04/05/2023 01:30 PM Senate LABOR & COMMERCE

          SB 45-DIRECT HEALTH AGREEMENT: NOT INSURANCE                                                                      
                                                                                                                                
2:03:15 PM                                                                                                                    
CHAIR  BJORKMAN   reconvened  the   meeting  and   announced  the                                                               
consideration  of  SENATE  BILL  NO.   45  "An  Act  relating  to                                                               
insurance;  relating  to  direct   health  care  agreements;  and                                                               
relating to unfair trade practices."                                                                                            
                                                                                                                                
He asked Senator Wilson and Ms.  Martin to provide a recap of the                                                               
bill.                                                                                                                           
                                                                                                                                
2:03:45 PM                                                                                                                    
SENATOR  DAVID  WILSON,  District N,  Alaska  State  Legislature,                                                               
Juneau,  Alaska, sponsor  of SB  45,  deferred to  Ms. Martin  to                                                               
provide a recap.                                                                                                                
                                                                                                                                
2:03:57 PM                                                                                                                    
JASMINE  MARTIN,  Staff,  Senator   David  Wilson,  Alaska  State                                                               
Legislature, Juneau,  Alaska, gave a  recap of SB 45.  She stated                                                               
that this bill allows Alaskans  and their healthcare providers to                                                               
enter into direct healthcare agreements  and specifies that these                                                               
agreements are not insurance.                                                                                                   
                                                                                                                                
2:04:36 PM                                                                                                                    
CHAIR  BJORKMAN solicited  public testimony  on SB  45 and  found                                                               
there was none.                                                                                                                 
                                                                                                                                
2:05:05 PM                                                                                                                    
At ease.                                                                                                                        
                                                                                                                                
2:07:21 PM                                                                                                                    
CHAIR BJORKMAN  reconvened the meeting  and asked  Ms. Wing-Heier                                                               
whether the  Division of  Insurance regulates  similar agreements                                                               
for subscription services in the state.                                                                                         
                                                                                                                                
2:07:56 PM                                                                                                                    
LORI WING-HEIER,  Director, Division of Insurance,  Department of                                                               
Commerce, Community and  Economic Development, Anchorage, Alaska,                                                               
stated  that the  division  currently does  not  have any  direct                                                               
healthcare agreements under its purview.                                                                                        
                                                                                                                                
CHAIR BJORKMAN asked whether the  Division of Insurance regulates                                                               
prepaid agreements.                                                                                                             
                                                                                                                                
MS. WING-HEIER  answered yes; the  legislature gave  the division                                                               
oversight of those agreements about  2015. The division refers to                                                               
them as "insurance lite" because  they do not meet the definition                                                               
of  an insurance  company.  There are  no  actuaries, no  audited                                                               
financials,  and the  agreements lack  the resources,  capital or                                                               
surplus  that   the  division  would  look   for  with  insurance                                                               
companies.  The division  takes consumer  complaints and  has the                                                               
consumers register to establish open communication.                                                                             
                                                                                                                                
CHAIR  BJORKMAN  asked  what the  similarities  are  between  air                                                               
ambulance agreements and the direct healthcare concept.                                                                         
                                                                                                                                
MS. WING-HEIER  answered that the  division doesn't  get involved                                                               
in  day-to-day   operations  but   she  doubts  there   are  many                                                               
similarities. She  explained that  the division worked  to ensure                                                               
that the language complies with  statutes. The service is similar                                                               
to  insurance  because   it  is  a  prepaid   product  for  which                                                               
healthcare  service  would  be  performed  in  exchange  for  the                                                               
premium.                                                                                                                        
                                                                                                                                
2:10:52 PM                                                                                                                    
CHAIR BJORKMAN  opened public testimony  on SB 45; he  found none                                                               
and closed public testimony.                                                                                                    
                                                                                                                                
CHAIR BJORKMAN held SB 45 in committee.