for state employees' and retirees' plans, and (10) Formation of a cross-section focus task force to continue to study and make recommendations to assure quality, affordable health care for all Alaskans. Number 432 KAREN PERDUE, a former Health Resources & Access Task Force member who is currently in private business with her husband in Fairbanks, said they are being saddled with costs for health care insurance that are unbelievable, so her interest in this subject has changed over time to understanding the needs of people who are having an ongoing problem managing the cost of health care premiums in Alaska. Ms. Perdue said over the past four or five years there has been a tremendous amount of activity at the state level to explore what's right for certain states, and there have been two categories of things that have been done: some states have moved forward with their own plans, such as the State of Washington and the State of Oregon; and there have been states who have chosen to wait for the federal government to come forward with their plan, and Alaska is in the later plan. Ms. Perdue cautioned that Alaska really needs to start thinking about what kinds of plans it is going to make for the day that the Clinton Administration releases its plan. She said there are some good experts in the state system, but we are not organized in a way to fully analyze some of the proposals that will be coming down from the federal government. She stressed that the health care authority would provide the state with the tool to do that. Number 485 DR. RODMAN WILSON, a retired internist living in Anchorage and a member of the Health Resources and Access Task Force, said his main criticism of the task force report and SSSB 114 is that it emphasizes the primacy of cost, which he agrees with, but it doesn't stress access quite enough. Mr. Wilson also stressed that the state needs to be ready to respond to what will be coming from Washington, D.C., and the more sound proposals that are on the table for discussion, the better. It is his hope that something can be fashioned that is a hybrid between SSSB 114 and the CHIPRA bill (HB 273). Mr. Wilson also noted that the Clinton Administration is talking about doing away with Medicaid and incorporating it into state plans, which is something that could be part of either SB 114 or HB 273 or an amalgamation of those issues. Number 562 CHAIRMAN RIEGER commented that one of reasons that managed competition seems like an interesting idea is that it seems to address some of the principles which make sense. He said if there is going to be a health care policy of some sort, it is necessary to guard against adverse selection. Without mandatory participation, there is always the possibility of adverse selection and the healthy people end up being insured and the others are left out. The high risk pool tends to become higher and higher risk as the dynamics of the system work themselves through. Chairman Rieger said there are number of other medical issues that should be addressed such as the philosophy of treating illness rather than prevention, high markups for distribution of health care, tort law, as well as reviewing some of the things that the State of Oregon has addressed. TAPE 93-36, SIDE B Number 012 CHAIRMAN RIEGER said it was his intention to have the CHIPRA measure introduced and before the committee, as well as other proposals before the committee for its consideration. There being no further business to come before the committee, the meeting was adjourned at 2:27 p.m.