HOUSE BILL NO. 25 "An Act relating to insurance coverage for contraceptives and related services; relating to medical assistance coverage for contraceptives and related services; and providing for an effective date." 1:36:32 PM LIZZIE KUBITZ, STAFF TO REPRESENTATIVE MATT CLAMAN, ANCHORAGE (via teleconference), relayed that she was available for questions regarding the amendments. 1:38:35 PM Representative Kawasaki MOVED to ADOPT Amendment 1, 30- LS0261\0.1 (Wallace, 4/18/17) (copy on file): Page 3, following line 13: Insert new bill sections to read: "*Sec. 2. AS 29.10.200 is amended by adding a new paragraph to read: (66) AS 29.20.420 (health care insurance plans). *Sec. 3. AS 29.20 is amended by adding a new section to article 5 to read: Sec. 29.20.420. Health care insurance plans. (a) If a municipality offers a group health care insurance plan covering municipal employees, including by means of self-insurance, the municipal health care insurance plan is subject to the requirements of AS 21.42.427. (b) This section applies to home rule and general law municipalities. (c) In this section, "health care insurance plan" has the meaning given in 12 AS 21.54.500." Renumber the following bill sections accordingly. Page 6, line 30: Delete "sec. 4" Insert "sec. 6" Page 7, line 1: Delete "sec. 4 Insert "sec. 6" Page 7, line 4: Delete "sec. 4" Insert "sec. 6" Page 7, line 7: Delete "sec. 4" Insert "sec. 6" Page 7, line 9: Delete "sec. 5" Insert "sec. 7" Page 7, line 10: Delete "sec. 4" Insert "sec. 6" Page 7, line 12: Delete "sec. 4" Insert "sec. 6" Page 7, line 14: Delete "sees. 5 and 6" Insert "sees. 7 and 8" Page 7, line 15: Delete "sec. 7" Insert "sec. 9 Representative Wilson OBJECTED. Representative Kawasaki explained the amendment. The amendment safeguarded that municipalities who self-insured were also covered within the twelve month period. He shared that he contacted the "top three" municipalities and was informed that they already had a similar provision. He did not feel the legislation impacted municipalities. Representative Wilson did not support the amendment without knowing how the bill impacted municipalities. She stated that how the legislation impacted municipalities was unknown. The bill mandated insurance coverage for contraceptives; it was not merely about extending the prescription to 12 months. A roll call vote was taken on the motion. IN FAVOR: Guttenberg, Kawasaki, Ortiz, Gara, Grenn, Foster, Seaton OPPOSED: Pruitt, Neuman, Tilton, Wilson The MOTION to Adopt Amendment 1 PASSED (7/4). 1:40:49 PM Representative Wilson MOVED to ADOPT Amendment 2, 30- LS0261\0.4 (Wallace, 4/18/17): Page 1, line 8, following "market": Insert "that provides coverage for prescription contraceptives" Co-Chair Seaton OBJECTED. Representative Wilson explained the amendment. She was concerned that the bill mandated coverage for contraceptives. She felt that some people purchased health insurance policies based on their needs and that the mandate would increase premium costs to individuals that did not need contraceptives. The amendment clarified that the bill only applied to insurers who already provided coverage for contraceptives. Co-Chair Seaton asked whether the bill sponsor wanted to speak to the amendment. REPRESENTATIVE MATT CLAMAN, SPONSOR, did not support the amendment. He commented that the amendment was contrary to the point of the bill. Representative Kawasaki asked whether there were health insurance policies and "individual market plans" that did not currently cover contraceptives. Representative Wilson responded that she did not know, which characterized the point of her amendment. She spoke to her understanding of the bill. She reiterated that the bill required every plan to provide the coverage even if it currently did not. Ms. Kubitz replied that HB 25 was about expanding access to contraceptives. She pointed out that the amendment would not allow the expansion of coverage. She believed coverage for contraceptives was a "standard of care" Alaskan women were entitled to unless an employer upheld a religious exemption. 1:45:39 PM Representative Ortiz asked whether the sponsor's intent was to force insurers to provide contraceptives as part of their plan. Representative Claman believed that the only plans that did not allow coverage were policies with religious exemptions. He did not believe HB 25 created a mandate and that contraceptive coverage was required under the Affordable Care Act (ACA). Representative Wilson believed the amendment would not harm existing practices. She maintained that the amendment clarified that the bill did not create a mandate that had unintended negative consequences. Representative Neuman asked how the 12 month requirement pertained to the amendment. Representative Wilson answered that the 12 month language was in the bill. She explained that the bill dealt with other contraceptive methods but extending prescriptions for pills was a major provision to prevent the inconvenience for women having to obtain the prescription from a pharmacy multiple times each year. She restated that her amendment ensured that contraceptive coverage was already included in the policy before the rest of the bill's provisions were applied. Representative Guttenberg asked whether there would be any other impacts from the bill and if the sponsor had heard from anyone who was concerned by the mandate. Representative Claman replied that he had not heard from anyone whose policies did not provide coverage and were apprehensive over the requirement. Co-Chair Seaton asked whether Representative Wilson's intention was to provide contraceptive coverage in Alaska regardless of whether or not the ACA mandated the coverage or was repealed. 1:51:33 PM Representative Wilson answered that was not her intent. She cited a letter from the National Federation of Independent Business (NFIB) (copy on file) that opposed the mandate. She offered that every time more mandates were placed on private companies to cover conditions their costs increased. She reiterated the intent of the amendment. 1:53:26 PM Representative Wilson provided final comments regarding the intent of the amendment. Co-Chair Seaton MAINTAINED his OBJECTION. A roll call vote was taken on the motion. IN FAVOR: Ortiz, Pruitt, Neuman, Tilton, Wilson OPPOSED: Kawasaki, Gara, Grenn, Guttenberg, Seaton, Foster The MOTION to adopt Amendment 2 FAILED (5/6). Representative Wilson WITHDREW Amendment 3, 30-LS0261\0.2 (Wallace, 4/18/17) (copy on file). 1:55:21 PM Vice-Chair Gara reviewed the fiscal notes: FN 1 (CED) zero from the Department of Commerce, Community and Economic Development, one new zero fiscal note from the Department of Administration, and FN 3 (DHS) showing fiscal impact from the Department of Health and Social Services, Medicaid Services that reported an anticipated cost savings of $678 thousand in FY 18 and $1.3 million in the out years through the reduction in unintended pregnancies. Representative Wilson was trying to determine how the savings was derived. She wondered how many women were not currently "taking the pill that should be." She understood that the department already could provide the prescription for twelve months but do not because a women might not be eligible for Medicaid for the entire twelve month period. She was uncertain the bill would allow the department to change its prescribing practices. 1:57:55 PM MARGARET BRODIE, DIVISION DIRECTOR HEALTH CARE SERVICES, ANCHORAGE (via teleconference), answered that based on national studies there was a 6 percent contraceptive failure rate utilizing a twelve month prescription period as opposed to a 9 percent failure rate based on 3 month prescriptions. She added that the department chose a 7 percent failure rate. The fiscal note was based on the difference between the lower and higher failure rate. Representative Wilson countered that the department had testified that it could have been prescribing contraceptives for 12 months without the legislation. She wondered why the extended prescriptions had not been implemented. Ms. Brodie answered that the Medicaid program was "under constant pressure to contain costs" and often the contraceptive prescriptions were not issued at all. She related that the contraceptive failure rate study was new. In addition, savings would be realized from reduced dispensing fees the department was required to pay for prescriptions. Representative Wilson cited the $1.4 million in savings and wondered how many individuals the figure represented. She asked why DHSS used national figures versus Alaskan numbers because the state's Medicaid standards were much higher than the federal poverty rate. Ms. Brodie responded that the national averages were employed to determine the contraceptive failure rate but Alaskan data was used to determine the number of unintended pregnancies (120). Representative Wilson asked what happened if a woman became ineligible within the year but was issued a 12 month prescription. Ms. Brodie answered that initially the situation was factored into the analysis. However, after further research, DHSS discovered that the state did not have to repay the ineligible portion as long as the individual was eligible for Medicaid at the time of dispensing the medication. Representative Wilson still believed the numbers in the DHSS fiscal note were "skewed" but did not have access to data to prove her assumption. Vice-Chair Gara remarked that the all of the data discussed was located on page 2 of the DHSS fiscal note analysis. He relayed the following: A report by Foster et. al. (2011) projects a decrease in failure rate of approximately 30 percent when oral contraceptives are dispensed in 12month quantities, which would result in an oral contraceptive failure rate of 6 percent. … Applying this differential, we estimate that approximately 5.28 of the avoided 120 unintended pregnancies would have been complicated births … Vice-Chair Gara noted that the data was the basis for the projected savings. He wanted to help prevent unintended pregnancies. Co-Chair Seaton addressed the question of whether the state's Medicaid program currently had the ability to provide 12 month prescriptions. He related that the bill contained conditional language that was not effective unless the federal Medicaid program approved the state's plan amendment adopting the 12 month requirement. 2:04:38 PM Representative Wilson asked whether Ms. Brodie's previous testimony regarding the issue had been incorrect. Ms. Brodie responded that regulations allowed it, but the state had to file a state plan amendment that required approval from the federal government. Representative Wilson asked whether legislation was required to amend the state plan. Ms. Brodie answered that the commissioner of DHSS could make the determination and request the federal government's approval. 2:05:54 PM Co-Chair Seaton MOVED to REPORT CSHB 25(FIN) out of committee with individual recommendations and the accompanying fiscal notes. Representative Wilson OBJECTED. She remarked on the usage of the words "unintended and unwanted" in a negative context. She reasoned that "everything in life was not always intended" but could be welcomed. She expressed concern that the bill carried a mandate in addition to the 12-month coverage. She opposed additional mandates and the problems she felt they created for small businesses. She appreciated that Co-Chair Seaton mentioned issues due to Medicaid expansion. She did not know what the overall costs to the state were due to the uncertainty of ACA and Medicaid expansion. She reiterated her opposition to mandates because of the "pressure" they placed on small businesses. 2:08:22 PM A roll call vote was taken on the motion. IN FAVOR: Ortiz, Gara, Grenn, Guttenberg, Kawasaki, Foster, Seaton OPPOSED: Pruitt, Neuman, Tilton, Wilson The MOTION PASSED (7/4). There being NO further OBJECTION, CSHB 25(FIN) was REPORTED out of committee with a "do pass" recommendation and with one new zero fiscal note from the Department of Administration; one previously published zero fiscal note: FN1 (CED); and one previously published fiscal impact note: FN3 (DHS).