03/14/2022 01:30 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| SB185 | |
| SB41 | |
| SB190 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 185 | TELECONFERENCED | |
| += | SB 41 | TELECONFERENCED | |
| += | SB 190 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
ALASKA STATE LEGISLATURE
SENATE LABOR AND COMMERCE STANDING COMMITTEE
March 14, 2022
1:31 p.m.
MEMBERS PRESENT
Senator Mia Costello, Chair
Senator Joshua Revak, Vice Chair
Senator Peter Micciche
Senator Gary Stevens
Senator Elvi Gray-Jackson
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE BILL NO. 185
"An Act relating to exemptions from minimum wage."
- HEARD & HELD
SENATE BILL NO. 41
"An Act relating to health care insurers; relating to
availability of payment information; relating to an incentive
program for electing to receive health care services for less
than the average price paid; relating to filing and reporting
requirements; relating to municipal regulation of disclosure of
health care services and price information; and providing for an
effective date."
- HEARD & HELD
SENATE BILL NO. 190
"An Act extending the termination date of the Regulatory
Commission of Alaska; and providing for an effective date."
- MOVED CSSB 190(L&C) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: SB 185
SHORT TITLE: ELIMINATE MINIMUM WAGE EXEMPTION
SPONSOR(s): SENATOR(s) MICCICHE
02/08/22 (S) READ THE FIRST TIME - REFERRALS
02/08/22 (S) L&C
02/28/22 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
02/28/22 (S) Scheduled but Not Heard
03/14/22 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
BILL: SB 41
SHORT TITLE: HEALTH INSURANCE INFO.; INCENTIVE PROGRAM
SPONSOR(s): SENATOR(s) HUGHES
01/25/21 (S) PREFILE RELEASED 1/15/21
01/25/21 (S) READ THE FIRST TIME - REFERRALS
01/25/21 (S) L&C, FIN
04/07/21 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
04/07/21 (S) Heard & Held
04/07/21 (S) MINUTE(L&C)
05/14/21 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
05/14/21 (S) <Bill Hearing Canceled>
02/14/22 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
02/14/22 (S) Heard & Held
02/14/22 (S) MINUTE(L&C)
03/14/22 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
BILL: SB 190
SHORT TITLE: EXTEND REGULATORY COMMISSION OF ALASKA
SPONSOR(s): SENATOR(s) MYERS
02/15/22 (S) READ THE FIRST TIME - REFERRALS
02/15/22 (S) L&C, FIN
02/28/22 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
02/28/22 (S) Heard & Held
02/28/22 (S) MINUTE(L&C)
03/14/22 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
WITNESS REGISTER
MADISON GOVIN, Staff
Senator Peter Micciche
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented the sectional analysis for SB 185
on behalf of the sponsor.
TANYA KEITH, Supervisor
Wage and Hour
Division of Labor Standards and Safety
Department of Labor and Workforce Development (DOLWD)
Anchorage, Alaska
POSITION STATEMENT: Answered questions during the hearing on SB
185.
HEIDI LIEB-WILLIAMS, Chair
Governor's Council on Disabilities and Special Education
Department of Health and Social Services (DHSS)
Anchorage, Alaska
POSITION STATEMENT: Provided invited testimony in support of SB
185.
COREY GILMORE, Chair
Community Inclusion, Supports, and Services Committee
Governors Council on Disabilities and Special Education
Department of Health and Social Services (DHSS)
Anchorage, Alaska
POSITION STATEMENT: Provided invited testimony in support of SB
185.
RIC NELSON, Chair
Self-Advocacy and Leadership Committee
Governor's Council on Disabilities and Special Education
Department of Health and Social Services (DHSS)
Anchorage, Alaska
POSITION STATEMENT: Testified by invitation in support of SB
185.
MYRANDA WALSO, Acting Executive Director
Governor's Council on Disabilities and Special Education
Department of Health and Social Services (DHSS)
Anchorage, Alaska
POSITION STATEMENT: Testified by invitation in support of SB
185.
BUDDY WHITT, Staff
Senator Shelley Hughes
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Provided information and answered questions
during the hearing on SB 41 on behalf of the sponsor.
LORI WING-HEIER, Director
Division of Insurance
Department of Commerce, Community and Economic Development
Anchorage, Alaska
POSITION STATEMENT: Answered questions during the hearing on SB
41.
ED MARTIN JR., representing self
Kenai, Alaska
POSITION STATEMENT: During the hearing on SB 41, testified that
health care costs are too high in Alaska.
BETHANY MARCUM, Chief Executive Officer (CEO)
Alaska Policy Forum
Anchorage, Alaska
POSITION STATEMENT: Offered suggestions and recommendations
during the hearing on SB 41.
MELODIE WILTERDINK, Staff
Senator Mia Costello
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented the changes between version A and
version I of SB 190.
SENATOR ROBERT MYERS
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Sponsor of SB 190.
ACTION NARRATIVE
1:31:30 PM
CHAIR MIA COSTELLO called the Senate Labor and Commerce Standing
Committee meeting to order at 1:31 p.m. Present at the call to
order were Senators Gray-Jackson, Micciche, Stevens, and Chair
Costello. Senator Revak arrived during the introductions.
SB 185-ELIMINATE MINIMUM WAGE EXEMPTION
1:32:19 PM
CHAIR COSTELLO announced the consideration of SENATE BILL NO.
185 "An Act relating to exemptions from minimum wage."
1:33:16 PM
SENATOR PETER MICCICHE, speaking as sponsor of SB 185, stated
that this legislation repeals the unfair minimum wage exemption
in AS 23.10.070 that justifies paying a substandard wage for
anyone who has a physical or mental disability or is impaired by
age or injury. The regulations have been changed but the
offensive language remains in statute and essentially creates
two classes of Alaskans: those who deserve a fair wage because
they do not have any impairment and those who do not deserve a
fair wage because they experience a physical or mental
deficiency or are impaired by age, or injury. He related that
when the Governor's Council on Disabilities and Special
Education brought this issue to his attention he was surprised
and offended to see that language in statute. SB 185 removes
that offensive language. He said the bill also added a provision
for a community group to pay less than minimum wage to
individuals who are younger than 18 years old when they work on
short-term special projects.
SENATOR MICCICHE summarized that SB 185 removes offensive
language from statute and recognizes that Alaskans with
disabilities are equal on the job.
1:35:30 PM
At ease
1:36:16 PM
CHAIR COSTELLO reconvened the meeting and asked Ms. Govin to go
through the sectional analysis for SB 185.
1:36:26 PM
MADISON GOVIN, Staff, Senator Peter Micciche, Alaska State
Legislature, Juneau, Alaska, presented the sectional analysis
for SB 185 on behalf of the sponsor.
[Original punctuation provided.]
Section 1-Sec.23.10.070-Page 1, Line 8-9
Inserts a minimum wage exemption for an individual
under 18 years old who is temporarily employed by a 501
(c)(3) non-profit organization.
Section 1-Sec.23.10.070-Page 1, Line 10-11
Deletes the minimum wage exemption for anyone whose
earning capacity is impaired by physical or mental
deficiency, age, or injury.
CHAIR COSTELLO mentioned who was available to answer questions.
1:37:06 PM
SENATOR GRAY-JACKSON thanked the sponsor for bringing the bill
forward. She asked for further explanation of the language that
the bill adds to statute.
1:37:40 PM
TANYA KEITH, Supervisor, Wage and Hour, Division of Labor
Standards and Safety, Department of Labor and Workforce
Development (DOLWD), Anchorage, Alaska, offered her
understanding that the added language would provide an exemption
for a minor who is temporarily employed by a nonprofit
organization.
SENATOR GRAY-JACKSON summarized her understanding that somebody
who is age 18 or younger and employed by a nonprofit can be paid
differently than somebody who is older than age 18 and is
employed by another agency.
MS. KEITH further explained that the exemption would not be
automatic. Rather, the nonprofit would have to request the
exemption from DOLWD and the commissioner would have to approve
the request.
CHAIR COSTELLO said her reading is that the commissioner would
establish in regulation the amount individuals would be paid.
MS. KEITH said that's correct. The regulation attached to the
statute was eliminated years ago, so if the bill were to pass a
regulation would have to be written to address how to apply for
the exemption and how it would be approved. She added that the
regulation would stipulate how low the wage could be.
CHAIR COSTELLO directed attention to the language on page 1,
line 6 that says, "by regulation or order." She observed that
the implication is that a nonprofit could hire somebody 18 years
old or younger and with a commissioner's order know almost
immediately what wage it could pay.
MS. KEITH replied that was her reading as well.
1:41:05 PM
SENATOR MICCICHE provided a hypothetical example to explain his
goal. He described a Boys and Girls Club planter box project in
the City of Kenai that sought to teach young people how to
garden and to demonstrate the financial benefit of hard work. He
noted that there is a way for young people to volunteer to work
on certain projects, but he didn't know whether they could be
compensated with something like a gift card that would be
equivalent to less than minimum wage. He asked Ms. Keith to
comment. He summarized that his goal was to encourage community
groups to demonstrate to young people that hard work results in
some level of compensation, although not technically a minimum
wage job.
1:42:43 PM
MS. KEITH explained that AS 23.10.05(a)(11) provides an
exemption from the Wage and Hour Act for somebody who is younger
than age 18 and is employed for not more than 30 hours a week.
These individuals may be paid as little as the federal minimum
wage.
SENATOR STEVENS expressed concern that the bill could result in
the loss of jobs or fewer jobs being available to individuals
with disabilities. He relayed his knowledge of an instance where
a municipality was able to give a young man who had mental and
physical disabilities a job, but it was not equal to that of a
fireman and the young man was paid less than minimum wage.
1:45:07 PM
SENATOR MICCICHE advised that in February 2018 [DOLWD] repealed
Section 8 ACC 15-120 and it became illegal to hire somebody with
a disability at less than minimum wage. SB 185 updates the
statute to reflect that change. He restated that he finds it
offensive that this is in statute even though it hasn't been
used for over four years. He added that there are ways for an
organization to get assistance to employ individuals with a
disability. Young people deserve to be treated like everyone
else on a minimum wage basis.
SENATOR STEVENS said his concern is about potentially leaving
some individuals behind.
1:47:26 PM
CHAIR COSTELLO reported that the Alaska minimum wage is $10.34
per hour and that it will go up next year. The federal minimum
wages is $7.25 per hour. She asked Ms. Keith to talk about the
law that stipulates that individuals may not be paid less than
the federal minimum wage.
MS. KEITH said [AS 23.10.055 (a)(11)] says that "an individual
under 18 years of age employed on a part-time basis not more
than 30 hours in a week" could be exempt from the Wage and Hour
Act. The law also provides that somebody who works less than 30
hours per week may not be paid less than the prevailing federal
minimum wage.
CHAIR COSTELLO asked if she had information about what jobs are
paying less than minimum wage and what the current job market
looks like, because employers like Fred Meyer in her community
are paying much more than minimum wage and seem to be having
difficulty finding workers.
1:49:33 PM
MS. KEITH agreed that in most cases employers are paying more
than minimum wage because employees won't work for less.
CHAIR COSTELLO asked her to talk about the philosophy behind
paying someone who is younger than age 18 years less than
minimum wage.
MS. KEITH said she's read anecdotally that the rationale for
paying individuals who are 14-18 years of age less than minimum
wage is that they potentially need additional oversight.
CHAIR COSTELLO asked the sponsor if the intention is to help the
nonprofit save money by paying less for the work it wants done.
1:51:09 PM
SENATOR MICCICHE replied that was not his intention. The idea is
to provide an opportunity for young people to see that there is
value in hard work. Some of the organizations want to support
the community and participate but they have very little money to
pay for small, short-term projects.
CHAIR COSTELLO asked Ms. Keith if there are Wage and Hour Act
considerations if a young person wants to volunteer their
services for either a nonprofit or for-profit organization.
MS. KEITH replied there are instances where somebody may
volunteer for a nonprofit but not for a for-profit business.
1:52:57 PM
SENATOR STEVENS said, at some point, he would like to hear from
municipalities.
CHAIR COSTELLO said she'd make sure that happens.
1:53:18 PM
CHAIR COSTELLO turned to invited testimony.
1:53:32 PM
HEIDI LIEB-WILLIAMS, Chair, Governor's Council on Disabilities
and Special Education, Provided invited testimony in support of
SB 185. She stated that she is a national speaker advocate who
experiences multiple disabilities and has also broken barriers.
She submitted the following statement from her heart:
We all have gifts and talents to offer and our work is
just as valuable as what others bring to the table,
and we should be paid fairly for our time and
knowledge. It is demeaning that someone could just
look at a person and judge them on the basis of their
disability, and offer them less than they are worth.
As Alaskans, we are better than that and this repeal
will help us all acknowledge the [Developmental
Disabilities Shared Vision] law becoming reality. How
can you be an adult and say that you can judge others
based on your automatic perception of what someone can
do, rather than teach them how, just like you would
someone else, and have them demonstrate their
capabilities to soar to new heights.
Nobody is going to be left behind, but propelled
forward based on sole ability to treat them with human
dignity with this law being nonexistent. People often
define themselves to have purpose in life by doing
work that serves others in the community by what
they're contributing as the daily job. That matters.
To pay them accordingly for doing things that make a
difference to other Alaskans.
MS. LIEB-WILLIAMS thanked the committee for the opportunity to
testify and expressed optimism that it would do what is right
for a better future in Alaska.
1:56:16 PM
COREY GILMORE, Chair, Community Inclusion, Supports, and
Services Committee, provided invited testimony in support of SB
185. He related that wherever he goes he is judged by the way he
speaks, looks, and moves. In fact, when he goes to a restaurant
his staff has to remind the wait person that he can order for
himself. He said this is irritating to say the least but they
don't know any better. The statute that SB 185 removes was
written by people who also didn't know any better.
MR. GILMORE stated that Developmental Disabilities Shared Vision
says Alaskans who experience disabilities have the right to run
their own lives and to dream big enough to have not just a job
but a career. People who experience disabilities deserve to have
a career if that is what they want. He shared that if he were to
have kids, he would want them to know that he and others have
helped to make Alaska better than it was because they know
better.
1:59:18 PM
RIC NELSON, Chair, Self Advocacy and Leadership Committee,
Governor's Council on Disabilities and Special Education,
Department of Health and Social Services (DHSS), testified by
invitation in support of SB 185.
Mr. Nelson's assistant read the following:
This bill is so important because all people, no
matter their disabilities, should get paid at least
minimum wage to do the same job as their able-bodied
peers. Having a law that singles someone out as not
deserving the same pay solely because of their
disability is dehumanizing.
As a person with a disability who has worked hard to
have a successful career and earned a master's degree,
I find this statute reinforces the misconception that
individuals with disabilities are somehow a liability
for an employer. Keeping this statute sends a message
that Alaska is the land of opportunity, only if you
are not disabled.
2:01:42 PM
MYRANDA WALSO, Acting Executive Director, Governor's Council on
Disabilities and Special Education, Department of Health and
Social Services (DHSS), testified by invitation in support of SB
185. She explained that the council works with communities and
other state agencies to ensure that people with intellectual and
developmental disabilities and their families receive the
services they need. These individuals also participate in the
planning and design of the services.
MS. WALSO relayed that the [Fair Labor Standards Act of 1938]
established the federal minimum wage. The Act included the
Subminimum Wage Provision that allowed employers with a certain
certificate to employ individuals with a physical or mental
disability at less than the authorized minimum wage. The basis
for this was the notion that individuals with a disability had
less capacity for productivity. This is discriminatory and
requires disabled workers to be measured by a standard that
nondisabled workers are measured by. Employers in past
generations were able to exploit workers who were deemed lesser.
That outdated notion is out of step today and the statute that
SB 185 seeks to repeal is similarly out of step. It holds to the
same notion that people with disabilities do not have the same
standing in the job market as their nondisabled peers. There is
a new understanding through the Americans with Disabilities Act
(ADA), the Individuals with Disabilities Education Act (IDEA),
and the Workforce Innovation and Opportunity Act (WIOA). Alaska
has enacted the Employment First policy that requires that
individuals with disabilities receive vocational services to
help them become gainfully employed at or above the minimum
wage. As previously mentioned, the regulations enacting
subminimum wages for individuals with disabilities were
repealed, but the statute remains.
MS. WALSO emphasized that it is not acceptable for public
policies to remain in effect when they conflict with the basic
premise that people with disabilities are valuable members of
society and have a right to participate in all aspects of life,
which means gainful employment and the pursuit of economic self-
sufficiency.
2:04:51 PM
CHAIR COSTELLO opened public testimony on SB 185; finding none,
she closed public testimony.
2:05:10 PM
CHAIR COSTELLO held SB 185 in committee for future
consideration.
SB 41-HEALTH INSURANCE INFO.; INCENTIVE PROGRAM
2:05:16 PM
CHAIR COSTELLO announced the consideration of SENATE BILL NO. 41
"An Act relating to health care insurers; relating to
availability of payment information; relating to an incentive
program for electing to receive health care services for less
than the average price paid; relating to filing and reporting
requirements; relating to municipal regulation of disclosure of
health care services and price information; and providing for an
effective date."
She noted that this was the third hearing and there was an
amendment for the committee to consider. She asked Mr. Whitt to
refresh the committee's recall of the bill.
2:05:48 PM
BUDDY WHITT, Staff, Senator Shelley Hughes, Alaska State
Legislature, Juneau, Alaska, summarized that SB 41 incentivizes
people to find in-network or out-of-network providers who can
save the insured and insurer money. He noted that the greatest
savings typically would be from out-of-network providers since
in-network providers generally negotiate rates that are similar
across the provider network. This has been implemented in
several other states and the sponsor believes would be a
productive policy for Alaska to consider.
CHAIR COSTELLO asked if the states that have similar legislation
have reported on realized savings.
MR. WHITT said there isn't much data since this is a relatively
new program, but he would look at the available analyses and
provide that information to the committee.
2:08:56 PM
SENATOR MICCICHE moved to adopt Amendment 1 to SB 41, work order
32-LS0247\I.2.
32-LS0247\I.2
Marx
3/4/22
AMENDMENT 1
OFFERED IN THE SENATE
TO: CSSB 41(L&C), Draft Version "I"
Page 4, line 10, following "regulation.":
Insert "Except as provided in (e) of this section, the
total amount of incentive payments a health care insurer
provides to a covered person in a calendar year under this
subsection may not exceed the amount of the covered
person's cost sharing in the calendar year by more than
five percent."
Page 4, line 15:
Delete the first occurrence of "of"
Insert "as provided in this subsection. Except as
provided in this subsection and (e) of this section, the
incentive a health care insurer provides the covered person
must be"
Page 4, line 18, following "service.":
Insert "Except as provided in (e) of this section, the
incentive a health care insurer provides to a covered
person in a calendar year under this subsection may not
exceed the amount of the covered person's cost sharing in
the calendar year."
Page 4, following line 24:
Insert a new subsection to read:
"(e) For a dental insurance policy or a vision
insurance policy, the incentives a health care insurer
provides to a covered person in a calendar year may
not exceed the amount of the dental benefits or vision
benefits provided to the covered person under the
dental insurance policy or the vision insurance
policy."
Reletter the following subsection accordingly.
Page 6, following line 10:
Insert a new paragraph to read:
"(1) "cost sharing" means a deductible,
coinsurance, copayment, or similar expense owed
by a covered person under the terms of the
covered person's health care insurance policy;"
Renumber the following paragraphs accordingly.
CHAIR COSTELLO objected for an explanation.
2:09:05 PM
SENATOR MICCICHE stated that the amendment addresses his concern
with the original version of the bill that people could be well
compensated for making poor decisions about who would provide
the medical care for specific procedures. The amendment would
provide the insured who shops around a benefit of five percent
more than their out of pocket costs. The amendment does not
incentivize people for making potentially damaging decisions
based on the profit that was available.
CHAIR COSTELLO asked for a detailed explanation of what the
amendment does and an example of the profit potential in the
earlier draft of the bill.
2:11:07 PM
SENATOR MICCICHE explained that the earlier version allowed the
covered person to receive 30 percent of the savings, which
potentially could have been tens to hundreds of thousands of
dollars more than the cost of the medical procedure. The
amendment clarifies that the insured will be paid five percent
more than their out-of-pocket costs. He provided a personal
example to demonstrate the profit potential without the
amendment. One of his daughters had a heart condition that was
monitored for a year. When it was determined that treatment was
necessary, he and his wife shopped around for the most cost
effective option. The right medical care at the right time was
the primary concern. However, if the original version of the
bill had passed, he could have pocketed $16,000. He posited that
some families may make a less than responsible choice for the
best medical outcome if they know that a particular choice will
put $16,000 in their pocket.
2:13:30 PM
SENATOR STEVENS asked where the money for the incentive comes
from.
SENATOR MICCICHE offered his understanding that it is money that
the insurance company would not longer need to pay. He deferred
further explanation to the sponsor.
2:14:15 PM
At ease
2:14:46 PM
CHAIR COSTELLO reconvened the meeting and asked Mr. Whitt to
respond to Senator Stevens' question.
2:15:13 PM
MR. WHITT explained that the savings is shared either 50/50
between the insured and the insurance company or three ways
between the employer who pays for the insurance, the insured
employee who sought the medical treatment, and the insurance
company. Regardless, the insurance company pays the incentive.
SENATOR STEVENS asked how the bill affects Medicare.
2:17:52 PM
LORI WING-HEIER, Director, Division of Insurance, Department of
Commerce, Community and Economic Development (DCCED), Anchorage,
Alaska, explained that Medicare, Medicaid, Alaska Care, and
union trusts would not be affected should the bill become law.
SB 41 would only apply to insured plans that fall under Title
21, which is just 18-20 percent of the state.
SENATOR STEVENS asked if deductible payments would be affected.
MS. WING-HEIER replied deductible payments are part of the out-
of-pocket maximum. Should the bill pass, the most an insured who
uses the incentive could receive is five percent more than their
total out of pocket maximum.
CHAIR COSTELLO said the underlying concept is good, but it
doesn't seem to improve cost transparency because the insured
probably won't know the total cost of a procedure until months
after it happened. Should the bill pass, she said a patient will
have to try to extract the information about cost from the
physician's office and share that with the insurance company.
She wondered whether another bill might be needed to address
transparency.
2:20:49 PM
MS. WING-HEIER acknowledged that there will be a learning curve.
For example, somebody who is having a knee replaced might call a
second facility to compare price, but they would also have to
look at the cost of the surgery center, the anesthesiologist,
and the other doctors that might be involved. The insurance
companies will have to work with the policy holders to look at
all the costs because a savings in one area might be offset by a
higher cost in another. Further, it adds to the cost if the
surgery is more complicated than anticipated. She noted the
federal legislation that requires providers to give consumers
good faith estimates, but warned that it will be the consumer's
responsibility to get cost estimates for all the different parts
of the procedure.
SENATOR MICCICHE expressed concern that a provider may give an
estimate that is based on a best case scenario and the consumer
might make a decision that results in complications that lead to
much higher medical bills later on. He posited that SB 41 might
not do what it's purported to do. He said Amendment 1 eliminates
just one of the many concerns he has with the bill.
2:24:45 PM
CHAIR COSTELLO said she would like to finish working on the
amendment.
SENATOR GRAY-JACKSON asked when she should raise questions
unrelated to the amendment.
2:25:05 PM
At ease
2:25:52 PM
CHAIR COSTELLO reconvened the meeting and removed her objection
to Amendment 1. Finding no further objection, Amendment 1 was
adopted.
SENATOR GRAY-JACKSON asked if AlaskaCare is a self-insured plan.
MS. WING-HEIER answered yes
SENATOR GRAY-JACKSON offered her understanding that SB 41 would
affect only those insurance plans that are not self-insured.
MS. WING-HEIER agreed.
SENATOR GRAY-JACKSON posed a hypothetical example of somebody
who shops for a procedure and selects an option that saves
$16,000. She asked why the savings are split.
MS. WING-HEIER explained that when the insurance company
receives half of the $16,000 savings, the overall cost of health
care goes down by $8,000. The notion is to encourage the insured
to shop for providers that can do the procedure for less than
the network plan.
SENATOR GRAY-JACKSON asked for further clarification on the
savings.
MS. WING-HEIER replied the only savings in the example is the
$8,000 that the insured doesn't have to pay the provider.
SENATOR GRAY-JACKSON continued to question the savings.
MS. WING-HEIER replied this is new territory, but the division
will do its best to ensure it works for both consumers and
insurance companies, should the bill pass.
2:30:01 PM
SENATOR STEVENS asked if Aetna would receive any benefit if it
were able to reduce the price of a procedure.
MS. WING-HEIER explained that in an employer sponsored plan, the
savings would be split three ways between the employer, the plan
sponsor, and the employee. In the example, the employer and the
insurance company are the same because Aetna administers the
plan for the state. She assumed that Aetna is paid on a per
person per month charge.
SENATOR STEVENS commented that he was now confused at a higher
level.
2:31:38 PM
SENATOR MICCICHE clarified that in the personal example he gave,
the $16,000 would have been his share as the insured so it saved
the state $48,000. He said he understands the concept in theory
but he struggles with it philosophically because he believes
people should make choices for the best medical outcome at the
lowest cost possible.
2:32:29 PM
CHAIR COSTELLO questioned whether the bill might drive increased
medical tourism and if that is happening in states that passed
similar legislation.
MR. WHITT said he had anecdotal data that people crossed the
state line to seek treatment when New Hampshire passed similar
legislation. He also shared that the sponsor traveled to Idaho
for a major medical procedure and that drastically reduced her
out of pocket in-network savings.
MR. WHITT addressed the earlier question about transparency,
noting that Ms. Wing-Heier pointed out that federal legislation
passed and was being implemented about transparency and giving
people information about the cost of procedures. He directed
attention to the provision in Section 4 that stipulates that
insurance companies operating in the state must provide a
mechanism by which insured persons can see the cost of medical
procedures.
MR. WHITT maintained that the bill would not incentivize people
to select lower quality care. Rather, it would incentivize a
shopping mentality for more affordable care. The bill simply
says that when the playing field is even and there is a drastic
difference in pricing, Alaskans should be able to realize some
of the savings that an insurance company would receive for
selecting the lower cost option.
2:39:15 PM
CHAIR COSTELLO opened public testimony on SB 41.
2:39:43 PM
ED MARTIN JR., representing self, Kenai, Alaska, said he likes
that SB 41 talks about transparency in getting cost information
about medical procedures. He offered his belief that medical
procedures in this state are too costly and he and his wife
likely would travel out of state to seek less expensive options
since they have never purchased insurance under the Affordable
Care Act. He opined that "there shouldn't be a profit margin
when it comes to health," regardless of whether it's the
individual, the insurance company or the doctors. He asserted
that the number of specialists throughout the country was out of
control. He recalled the time when children were born in Palmer
at the Valley Hospital for $350. Regarding the bill, he said
disclosure is fine, but the profit section is too complicated.
"If anybody should profit from it, it should be the
individuals." He said he didn't care about the insurance
companies and he will travel outside to receive health care
because costs are too high in this state and it is the
legislature's fault for not getting rid of Certificate of Need
and allowing competition.
CHAIR COSTELLO thanked him for his testimony and clarified that
if the bill were to pass, the savings would be shared with the
insured person.
2:42:51 PM
BETHANY MARCUM, Chief Executive Officer (CEO), Alaska Policy
Forum, Anchorage, Alaska, offered suggested changes and
recommendations during the hearing on SB 41. She read the
following testimony:
Price transparency is an essential component of
markets that work, but health care is not most
markets. Its pricing system is extremely complicated
and one primary reason for this complexity is the
presence of third-party payers for routine care. In
most market transactions, payment is made from the
person or entity receiving the good or service to the
entity providing the good or service. In those
instances, consumers typically shop around for the
best product or service at the best price. But some
form of health insurance, either private or government
provided has become the middle man in nearly all the
health care transactions today. Some patients only
receive services, but most do not directly pay for
services; instead paying for insurance premiums,
copays, or deductibles. Patients have much less
incentive to shop for the best service at the best
price. In fact, most Americans don't shop for health
care services in our current environment. So while
transparent pricing for health care services is
important, this alone will not have a significant
effect on the market as long as third-party payers are
involved. We have evidence of this from transparency
initiatives, which have occurred in other states.
MS. MARCUM continued to read:
Our 2020 report found that Alaska health care
expenditures per capita has grown significantly faster
than the national average over the past 30 years and
are now higher than every other state. In order to
bring down these costs, Alaska must create a
competitive marketplace. To truly make a difference in
our third-party payer health care system, three key
elements must be included.
First, is that for patients to make true price
comparisons, they must know what their own insurance
plan pays for the service. California implemented a
payers' bill of rights years ago and that required
disclosure of charge master rates. But later studies
found little to no observable effect on the end
result. So listing the undiscounted price or even an
out-of-pocket estimate is not sufficient to give
consumers the information they need to make life
choices.
The second and most important element is an incentive.
I mean, after all if only your insurance company
stands to gain from a patient choosing a lower cost
provider, why would patients do the extra footwork to
shop around? However, if they personally get a cut of
the savings, patient engagement with transparency
tools has shown to increase elevenfold. So some kind
of shared savings program is a vital component of any
transparency initiative. Some have expressed concern
that such an incentive program would push patients to
always choose the lower-cost provider and thus affect
quality and outcomes. But that surely presumes that
Alaskans are not smart enough to balance cost with
quality or to make their own health care decisions in
direct consultation with providers.
MS. MARCUM continued to read:
The final required element is loosening restrictive
in-network requirements. If patients are only
encouraged or incentivized to shop around within the
network, the network providers may keep costs high
knowing they have a captive audience. Patients should
be allowed to use lower priced services outside the
network if they so choose.
Lastly I would like to make a couple of specific
policy recommendations:
1. A provision should be included for a discounted
cash price to also be disclosed by providers and
facilities.
2. Language should be added to establish that
insurers cannot deny referrals to in-network
providers from out-of-network providers if the
patient went there for a lower cost.
3. All the federal rules that have been enacted in
the last five years related to price transparency
should be codified into this bill. And that is
regarding federal regulations 26, 29, and 45.
MS. MARCUM thanked the committee for the opportunity to testify.
2:46:51 PM
CHAIR COSTELLO closed public testimony on SB 41.
She asked the committee if there were any comments on the
suggested changes.
SENATOR REVAK said he would like the sponsor to comment on the
suggestions and recommendations.
2:47:24 PM
MR. WHITT pointed out that insurance companies that participate
in the incentive would be required to report the number and
amount of the incentives they paid, and the department would
also be required to submit a report to the legislature so
changes could be made to the program if they were needed.
Responding to the public testimony, he clarified that the
majority of individuals in the state who are insured through the
individual market with healthcare.gov don't pay anything for
insurance. For those people, the result of Amendment 1 is they
have no incentive to shop for a lower cost procedure. Their
incentive is limited to five percent above out-of-pocket costs,
and they have no out-of-pocket costs to recoup.
MR. WHITT restated that the sponsor believes SB 41 is good
policy. It has the potential both to bend the curve on health
care costs and change the minds of Alaskans about how to look
for health care.
2:49:25 PM
At ease
2:51:09 PM
CHAIR COSTELLO reconvened the meeting and recognized Senator
Micciche.
2:51:20 PM
SENATOR MICCICHE said he felt compelled to respond to Ms.
Marcum's comment that concerns about the incentive program as
initially drafted presumes that Alaskans are not smart enough to
balance cost and quality and make a good health care decision.
He said he believes Alaskans are smart enough to make good
choices whether they're paying the bill or not. His concern was
specifically focused on the cash incentive.
2:52:07 PM
CHAIR COSTELLO held SB 41 for future consideration.
SB 190-EXTEND REGULATORY COMMISSION OF ALASKA
2:52:14 PM
CHAIR COSTELLO announced the consideration of SENATE BILL NO.
190 "An Act extending the termination date of the Regulatory
Commission of Alaska; and providing for an effective date."
2:52:24 PM
At ease
2:53:01 PM
CHAIR COSTELLO reconvened the meeting and solicited a motion to
adopt the proposed committee substitute (CS).
2:53:25 PM
SENATOR REVAK moved to adopt the work draft CS for SB 190, work
order 32-LS1525\I, as the working document.
2:53:39 PM
CHAIR COSTELLO objected for an explanation of the changes.
2:53:48 PM
MELODIE WILTERDINK, Staff, Senator Mia Costello, Alaska State
Legislature, Juneau, Alaska, presented the changes between
version A and version I of SB 190.
Sec. 1 Page 1, Lines 4-9
Adds legislative intent language to uncodified law
which states that it is the intent to extend the
Regulatory Commission of Alaska every five years to
take into account the term length of legislators,
providing for awareness of the commission and its
purpose through legislative review and debate.
Sec. 2 AS 44.66.010(a)(3) Page 1, Lines 10-13
Changes the expiration date for the commission from
2030 to 2027.
2:54:56 PM
SENATOR STEVENS said he appreciates the five year extension
instead of eight years.
CHAIR COSTELLO stated that she supports the addition of the
legislative intent to extend the commission just five years, not
because there is a problem, but because the audit provides an
opportunity for legislative oversight of this very significant
commission. She noted that Senator Stevens previously mentioned
that it is possible to serve in the legislature and have no
interaction with the Regulatory Commission of Alaska unless
specific legislation is brought forward.
2:56:41 PM
CHAIR COSTELLO removed her objection. There being no further
objection, CSSB 190, version I was adopted. She invited the
sponsor to comment.
2:56:56 PM
SENATOR ROBERT MYERS, Alaska State Legislature, Juneau, Alaska,
sponsor of SB 190, thanked the committee for considering the
bill.
CHAIR COSTELLO solicited a motion.
2:57:27 PM
SENATOR REVAK moved to report CSSB 190, work order 32-LS1525\I,
from committee with individual recommendations and attached
fiscal note(s).
2:57:48 PM
CHAIR COSTELLO found no objection and CSSB 190(L&C), was
reported from the Senate Labor and Commerce Standing Committee.
2:58:16 PM
There being no further business to come before the committee,
Chair Costello adjourned the Senate Labor and Commerce Standing
Committee meeting at 2:58 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 41 Amendment I.2.pdf |
SL&C 3/14/2022 1:30:00 PM |
SB 41 |
| SB 190 Version I.pdf |
SL&C 3/14/2022 1:30:00 PM |
SB 190 |