Legislature(2025 - 2026)BELTZ 105 (TSBldg)
03/21/2025 01:30 PM Senate LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| SB28 | |
| SB4 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 28 | TELECONFERENCED | |
| *+ | SB 4 | TELECONFERENCED | |
SB 4-HEALTH CARE PRICES AND INCENTIVE PROGRAMS
2:29:52 PM
CHAIR BJORKMAN reconvened the meeting and 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."
2:30:12 PM
SENATOR SHELLEY HUGHES, District M, Alaska State Legislature,
Juneau, Alaska, presented a summary of SB 4:
[Original punctuation provided.]
Our state has healthcare costs that are among the
highest in the nation and on the entire planet.
• SB 4 is not the silver bullet, the panacea, the
complete solution
• But is an important tool that will help
• A part of the solution
• A step that will help get us to where we need to
be over time
Not a drastic step
• Won't suddenly disrupt the system
• Won't create chaos, instead
Through free market principles, SB 4 will bend the
cost curve down over time,
• it will nudge down provider charges
• nudge down insurance premiums
• nudge down out-of-pocket consumers pay
• nudge down employer costs for providing insurance
coverage for employees
• nudge down school districts' costs for health
benefits for teachers
• nudge down SOA costs for healthcare for state
workers
SB 4 helps relieve the disproportionate burden of
healthcare costs on our constituents
• on family budgets,
• seniors on fixed incomes
SB 4 -provide Alaskans with info to plan financially
for care decisions and
2:31:55 PM
SENATOR HUGHES continued with the summary of SB 4:
• incentivize them to make smart decisions
• result in two things
-cash in their pocket as a consumer -
immediately
-over time - reduced costs in healthcare system
overall,
-nudged down charges or at least flattened
charges
-that don't escalate year after year
Eleilia will go through how this would work but I'll
give you the "movie preview clip" quickly the gist
of what the bill does, the bottom line for the
consumer
-Based on the mechanism in the bill
• A patient/consumer will be able to find out
through their insurer what a procedure will cost
who the providers are for that procedure and what
they charge charge
• And will be incentivized to do so. Here's how:
• If consumer chooses a provider who charges less
than the average cost of that procedure
• The consumer will receive a share of the savings
back in a check
Range for procedure: $7K to $13K, difference of $6K,
median cost is $10K
-Consumer picks $7K ($4K less than median cost
of $10K)
-$3K in savings is shared:
-$1000 to patient
-$1000 to employer providing insurance
coverage
-$1000 to insurance company coordinating and
administering the incentive process
-If no employer; individual purchases
insurance directly
-Than a 50/50 split
-Half to consumer/patient and half to
insurance company to administer.
-$1500 to consumer; $1500 to insurer for
their work
2:34:28 PM
SENATOR HUGHES continued with the summary of SB 4:
Special Note: People with high-deductible plans often
forgo
• or delay necessary medical care.
• Incentive mechanism will allow individuals to
apply shared savings to deductible.
• Better health results for patient and
• Savings to overall system, to future premiums, to
employers
-because early care is less expensive care
-when delay and condition worsens, the care is
more costly
Other states have passed Right to Shop legislation
like SB 4.
• New Hampshire, Maine, Massachusetts, Tennessee
• you'll see a slide with the other states.
• They've seen that right-to-shop places pressure
-on the highest priced providers to lower their
rates
-saving millions of dollars annually.
Alaska can reap these same benefits.
• The Alaska Health Care Consumer's Right to Shop
Act will empower Alaskans to shop for smart
healthcare choices
• while introducing a bit of competition into the
healthcare market in Alaska
• to help nudge down the costs over time.
CLOSING
This right to shop mechanism giving patients the
incentive to choose better value health care
• has received widespread support from across the
political spectrum.
• Other states, both red and blue in the past few
years
• have implemented this right-to-shop concept.
• It's time for Alaska to do the same!
2:36:31 PM
ELEILIA PRESTON, Staff, Senator Shelley Hughes, Alaska State
Legislature, Juneau, Alaska, presented an overview of SB 4 and
moved to slide 2, Health Care Costs Increased. 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.
2:37:00 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 (which isn't always the most
expensive), helping lower health care costs, improve care,
reduce out-of-pocket expenses, and expand access.
2:37:27 PM
MS. PRESTON moved to slide 4, Patients Should Know, and gave an
example of getting a CT scan at hospitals in Anchorage. She said
there are big opportunities for savings on brain CT scans in
Anchorage. While some hospitals charge $650$2,850, the median
price across seven providers is just $492, showing that several
providers offer the same scan at much lower rates.
2:38:21 PM
MS. PRESTON moved to slide 5, How Right to Shop Works, and
stated the steps to use Right to Shop:
-See your doctor
-Call or go online to locate best options
-Choose location at the best value (in or out-of-network)
2:39:09 PM
SENATOR HUGHES clarified that if you are needing a surgery your
primary care doctor would need to recommend the procedure before
moving to step two: call or go online to locate best options.
MS. PRESTON continued with slide 5, How Right to Shop Works:
-Receive service at location of your choice
-Earn shared savings along with the employer, insurance company
and patient.
2:39:49 PM
MS. PRESTON moved to slide 6, Cool Tools Work for Shopping
Available to All, and stated that price shopping tools are
widely accessible through smartphones, computers, or even
libraries. She said under the Federal Transparency in Coverage
rule (released in October 2020), most group and individual
health plans must disclose prices and cost-sharing details,
making it easier for patients to compare coverage and costs.
2:40:32 PM
MS. PRESTON moved to slide 7, Patients Want the Right to Shop:
[Original punctuation provided.]
Patients Want the Right to Shop
• 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.
2:41:25 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.
2:42:03 PM
SENATOR GRAY-JACKSON asked if the state has a right to know
ordinance in statute, like the city of Anchorage does.
2:42:19 PM
SENATOR HUGHES replied that a few years ago, Alaska passed a
price transparency law, but it was difficult for patients to
find the correct procedure codes and cost. As a result, people
weren't using the information, and it didn't reduce costs. She
said congress later passed more user-friendly tools, which are
now available and practical, making the right to shop approach
of SB 4 more effective today.
2:43:13 PM
SENATOR YUNDT asked who the patient coordinates with to ensure
they receive the savings after selecting their provider.
2:43:38 PM
SENATOR HUGHES replied that the insurer provides the
information, and if the patient chooses that provider, the
shared savings are automatically applied. She said notifying the
insurer isn't required.
2:43:59 PM
SENATOR YUNDT noted that last year, while on the borough
assembly, he began exploring this concept. He received praise
from Anchorage representatives for supporting incentives that
help employees access lower health care costs. He opined that
the approach is brilliant, gives more control to patients, and
could help lower costs for everyone over time.
2:45:02 PM
CHAIR BJORKMAN asked how the patient will receive the savings if
they choose to do the knee replacement surgery in another state.
2:45:34 PM
SENATOR HUGHES replied that most insurances cover procedures
both in Alaska and out of state. She said some limits may exist,
though the same process for applying savings would work
regardless of location.
2:46:01 PM
CHAIR BJORKMAN asked whether the patient would need to submit
quotes from two doctors, one in Alaska and one out of state and
how they should provide evidence of cost savings.
2:46:18 PM
SENATOR HUGHES responded that the patient would choose the
surgeon in the other state, that surgeon would bill the
insurance company; the insurance company would see that the
lower cost option was chosen and then this would trigger the
payment to the patient. She said to avoid a fiscal note for SB
4, her office could remove the Division of Insurance reporting
requirement and Department of Administration's analysis and
report on AlaskaCare, both involve studying and reporting on
impacts.
2:47:25 PM
SENATOR YUNDT asked if patients traveling out of state for
surgery would need to pay for airfare and hotels upfront, or
would they receive an upfront credit, allowance or per diem to
cover those costs.
2:48:05 PM
SENATOR HUGHES replied that there isn't anything in SB 4 about
insurances covering upfront travel cost but she has heard of
insurances providing an upfront allowance.
2:48:31 PM
SENATOR HUGHES referenced a chart that shows evidence from other
states that follow the Right to Shop concept.
[CHAIR BJORKMAN held SB 4 in committee.]