Legislature(2021 - 2022)BELTZ 105 (TSBldg)
04/07/2021 01:30 PM Senate LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| Confirmation Hearing(s) | |
| SB41 | |
| SB6 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| *+ | SB 41 | TELECONFERENCED | |
| + | SB 6 | TELECONFERENCED | |
| + | SB 26 | TELECONFERENCED | |
| + | SB 93 | TELECONFERENCED | |
| + | SB 38 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
SB 41-HEALTH INSURANCE INFO.; INCENTIVE PROGRAM
1:55:44 PM
CHAIR COSTELLO announced the consideration of SENATE BILL NO. 41
"An Act relating to health care insurers; relating to
availability of payment information; relating to an incentive
program for electing to receive health care services for less
than the average price paid; relating to filing and reporting
requirements; relating to municipal regulation of disclosure of
health care services and price information; and providing for an
effective date."
1:56:13 PM
SENATOR SHELLEY HUGHES, Alaska State Legislature, Juneau,
Alaska, sponsor of SB 41, introduced the legislation speaking to
the sponsor statement:
Alaska's health care costs are among the highest in
the nation and continue to rise. Through free market
principles, SB 41 will bend the cost curve down over
time to help relieve the disproportionate burden of
health care costs on family budgets, seniors on fixed
incomes and employers providing insurance coverage to
their employees.
Senate Bill 41 will provide Alaskans with the
information they need to plan financially for their
health care decisions. The bill requires health care
provider and facilities to list meaningful cost
information online and onsite. The bill also requires
a health care provider and insurance company disclose
full cost information within five days of request by a
patient specific to their condition, including any
expected out of pocket costs.
The bill also adds a mechanism so insurance companies
will provide an incentive a shared savings check to
policyholders who choose an in-network provider who
charges below the average in-network cost. Employers
providing insurance coverage for employees will also
be eligible for some of the shared savings. This
approach will help bring down the high cost of
healthcare in Alaska by encouraging consumers to shop
and providers to compete for Alaska's healthcare
dollars.
Several states have either passed or are currently
working on healthcare cost transparency legislation.
SB 41 is among the most innovative approaches as a
result of the incentive provision and is expected to
bend the cost curve more effectively than other
efforts because of this.
The Alaska Health Care Consumer's Right to Shop Act
will empower Alaskans with the tools needed to make
healthcare choices that fit their needs and work for
their budgets while introducing a bit of competition
into the healthcare market in Alaska to help nudge
down the costs over time.
SENATOR HUGHES explained that somebody who selects a provider
who charges less than the average cost for that procedure will
be able to share in the savings. For example, if the average
cost of a procedure is $14,000 and the insured selected the
provider who charged $12,000 for the procedure they would share
in the $2,000 savings with the employer and the insurer. The
bill allows the insured to receive a minimum of one third of the
savings. Somebody who does not have an employer would receive
half of the savings. The idea is to provide an incentive for
Alaskans to think about the providers they select. The price
comparison tool will be an asset.
2:03:27 PM
SENATOR GRAY-JACKSON referred to the example and asked if the
insured would pay $12,000.
SENATOR HUGHES answered yes if the insured had met the
deductible.
SENATOR HOLLAND expressed appreciation for the bill; it seems
complicated but in essence is fairly simple.
SENATOR HUGHES expressed appreciation for Lori Wing-Heier's help
with the bill. She said there is no silver bullet, but SB 41
will help loosen free market principles and offer help to nudge
prices down in the healthcare industry.
2:05:49 PM
LISA HART, Staff, Senator Shelley Hughes, Alaska State
Legislature, Juneau, Alaska, read the following text from the
PowerPoint describing SB 41 into the record:
Alaska has the highest health care costs per capita in
the entire United States.
The cost of healthcare is eroding the bottom line for
business owners small, medium and large. More money
that employers put into healthcare means less money to
create more jobs.
Observers have offered several explanations for
Alaska's extra-high health care costs:
• Limited competition among providers, especially
specialty physicians
• Particularly high compensation for providers,
specialty physicians who perform procedures (such
as orthopedic surgeons, cardiologists, and
neurosurgeons)
• Hospital profit margins in urban Alaska that are
higher than national averages
• Regulation by the State of Alaska, particularly
the "80th percentile rule"
• Absence in Anchoragethe state's largest
communityof public and/or teaching hospitals
that are open to all patients
Right to Shop empowers patients by rewarding them when
they seek out high-value care.
It is pro-patient as it lowers healthcare costs,
improves patient care, contains out-of-pocket costs
and increases patient access.
Prices vary widely in health care. For example, the
same x-ray on the same kind of machine in different
locations can vary in price from a couple hundred
dollars to thousands. Surgery by the same doctor but
in different facilities can range from a few thousand
dollars to tens of thousands.
2:08:01 PM
How does Right to Shop work?
1. A doctor recommends a medical service
2. Patients connect with their insurer by phone or
go on-line to find their best options
3. Patients choose the best location at the best
value
4. Patients have their procedure at the location of
their choice
5. Patients, employers and insurance companies share
in the savings
The Transparency in Coverage rule was released by the
Trump administration in Oct 2020.
The rule requires most group health plans, and health
insurance issuers in both the group and individual
market to disclose price and cost-sharing information
to participants, beneficiaries, and enrollees.
Right now the requirements are being finalized to give
consumers real-time, personalized access to cost-
sharing information, including an estimate of their
cost-sharing liability, through an internet based
self-service tool, essentially an online price
comparison tool. These tools are being developed now
with an expected launch date of January 2022.
Some states have initiated Right to Shop programs for
state employee health plans while others have enacted
legislation encouraging private insurers to develop
shared savings incentive programs.
Florida, Maine, Nebraska, Tennessee, Utah and Virginia
enacted legislation requiring or encouraging private
health plans to initiate Right to Shop programs for
enrollees.
SB 41 is among the most innovative approaches as a
result of the incentive provision and is expected to
more effectively bend the cost curve.
Right To Shop empowers patients with the knowledge
they need to make smart choices about how and where
they consume health care.
They're given tools to find the best value providers
and, when they choose those options, they get a share
of the savings.
SENATOR HOLLAND asked her to repeat which states have enacted
similar legislation.
MS. HART listed Florida, Maine, Nebraska, Tennessee, Utah and
Virginia and clarified they are in the private insurance group,
not public employee.
SENATOR HOLLAND asked if any states have adopted the incentive
provision.
MS. HARD replied Maine has enacted this legislation and New
Hampshire did something similar for public employee health
insurance programs.
CHAIR COSTELLO related her experience that it is almost
impossible to determine the cost of a procedure until the
billing stage. She asked if consumers in states that have
similar legislation have actually been able to shop.
SENATOR HUGHES acknowledged that the final cost might differ
from the quote because there could be complications. There would
be an allowance for that. She understood that the states that
have this legislation have a provision for that and Alaska would
want that too. She acknowledged that this makes it difficult for
insurers to develop the cost comparison tool.
SENATOR HUGHES said it is a little unique to offer the employer
a share in the savings, but the belief is that it will motivate
employers to encourage their employees to shop.
CHAIR COSTELLO invited Lori Wing-Heier to comment on the bill.
2:14:13 PM
LORI WING-HEIER, Director, Division of Insurance, Department of
Commerce, Community and Economic Development (DCCED), Anchorage,
Alaska, advised that she and the sponsor have held many
Microsoft Teams meetings to give insurers access to the sponsor
and the division to address any concerns with the bill. To that
end, Senator Hughes has said she will look at an effective date
so the tools the insurers need to do for the federal bill can be
finished and in operation when SB 41 goes into effect. The
federal tools are to be available January 1, 2022, but
colleagues in Washington, DC have indicated there is a concern
about being ready by that date. She described it as a chicken
and egg situation because the federal government has to tell
states what those tools should look like and that has not
happened. She said to have the tools designed and working on all
Blue Cross systems, Moda, Aetna, and UnitedHealthcare is a large
undertaking, and it is not clear that the federal government
will make the January 1 date.
CHAIR COSTELLO asked if SB 41 is dependent on the all-payer
database (APCD) passing.
MS. WING-HEIER answered no; they would piggyback nicely but one
could pass without the other.
CHAIR COSTELLO offered her understanding that depending on the
insurance coverage, the price of a procedure differs from one
consumer to the next. Based on that assumption, she asked if an
average cost is calculated by geographic region or statewide.
MS. WING-HEIER answered it is both. When the division interacted
with the Centers for Medicare and Medicaid on the federal bill,
they submitted information by geographic region because the cost
of a procedure differs based on where it is performed. She
predicted that the ACPD would implement a one-stop-shop for
consumers to look at costs of procedures, whereas the federal
bill would necessitate looking to each insurance company. She
acknowledged that it would be cumbersome for families that have
coverage from more than one insurance company.
CHAIR COSTELLO asked if this would increase costs for providers
for administration or data entry.
MS. WING-HEIER answered no because the insurers will provide the
database.
CHAIR COSTELLO asked Emily Ricci if the administration had a
position on SB 41.
2:18:18 PM
EMILY RICCI, Chief Healthcare Administrator, Division of
Retirement and Benefits, Department of Administration, Juneau,
Alaska, summarized her understanding of SB 41 and said the
division could absorb the provisions of SB 41 into their
standard health plan programming and strategic development,
should the bill pass.
2:19:21 PM
CHAIR COSTELLO stated she would hold SB 41 for further
consideration.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SLAC GOV Appointee Tanya Kirk Board Application Redacted.pdf |
SL&C 4/7/2021 1:30:00 PM |
SLAC GOV APPOINTEE CDEM TANYA KIRK |
| SLAC GOV Appointee Tanya Kirk Resume Redacted.pdf |
SL&C 4/7/2021 1:30:00 PM |
SLAC GOV APPOINTEE CDEM TANYA KIRK |
| SLAC GOV Appointee Hannah St George Board Application Redacted.pdf |
SL&C 4/7/2021 1:30:00 PM |
SLAC GOV APPOINTEE CDEM HANNAH ST GEORGE |
| SLAC GOV Appointee Rachel Berngartt Resume Redacted.pdf |
SL&C 4/7/2021 1:30:00 PM |
SLAC GOV APPOINTEE VE RACHEL BERNGARTT |
| SLAC GOV Appointee Tammy Lindemuth Board Application Redacted.pdf |
SL&C 4/7/2021 1:30:00 PM |
SLAC GOV APPOINTEE BP TAMMY LINDEMUTH |
| SLAC GOV Appointee Vincent Perez Resume Redacted.pdf |
SL&C 4/7/2021 1:30:00 PM |
SLAC GOV APPOINTEE OSHR VINCENT PEREZ |
| SB 41 Sponsor Statement.pdf |
SL&C 4/7/2021 1:30:00 PM |
SB 41 |
| SB 41 Sectional Analysis Version A.pdf |
SL&C 4/7/2021 1:30:00 PM |
SB 41 |
| SB 41 Presentation 4.7.21.pdf |
SL&C 4/7/2021 1:30:00 PM |
SB 41 |
| SB 41 Letter of Comment Premera.pdf |
SL&C 4/7/2021 1:30:00 PM |
SB 41 |
| CSSB 6 (EDC) Sponsor Statement Version B.pdf |
SL&C 4/7/2021 1:30:00 PM |
SB 6 |
| CSSB 6 (EDC) Sectional Analysis Version B.pdf |
SL&C 4/7/2021 1:30:00 PM |
SB 6 |
| SB 6 Letter of Support Michael Ripke.pdf |
SL&C 4/7/2021 1:30:00 PM |
SB 6 |