02/18/2015 01:30 PM Senate HEALTH & SOCIAL SERVICES

         SB 18-HEALTH CARE SHARE MINISTRY NOT INSURANCE                                                                     
                                                                                                                                
1:32:31 PM                                                                                                                    
CHAIR STEDMAN  announced the consideration  of SB 18. He  said it                                                               
was the first hearing on the bill.                                                                                              
                                                                                                                                
1:34:00 PM                                                                                                                    
JORDAN SHILLING, Staff, Senator John  Coghill, presented SB 18 on                                                               
behalf of  the sponsor. He related  that SB 18 has  two purposes;                                                               
to define health care sharing  ministries and to exempt them from                                                               
insurance  statutes because  they  are charitable  organizations.                                                               
Health  care sharing  is a  payment arrangement  for health  care                                                               
among persons  of similar beliefs.  It is administered by  a non-                                                               
profit corporation.                                                                                                             
                                                                                                                                
He  noted  the three  largest  sharing  ministries are  Christian                                                               
Health   Care  Ministries,   which  was   established  in   1990,                                                               
MediShare,  established   in  1993,  and   Samaritan  Ministries,                                                               
established  in 1994.  All three  are biblically  based and  have                                                               
membership  requirements, such  as living  a Christian  lifestyle                                                               
and abstaining from tobacco.                                                                                                    
                                                                                                                                
He continued to  explain that health care  sharing ministries are                                                               
different from  regular insurance.  Insurance is the  transfer of                                                               
risk  from one  entity to  another in  exchange for  a guaranteed                                                               
payment. The sharing  ministries are 501(c)(3)s and  no member is                                                               
required by law to pay  anyone's medical bills. They don't assume                                                               
or transfer  risk, pool  money or use  actuaries, and  they don't                                                               
purchase reinsurance  policies. They  are a  group of  people who                                                               
come together voluntarily and agree to share costs.                                                                             
                                                                                                                                
He  stated  that  most  states' Divisions  of  Insurance  do  not                                                               
considered  sharing ministries  a  form  of insurance,  including                                                               
Alaska. There are about 3,400  Alaskans in sharing ministries. He                                                               
noted 30 states  have passed laws similar to SB  18. If the state                                                               
were   to  regulate   these  sharing   ministries  as   insurance                                                               
companies, they would likely cease to exist.                                                                                    
                                                                                                                                
1:37:49 PM                                                                                                                    
CHAIR STEDMAN noted the arrival of Senator Stoltz.                                                                              
                                                                                                                                
SENATOR  GIESSEL asked  if SB  18  is a  preventative measure  to                                                               
secure the fact  that sharing ministries would  not be considered                                                               
insurance.                                                                                                                      
                                                                                                                                
MR. SHILLING said yes.                                                                                                          
                                                                                                                                
CHAIR  STEDMAN requested  that Ms.  Wing-Heier  continue with  an                                                               
explanation  of  the  difference   between  health  care  sharing                                                               
ministries and insurance, as well  as with background information                                                               
about how other states are dealing with this issue.                                                                             
                                                                                                                                
1:38:57 PM                                                                                                                    
LORI WING-HEIER,  Director, Division of Insurance,  Department of                                                               
Commerce,  Community and  Economic Development  (DCCED), answered                                                               
questions related  to SB 18.  She said currently there  are about                                                               
3,400  to  3,500  people participating  in  health  care  sharing                                                               
ministries in  Alaska. There is a  zero fiscal note and  the bill                                                               
will have no impact on the tax revenue.                                                                                         
                                                                                                                                
She explained  that sharing  ministries were  a carve-out  of the                                                               
Affordable  Care Act  (ACA) because  they have  existed for  many                                                               
years in  all 50 states.  There is legislation  regarding sharing                                                               
ministries in 29 other states.                                                                                                  
                                                                                                                                
CHAIR STEDMAN  requested a definition  of ACA and  Ms. Wing-Heier                                                               
reiterated that it is the Affordable Care Act.                                                                                  
                                                                                                                                
MS. WING-HEIER  said ACA specifically addresses  the exemption of                                                               
sharing ministries if  they were in existence as of  1999. All of                                                               
the previously  mentioned ministries  were in existence  in 1999.                                                               
Start-up  sharing ministries  are  not allowed.  She pointed  out                                                               
that  sharing ministries  are  not  considered insurance  because                                                               
there  is no  guarantee of  payment. Members  contribute a  share                                                               
each  month  to  another  member's medical  bills.  There  is  no                                                               
guarantee  that  there will  be  enough  money to  cover  medical                                                               
bills.                                                                                                                          
                                                                                                                                
1:41:46 PM                                                                                                                    
SENATOR STOLTZE  asked how it  differs from a  Lutheran insurance                                                               
company such as Thrivent.                                                                                                       
                                                                                                                                
MS. WING-HEIER  assumed a Lutheran  could be  a member of  one of                                                               
the health  care sharing ministries.  She said she does  not know                                                               
how  one would  apply  to  become a  member.  Members must  share                                                               
similar  beliefs,  not   be  a  smoker,  and   live  a  Christian                                                               
lifestyle.                                                                                                                      
                                                                                                                                
CHAIR STEDMAN opened public testimony.                                                                                          
                                                                                                                                
JAMES  LANSBERRY,  President,   Alliance  of  Healthcare  Sharing                                                               
Ministries,  provided information  about  SB 18.  In response  to                                                               
Senator  Stoltze's question,  he  said all  members  must sign  a                                                               
statement  of  faith; some  are  Lutherans.  He stated  that  ACA                                                               
continues  to allow  health care  sharing ministries  to operate;                                                               
care ministries  would like  to continue  to operate  without any                                                               
repercussions from  state insurance  divisions. The  bill removes                                                               
the  potential ambiguity  for a  future  insurance department  to                                                               
regulate sharing ministries as insurance.                                                                                       
                                                                                                                                
1:45:31 PM                                                                                                                    
BECKY  HULTBERG,  President/CEO,  Alaska State  Hospital  Nursing                                                               
Home Association  (ASHNHA), testified  in support  of SB  18. She                                                               
said her association is interested  in people's ability to access                                                               
and pay for health care.                                                                                                        
                                                                                                                                
CHAIR STEDMAN asked if ASHNHA has a position on the bill.                                                                       
                                                                                                                                
MS. HULTBERG said  ASHNHA has not taken a formal  position on the                                                               
bill, but  is supportive of  people having  the means to  pay for                                                               
health  care. Health  care sharing  ministries is  one way  to do                                                               
that.                                                                                                                           
                                                                                                                                
CHAIR STEDMAN closed public testimony.                                                                                          
                                                                                                                                
1:47:03 PM                                                                                                                    
CHAIR STEDMAN held SB 18 in committee.