ALASKA STATE LEGISLATURE  HOUSE HEALTH AND SOCIAL SERVICES STANDING COMMITTEE  April 8, 2010 3:05 p.m. MEMBERS PRESENT Representative Bob Herron, Co-Chair Representative Wes Keller, Co-Chair Representative Tammie Wilson, Vice Chair Representative Bob Lynn Representative Paul Seaton Representative Sharon Cissna Representative Lindsey Holmes MEMBERS ABSENT  All members present COMMITTEE CALENDAR  HOUSE BILL NO. 423 "An Act stating a public policy that allows a person to choose or decline any mode of securing health care services, and providing for enforcement of that policy by the attorney general." - MOVED CSHB 423(HSS) OUT OF COMMITTEE HOUSE BILL NO. 282 "An Act relating to naturopaths and to the practice of naturopathy; establishing an Alaska Naturopathic Medical Board; authorizing medical assistance program coverage of naturopathic services; amending the definition of 'practice of medicine'; and providing for an effective date." - MOVED CSHB 282(HSS) OUT OF COMMITTEE COMMITTEE SUBSTITUTE FOR SENATE BILL NO. 10(HSS)(EFD DEL) "An Act requiring health care insurers to provide insurance coverage for medical care received by a patient during certain approved clinical trials designed to test and improve prevention, diagnosis, treatment, or palliation of cancer; directing the Department of Health and Social Services to provide Medicaid services to persons who participate in those clinical trials; and relating to experimental procedures under a state plan offered by the Comprehensive Health Insurance Association." - SCHEDULED BUT NOT HEARD PREVIOUS COMMITTEE ACTION  BILL: HB 423 SHORT TITLE: POLICY FOR SECURING HEALTH CARE SERVICES SPONSOR(s): JUDICIARY 03/31/10 (H) READ THE FIRST TIME - REFERRALS 03/31/10 (H) HSS, JUD 04/06/10 (H) HSS AT 3:00 PM CAPITOL 106 04/06/10 (H) Heard & Held 04/06/10 (H) MINUTE(HSS) 04/08/10 (H) HSS AT 3:00 PM CAPITOL 106 BILL: HB 282 SHORT TITLE: NATUROPATHS SPONSOR(s): MUNOZ 01/15/10 (H) PREFILE RELEASED 1/15/10 01/19/10 (H) READ THE FIRST TIME - REFERRALS 01/19/10 (H) L&C, HSS, JUD, FIN 01/25/10 (H) JUD REFERRAL REMOVED 03/01/10 (H) L&C AT 3:15 PM BARNES 124 03/01/10 (H) Heard & Held 03/01/10 (H) MINUTE(L&C) 03/10/10 (H) L&C AT 3:15 PM BARNES 124 03/10/10 (H) Heard & Held 03/10/10 (H) MINUTE(L&C) 03/19/10 (H) L&C AT 3:15 PM BARNES 124 03/19/10 (H) Moved CSHB 282(L&C) Out of Committee 03/19/10 (H) MINUTE(L&C) 03/22/10 (H) L&C RPT CS(L&C) 1DP 1DNP 3NR 03/22/10 (H) DP: BUCH 03/22/10 (H) DNP: LYNN 03/22/10 (H) NR: T.WILSON, HOLMES, OLSON 04/01/10 (H) HSS AT 3:00 PM CAPITOL 106 04/01/10 (H) Heard & Held 04/01/10 (H) MINUTE(HSS) 04/08/10 (H) HSS AT 3:00 PM CAPITOL 106 WITNESS REGISTER REPRESENTATIVE CARL GATTO Alaska State Legislature Juneau, Alaska POSITION STATEMENT: Introduced and explained Conceptual Amendment 1, on behalf of the sponsor, the House Judiciary Standing Committee. THOMAS REIKER, Staff to Representative Carl Gatto Alaska State Legislature Juneau, Alaska POSITION STATEMENT: Testified and answered questions on behalf of the sponsor of HB 423, the House Judiciary Standing Committee. JON SHERWOOD, Medicaid Special Projects Office of the Commissioner Department of Health and Social Services Juneau, Alaska POSITION STATEMENT: Testified during discussion on HB 423. MIKE FORD, Assistant Attorney General; Legislative Liaison Legislation & Regulations Section Civil Division (Juneau) Department of Law Juneau, Alaska POSITION STATEMENT: Answered questions during discussion of HB 423. DAVE JONES, Senior Assistant Attorney General Opinions, Appeals, & Ethics Civil Division (Anchorage) Department of Law (DOL) Anchorage, Alaska POSITION STATEMENT: Answered questions during discussion of HB 423. DENNIS BAILEY, Attorney Legislative Legal Counsel Legislative Legal and Research Services Legislative Affairs Agency (LAA) Juneau, Alaska POSITION STATEMENT: Answered questions during discussion of HB 423. WILDA LAUGHLIN, Special Assistant Office of the Commissioner Department of Health & Social Services Juneau, Alaska POSITION STATEMENT: Testified and answered questions during the discussion of HB 423. KENDRA KLOSTER, Staff to Representative Cathy Munoz Alaska State Legislature Juneau, Alaska POSITION STATEMENT: Testified and answered questions during the discussion of HB 282. ACTION NARRATIVE 3:05:08 PM CO-CHAIR BOB HERRON called the House Health and Social Services Standing Committee meeting to order at 3:05 p.m. Representatives Herron, Keller, Seaton, and T. Wilson were present at the call to order. Representatives Holmes, Cissna, and Lynn arrived as the meeting was in progress. HB 423-POLICY FOR SECURING HEALTH CARE SERVICES  3:05:30 PM CO-CHAIR HERRON announced that the first order of business would be HOUSE BILL NO. 423, "An Act stating a public policy that allows a person to choose or decline any mode of securing health care services, and providing for enforcement of that policy by the attorney general." 3:06:28 PM REPRESENTATIVE GATTO reported that he met with Department of Health and Social Services (DHSS) and Department of Law (DOL) to work to address the concerns about school immunizations and involuntary [psychiatric] commitment. 3:07:59 PM The committee took an at-ease from 3:07 p.m. to 3:11 p.m. 3:11:08 PM CO-CHAIR HERRON brought the committee back to order. 3:11:21 PM REPRESENTATIVE CARL GATTO, Alaska State Legislature, referred to a document labeled "Conceptual Amendments" and introduced Conceptual Amendment 1, which read [original punctuation provided]: Section 3 is amended to read: AS 44.99 is amended by adding a new section to article 2 to read: Sec. 44.99.130. Declaration of Policy for  Securing Health Care Services  (a) (1) The power to require or regulate a person's  choice in the mode of securing health care services,  or to impose a penalty related thereto, is not found  in the Constitution of the United States of America,  and is therefore a power reserved to the people  pursuant to the Ninth Amendment, and to the several  states pursuant to the Tenth Amendment. The state of  Alaska hereby exercises its sovereign power to declare  the public policy of the state of Alaska regarding the  right of all persons residing in the state of Alaska  in choosing the mode of securing health care services.   (2) It is hereby declared that the public policy  of the state of Alaska is that every person within the  state of Alaska is and shall be free to choose or  decline to choose any mode of securing health care  services without penalty or threat of penalty, as  defined in this bill. (b) The policy stated in (a) of this section (1) does not apply to health care services  required by the state, a political subdivision of the  state, or a court of the state;  (2) may not impair a contract right that provides health care services. (c) A public official, employee, or agent of the state or its political subdivisions may not impose, collect, enforce, or implement a penalty contrary to the policy stated in (a) of this section. (d) [THE ATTORNEY GENERAL SHALL EXPEDITIOUSLY SEEK INJUNCTIVE AND OTHER APPROPRIATE RELIEF TO PRESERVE THE RIGHTS OF THE RESIDENTS OF THE STATE AND DEFEND THE STATE AND ITS OFFICIALS, EMPLOYEES, AND AGENTS IF A LAW IS ENACTED OR A REGULATION ADOPTED VIOLATING THE DECLARATION OF POLICY FOR SECURING HEALTH CARE SERVICES UNDER THIS SECTION] In this section, (1) "health care services" means a service or treatment, or provision of a product, for the care of a physical or mental disease, illness, injury, defect, or condition, or to maintain or improve physical or mental health; (2) "mode of securing" means directly purchasing health care services from a health care provider, purchasing insurance covering health care services, [PARTICIPATING IN AN EMPLOYER OR GOVERNEMENT SPONSORED HEALTH BENEFIT PLAN] or other means of obtaining health care services; (3) "penalty" means a fine, tax, [SALARY OR WAGE WITHHOLDING] surcharge, fee, or other [CONSEQUENCE] monetary charge.    REPRESENTATIVE GATTO explained that subsection (a) contained "quite a bit of the Idaho language has passed legal muster and while it has changed somewhat is pretty much a copy of the Idaho bill." He said that subsection (b) was added for clarify for some issues raised during an earlier discussion. Additionally, three definitions were added. He pointed out that Conceptual Amendment 1 is a conceptual amendment. 3:12:40 PM CO-CHAIR KELLER made a motion to adopt Conceptual Amendment 1. CO-CHAIR HERRON objected for purpose of discussion. REPRESENTATIVE SEATON asked if proposed Conceptual Amendment 1 would be considered as one amendment or as separate amendments. CO-CHAIR HERRON offered his intention to consider proposed Conceptual Amendment 1 under one motion. He referred to the memorandum dated April 8, 2010 from Representative Carl Gatto titled "Explanation of Conceptual Amendment changes in HB 423, Version R" [Included in the committee packets.] 3:14:20 PM REPRESENTATIVE GATTO, referring to proposed Conceptual Amendment 1, pointed out that the amendment contained new language for Section 3 of HB 423. He explained that it "spelled out" the problems of the federal health care law with the Ninth and Tenth Amendments to the Constitution. He stated that these violations required Alaska to defend its constitutional rights. 3:15:52 PM THOMAS REIKER, Staff to Representative Carl Gatto, Alaska State Legislature, explained that a concern had been raised that HB 423 did not specifically address the Tenth Amendment or the federal health care reform. He stated that a state cannot nullify a federal law, but it can establish distinct policies if a law were found to be unconstitutional. He noted that proposed Conceptual Amendment 1 specifically outlined the Tenth Amendment problems with the federal health care reform. He pointed to subsection (a) (2) of proposed Conceptual Amendment 1 and said that it was intended to be in the original bill. He said the challenge to the federal health care reform was to the mandate. He noted that Section 3, (d) (3) of proposed Conceptual Amendment 1 would change the definition of penalty to simply include a fine, tax, fee, surcharge, or other monetary charge. He said that this conceptual amendment was crafted in response to the state requirement to accept its health insurance. He said that adoption of proposed Conceptual Amendment 1 would define HB 423 as "the freedom to choose or decline to choose without penalty or threat of penalty." He said this new definition of penalty would allow for involuntary commitment or exclusion from school for refusal of immunization as they would no longer be defined as penalties. He directed attention to the language change contained in Section 3, (b) (1), and subsection (b) (2) of proposed Conceptual Amendment 1. He said that this language was crafted by the Department of Law (DOL) and is intended to ensure that HB 423 did not supersede any current Alaska law. 3:20:59 PM MR. REIKER added that proposed Conceptual Amendment 1 also deleted Section 3, (d), since Section 2 of HB 423 should be sufficient. CO-CHAIR HERRON suggested that Section 2 of HB 423 should be deleted as the attorney general would take action to defend any policy. 3:22:27 PM REPRESENTATIVE GATTO replied that it was necessary to have the attorney general act on behalf of the state of Alaska. CO-CHAIR HERRON agreed, but he questioned the necessity of Section 2 as the attorney general was responsible to defend any legislation. REPRESENTATIVE GATTO replied that the state was initiating a lawsuit, not defending one. He stated that he would not object to this deletion. CO-CHAIR HERRON stated his preference to deliberate on proposed Conceptual Amendment 1 on a section-by-section basis. He asked if there was any further discussion on Conceptual Amendment 1, to delete Section 3, subsection (d) and Section 2 of HB 423. 3:25:20 PM REPRESENTATIVE CISSNA said that she had received an opinion from Legislative Legal and Research Services. She expressed a need for more time to better understand that opinion, as well as the bill itself. She asked why HB 423 had been queued in front of other legislation. CO-CHAIR HERRON agreed that it was a serious issue, and that he would like to pursue this line of questioning. He noted that the sponsor had agreed with the deletions. He suggested that it might be necessary to schedule extra committee hearings in order to hear other legislation. He repeated that he would prefer a section-by-section discussion. He asked if Representative Cissna would share the legal memo with the rest of the committee. REPRESENTATIVE CISSNA replied that she had previously submitted it. 3:27:49 PM REPRESENTATIVE CISSNA, referring to Section 2 and Section 3,subsection (d) of HB 423, from the Legislative Legal and Research Services memo, which read: The principal objection appears to be that the legislature is proposing to direct the state's attorney general in the exercise of the duties and functions of the office. CO-CHAIR HERRON said that the sponsor had agreed to delete Section 2. REPRESENTATIVE CISSNA asked if both Sections 2 and Section 3, subsection (d) would be deleted. She opined that it could be a dilemma to the attorney general if both the legislature and the governor were "commanding him to do things." 3:30:36 PM REPRESENTATIVE GATTO agreed to both deletions. CO-CHAIR HERRON asked for other comments on both the proposed Conceptual Amendment 1 and HB 423. REPRESENTATIVE SEATON asked if this was a conceptual amendment to Conceptual Amendment 1. CO-CHAIR HERRON replied that he would reserve that option, but agreed that proposed Amendment 1 would be: Delete Section 2 of HB 423. Delete Section 3, subsection (d). 3:31:31 PM CO-CHAIR HERRON, in response to Representative Gatto, agreed that Section 3, subsection (d) had already been deleted in proposed Conceptual Amendment 1. 3:31:38 PM REPRESENTATIVE SEATON, referred to proposed Conceptual Amendment 1, to Section 3, subsection (a), paragraph (1). He stated that this subsection contained "findings" and not an actual provision of substance for a bill. CO-CHAIR HERRON asked for an opinion from Legislative Legal and Research Services. 3:32:15 PM REPRESENTATIVE SEATON asked for a legal definition of proposed Conceptual Amendment 1. He referred to Section 3, subsection (a), paragraph (2), which read in part: ..., that a person has the right and is free to choose or decline any mode of securing health care services without penalty or threat of penalty,... 3:33:14 PM CO-CHAIR KELLER asked if the sponsor intended to delete this language. MR. REIKER explained that the intent was to delete Section 3, subsection (a) of HB 423, and insert proposed Conceptual Amendment 1, Section 3, subsection (a). 3:35:10 PM REPRESENTATIVE HOLMES opined that Section 3, (a) (1) of proposed Conceptual Amendment 1 appeared to be language that describes legislative intent and not language for statute. CO-CHAIR HERRON agreed that this needed clarification from Legislative Legal and Research Services. REPRESENTATIVE HOLMES asked for a clarification of proposed Conceptual Amendment 1, in Section 3, (a) (2), which read: "..., as defined in this bill." She opined that once a bill becomes a statute, then it would be confusing for the reference to a bill. CO-CHAIR HERRON agreed and pointed out that proposed Conceptual Amendment 1 is a conceptual amendment and the bill drafter would appropriately "conform" the language. 3:36:13 PM REPRESENTATIVE CISSNA asked for a definition of "mode of securing" and "health care services." MR. REIKER, in response to Representative Cissna, said that both definitions were contained in Section 3, (e) of HB 423. He clarified that proposed Conceptual Amendment 1 had added additional language to ensure that the definitions did not impede existing Alaska law. 3:36:55 PM REPRESENTATIVE CISSNA asked about the implications to licensure and regulations within the state. REPRESENTATIVE GATTO referred to proposed Conceptual Amendment 1, to Section 3, (b)(1), and said it would keep existing language intact. MR. REIKER explained that the definition for penalty had been narrowed in Section 3 of proposed Conceptual Amendment 1. He related that Section 3, (d)(3), and language added in Section 3,(a)(2), which read, "without penalty or threat of penalty," was done in conjunction with Department of Law (DOL) to ensure that existing Alaskan statutes were not affected. 3:39:13 PM REPRESENTATIVE HOLMES cited that she wanted her health care to be Medicare, Tri-Care, or Indian Health Care. Referring to the language in proposed Conceptual Amendment 1 to Section 3, (a)(2), she posed that the language enabled her to qualify for any of these health care services, although she was not eligible. MR. REIKER referenced DOL and said that federal law would supersede state law, unless federal law was found unconstitutional. He pointed out that should the acts governing each of these health care services be found constitutional, then the federal law would govern. 3:40:23 PM REPRESENTATIVE HOLMES posed a scenario in which her father wanted health insurance from the State of Alaska, but he did not work for the state. She asked if this language would allow any Alaskan the right to choose any health plan, even if they did not qualify. MR REIKER replied that the bigger concern by DOL and DHSS was with the requirement for health insurance. He explained that the original amendment was to have a blanket statement that stated there was not an effect on existing Alaska law. He suggested a return to the language which stated that HB 423 did not supersede existing Alaska law. 3:41:44 PM REPRESENTATIVE HOLMES opined that Conceptual Amendment 1 stated that anyone could buy any program they wanted, even without meeting the qualifications. REPRESENTATIVE T. WILSON, in response to Representative Holmes, offered her belief that Conceptual Amendment 1 would offer buyers a choice, but it did not require the insurance company to accept the applicant. REPRESENTATIVE GATTO agreed that was the intent. He said the language might only be inferred, rather than stated. He offered to amend Conceptual Amendment 1, as follows: Page 1, subsection (a) paragraph (2): Following "free to choose": Insert "and qualify for" 3:44:11 PM MR. REIKER, referring to Section 3 of proposed Conceptual Amendment 1, to subsection (b)(1), offered his opinion that this did not refer to health care services required by the state, as the state only required its state agencies to offer those health care services to people that qualify; therefore, the language from subsection (a)(2) is also covered the state programs. 3:44:36 PM REPRESENTATIVE CISSNA said that the outcomes were too complex to do this quickly. She asked if HB 423 would close off future options and alternatives. She asked for testimony regarding any future limitations that this bill would create. CO-CHAIR HERRON agreed that DOL would be asked this question. REPRESENTATIVE GATTO relayed that there were two questions: (1) What was the future of Alaska with regard to tort reform and defensive medicine?; and (2) What were the possible excessive costs with taxes and fees of the federal health care plan? He opined that, as Alaska was a known factor, it was possible to address tort reform and defensive medicine. He opined that it was not possible to predict federal health care costs, but he suggested that it was necessary to "deal with it ourselves." 3:48:30 PM REPRESENTATIVE CISSNA offered her belief that the move to Medicare reflected a different state direction. She asked if the sponsor's goal was to eliminate any federal subsidy for health care. REPRESENTATIVE GATTO replied that Alaska was not able to eliminate the federal health care programs. He stated that the reason for HB 423 was to ask the courts whether the federal government had overstepped its authority and caused harm to Alaska. He offered his belief that it was the obligation of every state to pursue this, instead of simply accepting the edict of the federal government. 3:50:15 PM REPRESENTATIVE CISSNA noted that he was talking about a federal action that was not addressed in this bill. REPRESENTATIVE GATTO, in response to Representative Cissna, said that both the Ninth and Tenth Amendments were mentioned in proposed Conceptual Amendment 1. MR. REIKER explained that Alaska could not nullify a federal law, but it could challenge the constitutionality of a federal law. He stated that Alaska had the right to assert its Tenth Amendment rights in a federal court. He pointed out that HB 423 was a statute, not a constitutional amendment, and if there were unforeseen consequences, the bill could be revised or repealed. 3:52:47 PM CO-CHAIR KELLER asked if a state had the right to decide not participate in Medicaid. JON SHERWOOD, Medicaid Special Projects, Office of the Commissioner, Department of Health and Social Services (HSS), in response to Co-Chair Keller, said that participation in Medicaid was voluntary. CO-CHAIR KELLER asked if the federal health care reform had changed this aspect. MR. SHERWOOD offered his belief that there was not a requirement to maintain the Medicaid program, but that if it was maintained, the state was held to specific requirements. 3:53:54 PM REPRESENTATIVE T. WILSON asked if more people would qualify for Medicaid after passage of the federal health care reform legislation. MR. SHERWOOD replied that Medicaid would expand to cover a broad range of individuals who were not currently eligible under the federal health care reform. REPRESENTATIVE T. WILSON questioned whether more people would choose to sign up with Medicaid since it would be less costly than purchasing private health insurance. MR. SHERWOOD, in response to Representative T. Wilson, said that currently subsidies exist for low-income individuals to purchase health care insurance. He stated that he did not know all the choices available. 3:55:17 PM REPRESENTATIVE T. WILSON asked if there were copays with Medicaid. MR. SHERWOOD replied that there were not copays for children or pregnant women, but that there were modest copays for adults. REPRESENTATIVE T. WILSON, reporting a concern of other states, asked about the increased costs to Medicaid with the federal health care reform. MR. SHERWOOD replied that he did not know the cost impact. He shared that there would be an increased federal subsidy. He said that he did not know about the increased expenditures. REPRESENTATIVE T. WILSON said that other states were concerned with the increased costs, and she opined that it was necessary for Alaska to determine the increased expenses. 3:57:20 PM REPRESENTATIVE CISSNA asked if Alaska could choose the Medicaid programs in which to participate. MR. SHERWOOD explained that Medicaid had requirements for mandatory categories and services. He mentioned that there was also a wide range of optional services and eligibility categories. He pointed out that Alaska had made its choices, which included a broad range of options, and these choices were submitted with a state plan amendment which required federal approval. 3:58:50 PM REPRESENTATIVE CISSNA asked whether the new federal health care reform had more extensive mandates, and if so, would these allow for choices. MR. SHERWOOD replied that there were some new options being analyzed. He reported that the most obvious substantial mandate required coverage for all individuals with income up to 133 percent of the federal poverty level. Prior to the federal health care reform, eligibility had been limited to the aged, blind, disabled, pregnant, and children and their eligible caretaker relatives. REPRESENTATIVE CISSNA inquired as to whether HB 423 would change the program options to Alaska for "the greatest good for the greatest number of people." MR. SHERWOOD replied that he would defer to the Department of Law (DOL). 4:01:56 PM MIKE FORD, Assistant Attorney General & Legislative Liaison, Legislation & Regulations Section, Civil Division (Juneau), Department of Law, in response to Representative Cissna, offered that the concern was for the broad nature of the language of HB 423. He stated that he could not make any assurances, but he reminded that the legislature had the ability to make amendments. He opined that the committee was not binding itself. He offered his belief that the sponsor was targeting federal law and was working to narrow HB 423 to avoid any implications for state law. 4:03:09 PM REPRESENTATIVE SEATON directed attention to proposed Conceptual Amendment 1. He referred to page 2, to Section 3, (d)(3). He asked if the proposed deletions of "salary or wage withholding" and "consequence" would still be included under "fine, tax, surcharge, fee, or other monetary charge." MR. FORD replied, "conceivably." 4:03:58 PM REPRESENTATIVE SEATON referred to page 2, to Section 3 of the proposed Conceptual Amendment 1. He referred to subsection (c) and asked for clarification. MR. FORD shared his concern and stated that the language was broad. He offered that it was not well written, but it implied that an individual could not be forced to pick a specific health care service and could not be penalized for that choice. 4:06:15 PM REPRESENTATIVE SEATON agreed to ask the question to Legislative Legal and Research Services. REPRESENTATIVE CISSNA offered her belief that it appeared someone would not have to pay. MR. FORD said that a public policy was stated in general terms, but that statutory provisions imposed certain things. He opined that HB 423 was written as a policy, not as statute. DAVE JONES, Senior Assistant Attorney General, Opinions, Appeals, & Ethics, Civil Division (Anchorage), Department of Law (DOL), in response to the question from Representative Seaton, said that he had no greater insight to the meaning or effect of the provisions. 4:08:51 PM DENNIS BAILEY, Attorney, Legislative Legal Counsel, Legislative Legal and Research Services, Legislative Affairs Agency (LAA), in response to the earlier question by Representative Seaton, on proposed Conceptual Amendment 1 and to page 2, Section 3 (c), and said that it was a statement of policy that also attempted to establish mandatory laws. He offered his belief that this leads to confusion. He opined that the broad meaning in the general statement combined with the more specific mandates to public officials made this difficult to understand. 4:11:42 PM REPRESENTATIVE SEATON referred to proposed Conceptual Amendment 1 to Section 3 (a) (2) and the language "mode of securing" which eliminates "participating in an employer or government sponsored health benefit plan." He stated this would refer to "purchasing insurance covering health care services" or "other means of obtaining health care services." He asked whether not referring to "government health benefit plan" or "participating in an employer plan" would negate those or if those terms are included in the phrase "other means of obtaining health care services." MR. BAILEY answered that Representative Seaton raises a good point, that the additional inclusion of language "or other means of obtaining health care services" may also incorporate the language that is struck. MR. FORD offered that the change is an attempt to be consistent with the change on page 2, Section 3 (d) (2). He explained that if the scope of the bill is narrow it does not apply to state policies or plans and this language should be deleted. He suggested the committee may also want to remove the last phrase, "or other means of obtaining health care services" if the committee wants to narrow the scope. CO-CHAIR HERRON pointed out Conceptual Amendment 1 is a conceptual amendment. 4:14:02 PM REPRESENTATIVE T. WILSON related her understanding that the bill attempts to give the attorney general direction to minimize any negative impacts the new health care may have on Alaska. She asked whether there would be any downside for the attorney general to "fight it legally to keeping the option open." MR. FORD responded when the legislature requests action by the attorney general that the request is typically done with a resolution. He related that passing statutes raises other issues, including separation of powers. He stated that it is really difficult for the state to predict positive and negative substantive effects until the final language is thoroughly reviewed. He clarified that when the legislature requests an official from the executive branch to take certain action, the legislature is "speaking as a voice" and the "voice of the legislature" typically occurs through resolutions. REPRESENTATIVE T. WILSON asked which one sends a stronger message. MR. FORD characterized a bill and a resolution as "a bit like apples and oranges. They are both fruit, but they taste differently." If the legislature wishes to clarify an opinion, it speaks through a resolution. Sometimes, the legislature's voice is expressed in statute and can be combined to some degree. As to which is more effective, it depends on the topic. He offered that the committee is experiencing the difficulty of using statutes in this realm. REPRESENTATIVE T. WILSON asked why more states have decided to pass bills instead of resolutions to address the federal health care reform. MR. FORD said could not answer questions about other states since other states have different constitutions. However, he stated that that in Alaska there are problems in proceeding this way. 4:16:56 PM REPRESENTATIVE SEATON referred to page 1, to proposed Conceptual Amendment 1, to Section 3 (b)(1), which read: "does not apply to health care services required by the state, a political subdivision of the state, or a court of the state;". He asked whether that would eliminate Medicare. He asked for an interpretation of whether this refers to the State of Alaska or a political subdivision. MR. FORD replied that the intent is that this would apply to Alaska programs since the legislature cannot change federal programs or federal programs. The object is to eliminate state programs that may affected by the bill by adding the exclusionary provision. 4:17:52 PM REPRESENTATIVE SEATON asked whether people would be authorized not to pay Medicare or could object to the deduction from their wages. MR. FORD said he could not answer that question. He clarified that federal law has not been changed and if there is an obligation imposed by federal law, the obligation still remains. MR. SHERWOOD said he did not have anything to add. He noted that the definition of penalty was changed to eliminate specific reference to salary or wage withholding which would be required for payment into Medicare. He deferred to the DOL for interpretation of the broader language of the bill. 4:19:27 PM REPRESENTATIVE CISSNA related "we are talking about freedom and the ability for people to make the choices and for the administration of both [Department of] Health and Social Services and the Department of Law." She asked for ideas of ways to address this that would be "clearer and fit." MR. FORD said that DOL is currently undertaking an analysis of the legislation and will explore the options. Once its review is completed the DOL may have answers. He suggested the committee may wish to attempt to clarify the language to avoid unintended consequences. He advised that he met with the bill sponsor and raised some issues to consider and in an effort to address those issues some additional language has been crafted, but he said he does not claim it is the "magic bullet" for all the concerns. The process will unfold as the bill moves forward. 4:22:13 PM REPRESENTATIVE HOLMES referred to page 1 of proposed Conceptual Amendment 1, and to Section 3 (b)(1), and to the word "required." She asked whether it should be "provided" instead since it seems limiting and would be a narrow exclusion. MR. FORD agreed. This language may need fine tuning, he stated. He said that what triggered this issue is how it would apply to the state employee health plan. He reported that state employees are required to participate in that plan. He asked if the intent of the bill is to allow state employees to opt out of health care coverage. He stated if that is not the intent, some method needs to be developed to clarify the intent. He agreed other concerns may also need to be addressed which would require the committee to broaden the language. 4:24:45 PM WILDA LAUGHLIN, Special Assistant, Office of the Commissioner, Department of Health & Social Services, introduced herself. CO-CHAIR HERRON referred to the April 8, 2010, memorandum from Representative Carl Gatto. He asked for comments to paragraph 2. MS. LAUGHLIN began by noting the sponsor was open to amending the bill. Thus, the department reviewed proposed Conceptual Amendment 1 but is not ready to say this amendment would alleviate all of the department's concerns. 4:26:14 PM CO-CHAIR HERRON asked to "tackle" Conceptual Amendment 1 by breaking it down into individual amendments. He asked for consideration to withdraw Conceptual Amendment 1. He then withdrew his objection. CO-CHAIR KELLER withdrew Conceptual Amendment 1. CO-CHAIR HERRON made a motion to adopt Conceptual Amendment 1, to delete Section 3 (d), and to delete Section 2 of the bill. REPRESENTATIVE T. WILSON objected for purpose of discussion. CO-CHAIR KELLER suggested that proposed Conceptual Amendment 1 would require a change to the title of the bill. CO-CHAIR HERRON agreed and stated that would be a conforming amendment to Conceptual Amendment 1. He restated Conceptual Amendment 1, and referred to page 2, lines 7-11, to delete Section 3 (d) and to delete Section 2 of the bill. The conforming amendment would remove part of the title, as well. REPRESENTATIVE T. WILSON withdrew her objection. There being no further objection, Conceptual Amendment 1 was adopted. 4:29:27 PM CO-CHAIR HERRON referred to page 1 of the document labeled "Conceptual Amendments" to Section 3(a), which read: "(1) The power to require or regulate a person's choice in the mode of securing health..." He asked Mr. Bailey if this would be part of the bill or would constitute a "finding." MR. BAILEY answered that the language of Section 3 (a), (1) of Conceptual Amendment 1 would create statements of position rather than of findings. He related that findings would be a statement that a problem exists or would outline the circumstances that justify the legislation. Findings are not a preferred method to set a state policy or law. It would be preferable to include the language in the bill itself rather than create a findings statement. He read, "...The state of Alaska hereby exercises its sovereign power to declare public policy of the state of Alaska regarding the right of all persons residing in the state of Alaska..." He was not sure that represents a "finding," but thought it was more of a statement. He suggested that if the topics are listed that this provision should be redrafted as a statement of condition or a finding. He said, "Again, it is preferable to establish what the basis for the bill is, either in the committee hearings or in the bill itself rather than do a findings statement." 4:31:52 PM REPRESENTATIVE SEATON asked whether this statement would be appropriate in a resolution. MR. BAILEY agreed. 4:32:23 PM REPRESENTATIVE CISSNA asked the sponsor if he would consider introducing a resolution. REPRESENTATIVE GATTO said he decided against it. 4:32:47 PM CO-CHAIR HERRON referred to the document labeled "Conceptual Amendments" to Section 3 (a)(2) and asked whether this language is covered elsewhere in bill. MR. BAILEY responded that the language is not the normal bill language for a statement since it uses terms such as, "hereby" which are not normally used. He said Section 3 (a) (2) varies somewhat from the language in the bill, although he did not see substantive changes. He said he preferred the existing language in the bill. He referred to the language in "Conceptual Amendments" to Section 3 (a) (2) and suggested removing "hereby" and use "public policy" instead of public policy of the state. The bill has language "consistent with the right of liberty" that is missing from the Conceptual Amendment language. He suggested the drafting convention is to use "a" instead of "any." And, "as defined in this bill" for the definition of a penalty is likely unnecessary, since the penalty provision on page 2, line 12, Section 3 (e) already applies to the bill. 4:35:46 PM CO-CHAIR HERRON moved to adopt Conceptual Amendment 2, on page 1 line 13 to delete "consistent with the right of liberty." REPRESENTATIVE T. WILSON objected for the purpose of discussion. 4:36:38 PM REPRESENTATIVE GATTO said he did not object to the suggested changes by the drafter. CO-CHAIR HERRON related his understanding that the bill drafter advised that the bill language was similar except for the phrase "consistent with the right of liberty" so deleting this reference should make the bill similar to the conceptual amendment. 4:37:43 PM MR. REIKER asked about inclusion of "without penalty or threat of penalty." CO-CHAIR HERRON characterized the suggestion as wanting "both the belt and suspenders" in this provision. He asked for clarification on whether "without penalty or threat of penalty" is already contained in HB 423. MR. BAILEY said no, he did not believe it was covered in the original bill and would be helpful. He said he missed that in his initial review. REPRESENTATIVE SEATON asked whether it would be easier to delete current (a) and insert the new (a) in the bill. REPRESENTATIVE T. WILSON said taking out the language "consistent with right of liberty" does not change the bill. She referred to page 1, line 13 of Section 3, and read: "(a) It is the policy of the State of Alaska that a person has the right and is free to choose or decline any mode of securing health care services." She offered her belief that is "what we're really trying to do in [Section 3] (a) since it still keeps in what we want." She suggested adding the penalties in Section 3 (c). CO-CHAIR HERRON related the debate is whether to leave in "without penalty or threat of penalty" and add that to the end of page 2, line 1. 4:41:00 PM MR. BAILEY, in response to Representative T. Wilson, pointed out that Section 3 (c) in the bill is a bit redundant, since it says a "public official or agent of the state or its political subdivision" may not impose a penalty. He related that contrary to the policy stated in (a), it would emphasize that the policy is trying to establish a rule. He suggested that it seemed preferable to include the language in Section 3 (a) rather than in Section 3 (c). 4:42:16 PM REPRESENTATIVE CISSNA referred to "penalty" to the growth of entitlements. She asked for clarity of the meaning and "are we getting free lunch no matter what?" She stated she believed in freedom but was unsure of what it meant without penalty. MR. BAILEY said that the point that is stated as policy is intended to require that one can choose a means of getting health insurance and if you choose or do not choose would not result in a penalty. He recalled that the penalty would be limited to a fine, tax, or surcharge, which would be a dollar amount. 4:44:27 PM REPRESENTATIVE HOLMES related her understanding that by adding to Section 3 (a) "without penalty or threat of penalty" would allow the committee to remove Section 3 (c). MR. BAILEY advised that Section 3 (c) essentially states when a penalty could be imposed by a public official. That may be the source of some of the confusion. He suggested that she is correct, that adding "without penalty or threat of penalty" to Section 3 (a) would allow the committee to remove Section 3 (c). 4:45:43 PM CO-CHAIR HERRON explained Conceptual Amendment 2. On line 13, would strike "consistent with the right of liberty" and on page 2, to add "without penalty or threat of penalty;" and on page 2, delete lines 4-6, Section 3 (c). REPRESENTATIVE CISSNA referred to page 1, Section 3 (a), and to the language "securing health care services." She asked whether securing meant signing up or actually obtaining health care services and if this language allowed people to get health care without paying for it. MR. BAILEY said that securing may have an unintended meaning or is unclear. He suggested that the intent would be to purchase insurance, or purchase health care services may be a better way to describe it. 4:48:05 PM CO-CHAIR HERRON restated Conceptual Amendment 2. On line 12-13, it is the policy of the State of Alaska that a person has the right and is free to choose or decline any mode of securing health care services without penalty or threat of a penalty. On page 2, delete lines 4-6, of Section 3 (c). CO-CHAIR KELLER asked for the reason the reference to constitutional rights was removed. MR. BAILEY explained that bill is trying to establish a policy and also a law. The statement of policy may include comments to state the purpose of the law or intentions, but when passing a law, the goal is describe the conduct and what is permitted or prohibited. He related language superfluous to the content of the rule is best left out of the statutory language. 4:50:33 PM CO-CHAIR KELLER asked whether removing the phrase would imply a new right was being established. MR. BAILEY answered that it is a debatable question as to whether policy can establish a right. He said that is a question that he cannot answer. It seemed to him that on page 1, subsection (a), that it the state's policy that a person has a right, but he does not know that the policy establishes the right or if it states that the right already exists. 4:51:17 PM CO-CHAIR HERRON restated proposed Conceptual Amendment 2. REPRESENTATIVE T. WILSON removed her objection. REPRESENTATIVE CISSNA referred to page 1, Section 3 (a) states that person has a right and is free to choose, deals with cash and being able to afford health care. She asked whether "free to choose" is statutorily "solid" language. MR. BAILEY replied that "free to choose" would be adequate to state the sponsor's intent, but the preferable language from a drafting perspective would be that a person "may" choose or decline rather than "is free to." REPRESENTATIVE CISSNA asked about preferable language for statutory language and asked whether a conceptual amendment to the Conceptual Amendment should be considered. 4:53:56 PM There being no further objection, Conceptual Amendment 2 was adopted. REPRESENTATIVE CISSNA referred to page 1 of HB 423, which read: "free to choose or decline any mode of purchasing health care services." REPRESENTATIVE CISSNA made a motion to adopt Conceptual Amendment 3, as follows: On line 14: Delete "is free to" and following "has the right and" Insert "may" On line 14: Delete "securing" and following "decline any mode of" Insert "purchasing" 4:55:24 PM CO-CHAIR HERRON restated Conceptual Amendment 3. On line 14: Delete "is free to" and following "has the right and" Insert "may" Delete "securing" and following "any mode of" Insert "purchasing" REPRESENTATIVE T. WILSON objected. REPRESENTATIVE HOLMES asked whether it would be more consistent to eliminate "has the right and is free to" or "is free to" and to substitute the word "may." MR. BAILEY asked Representative Holmes to repeat the question. CO-CHAIR HERRON said he would attempt to repeat the suggested language. On line 14, Delete "has the right and is free to" and Insert "may" MR. BAILEY suggested that "and" has to stay in. CO-CHAIR HERRON said no. On line 14, Delete: "has the right and is free to" Insert: "may" MR. BAILEY replied that is certainly an option. CO-CHAIR HERRON asked if it was an option or a drafting preference. MR. BAILEY noted that to some degree "may" would change the content so it would not only be a drafting change. He noted the conflict between stating policy and establishing a right. He thought it may clarify the matter to say, "It's the policy that a person may choose" and avoid the issue of whether the person has a right or does not have a right. REPRESENTATIVE GATTO agreed to the change to delete "is free to" and substitute "may." He said, "has the right" should remain. CO-CHAIR HERRON restated for clarification that proposed Conceptual Amendment 3. On line 14: Delete "is free to" and Insert "may" REPRESENTATIVE HOLMES added there is a second portion. CO-CHAIR HERRON agreed. He acknowledged proposed Conceptual Amendment 3 also included: On line 14: Delete "securing" and following "any mode of" Insert "purchasing" 4:58:26 PM REPRESENTATIVE T. WILSON suggested that a person working at a store is not "purchasing" but is "securing" health care. REPRESENTATIVE HOLMES asked whether a better alternative existed to "securing." MR. BAILEY suggested using "purchasing" or "obtaining" since any mode of getting health insurance. 4:59:53 PM CO-CHAIR HERRON restated proposed Conceptual Amendment 3, as follows: On line 14: Delete "is free to" and Insert "may" Delete "securing" and Insert "obtaining" REPRESENTATIVE T. WILSON withdrew her objection. There being no further objection, Conceptual Amendment 3 was adopted. 5:00:37 PM CO-CHAIR HERRON moved to page 2 and asked for clarification on the language for the next conceptual amendment. MR. REIKER stated that the language for the next conceptual amendment came from the assistant attorney general, Mike Ford. MR. JONES said he was unfamiliar with the language, but assumed the intent is to make certain this did not to apply to state's health insurance or to political subdivisions. 5:02:14 PM REPRESENTATIVE HOLMES asked about the term "required" and whether "provided" could be substituted. MR. JONES replied that the terms are aimed at two different things. One of the concerns raised at the last committee meeting was that the prior version of the bill may keep the state from providing immunizations, quarantines, or involuntary committals, which are required health care services. He offered his belief that this language was designed to also address the state's ability to require its employees to participate in health care services. He suggested one method to address this is to refer to "modes of securing or obtaining health care services provided by the state, a political subdivision, or a court of the state, in addition to health care services required by them." 5:04:13 PM REPRESENTATIVE HOLMES turned to Conceptual Amendment 4 of the "Conceptual Amendments" to Version R. She made a motion to amend Section 3 (b)(1), by adding "provided or" after "services." Thus, proposed Conceptual Amendment 4 would read, as follows: (b) The policy stated in (a) of this section (1) does not apply to health care services provided or required by the state, a political subdivision of the state, or a court of the state; REPRESENTATIVE T. WILSON objected for purpose of discussion. CO-CHAIR KELLER asked for clarification if the motion read "or" or "and." MR. BAILEY replied it should be "or." 5:06:42 PM CO-CHAIR HERRON stated that proposed Conceptual Amendment 4 would be "conformed" by the drafter. REPRESENTATIVE HOLMES related that proposed Conceptual Amendment 4 would be inserted on page 2, line 2 after "section" and subsection (b) would read: (b) The policy stated in (a) of this section (1) does not apply to health care services provided or required by the state, a political subdivision of the state, or a court of the state; (2) may not impair a contract right that provides health care services. REPRESENTATIVE T. WILSON removed her objection. There being no further objection, Conceptual Amendment 4 was adopted. 5:07:54 PM CO-CHAIR HERRON made a motion to adopt proposed Conceptual Amendment 5, to delete language on line 18, as follows: "participating in an employer or government sponsored health benefit plan." REPRESENTATIVE T. WILSON objected. MR. RIEKER suggested that the language "mode of securing" should also be changed to "mode of obtaining." CO-CHAIR HERRON agreed, stating that would be a conforming amendment. 5:09:01 PM REPRESENTATIVE HOLMES expressed concern that leaving in the language "or other means of obtaining health care services" in HB 423 might be interpreted as including the language deleted in proposed Conceptual Amendment 5. Thus, what would be left in the bill would be the following, "mode of securing" means directly purchasing health care services from a health care provider, purchasing insurance covering health care services, or other means of obtaining health care services;." She explained that "or other means of obtaining health care services" would also include "participating in an employer or government sponsored health benefit plan." 5:09:50 PM CO-CHAIR HERRON amended proposed Conceptual Amendment 5, to delete lines 18 and 19, which read: "participating in an employer or government sponsored health benefit plan or other means of obtaining health care services;" REPRESENTATIVE T. WILSON removed her objection. There being no further objection, Conceptual Amendment 5, as amended, was adopted. 5:10:15 PM CO-CHAIR HERRON made a motion to adopt Conceptual Amendment 6, on page 2, lines 20 and 21, which read as follows [original punctuation provided]: (3) "penalty" means a fine, tax [SALARY OR WAGE WITHHOLDING] surcharge, fee, or other [CONSEQUENCE] monetary charge. REPRESENTATIVE T. WILSON objected. REPRESENTATIVE T. WILSON removed her objection. There being no further objection, Conceptual Amendment 6 was adopted. 5:10:50 PM REPRESENTATIVE T. WILSON moved to report HB 423, as amended, out of committee with individual recommendations and the accompanying fiscal notes. REPRESENTATIVE HOLMES objected. 5:11:33 PM REPRESENTATIVE CISSNA expressed concern that the process of working on complex issues and passing the bill out in a short time without fully understanding the outcomes is a very serious problem in the state legislature. She offered her belief that moving so quickly on complex issues does the state a disservice. Thus, she said she will vote no. REPRESENTATIVE HOLMES reiterated Representative Cissna's comments. She appreciated that the committee took a difficult issue and worked through it. She commended the work by the parties involved. She said she will also vote no on HB 423 since she is troubled by the concerns raised by the DHSS and DOL. She thought that the eagerness to react to action taken at the federal level could have unintended consequences. She said, "A resolution is one thing; this is actual law, so I'm troubled..." She related that this bill will come before the House Judiciary Committee so she will have another chance to review the bill. 5:14:07 PM REPRESENTATIVE T. WILSON said she wished there was more time to work on this bill, but she did not think the state has more time. She offered her belief that the federal government has put the state in the position. She said reviewed actions other states have taken and their interpretations. She suggested the state should take a stand that other states have taken on this issue since the federal government has mandated changes that will "cost the states." She offered that she is willing to move the bill forward and allow the House Judiciary Standing Committee to review it. She related her constituents are upset with how the health care bill may affect them. She concluded by stating that she does not have faith in the federal system. 5:16:02 PM CO-CHAIR KELLER expressed his outrage at the federal law, which he said has impugned Alaskan rights and "a takeover of a system." He said one-sixth of the economy is regulated at the federal level. He agreed with Mike Ford, the assistant attorney general that the committee may be reacting more quickly to make this bill "perfect." He pointed out that any health bill will have a level of uncertainty, but he also reserves the right to revisit the policy issue of this bill, just as the committee does with any other bill it passes. He expressed frustration that the intent of the reform is to redistribute wealth. He said he would be a strong yes vote. He thinks the discussion is healthy. REPRESENTATIVE SEATON remarked that health care is one of the most critical things for the State of Alaska. Alaska has a poor record in many of the health care situations. He said, "I find it ironic that under the auspices of this bill, if this had been a single payer government program, there would be no objection, because the objection to this is that we are using private industry and private insurance. And we have the objection to this bill from the people who would not have the objection for but a single payer government sponsored "all in one" health care. So I find it ironic in that way." He said he did not think the legislature has enough information about the new system or the implications. He said, "I'm a do not pass." He did not think it is good public policy and would be much more appropriate as a resolution. He stated that he would not hold the bill up. REPRESENTATIVE LYNN expressed concerns with health care. He stated that he personally is fortunate to have state, Medicare, and military health benefits. He related that as people age, their health care needs are more substantial. He expressed concern for people who cannot afford medicine and routine prescriptions are very expensive. He related that the U.S. needs good health care and the federal government has passed a very comprehensive bill. This bill is to accept or reject that federal bill. He stated the importance to have the liberty to accept or reject this reform, which is a personal decision. He speculated that the debate will ensue over a long period of time. This bill provides that avenue and serves a good purpose. He offered his belief that ultimately the courts will decide. He said, "I'm a yes vote on this." 5:23:29 PM CO-CHAIR HERRON said it is important issue. He expressed concern with some parts of federal law, but he also appreciated most parts of it. His constituents will enjoy the permanent reauthorization of Indian Health Service (IHS). He appreciated the sponsor bringing this issue forward. He stated that the committee rewrote the bill so that it is now an appropriate health care policy. Next, it will go through a constitutional debate in the House Judiciary Standing Committee. REPRESENTATIVE HOLMES maintained her objection. A roll call vote was taken. Representatives Lynn, Seaton, T. Wilson, Keller, and Herron voted in favor of reporting HB 423, as amended, from the House Health and Social Services Standing Committee. Representatives Cissna and Holmes voted against it. Therefore, the CSHB 423(HSS) was reported out of the House Health and Social Services Standing Committee by a vote of 5-2. 5:25:22 PM The committee took an at-ease from 5:25 p.m. to 5:45 p.m. HB 282-NATUROPATHS  5:45:25 PM CO-CHAIR HERRON announced that the final order of business would be HOUSE BILL NO. 282, "An Act relating to naturopaths and to the practice of naturopathy; establishing an Alaska Naturopathic Medical Board; authorizing medical assistance program coverage of naturopathic services; amending the definition of 'practice of medicine'; and providing for an effective date." [Before the committee was Version W.] 5:46:10 PM KENDRA KLOSTER, Staff to Representative Cathy Munoz, Alaska State Legislature, explained that HB 282 would establish a board for Naturopaths. She related that she brought forth additional information for members and is available for any questions members may have. 5:47:55 PM CO-CHAIR HERRON closed public testimony on HB 282. 5:48:04 PM CO-CHAIR KELLER said that he preferred the option for people to have choices for medical care. He related his understanding that Naturopaths often work to take people off prescriptions and use supplements, which is worthwhile. Thus, Naturopaths offer treatment that a medical doctor would not offer. 5:49:17 PM CO-CHAIR KELLER moved to report the proposed committee substitute (CS) labeled 26-LS1208\W, Bullard, 3/30/10, out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, the CSHB 282(HSS) was reported from the Health and Social Services Standing Committee. 5:49:45 PM ADJOURNMENT  There being no further business before the committee, the House Health and Social Services Standing Committee meeting was adjourned at 5:49 p.m.