Legislature(1993 - 1994)
04/06/1994 01:38 PM Senate HES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE HEALTH, EDUCATION AND SOCIAL SERVICES COMMITTEE
April 6, 1994
1:38 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
SENATE BILL NO. 367
"An Act relating to health care and insurance for health care; to
review and approval of health insurance rates and rating factors;
relating to certain civil actions against health care providers; to
coordination of insurance benefits and to determination and
disclosure of fees paid to an insured or health care provider; to
the rate of interest on certain judgments and decrees; to excise
taxes on cigarettes; amending Alaska Rules of Civil Procedure 26,
27, 68, 79, and 82 and Alaska Rules of Evidence 802, 803, and 804;
repealing Alaska Rule of Civil Procedure 72.1; and providing for an
effective date."
PREVIOUS SENATE COMMITTEE ACTION
SB 367 - See Health, Education & Social Services minutes dated
3/28/94 and 3/30/94.
WITNESS REGISTER
Elmer Lindstrom, Special Assistant
Department of Health and Social Services
P.O. Box 110601
Juneau, Alaska 99811-0601
POSITION STATEMENT: Suggested adding an alcohol excise tax.
Peter Nakamura, Director
Division of Public Health
Department of Health and Social Services
P.O. Box 110610
Juneau, Alaska 99811-0601
POSITION STATEMENT: Addressed the need for public health.
Offered an amendment.
Nancy Usera, Commissioner
Department of Administration
P.O. Box 110200
Juneau, Alaska 99811-0200
POSITION STATEMENT: Discussed Amendment 3.
David Walsh, Director
Division of Insurance
P.O. Box 110805
Juneau, Alaska 99811
POSITION STATEMENT: Reviewed amendments and offered information
regarding SB 367.
Mike Ford, Legislative Legal Counsel
Division of Legal Services
Legislative Affairs Agency
130 Seward Street
Juneau, Alaska
POSITION STATEMENT: Offered legal information regarding SB 367.
Barbara Thurston, Chief Actuary
Division of Insurance
Juneau, Alaska
POSITION STATEMENT: Answered questions.
Katy Campbell, Actuary
Division of Insurance
Juneau, Alaska
POSITION STATEMENT: Discussed various insurance packages.
Dr. Rodman Wilson, Physician
800 M Street #5W
Anchorage, Alaska 99501
POSITION STATEMENT: Expressed other concerns.
ACTION NARRATIVE
TAPE 94-26, SIDE A
Number 007
CHAIRMAN RIEGER called the Senate Health, Education and Social
Services (HESS) Committee to order at 1:38 p.m. He introduced SB
367 (HEALTH CARE REFORM COMMITTEES) as the only order of business
before the committee.
ELMER LINDSTROM, Special Assistant for the Department of Health and
Social Services, commended the inclusion of a provision increasing
the excise tax on tobacco. He requested the inclusion of an excise
tax increase on alcohol for the same reasons that the tobacco
excise tax was included. He noted that Governor Hickel had
sponsored legislation dealing with alcohol and tobacco tax
increases. The rationale is essentially the same in both cases.
From the perspective of DHSS, an increase in taxes on alcohol and
tobacco would be justified solely on the grounds of public health
regardless of the health care or financial environment. He stated
that an increase in taxation of these products would result in a
decrease in consumption which would be beneficial for all Alaskans.
Mr. Lindstrom said that the cost of alcohol and tobacco use and
abuse on the health care system is extraordinary which everyone
should understand very well by now. The increase in excise tax
would offset some of those costs to the health care system. He
expressed the need for a prevention aspect when attempting cost
containment of health care reform which could be achieved by
decreasing the use and abuse of alcohol and tobacco. The revenue
generated from the increased excise tax could help pay for other
aspects of health care reform in SB 367. He noted that SB 269
includes increases in alcohol and tobacco taxes which would bring
in approximately $15 million in additional revenues. He urged
consideration of amending SB 367 to include an increase in taxes on
alcohol as outlined in SB 269.
Number 092
SENATOR DUNCAN expressed concern with the cigarette tax paying for
this bill. That would seem to violate the single subject rule of
the constitution. He asked if that had been considered. He also
said that he did have a legal opinion that indicated that this was
in violation of the single subject rule which would be a
constitutional matter.
CHAIRMAN RIEGER explained that conceptually those issues are a
single subject when addressing and considering the health care
package. If later on there is concern that SB 367 would be
jeopardized by the single subject rule, then the bill could be
split into sustainable pieces. He reiterated the importance to
consider it as a whole for purposes of debate on health care.
SENATOR DUNCAN agreed that increased taxation on alcohol and
tobacco are important portions of the health care discussion;
however, the constitutional violation is clear. He noted that he
had passed out Mr. Ford's opinion. He thought it could be
considered together, but in different legislation. Perhaps, it
would not be in the best interest of the legislation, if passage of
SB 367 is desired, to have it combined.
PETER NAKAMURA, Director of the Division of Public Health, said
that he was speaking for the Division of Public Health as well as
a large coalition of Alaskans who have discussed health care
reform, specifically the issue of health as it applies to health
care reform. In that dialogue, much of the discussion has focused
on access to clinical care, financing of health care, etcetera. He
indicated that this coalition and other citizens have practically
mandated that the Division of Public Health stay in the dialogue in
order to assure that public health is addressed. He expressed
concern with the possibility that health care reform proposals may
not address the public health issue. He recommended that any
health care reform proposal address the issue of developing a
public health improvement plan. That would identify the core
services and functions while quantifying them in terms of dollars;
therefore, allowing meaningful decisions.
CHAIRMAN RIEGER asked if Dr. Nakamura had any specific amendments
that he wanted to propose. PETER NAKAMURA submitted the amendment
which was in the Governor's bill, HB 414.
Number 181
SENATOR SALO asked if Dr. Nakamura had participated in the process
resulting in SB 284 and did it include a good comprehensive public
health proposal. PETER NAKAMURA said yes. The wording of SB 284
basically came from the various health conferences on public
health.
SENATOR DUNCAN asked if Dr. Nakamura felt that SB 367 addressed
public health. PETER NAKAMURA said that SB 367 does not address
public health in a manner with which they feel comfortable.
CHAIRMAN RIEGER said that they could take his suggested amendment
under advisement. He felt that this amendment seemed to be fairly
soft language. Some of the provisions of SB 367 were intended to
be more concrete in the area of public health. He pointed out the
excise tax on cigarettes, the direction for the benefit plan to
review prenatal care and child health issues as examples that
address public health in SB 367. He stated that he did not oppose
what the amendment offered, but the language seemed soft.
PETER NAKAMURA explained that specific service issues such as
immunization, cancer screening, etcetera are very important;
however, the trade-offs must be understood in order to make
meaningful decisions. Before specific programs are launched, the
total need for public health must be known which is what the public
health improvement plan addresses.
CHAIRMAN RIEGER reminded the committee of the previous meeting in
which Senator Leman offered two amendments.
SENATOR LEMAN moved to adopt Amendment 2.
AMENDMENT 2
Page 19, after line 27:
Insert new paragraph to read:
"(3) health care services that may not be covered include
elective abortions;"
Renumber the following paragraphs accordingly.
CHAIRMAN RIEGER objected.
SENATOR LEMAN explained that Amendment 2 eliminates the provision
of health services for elective abortions in the basic package. He
felt that asking all taxpayers to pay for something they find
objectionable was inappropriate. In his opinion, Amendment 2 is
the Pro-Choice position because this allows people the choice of
whether to select this or not rather than mandating that everyone
pay for it. He expressed his view that elective abortions do not
have anything to do with health care. This amendment seems to be
consistent with SB 367. He urged their support for Amendment 2.
SENATOR SALO felt that Amendment 2 was inconsistent with SB 367
because there is no defined benefits package in SB 367. Amendment
2 is not a Pro-Choice position. She explained that it would only
be a Pro-Choice position for women with money. She objected to
Amendment 2.
Number 270
CHAIRMAN RIEGER called for a hand vote on Amendment 2. Senators
Leman and Miller voted "yea" and Senators Sharp, Rieger, Salo,
Duncan, and Ellis voted "no." The motion failed.
CHAIRMAN RIEGER offered Amendment 3. He explained that the
Administration had suggested that the advisory committee be located
in the Department of Commerce and Economic Development instead of
the Office of the Governor.
AMENDMENT 3
Page 19, lines 1-2:
Delete "Office of the Governor"
Insert "Department of Commerce and Economic Development"
Page 21, line 24:
Delete "Office of the Governor"
Insert "Department of Commerce and Economic Development"
NANCY USERA, Commissioner of the Department of Administration,
explained that the advisory committees outlined in SB 367 are very
task specific. All of the other responsibilities in SB 367 are
located in the Department of Commerce. She felt keeping everything
in one area would be valuable and more cost effective.
SENATOR ELLIS asked if the Commissioner of the Department of
Commerce had expressed an opinion on this amendment. NANCY USERA
said that this was at the request of the Administration. Ms. Usera
clarified that she was a spokesperson for the Administration on
health care issues.
SENATOR ELLIS stated that it appeared to him that when something is
moved from the Office of the Governor to a department, there is a
perception of less importance of the task.
CHAIRMAN RIEGER called for a hand vote on Amendment 3. Senators
Miller and Sharp voted "Yea" and Senators Duncan, Ellis, Salo and
Leman voted "Nay." The motion failed.
CHAIRMAN RIEGER offered Amendment 4. He explained that he had
received correspondence suggesting that the parties should have an
opportunity to agree on an arbitrator before the Court appoints
one. Amendment 4 would place that process in the scheme of
arbitration.
AMENDMENT 4
Page 5, line 11, after "shall":
Insert "determine if the parties can agree on an arbitrator to
review the claim. If the parties agree on an arbitrator, the court
shall appoint that person to review the claim. If within 30 days
after the filing of an answer to the complaint the parties have not
agreed on an arbitrator, the court shall"
SENATOR ELLIS asked if any of these amendments were responsive to
Dr. Rodman Wilson's written comments. CHAIRMAN RIEGER said he did
not know, he did not believe the amendment corresponded to Dr.
Wilson's concerns.
Hearing no objection, Amendment 4 was adopted.
CHAIRMAN RIEGER explained that Amendment 5 would clarify the
ambiguity of the sequence of events regarding arbitration.
Amendment 5 would have the arbitration occur first, if there was no
resolution the arbitration would move into the Court process with
the expert advisor. He pointed out a typographical error in the
amendment; "[AGREED TO]" should be "[NOT AGREED TO]."
AMENDMENT 5
Page 6, lines 10-11:
Delete "[WHEN THE PARTIES HAVE NOT AGREED TO ARBITRATION OF
THE CLAIM UNDER AS 09.55.535,]"
Insert " after [WHEN] the parties have completed [NOT AGREED D
TO] arbitration of the claim under AS 09.55.535."
Page 6, lines 12-13:
Delete "within 20 days after filing of answer to a summons and
complaint an expert medical advisor [A THREE-PERSON EXPERT ADVISOR SOR
PANEL]"
Insert " an expert medical advisor within 20 days after
completion of arbitration [FILING OF ANSWER TO A SUMMONS AND
COMPLAINT A THREE-PERSON EXPERT ADVISORY PANEL]"
Hearing no objection, Amendment 5 was adopted.
Number 388
CHAIRMAN RIEGER explained that Amendment 6 would change the
Division of Insurance's approval of rates. Amendment 6 would give
the division 90 days to review and disapprove a rate. He noted
that Amendment 6 addresses the concern that with prior approval,
the Division of Insurance could sit on rate filing forever.
AMENDMENT 6
Page 8, line 21, through page 9, line 3:
Delete all material and insert:
"Sec. 21.51.350. PREMIUM RATES AND RATING FACTORS. (a) A
disability insurer
(1) shall file with the director rates or rating
factors for disability insurance at least 90 days before
the intended effective date of the rate or rating factor;
and
(2) may not use a rate or rating factor that has not
been filed with the director as required under this
subsection.
(b) A rate or rating factor not disapproved by the
director before the intended effective date of the rate or
rating factor is considered approved by the director."
Page 11, after line 29:
Insert new bill sections to read:
" *Sec. 9. AS 21.86.070(g) is amended to read:
(g) The director may require that additional relevant
material considered necessary by the director be submitted in
order to determine the acceptability of a filing made under
[EITHER] (b) [OR (e)] of this section.
*Sec. 10. AS 21.86 is amended by adding a new section to read:
Sec. 21.86.075. PREMIUM RATES AND CHARGES. (a) A health
maintenance organization
(1) shall file with the director rates, rating
factors, premiums, fees for services, and enrollee fees,
including a change to a rate, rating factor, premium, or
fee, used in providing health care services to enrollees
of the health maintenance organization; a filing required
under this paragraph must be made at least 90 days before
the intended effective date of the filing; and
(2) may not use a rate, rating factor, premium, or
fee that has not been filed with the director as required
under this subsection.
(b) A filing under this section not disapproved by the
director before its intended effective date is considered
approved by the director."
Renumber the following bill sections accordingly.
Page 12, after line 5:
Insert a new bill section to read:
" *Sec. 12. AS 21.87.190 is repealed and reenacted to read:
Sec. 21.87.190. RATES AND CHARGES . (a) A service
corporation
(1) shall file with the director subscription rates,
rating factors, fees, and payment charges, including a
change to a rate, rating factor, fee, or payment charge,
to be charged to or on account of the service
corporation's subscribers; a filing required under this
paragraph must be made at least 90 days before the
intended effective date of the filing; and
(2) may not use a rate, rating factor, fee, or
payment charge that has not been filed with the director
as required under this subsection.
(b) A filing under this section not disapproved by the
director before its intended effective date is considered
approved by the director."
Renumber the following bill sections accordingly.
Page 18, line 22:
Delete "Sections 9, 10, and 11"
Insert "Sections 11, 13, and 14"
Page 22, after line 24:
Insert a new bill section to read:
" *Sec. 22. AS 21.86.070(e) and 21.86.070(f) are repealed."
Renumber the following bill sections accordingly.
Page 23, line 7:
Delete "Section 18"
Insert "Section 21"
Page 23, line 10:
Delete "Sections 16 and 17"
Insert "Sections 19 and 20"
SENATOR ELLIS asked what the sanction would be if the approval is
not done in 90 days. CHAIRMAN RIEGER said that in that case it
would be considered approved. SENATOR ELLIS asked if the division
could appeal that.
DAVID WALSH, Director of the Division of Insurance, said that under
Amendment 6 and prior approval the division has a specified amount
of time and if they do not make a decision then the rates are
deemed approved. He said that there had never been a case when the
time limit was reached and the rates had to be deemed approved.
SENATOR DUNCAN asked Mr. Walsh what he meant by prior approval.
DAVID WALSH clarified that he was referring to prior approval as
with other insurances.
SENATOR LEMAN felt that Amendment 6 would be an improvement. He
asked if they had already considered an amendment on a file and use
approach which he believes would be better than Amendment 6.
CHAIRMAN RIEGER did not have a problem with the sequence of the
amendments or suggested language regarding this issue.
Hearing no objection, Amendment 6 was adopted.
CHAIRMAN RIEGER explained that Amendment 7 would take a similar
approach to that of SB 284 regarding the compensation of the
members of the advisory committee. There would be a daily
compensation of $400.
AMENDMENT 7
Page 19, after line 13:
Insert a new subsection to read:
"(c) A committee member is entitled to receive
compensation at the rate of $400 a day for each day spent in
performing duties as a committee member and to travel and per
diem expenses authorized by law for boards and commissions
under AS 39.20.180."
Renumber the following sections accordingly.
Page 20, line 20:
Delete "(d)(1)-(5)"
Insert "(e)(1)-(5)"
Page 21, after line 31:
Insert a new subsection to read:
"(b) A committee member is entitled to receive
compensation at the rate of $400 a day for each day spent in
performing duties as a committee member and to travel and per
diem expenses authorized by law for boards and commissions
under AS 39.20.180."
Reletter the following sections accordingly.
Number 440
CHAIRMAN RIEGER offered Amendment 7. Hearing no objection,
Amendment 7 was adopted.
SENATOR MILLER offered Amendment 8. He noted earlier discussion on
the single subject rule which he felt should be left for the
committee to discuss. He believed that Amendment 8 fits under
health care. Amendment 8 would lower the alcohol for driving to
.08.
AMENDMENT 8
Page 1, line 5, after " provider; ":
Insert " relating to the offense of operating a commercial
motor vehicle, aircraft, or watercraft while intoxicated;
relating to presumptions arising from the amount of alcohol in
a person's breath or blood; relating "
Page 17, after line 13:
Insert new bill sections to read:
" *Sec. 12. AS 28.33.030(a) is amended to read:
(a) A person commits the crime of operating a commercial
motor vehicle while intoxicated if the person operates a
commercial motor vehicle
(1) while under the influence of intoxicating liquor
or any controlled substance;
(2) when, as determined by a chemical test taken
within four hours after the alleged offense was
committed, there is at the time the test is taken 0.04
percent or more by weight of alcohol in the person's
blood or 40 milligrams or more of alcohol per 100
milliliters of blood, or when there is 0.04 grams or more
of alcohol per 210 liters of the person's breath; or
(3) while under the combined influence of
intoxicating liquor and a controlled substance.
*Sec. 13. AS 28.35.030(a) is amended to read:
(a) A person commits the crime of driving while
intoxicated if the person operates or drives a motor vehicle
or operates an aircraft or a watercraft
(1) while under the influence of intoxicating
liquor, or any controlled substance;
(2) when, as determined by a chemical test taken
within four hours after the alleged offense was
committed, there is at the time the test is taken 0.08
[0.10] percent or more by weight of alcohol in the
person's blood or 80 [100] milligrams or more of alcohol
per 100 milliliters of blood, or when there is 0.08
[0.10] grams or more of alcohol per 210 liters of the
person's breath; or
(3) while the person is under the combined influence
of intoxicating liquor and a controlled substance.
*Sec. 14. AS 28.35.033(a) is amended to read:
(a) Upon the trial of a civil or criminal action or
proceeding arising out of acts alleged to have been committed
by a person while operating or driving a motor vehicle or
operating an aircraft or a watercraft while intoxicated, the
amount of alcohol in the person's blood or breath at the time
alleged shall give rise to the following presumptions:
(1) If there was 0.04 [0.05] percent or less by
weight of alcohol in the person's blood, or 40 [50]
milligrams or less of alcohol per 100 milliliters of the
person's blood 0.04 [0.05] grams or less of alcohol per
210 liters of the person's breath, it shall be presumed
that the person was not under the influence of
intoxicating liquor.
(2) If there was in excess of 0.04 [0.05] percent
but less than 0.08 [0.10] percent by weight of alcohol in
the person's blood, or in excess of 40 [50] but less than
80 [100] milligrams of alcohol per 100 milliliters of the
person's blood, or in excess of 0.04 [0.05] grams but
less than 0.08 [0.10] grams of alcohol per 210 liters of
the person's breath, that fact does not give rise to any
presumption that the person was or was not under the
influence of intoxicating liquor, but that fact may be
considered with other competent evidence in determining
whether the person was under the influence of
intoxicating liquor.
(3) [REPEALED
(4)] If there was 0.08 [0.10] percent or more by
weight of alcohol in the person's blood, or 80 [100]
milligrams or more of alcohol per 100 milliliters of the
person's blood, or 0.08 [0.10] grams or more of alcohol
per 210 liters of the person's breath, it shall be
presumed that the person was under the influence of
intoxicating liquor.
*Sec. 15. AS 28.35.033(c) is amended to read:
(c) The provisions of (a) of this section
(1) may not be construed to limit the introduction
of any other competent evidence bearing upon the question
of whether the person was or was not under the influence
of intoxicating liquor ; and
(2) do not apply to a civil action permitted under
AS 04.21.020. "
Page 23, line 7:
Delete "Section 18"
Insert "Section 22"
Page 23, line 10:
Delete "Sections 16 and 17"
Insert "Sections 20 and 21"
SENATOR DUNCAN reiterated the issue of having multiple subjects in
one bill which would create a constitutional problem. He said that
he would support the amendment.
Hearing no objection, Amendment 8 was adopted.
CHAIRMAN RIEGER directed the committee to the letter from Dr.
Rodman Wilson. He suggested reviewing his proposals for possible
amendments of the committee. The committee began to go through Dr.
Wilson's suggestions.
SENATOR ELLIS moved Amendment 9 for purposes of discussion.
AMENDMENT 9
Page 5, line 20, after "a":
Insert "written"
Hearing no objection, Amendment 9 was adopted.
SENATOR ELLIS moved Amendment 10.
SENATOR DUNCAN did not believe that Amendment 10 was in the context
of the bill. CHAIRMAN RIEGER said that the amendment could be
reduced to the singular by saying "the specialty represented by the
medical expert" or the amendment could refer to "the specialty of
the expert." Chairman Rieger asked what the difference would be.
Number 506
MIKE FORD, Legislative Legal Counsel for the Division of Legal
Services, explained that originally the sentence was intended to
allow the Court to determine what specialties are on the panel and
then allow parties to make suggestions to the panel. Even with the
amendment, it does not fit because it changes to a single person.
He thought that this section may need some additional work. He
suggested eliminating the issue of specialty.
CHAIRMAN RIEGER felt that adopting Amendment 10 would not do any
damage. MIKE FORD agreed that if the language said, "represented
by the medical expert" it should work.
SENATOR ELLIS withdrew Amendment 10.
SENATOR DUNCAN clarified the revised version of the amendment, now
Amendment 10A.
SENATOR ELLIS moved to adopt Amendment 10A
AMENDMENT 10A
Page 6, line 15:
Delete "professions or specialties to be"
Insert "profession or specialty"
Hearing no objection, Amendment 10A was adopted.
MIKE FORD explained that Dr. Wilson's question regarding the use of
"must" versus "shall" page 7, lines 10, 12, 13 was the appropriate
style for Alaska's statutes. He addressed Dr. Wilson's next
concern with the discovery issue. Dr. Wilson's suggestion would
eliminate a provision prohibiting discovery until the expert
advisor completes their report. He noted an exception to that if
good cause is shown. It would stop the process until the expert
advisor completes his work.
CHAIRMAN RIEGER asked if this had been suggested in a bill
introduced last year.
MIKE FORD recommended that this provision be kept because it
prohibits the Court process while the arbitration for the expert
advisor processes are occurring.
SENATOR DUNCAN offered Amendment 11. CHAIRMAN RIEGER objected.
AMENDMENT 11
Page 8:
Delete lines 1-3
Page 23:
Delete lines 1-3
SENATOR DUNCAN asked if this provision had been introduced as
legislation resulting from the task force last year.
DEBORAH GRAVO, Executive Director of the Alaska Trollers,
recollected that this issue had been discussed in the task force
and the amendment was well received. She said that she thought
that the medical community was in favor of the amendment and the
trial lawyers did not have any problems with Dr. Wilson's
amendment. In response to Senator Duncan, Ms. Gravo explained that
staying discovery would make the process longer and a little
more expensive. CHAIRMAN RIEGER reiterated that the court may
relax this prohibition if good cause is shown.
CHAIRMAN RIEGER maintained his objection. Upon a hand vote
Senators Salo, Ellis, and Duncan voted "Yea" and Senators Miller,
Leman, Sharp, and Rieger voted "No." The motion failed.
TAPE 94-26, SIDE B
Number 592
CHAIRMAN RIEGER explained Dr. Wilson's next suggestion. Dr. Wilson
suggested that the expert advisor receive a stipend of $500.
Currently, SB 367 allows a $300 per day expert witness fee which
would only be on the witness day. Chairman Rieger offered
Amendment 12.
SENATOR MILLER asked if this was only a substitution from " $300 00
$500. CHAIRMAN RIEGER believed that the $300 was an expert fee on
the day of the trial while Dr. Wilson's suggestion referred to work
other than the trial day. Chairman Rieger felt that Senator
Miller's suggestion would work if line 11 changed the $300 to $500.
AMENDMENT 12
Page 8, line 11:
Delete " $300 "
Insert "$500"
SENATOR SHARP inquired of the differences in qualifications of the
individual receiving $150 per day described in existing statutes
and the individual receiving $500 per day.
CHAIRMAN RIEGER explained that there is already a three person
panel provided in statutes. Each of the members of the panel
receive $150 per day if they testify at the trial. He said that
Amendment 12 would decrease the number of participants involved in
the expert advise section of the civil proceedings from 3 to 1.
The 1 individual would be paid $500 per day.
Hearing no objection, Amendment 12 was adopted.
SENATOR MILLER said that some of Dr. Wilson's points were actually
editorial comments not specific changes.
MIKE FORD pointed out that the definition of "Health care service"
was actually defined as Dr. Wilson had suggested. "Health care
service" is defined by AS 21.58.400.
CHAIRMAN RIEGER referred Dr. Wilson's question about actuaries to
Mr. Walsh. DAVID WALSH informed the committee that there are three
actuaries in Alaska and the Division of Insurance has two of them.
Mr. Walsh noted that there are contracted actuaries outside of
Alaska. Mr. Walsh pointed out that the division's two actuaries
took approximately two years to acquire.
CHAIRMAN RIEGER inquired as to the value of an actuary serving on
an advisory committee determining a health care benefit package.
Number 510
BARBARA THURSTON, Chief Actuary for the Division of Insurance,
stated that actuarial expertise was definitely needed; however, in
this case it may be better to contract those actuaries. She
explained that part of the responsibilities in SB 367 such as
coming up with a benefits package within certain guidelines would
necessitate an actuary. There are consulting firms that do that
for other states which may be an option.
CHAIRMAN RIEGER offered Amendment 13.
AMENDMENT 13
Page 19, line 11:
Delete "is an actuary who"
SENATOR DUNCAN asked what that would mean; an insurance salesman,
a broker. CHAIRMAN RIEGER said that it could mean any of those;
the Governor would choose who to appoint. SENATOR DUNCAN felt that
this would refer to an insurance industry person. SENATOR ELLIS
thought that changing the language to "who has experience with
health care insurance" rather than "in health care insurance."
SENATOR DUNCAN inquired as to Chairman Rieger's intention with this
amendment. CHAIRMAN RIEGER said that he was flexible. Chairman
Rieger stated that with the amendment the language seemed flexible.
Hearing no objection, Amendment 13 was adopted.
CHAIRMAN RIEGER offered Amendment 13 due to previous testimony by
Alaska Public Interest Research Group (AKPIRG).
AMENDMENT 14
Page 19, lines 4 and 6:
Delete " who is employed"
Insert " with experience"
Page 19, line 8:
Delete "who is"
Insert "with experience as"
Hearing no objection, Amendment 14 was adopted.
SENATOR DUNCAN asked why spouse and dependent children coverage was
needed if participation is mandatory by all state residents; the
spouse and the dependent children are state residents. He inquired
as to the intent of the $3000 in covered expenses; would that be
per individual or per family.
CHAIRMAN RIEGER said that it referred to individual policies, but
there is a break for a premium when a spouse and a dependent child
are part of a family unit. The premium could be 50 percent of the
first individual's cost. He agreed that it could be implicitly
treated that way without specific language.
SENATOR MILLER posed the example of the military. In a military
situation, a spouse may be or may not be a state resident. He
explained that deleting that language could eliminate those
individuals because they are not state residents. CHAIRMAN RIEGER
agreed that this language would not be superfluous because of
Senator Miller's point.
SENATOR DUNCAN stated that participation is mandatory by all state
residents. If a man, a resident of California, in the military
comes to Alaska, marries an Alaskan resident. Under this language,
her coverage would include her spouse.
SENATOR ELLIS gave the example of children of divorce who live out
of state with one of the parents while the other parent remains in
Alaska; would the out of state children be covered.
Number 425
CHAIRMAN RIEGER thought that using language such as "spouse and
dependent children in the state" could be useful. He asked if
there was a difference between "residing in Alaska" and "resident
of Alaska."
MIKE FORD noted that the term "residency" had not been defined
which is a key point for triggering coverage.
SENATOR SALO expressed the need to avoid leaving college students
uninsured because they resided outside the state. SENATOR DUNCAN
and SENATOR ELLIS both implied that should not be a problem since
they would be legal residents of Alaska. SENATOR SALO felt that
would still return to the question of the difference between
"residing in Alaska" and "resident of Alaska."
SENATOR MILLER felt that Chairman Rieger's suggestion was in the
correct direction; we may not want to cover dependent children in
another state while wanting to cover a dependent spouse physically
in the state of Alaska.
CHAIRMAN RIEGER asked if inserting ", who are residing in the
state" after the word "children" would correct the problem.
MIKE FORD suggested inserting the following language: "coverage
includes spouse and dependent children whether or not they are
residents, but who live in the state." Mr. Ford reiterated the
problem of not knowing the definition of "residency." Mr. Ford
asked if the committee wanted to exclude individuals living outside
the state versus an individual who does not qualify for residency,
but is located in the state.
CHAIRMAN RIEGER clarified that they were referring to an individual
who was neither a resident nor physically present in the state, but
is a dependent child or spouse of an Alaskan resident. Those
individuals should not be covered. He felt that Mr. Ford's
suggested language would work. MIKE FORD stated that the decision
of what living in the state means, six months or a year, would
remain.
SENATOR DUNCAN inquired as to why the children of divorce living
with one parent in another state while the other parent resides in
Alaska would not be covered under the Alaskan parents insurance.
He was unsure of the impact of this as well as the impact of
excluding children just because they do not reside in the state.
MIKE FORD explained that much of this issue would be left to
interpretation of the committee. They could create coverage that
resolves this problem or exclude certain individuals who live in
the state, but do not qualify under the terms the committee
applies. He suggested changing the language if the committee wants
to exclude certain individuals.
Number 366
CHAIRMAN RIEGER expressed willingness to leave the issue to the
advisory committee to address. He pointed out that SB 367 attempts
to give the advisory committee some direction in designing a plan.
He said that he would entertain more specific language. Chairman
Rieger directed the committee back to Dr. Wilson's letter picking
up with Dr. Wilson's concerns regarding preventive care. Hearing
no discussion, they continued with Dr. Wilson's next concern.
CHAIRMAN RIEGER interpreted line 30 as saying that expenses would
be covered by a policy, but has a deductible on covered expenses so
that the first $3,000 would not be paid. MIKE FORD said that once
again, this would be left to the committee's interpretation unless
specified.
SENATOR DUNCAN did not want to leave that up to the committee. He
suggested the following language: "after the first $3,000 of the
expenses incurred for the covered benefits." There is a $3,000
deductible after which there is an 80 percent reimbursement. He
recommended clearer language.
MIKE FORD stated that if they wanted to specify, then language such
as "coverage shall be designed to impose a deductible of $3,000 and
to allow reimbursement" should be added to line 28 on page 19.
SENATOR DUNCAN expressed the need to be sure that the $3,000
deductible does not apply to preventive care, prenatal care, and
immunizations. He inquired as to the intent of the deductible; is
the $3,000 a family or an individual deductible. CHAIRMAN RIEGER
stated that he had not thought about that issue, but felt that it
would be a family deductible.
SENATOR DUNCAN said that a $3,000 individual deductible would be a
catastrophic policy. That would be the only way to reach the $100
per month premium. The $3,000 deductible would be different for an
individual versus a family. CHAIRMAN RIEGER suggested that it be
considered a family deductible.
SENATOR DUNCAN asked if the premium specified on page 20, lines 7-8
was in the range of possibility. He expressed concern that the
advisory committee was being sent conflicting directions. He
indicated that this would be headed for failure due to the
provision not allowing a premium to exceed $100 per month.
CHAIRMAN RIEGER noted that the state of Washington's basic plan had
$110 per month premium. SENATOR DUNCAN clarified Washington
state's plan. Senator Duncan felt that many of the issues of SB
367 such as the children's health program were good areas to cover;
however, they are not covered by the basic plan. In Washington,
the basic plan does not cover children's health programs and it has
a $100 per month premium whereas here such coverage is mandated,
but cannot exceed $100 per month premium. Senator Duncan thought
that with a $100 premium limit, the cost of the coverage could be
determined by simple multiplication.
Number 252
KATY CAMPBELL, Actuary for the Division of Insurance, said that she
was a life and financial actuary, but that she had been getting
involved in the area of health.
CHAIRMAN RIEGER posed the example of a family policy where the
first individual covered is $100 a month and each additional
individual covered under that policy would be $50. With a three
member family, you would have a family premium of $200 a month. He
asked if there is catastrophic health insurance coverage that could
cover catastrophic and other things contemplated in SB 367 for $200
a month under assumptions of very broad based coverage. He
inquired as to the size of an average family.
A discussion ensued regarding the size of an average family which
concluded that an average family would be four.
CHAIRMAN RIEGER said that an average family premium would be $250
under the parameters. He inquired as to the type of policy $250
would purchase under assumptions of broad based coverage.
KATY CAMPBELL stated that such a policy would have very high
deductibles and high co-insurance. She said, "the current rates
under Blue Cross's basic one is something closer to $400." In
response to Chairman Rieger, she said, "that is not a catastrophic
plan, but it has fairly high deductibles; they'll go up to $2,500
deductibles, some $5,000 deductibles and that has fairly low
benefits in comparison to their other plans."
SENATOR DUNCAN pointed out that Blue Cross's basic plan does not
have the requirements of children's health care, immunizations,
preventive care and prenatal care as does SB 367. KATY CAMPBELL
agreed. SENATOR DUNCAN said that those areas, although
commendable, were not cheap and he did not want to direct the
committee to attempt something that would be impossible.
CHAIRMAN RIEGER asked if Senator Duncan wanted to design an escape
valve if the committee cannot achieve this. He felt that this was
a realistic although, an aggressive target.
KATY CAMPBELL stated, "that most people are going to make more than
that, that $8,500 you'd have to be making to meet that $100." MIKE
FORD said that the premium requirement language was only intent
language which the committee could change. CHAIRMAN RIEGER did not
believe that the committee was prevented from making
recommendations, but they need some direction.
Number 183
SENATOR DUNCAN expressed concern that the intent language was
misleading because the committee would not be reviewing a
comprehensive package. This approach would come back with a high
cost figure. He said that SB 367 directs the committee to review
the cost of a package with a $3,000 family deductible under present
market conditions with the numerous inefficiencies of the current
system while adding prenatal care, children's health care,
preventive care, and immunizations into the package. Without a
system designed to stop cost shifting and decrease administrative
expenses of the insurance industry there will be high cost
projections which will shock people; that illustrates the danger
with an incremental approach.
CHAIRMAN RIEGER directed the committee to page 19, lines 23 & 24,
when asking Ms. Campbell if there would be a dramatic differential
between health care plans subject to individual, voluntary
selecting in or out of the plan versus mandatorily covered group
policies.
KATY CAMPBELL believed that there is a great deal of anti-selection
among health care plans which would eliminate some of the cost
shifting by covering everyone. She did not have specific numbers.
CHAIRMAN RIEGER asked if mandatory participation by all state
residents was assumed, would anti-selection be eliminated. KATY
CAMPBELL agreed because if they are all required to participate
then there would not be any selection decisions.
SENATOR DUNCAN agreed that might eliminate some cost shifting, but
he noted the other types of cost shifting. There is cost shifting
due to uncompensated care, but there is also cost shifting from
Medicare which shifts costs to private payers. He expressed the
need to solve that problem in order to include all payers in the
system. He did not believe that provision would eliminate cost
shifting. This does not reduce cost shifting because there will
still be a level of uncompensated care; people forced to use the
$3,000 deductible will get the service and not be able to pay for
it. He reiterated his belief that costs will increase without a
comprehensive package.
DAVID WALSH informed the committee that a few years ago the biggest
area of underpayment or uncompensated care was Medicare and
Medicaid underpayment. Mr. Walsh said, "If I remember the
Providence spreadsheet right, they had $129 million in gross sales;
of that they collected $80 or $90. In the spread, whatever the
number was, there was about $3 million that they booked as
uncompensated care. There was about $5 million they booked as
charity care and all the rest was Medicare, Medicaid underpayment."
He recounted a question of one of the members, "What would happen
to your claim about uncompensated care if Medicare and Medicaid
paid at 100 percent?" There would not be much of a problem. He
felt that Senator Duncan was correct about the problem of cost
shifting, but he did not have a solution.
Number 047
CHAIRMAN RIEGER inquired as to what a $250 family policy would buy
as catastrophic or what a $375 basic plan would buy. DAVID WALSH
said, "I would think that at $375, you could probably get the
deductible fairly low." Mr. Walsh noted that it was still a guess.
He said, "My guess is that you would be looking at a substantial
deductible, but maybe not $3,000." He stated that they could
request that the companies give them a better idea. He said, "I
think you would be looking at $1,000 at $375 and a little more than
that at $250."
CHAIRMAN RIEGER noted that adding $50 would place the plan at the
level of the state plan. He did not understand the dramatic
difference between a $375 and a $425 deductible.
SENATOR DUNCAN indicated that perhaps Mr. Walsh did not consider
that this is more than a $3,000 deductible, some benefits are not
applied to that deductible. He expressed concern with the
committee coming back with such an astronomical figure.
TAPE 94-27, SIDE A
Number 012
SENATOR DUNCAN asked if language needed to be changed in order to
assure that the $3,000 deductible was per family.
MIKE FORD offered some language addressing this issue.
AMENDMENT 15
Page 19, line 28, after "designed":
Insert " to impose a family deductible of $3,000 for all
covered health care services other than prematernal care,
preventive care and immunizations and"
CHAIRMAN RIEGER moved to adopt Amendment 15. Hearing no objection,
Amendment 15 was adopted. He then resumed reviewing Dr. Wilson's
list of suggestions and concerns.
SENATOR DUNCAN felt that Dr. Wilson's point referring to page 20,
lines 4-5 was a valid concern. Senator Duncan agreed with Dr.
Wilson that large families would face expensive rates. He asked if
a sliding scale had been considered.
CHAIRMAN RIEGER preferred to keep that section as it was for now.
Once costs are in front of the committee, then there could be a
policy call regarding the break point for large families. He
reminded everyone of the 14 percent of income escape valve. The
committee continued reviewing Dr. Wilson's letter.
CHAIRMAN RIEGER offered Dr. Wilson's suggestion regarding page 21,
lines 25-31 as Amendment 16.
AMENDMENT 16
Page 21:
Delete "lines 26 and 27"
Insert "two physicians licensed under AS 08.64;"
Hearing no objections, Amendment 16 was adopted.
Number 118
SENATOR DUNCAN inquired as to the meaning of medical practice
parameters referred to under section 17; is this a Tort Reform
committee. CHAIRMAN RIEGER stated that Maine and other states were
reviewing practice parameters to spell them out in order to define
acceptable practice as an alternative to the Courts defining them
through malpractice cases.
SENATOR DUNCAN asked why there was not a consumer present on the
committee, someone from the trial attorneys; why are there only
providers. CHAIRMAN RIEGER explained that the reason the Medical
Practice Advisory Committee was drafted as such was due to the
technical nature of the committee.
SENATOR DUNCAN expressed concern that this committee may give
policy recommendations on such areas as caps on non-economic
damages and other issues. This committee does not seem to be that
narrowly charged, consumers have interests in practice parameters.
He stated that using practice parameters to help eliminate medical
malpractice claims would seem to necessitate a trial attorney
position. He did not understand the purposes for having only
providers on the committee.
Number 174
DR. RODMAN WILSON said that Amendment 5, regarding the expert
advisor, seems to have eliminated the expert advisor for
arbitration until an appeal occurs. CHAIRMAN RIEGER explained that
Amendment 5 was intended to give the arbitrator a chance before
moving forward to Court action in which an expert advisor seems to
be the first step towards that Court action.
DR. RODMAN WILSON thought that a medical malpractice always needed
expert testimony. He said that the task force and CHIPRA agreed
that an arbitrator needed an expert advisor as soon as the case was
filed. The expert reviews the case and offers a written opinion
which the arbitrator can use. He indicated that when the expert
advisor reviews and writes his opinion, it is hard work and is
worth $500. Going to court is not as difficult. In the past, the
three person expert panel has only been entitled to travel expenses
and per diem.
Number 249
CHAIRMAN RIEGER offered to remove Amendment 5.
MIKE FORD explained that if a mandatory arbitration provision is
created, then the arbitrator can confer with medical specialists.
Amendment 5 means that the core process would not begin until the
termination of the arbitration process. He noted that if the
arbitration cannot settle it, then the core process begins which
would trigger the medical expert. That would be a policy call by
the committee.
CHAIRMAN RIEGER moved to rescind Amendment 5. Hearing no
objection, Amendment 5 was rescinded.
CHAIRMAN RIEGER continued with Dr. Wilson's other concern regarding
the difference between the expert witness fee and the actual
entitlement during research of the case. He moved to rescind
Amendment 12. Hearing no objection, Amendment 12 was rescinded.
Number 289
CHAIRMAN RIEGER moved to adopt a revised Amendment 12 which would
insert "a stipend of $500 and" on page 8, line 6 after "to."
MIKE FORD suggested using the word "fee" instead of "stipend."
CHAIRMAN RIEGER agreed.
AMENDMENT 12 (REVISED)
Page 8, line 6 after "to":
Insert "a fee of $500 and"
Hearing no objections, Amendment 12 (Revised) was adopted.
DR. RODMAN WILSON asked if they added a public member to the
Medical Advisory Committee. CHAIRMAN RIEGER said no. DR. RODMAN
WILSON preferred to have a public member and a lawyer on the
committee due to the legal duties required.
CHAIRMAN RIEGER pointed out that the Medical Advisory Committee
does have the ability to contract for expert advise, but that could
be considered.
SENATOR DUNCAN moved Amendment 17.
SENATOR ELLIS offered his amendment, Amendment 18.
CHAIRMAN RIEGER requested that Mr. Ford draft a CS including all
the amendments to date. Amendments 17 and 18 were held until
Thursday.
The committee recessed at 3:35 p.m. and will reconvene after the
joint session on Thursday.
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