02/08/2011 02:00 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| SB34 | |
| SB70 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 70 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| = | SB 34 | ||
ALASKA STATE LEGISLATURE
SENATE LABOR AND COMMERCE STANDING COMMITTEE
February 8, 2011
2:03 p.m.
MEMBERS PRESENT
Senator Dennis Egan, Chair
Senator Joe Paskvan, Vice Chair
Senator Linda Menard
Senator Bettye Davis
Senator Cathy Giessel
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE BILL NO. 34
"An Act establishing the Alaska small business revolving loan
fund; relating to the fund and loans from the fund; and
providing for an effective date."
- MOVED CSSB 34(L&C) OUT OF COMMITTEE
SENATE BILL NO. 70
"An Act establishing the Alaska Health Benefit Exchange; and
providing for an effective date."
- HEARD AND HELD
PREVIOUS COMMITTEE ACTION
BILL: SB 34
SHORT TITLE: SMALL BUSINESS REVOLVING FUND
SPONSOR(s): SENATOR(s) WIELECHOWSKI, ELLIS, PASKVAN, MCGUIRE,
MENARD, THOMAS
01/19/11 (S) PREFILE RELEASED 1/14/11
01/19/11 (S) READ THE FIRST TIME - REFERRALS
01/19/11 (S) L&C, FIN
02/03/11 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
02/03/11 (S) Heard & Held
02/03/11 (S) MINUTE(L&C)
02/08/11 (S) L&C AT 2:00 PM BELTZ 105 (TSBldg)
BILL: SB 70
SHORT TITLE: ALASKA HEALTH BENEFIT EXCHANGE
SPONSOR(s): SENATOR(s) FRENCH
01/26/11 (S) READ THE FIRST TIME - REFERRALS
01/26/11 (S) L&C, FIN
02/08/11 (S) L&C AT 2:00 PM BELTZ 105 (TSBldg)
WITNESS REGISTER
DANA OWEN, Staff to Senator Egan
Alaska State Legislature
Juneau, AK
POSITION STATEMENT: Explained changes in CSSB 34 from original
bill.
SENATOR BILL WIELECHOWSKI, sponsor of SB 34
Alaska State Legislature
Juneau, AK
POSITION STATEMENT: Approved changes in CSSB 34.
SENATOR HOLLIS FRENCH, sponsor of SB 70
Alaska State Legislature
Juneau, AK
POSITION STATEMENT: Read sponsor statement.
ANDY MADEROW, Staff to Senator French
Alaska State Legislature
Juneau, AK
POSITION STATEMENT: Presented sectional analysis of SB 70.
MARK REGAN, Legal Director
Disability Law Center of Alaska
Anchorage, AK
POSITION STATEMENT: Testified in support of SB 70.
WANETTA AYERS, Director
Division of Economic Development
Department of Commerce, Community, and Economic Development
Anchorage, AK
POSITION STATEMENT: Answered questions regarding SB 34.
RON KREIER, Acting Director
Division of Public Assistance
Department of Health and Social Services
Juneau, AK
POSITION STATEMENT: Testified in support of SB 70.
LINDA HALL, Director
Division of Insurance
Department of Commerce, Community and Economic Development
(DCCED)
Anchorage, AK
POSITION STATEMENT: Answered questions regarding SB 70.
PAT LOVEY, Advocacy Director
American Association of Retired Persons
Anchorage, AK
POSITION STATEMENT: Testified in support of SB 70.
JOHN GEORGE
Aflac Insurance
Juneau, AK
POSITION STATEMENT: Requested technical change to SB 34.
CRAIG DAHL, President and CEO
Alaska Pacific Bank
Juneau, AK
POSITION STATEMENT: Testified in support of SB 34.
DORIS ROBBINS, representing herself
Fairbanks, AK
POSITION STATEMENT: Testified in support of SB 70.
ACTION NARRATIVE
2:03:26 PM
CHAIR DENNIS EGAN called the Senate Labor and Commerce Standing
Committee meeting to order at 2:03 p.m. Present at the call to
order were Senators Giessel, Davis, Paskvan, Menard, and Chair
Egan.
SB 34-SMALL BUSINESS REVOLVING FUND
CHAIR EGAN announced the first order of business would be SB 34,
relating to the small business revolving loan fund.
2:05:15 PM
SENATOR PASKVAN moved to adopt the proposed committee substitute
to SB 34, labeled 27-LS0286\B, as the working document of the
committee. Without objection, the motion carried.
2:06:02 PM
DANA OWEN, staff to Senator Egan, explained the changes to CSSB
34 from the original bill. On page 2, line 13, the word "grant"
was missing, which was a drafting oversight. On page 3, lines 16
- 21 now include a turn-down provision. This gives banks a
chance to make or deny loans before the business comes to the
state. He explained this turn-down provision would apply to any
loan in excess of $35,000, and noted that the bankers are happy
with it. On line 30, new language clarifies that you must be
turned down from an Alaska institution. Mr. Owen noted a memo
attached to the draft CS by Legislative Legal Services Attorney
Terry Bannister, which points out potential conflicts with
federal law. This is not unusual. He further noted there are two
revised fiscal notes.
2:08:35 PM
SENATOR WIELECHOWSKI, sponsor of SB 34, said he supports the
changes in the CS, and noted it is a very fair compromise.
2:09:42 PM
WANETTA AYERS, Director, Division of Commerce, Community and
Economic Development, said she was available to answer any
questions about the fiscal notes.
2:10:26 PM
CRAIG DAHL, President and CEO, Alaska Pacific Bank, Juneau,
representing that bank as well as the Alaska Bankers
Association, testified that both support SB 70. He said that
Alaskan banks have consistently served the small business
community. In addition to direct lending, all the banks have
participated in federal government programs. For example, Alaska
Pacific Bank has received the Small Business Association (SBA)
Community Lender of the Year award for four consecutive years.
Wells Fargo has received the SBA lender of the year for two
consecutive years.
2:14:56 PM
SENATOR PASKVAN commented it was his understanding that SB 34
focuses on new business customers, as opposed to existing
customers receiving new loans.
MR. DAHL replied they do not have a breakdown of those numbers,
but in general there were not a lot of brand new businesses
starting up in the past year.
2:16:06 PM
SENATOR PASKVAN moved to report CS for SB 34 from committee with
individual recommendations and accompanying fiscal notes.
Without objection, CSSB 34(L&C) moved from committee.
2:16:53 PM - 2:18 p.m.
At-ease.
SB 70-ALASKA HEALTH BENEFIT EXCHANGE
2:18:57 PM
CHAIR EGAN announced SB 70 to be up for consideration.
SENATOR HOLLIS FRENCH, sponsor of SB 70, introduced the bill and
read the sponsor statement, as follows:
Competition improves quality, lowers cost and gives
consumers a meaningful choice. The Alaska Health
Benefit Exchange will make private health insurance
companies more responsive to health care consumers in
Alaska.
Buying health insurance can be difficult and
complicated. This legislation helps consumers
identify and enroll in a health insurance policy that
will serve them well, regardless of what their future
holds.
The Exchange will promote competition among plans by
providing information to consumers on a leveled
playing field. Today, individuals shopping for
airline tickets can log onto the internet and in
minutes view competing itineraries, sorted by route,
schedule, carrier and price. In this same way, the
web based portal created by this bill will allow
health insurance consumers to compare carriers, cost-
sharing, benefit design, and premium costs of
different plans, all in a manner of minutes.
The legislation helps make health coverage affordable
for Alaskans. The exchange will determine eligibility
for health insurance tax credits, cost-sharing
assistance, medical assistance programs like
Medicaid. Through the Small Business Health Options
Program (SHOP), the exchange will connect small
businesses with tax incentives and an insurance
pooling mechanism, which can stabilize premiums and
make coverage more affordable. Finally, the exchange
establishes the mechanism to exempt people from the
requirement to have health coverage, if affordable
insurance products aren't available.
An exchange can open the door to innovative ways that
keep health care costs down. For years, the idea of
buying and selling health insurance across state lines
has been cited as a competitive response to small
insurance pools. This legislation will ask the
Exchange board to consider interstate compacts, and if
one makes sense for Alaskans, legislation can be
proposed to make it happen.
Forty-nine other states are working towards the
establishment of an exchange, and while other elements
of health reform are controversial, the exchange idea
is championed by Governors of both parties - even by
those who are suing the federal government to stop
reform.
'State exchanges are good from a conservative
standpoint because they involve consumer choice and
markets, said former US Senate Majority Leader Bill
Frist, a Tennessee Republican, in an Associated Press
article (1/22/11). 'Each state can develop the
exchange that best meets the needs of their people.'
Finally, this legislation is our last chance to create
a health insurance exchange on our own terms. By
2014, the state is required to have a consumer-
centered exchange that makes buying health insurance
easier for individuals and small businesses in
Alaska. If we don't act now, the federal government
will.
Please join me in supporting an Alaskan-based solution
which puts Alaskans first.
2:24:30 PM
ANDY MADEROW, staff to Senator French, presented a sectional
analysis of SB 70, as follows:
Section 1, through page 2, line 5, provides the intent language
for SB 70; fundamental to the aim of SB 70 is connecting
individuals and small business with quality health policies to
reduce the number of uninsured Alaskans.
Section 2, starting on page 2, line 6, establishes the health
benefit exchange as a public corporation of the state.
Section 21.51.210 establishes a board of directors to oversee
exchange; the board has 13 members.
Section 21.54.220 outlines powers and duties of the health
benefit exchange. The primary duty of the exchange is to
facilitate purchase and sale of qualified health plans.
Sections (a) 3 and (a) 13 both establish the Small Business
Health Options Program (SHOP).
2:27:51 PM
Section (a)4 provides for a telephone call center.
Section (a)5 requires that enrollment periods be held annually
to facilitate the changing of plans.
Section (a)6 provides for the creation of an internet
marketplace to connect individuals with health insurance
coverage.
Section (a)7 provides for certification and decertification of
health plans sold through the exchange.
Sections (a)8 and (a)9 require the exchange to compare health
plans on metrics of quality and price.
Section (a)10 requires the exchange to use a standardized format
for presenting health benefit options in the exchange
Section (a)11 requires the exchange to determine potential
eligibility for state or local medical assistance programs, such
as Medicaid and Denali KidCare. If qualified, the exchange will
assist with the enrollment process.
Section (a)12 establishes a tax credit calculator.
Section (a)14 requires that the exchanges exempt Alaskans from
requirement to retain health insurance if certain criteria is
met.
Section (a)15 relates to sharing information about individuals
exempted from the health insurance requirement.
Section (a)16 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 or is unaffordable.
Section (a)17 explicitly states that the exchange will assist
consumers by determining eligibility for premium tax credits,
reduced-cost sharing, or exemptions from the insurance mandate.
Section (a)18 sets up the 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.
Section (a)19 requires the board 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
SHOP exchange
Section (a)20 asks the board to consider policy and procedures
that minimize adverse selection, both inside the exchange and
between plans sold within and outside the exchange.
Section (a)21 requires the exchange to provide credit for any
"free choice voucher" that an employer provides an employee for
the purpose of covering premium costs.
Sections (a)23 and 24 outline accounting procedures and
submission of receipts for review, to both federal and state
stakeholders.
Section (a)25 allows for cooperation with any investigation or
audit by the Secretary of Health and Human Services.
Section (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.
Section (a)27 requires the exchange to apply for planning and
establishment grants for the exchange. Grants of up to $1
million have been awarded to each of 49 states to date for
planning.
Section (a)28 requires the exchange board to offer
recommendations about potential interstate compacts that would
permit the sale and purchase of health insurance across state
lines.
Section (b)1, found on page 8 lines 21-27, allows the exchange
to contract out some of the responsibilities outlined in this
legislation.
Section (b)2 allows the exchange to share information with
federal and state agencies, provided that confidentiality
protections are upheld.
Section (b)3 allows the exchange to receive grants to finance
operations.
Section (c) prohibits certain expenses to keep costs down for
consumers.
Section (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.
2:36:15 PM
Proposed Section 21.54.230 of the new title, found on page 9,
line 14, through page 13, line 7, relates to health plan
certification.
2:38:13 PM
SENATOR GIESSEL asked why the exchange is established as a
public corporation.
SENATOR FRENCH explained that this was a policy decision made to
emphasize that the exchange is more market-based than
government-based.
2:39:35 PM
RON KREIER, Acting Director, Division of Public Assistance,
Department of Health and Social Services (DHSS), stated the
division had prepared a fiscal note under the assumption that it
would receive information directly from the exchange and would
issue benefits.
2:40:55 PM
CHAIR EGAN responded the committee does not have that fiscal
note and would not move SB 70 today.
MR. KRIER replied the fiscal note would be delivered to the
committee as soon as possible.
SENATOR DAVIS asked why the fiscal note came from his division.
Mr. KRIER said his assumption was that the health care exchange
would not make actual determinations of benefits; rather, the
division would do that through public assistance.
SENATOR DAVIS asked if the department had consulted with the
Division of Insurance.
2:43:45 PM
MR. KRIER replied that he had not discussed this issue with the
Division of Insurance.
CHAIR DAVIS noted that other consumers would also use the
exchange, and she thought the division of insurance would have
an interest.
LINDA HALL, Director, Division of Insurance, Department of
Commerce, Community and Economic Development (DCCED), noted
there has been a substantial amount of work on fiscal notes. The
division is in the process of reviewing numbers, trying to make
the fiscal note as accurate as possible.
SENATOR DAVIS noted that Alaska is the only state that has not
accepted federal money to set up a health care exchange.
MS. HALL confirmed that was true.
SENATOR DAVIS asked if the money was still available.
MS. HALL replied the money was still available, but there was a
short timeline.
SENATOR MENARD asked if Utah has set up an exchange program.
MS. HALL said yes, also Massachusetts.
SENATOR MENARD asked if the Division of Insurance is in contact
with those states.
MS. HALL said they are in contact with a number of states, and
research is being done, especially with regard to what might
benefit Alaskans.
2:48:22 PM
SENATOR PASKVAN asked Ms. Hall if she believed SB 70 would
reduce the number of uninsured.
MS. HALL answered she did not know, but Alaska does have
extremely high health care costs, which is the primary cost
driver for health insurance premiums. Competition could impact
that.
SENATOR PASKVAN noted this is a capitalistic approach to
hopefully lower costs and numbers of uninsured.
MS. HALL concurred.
2:50:04 PM
SENATOR FRENCH said the short answer is yes. SB 70 is designed
to insure more people by offering private insurance to consumers
through an exchange; the bill preserves the insurance system as
it is now.
2:51:08 PM
SENATOR DAVIS asked if Senator French would be opposed to
extending this bill to insurance carriers in neighboring states.
SENATOR FRENCH replied that is one of the aspects of the
exchange. One reality of living in Alaska is that it has a small
pool of people. He also noted that regulation of insurance is
largely a state matter, not a national effort, and the exchange
specifically makes provision for exploring the process of
pooling with other states.
SENATOR GIESSEL asked why the director of the Division of
Insurance would not be a member of the board.
SENATOR FRENCH replied he doubted that Ms. Hall would accept
such a position, but should the committee ask to add her, he
would welcome the addition.
MS. HALL deferred response.
2:54:14 PM
PAT LOVEY, Advocacy Director, AARP Alaska, testified in support
of SB 70. She stressed that if the state does not establish its
own exchange, the federal government will impose one on it.
2:56:32 PM
DORIS ROBBINS, representing herself, said she supports SB 70,
because you never know when an insurer will end coverage or an
unexpected medical bill will put you in financial jeopardy. The
exchange will act as a one-stop-shop for choice making with no
hidden fees, and all rules on display. She noted the federal
cash for set-up costs was not earmark money, and with the
cooperation of the governor, exchange start-up costs can be
paid.
2:59:59 PM
MARK REGAN, Legal Director, Disability Law Center of Alaska,
testified in support of SB 70. He said the exchange would serve
people with disabilities as well as other consumers, and might
make it possible for health care costs to come down. Reluctance
to the idea of the exchange may be based on misunderstanding, he
commented. In reality, the exchange will not penalize people for
not having private health insurance.
3:04:12 PM
JOHN GEORGE, representing Aflac Insurance, said they don't have
a duck in the fight, but he would like to recommend a technical
change to SB 70. On page 13, the bill states that the exchange
is to be funded by fees or assessments on health care insurers.
Under definitions, Aflac would like to add "insurers offering
health benefit plans" on page 13, line 9. This wording would
exclude other types of insurance such as automobile insurance
medical payments, and would ensure that only people
participating in the exchange are funding the administrative
costs.
SENATOR PASKVAN asked if only insurers offering health benefit
plans would pay the fees.
MR. GEORGE responded that automobile medical coverage, for
example, should not be included.
3:07:18 PM
CHAIR EGAN closed public testimony and held SB 70 in committee.
SENATOR MENARD asked if they had weighed in with the Alaska
Medical Society or the Alaska Dental Society.
SENATOR FRENCH said many people are still looking at the bill.
SENATOR GIESSEL noted the committee should hear from some of the
large insurers in Alaska.
SENATOR MENARD noted the state has chosen Wells Fargo.
SENATOR EGAN stated he would have his staff contact several
insurers before the next meeting, if the bill sponsor did not
object.
SENATOR FRENCH said he had no objection.
[SB 70 was held in committee.]
3:09:26 PM
There being no further business to come before the committee,
Chair Egan adjourned the meeting at 3:09 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 70 Disability Law Center lttr supporting.PDF |
SL&C 2/8/2011 2:00:00 PM |
SB 70 |