Legislature(2025 - 2026)BUTROVICH 205
04/24/2025 03:30 PM Senate HEALTH & SOCIAL SERVICES
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| Audio | Topic |
|---|---|
| Start | |
| SB4 | |
| SB45 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 4 | TELECONFERENCED | |
| += | SB 45 | TELECONFERENCED | |
SB 4-HEALTH CARE PRICES AND INCENTIVE PROGRAMS
3:32:53 PM
CHAIR DUNBAR announced the consideration of SENATE BILL NO. 4
"An Act relating to a health care insurance policy incentive
program; relating to health care services; and providing for an
effective date."
3:33:30 PM
SENATOR HUGHES, speaking as sponsor of SB 4, gave opening
remarks about the bill. She stated that Alaska has some of the
highest health care costs in the nation and the world. While SB
4 is not a complete solution, it is a measured, non-disruptive
step that will help lower costs over time by applying free-
market principles. She said the approach will gradually bend the
cost curve downward, ease the burden on families, seniors,
school districts, and other constituents, and give Alaskans
better information to plan and make informed health care
decisions. Ultimately, it will put more money in consumers'
pockets and reduce overall system costs. She said SB 4 allows
consumers to obtain price and provider information for
procedures through their insurer and incentivizes them to choose
lower-cost providers. If a consumer selects a provider charging
less than the average price, the resulting savings are shared
among the consumer, employer, and insurer, or split between the
consumer and insurer for privately purchased plans. She stated
that the savings can be applied to deductibles, encouraging
timely care and improving health outcomes. Other states have
implemented similar models, placing downward pressure on high
prices and saving millions of dollars.
3:38:30 PM
ELEILIA PRESTON, Staff, Senator Shelley Hughes, Alaska State
Legislature, Juneau, Alaska, offered a presentation on SB 4. She
stated that health care costs, measured by insurance premiums,
have risen by 42 percent between 2019 and 2025; a significant
increase in just six years.
3:39:03 PM
MS. PRESTON moved to slide 3, Three Pillars of SB 4 Right to
Shop, and stated that SB 4 is built on three pillars: the right
to know, the right to save and the right to pick. It empowers
patients to seek high-value care, noting higher-value doesn't
necessarily mean being the most expensive. It helps to lower
health care costs, improve care, reduce out-of-pocket expenses,
and expand access.
3:39:24 PM
MS. PRESTON moved to slide 4, Patients Should Know. She stated
that health care prices vary widely for identical services. The
same X-ray or surgery can cost anywhere from a few hundred to
several thousand dollars depending on the facility, even when
performed by the same provider. She gave an example of the cost
of a brain CT scan at about $492 at one Anchorage provider, but
ranges from $575 to $1,250 at a regional hospital and $1,300 to
$2,850 at the Alaska Native Medical Center, demonstrating
significant and often unexplained price differences.
3:40:56 PM
MS. PRESTON moved to slide 5, How Right to Shop Works, and gave
the steps to use Right to Shop:
[Original punctuation provided.]
-See your doctor
-Call or go online to locate the best options
-Choose location at the best value (in- or out-of-
network)
-Receive service at location of your choice
-Be rewarded with shared savings
3:41:50 PM
MS. PRESTON moved to slide 6, Cool Tools Work for Shopping
Available to All, and stated that the federal transparency and
coverage rule, passed by Congress and released in October 2020,
requires most group health plans and insurers in both group and
individual markets to disclose price and cost-sharing
information to enrollees. The rule took full effect on January
1, 2024.
3:42:20 PM
MS. PRESTON moved to slide 7, Patients Want the Right to Shop,
and stated that health care is essential, yet people rarely shop
for it. Transparency would empower them to choose better
options:
[Original punctuation provided.]
-53 percent of voters say its difficult to determine
medical costs before a visit.
-Only 12 percent think higher-cost providers always
provide better care.
-77 percent of Americans want the Right to Shop for
more affordable health care.
3:43:03 PM
MS. PRESTON moved to slide 8, Other States with Right to Shop,
and noted that other states with different approaches and values
have adopted Right to Shop and have seen success.
3:43:50 PM
SENATOR TOBIN noted that most example states have few rural
communities. She asked whether the legislation would
significantly impact rural populations and who would be affected
by the bill.
MS. PRESTON replied that states like Virginia, Florida, and
Georgia, often viewed as urban, contain many rural communities.
CHAIR TOBIN clarified that she was referring to rural and remote
communities. She asked whether similar impacts have been
observed in other states with remote populations.
3:45:32 PM
SENATOR HUGHES answered that Alaska may be the first state,
aside from Hawaii, with highly remote communities to consider
this approach. She said in many villages, routine care occurs
locally, while price shopping would apply mainly to major
procedures that already require travel, often out of state,
where consumers may be motivated to compare options.
3:46:27 PM
CHAIR DUNBAR asked how the average procedure cost is calculated
and whether it is a simple or weighted mean when there are
multiple higher-priced providers and a single lower-cost
outlier.
SENATOR HUGHES replied that she is not sure. She stated her
belief that the calculation used in SB 4 is the median and is
open to making changes as necessary.
CHAIR DUNBAR stated that there is some complexity in calculating
averages with few providers and said he will direct his question
to the testifiers from other states.
3:48:34 PM
SENATOR CLAMAN stated he is happy to hear from invited testimony
on the matter.
3:48:49 PM
SENATOR HUGHES shared that AETNA provided a letter of concern
with premise. She stated that lower cost does not lead to lower
quality citing research showing no correlation. She said SB 4 is
voluntary, does not force consumers to shop, allows insurers to
provide quality rankings, and fairly shares savings with
employers. She noted that some objections stem from
misunderstandings of the bill.
3:50:56 PM
ROB GRAYBILL, Senior Vice President, Commercialization, Zelis,
Boston, Massachusetts, testified by invitation on SB 4. He
stated that he is relevant to today's discussion as he is the
co-founder of SmartShopper. He cited proven success of right-to-
shop and shared savings programs. He has had success in states
such as New Hampshire, where SmartShopper saved patients and
taxpayers millions of dollars. He emphasized that high care
prices drive Alaska's insurance costs. He stated that SB 4 would
provide accessible price information, meaningful shared savings
incentives, deductible credit, and compliance with federal
transparency rules. He noted SmartShopper has generated over
$130 million in savings nationwide and recommended allowing
rewards as low as $25 to encourage participation in lower-cost
procedures and preventive care.
3:54:47 PM
MR. GRAYBILL said that offering incentives for preventive
services like mammograms, lab work, and screenings can reduce
financial barriers and improve overall health. High-volume
providers often deliver higher-quality care at lower cost, and
shared savings models are proven, popular with patients, and
effective at reducing financial burdens while increasing
competition among efficient, high-quality providers.
3:56:28 PM
TIM FROST, Senior Fellow, Cicero Institute, Boise, Idaho,
testified by invitation on SB 4. He stated that patients should
be empowered to shop for care to reduce costs, but true
empowerment requires accessible, usable information and
meaningful incentives. SB 4 transforms price transparency from
passive disclosure into an active cost-saving tool, rewarding
patients for choosing medically necessary care among approved
options. He said SB 4 does not encourage overuse, promotes
informed decision-making, motivates providers to compete on
value, and helps insurers lower claims, giving Alaskans greater
control over their health care spending. He referenced SB 4,
page 2, line 31, that specified "an incentive may be calculated
as a percentage of the price difference, as a flat dollar
amount, or by other reasonable methodology adopted by the
director by regulation." SB 4 gives the department flexibility
to consider service-specific benchmarks, comparable procedures,
geographic or market adjustments, in-network claims data, and
timing, with provisions that can be strengthened if necessary.
He stated that concerns about administrative costs are
overstated, as most insurers already provide price transparency
tools under the No Surprises Act. SB 4 builds on this existing
infrastructure, links it to consumer incentives, and leverages
successful employer plans and third-party vendors. Reduced
claims from lower-cost choices can generate system-wide savings
that outweigh any administrative costs, even with modest
adoption in Alaska.
4:01:23 PM
SENATOR GIESSEL asked if Mr. Frost was with the Think Tank of
Cicero Institute.
4:01:32 PM
MR. FROST replied in the affirmative.
SENATOR GIESSEL noted that Idaho is not among the 13 states with
right-to-shop laws and asked whether any of those states with
right-to-shop also have certificate-of-need requirements.
4:02:10 PM
MR. FROST replied that he cannot provide a full breakdown of the
13 right-to-shop states with certificate-of-need (CON) laws
however, most states have addressed CON. He said recent changes
include South Carolina repealing its CON law, West Virginia
considering repeal, while Minnesota, Florida, and North Carolina
maintain longstanding laws. Texas has an active right-to-shop
bill similar to the one under discussion.
SENATOR GIESSEL asserted that Alaska's cost of healthcare is
complicated by certificate of need.
4:03:12 PM
CHAIR DUNBAR noted that the No Surprises Act went into effect in
2023. He asked Mr. Frost why Idaho hasn't participated in right-
to-shop.
MR. FROST replied that Cicero is located in another state. He
noted that while Idaho has begun exploring right-to-shop
policies, none have passed. He highlighted similarities with
Alaska, including rural access challenges, and emphasized that
SB 4 is not mandatory, though it provides patients a tool to
compare prices and potentially save money for themselves,
families, employers, and insurers.
CHAIR DUNBAR noted surprise at Aetna's opposition, given
insurers share in savings and can cover administrative costs. He
asked whether, in other states, providers have opposed right-to-
shop laws and, if so, what their concerns or arguments typically
are.
4:05:56 PM
MR. FROST deferred the question to Mr. Graybill.
CHAIR DUNBAR asked if Mr. Graybill has any sense of resistance
from the provider community in other states.
4:06:19 PM
MR. GRAYBILL replied that providers delivering high-quality,
affordable care tend to support this legislation, as it brings
them more patients and allows them to benefit from shared
savings. In markets where this program has operated, such
providers have been consistently supportive.
4:07:28 PM
LORI WING-HEIER, Director, Division of Insurance, Department of
Commerce, Community, and Economic Development, Juneau, Alaska,
answered question on SB 4 and introduced herself.
4:07:39 PM
SENATOR CLAMAN asked whether all in-network providers would
charge the same rate for a procedure under SB 4.
4:08:30 PM
MS. WING-HEIER replied that it's unlikely all in-network
providers will have the same rate. She said total costs vary
depending on the facility, anesthesiologist, and other
components, even if the physician's charge is the same.
4:08:57 PM
SENATOR CLAMAN asked how an in-network patient can easily and
efficiently compare the total cost of a complex procedure like a
colonoscopy among multiple providers, and how much time it will
take both the patient and providers to obtain that information.
4:09:38 PM
MS. WING-HEIER answered that comparing in-network and out-of-
network options will be a process for consumers, as they must
consider differences in cost sharing, reimbursement,
deductibles, and co-pays to determine the best choice for a
procedure.
SENATOR CLAMAN stated that a consumer would need to compare
multiple in-network providers for a colonoscopy by collecting
and calculating each provider's total cost and their personal
share, then use that information to decide which option offers
the best value.
4:11:25 PM
MS. WING-HEIER replied in the affirmative. She said the consumer
will have to make phone calls and compare numbers to decide what
is best for them.
4:11:50 PM
SENATOR CLAMAN asked whether any out-of-network rates in Alaska
are currently lower than in-network rates for any procedures.
4:12:15 PM
MS. WING-HEIER replied that she is not aware of any and will
have to do some research.
4:12:24 PM
SENATOR HUGHES referenced SB 4, page 2, line 14-15 and said that
patients do not need to verify rates themselves. The bill
requires insurers to provide comprehensive price comparisons by
phone and online. She said patients won't need to contact
multiple providers, as insurers provide price and cost-sharing
information. Consumers still need to consider their options, but
the research is handled by the insurer.
4:13:47 PM
SENATOR CLAMAN said his understanding is health insurers keep
in-network rates confidential. He asked if the intention of SB 4
is to make all in-network rates publicly available for all
providers.
4:14:38 PM
SENATOR HUGHES replied that price transparency already exists,
as required by Congress. Alaska requires hospitals to post their
rates. This change may not be as major as it seems. She said the
Division Director can provide more details.
4:15:00 PM
MS. WING-HEIER replied that insurance companies post what they
will pay, not providers' full charges. In-network discounts
apply, and providers cannot share negotiated rates to prevent
collusion. Network rates may not reflect total provider charges.
4:16:11 PM
SENATOR CLAMAN said that he finds the situation confusing,
noting that hospitals may post their rates, however insurers
often keep in-network payments confidential. He asked whether SB
4 requires insurers to publish in-network rates, since insurers
typically do not know out-of-network rates.
4:17:02 PM
MS. WING-HEIER replied that she will look into the rules on
posting rates and report back to the committee.
4:17:13 PM
SENATOR HUGHES asked if invited testimony could respond to the
question.
CHAIR DUNBAR repeated Senator Hughes question to Mr. Graybill.
4:18:06 PM
MR. GRAYBILL responded that federal law requires hospitals to
post their charges, making that information publicly available.
He said in-network cost information is generally easy for
consumers to access through insurer websites or member portals,
often within minutes, and includes all components of a service,
such as professional, facility, and ancillary fees. These
transparency tools have been available for years without causing
confusion in other markets. SB 4 builds on this by incentivizing
consumers to use the information and act on it through rewards.
4:20:16 PM
CHAIR DUNBAR held SB 4 in committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| CSSB 4 Sectional Analysis v. H.pdf |
SHSS 4/24/2025 3:30:00 PM |
SB 4 |
| Aetna Letter SB 4 Final.pdf |
SHSS 4/24/2025 3:30:00 PM |
SB 4 |
| CS SB 4 Summary of Changes, version N to H.pdf |
SHSS 4/24/2025 3:30:00 PM |
SB 4 |
| SB 4 Fiscal Note DOA DRB 4.23.25.pdf |
SHSS 4/24/2025 3:30:00 PM |
SB 4 |
| SB 4 Fiscal Note DCCED DOI 3.14.25.pdf |
SHSS 4/24/2025 3:30:00 PM |
SB 4 |
| SB 4 Sponsor Statement version N.pdf |
SHSS 4/24/2025 3:30:00 PM |
SB 4 |
| CSSB 4 (L&C) v. H.pdf |
SHSS 4/24/2025 3:30:00 PM |
SB 4 |
| CSSB 4 Sectional Analysis v. H.pdf |
SHSS 4/24/2025 3:30:00 PM |
SB 4 |
| SB 45 Version N 4.14.24.pdf |
SHSS 4/24/2025 3:30:00 PM |
SB 45 |
| SB 4 SHSS Presentation 4.24.25 Right to Shop.pdf |
SHSS 4/24/2025 3:30:00 PM |
SB 4 |
| SHSS CSSB 45 Version I 4.24.25.pdf |
SHSS 4/24/2025 3:30:00 PM |
SB 45 |
| CS SB 45 Summary of Changes, version A to I 4.24.25.pdf |
SHSS 4/24/2025 3:30:00 PM |
SB 45 |
| SB 45 DOI Response to SHSS 4.29.25.pdf |
SHSS 4/24/2025 3:30:00 PM |
SB 45 |
| SB 4 DOI Response to SHSS 4.30.25.pdf |
SHSS 4/24/2025 3:30:00 PM |
SB 4 |