03/27/2025 03:30 PM Senate HEALTH & SOCIAL SERVICES

           SB 122-HEALTH INSURANCE NETWORK STANDARDS                                                                        
                                                                                                                                
4:16:04 PM                                                                                                                    
CHAIR   DUNBAR  reconvened   the   meeting   and  announced   the                                                               
consideration  of  SENATE  BILL  NO.  122  "An  Act  relating  to                                                               
insurance; establishing  standards for health  insurance provider                                                               
networks; and providing for an effective date."                                                                                 
                                                                                                                                
4:16:27 PM                                                                                                                    
CHAIR DUNBAR opened public testimony on SB 122.                                                                                 
                                                                                                                                
4:16:55 PM                                                                                                                    
GARY  STRANNIGAN, Vice  President, Congressional  and Legislative                                                               
Affairs,  Premera  Blue Cross  Blue  Shield  of Alaska,  Everett,                                                               
Washington,  testified in  opposition to  SB 122  and paraphrased                                                               
the following:                                                                                                                  
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     At  Premera,  we  feel  that  efforts  to  promote  the                                                                    
     affordability of our products  are key to continuing to                                                                    
     be  able to  provide care  for our  customers. This  is                                                                    
     because  affordability has  become  the  highest bar  a                                                                    
     person must  clear, in order  to gain access  to health                                                                    
     insurance and health care services.                                                                                        
                                                                                                                                
     SB 122 would put in  place the most restrictive network                                                                    
     adequacy system of  any state in the  United States. If                                                                    
     (a big  if) a  carrier could  actually comply  with the                                                                    
     measure's provisions,  it would certainly be  at a very                                                                    
     high cost.                                                                                                                 
                                                                                                                                
     Invited testimony  from Mr.  Jeff Davis  indicated that                                                                    
     this bill  is intended to  address a problem  that does                                                                    
     not yet  exist: narrow networks in  Alaska. Premera has                                                                    
     the broadest  network of any  carrier in the  state and                                                                    
     we  don't  foresee  a narrow  network  in  our  future.                                                                    
     Further, from  what we can tell,  our competitors don't                                                                    
     employ  narrow  networks  either.   This  bill  is  not                                                                    
     needed.                                                                                                                    
                                                                                                                                
4:17:59 PM                                                                                                                    
MR. STRANNIGAN continued with his testimony for SB 122:                                                                         
                                                                                                                                
     Mr. Davis  also suggested  to the committee  that there                                                                    
     are  no  network  adequacy  requirements  in  place  in                                                                    
     Alaska.  While it  is true  that  Alaska is  one of  18                                                                    
     mostly  rural  states  that  does  not  have  a  state-                                                                    
     specific set of requirements  for network adequacy, the                                                                    
     federal   government   does   have   network   adequacy                                                                    
     requirements  for Qualified  Health Plans  (QHPs) under                                                                    
     the Affordable  Care Act (ACA)    including  those that                                                                    
     serve   Alaskans.    Premera   complies    with   these                                                                    
     requirements for  our individual  health plans,  and by                                                                    
     extension, the rest  of our lines of business  do so as                                                                    
     well.  This   is  because   we  essentially   have  one                                                                    
     (compliant) network for all our products                                                                                   
                                                                                                                                
     To   touch  on   a  few   of  the   bill's  problematic                                                                    
     provisions:                                                                                                                
     -In  the case  of both  the 100  percent threshold  for                                                                    
     facilities, and the 95  percent threshold for specialty                                                                    
     providers,  virtually  every  provider  will  have  the                                                                    
     opportunity  to   hold  a  health  plan   hostage.  The                                                                    
     provider will  be able demand whatever  rate they want.                                                                    
     If  the  health  plan  would like  to  do  business  in                                                                    
     Alaska,  the health  plan  must  agree. This  provision                                                                    
     will have an  upward spiraling effect on  costs, if not                                                                    
     completely  crash the  health  insurance marketplace                                                                       
     all it  would take to  disqualify a carrier is  for one                                                                    
     provider to  refuse to contract  and that  carrier does                                                                    
     not comply. This is to  say nothing of the small subset                                                                    
     of  providers  to  do   not,  under  any  circumstances                                                                    
     contract  with  insurance  companies. Would  they  also                                                                    
     carry  a veto  over  health carriers?  Under the  bill,                                                                    
     carriers  would need  to contract  with  95 percent  of                                                                    
     specialty  and subspecialty  providers in  an area.  In                                                                    
     many   instances,   the   number   of   specialty   and                                                                    
     subspecialty  providers in  an area  can be  counted on                                                                    
     one  hand.  Mathematically,  a carrier  would  need  to                                                                    
     contract with  five out of  five providers and  if just                                                                    
     one  declines,  that  carrier  does  not  meet  the  95                                                                    
     percent  threshold  and   is  disqualified  from  doing                                                                    
     business in Alaska.                                                                                                        
     -There is  no exception  in the  bill for  poor quality                                                                    
     providers/facilities  or   those  providers   who  have                                                                    
     previously been excluded from a  carrier network due to                                                                    
     fraud concerns. By requiring  carriers to contract with                                                                    
     them,  it  will  subject members  to  potentially  low-                                                                    
     quality   care    and/or   fraudulent    behavior.   In                                                                    
     conclusion,  we  urge the  legislature  to  set SB  122                                                                    
     aside  and instead  focus on  the  countless other,  in                                                                    
     many  cases,   serious,  pressing   problems  currently                                                                    
     confronting the  Alaska legislature. There is  no sense                                                                    
     investing   effort  in   a  problem   that  is   purely                                                                    
     theoretical; especially  when the proposed  solution is                                                                    
     so costly.                                                                                                                 
                                                                                                                                
4:19:29 PM                                                                                                                    
SENATOR  HUGHES noted  that the  proposal may  impose one  of the                                                               
strictest  network adequacy  standards  in the  nation and  asked                                                               
what the federal requirements are for the Affordable Care Act.                                                                  
                                                                                                                                
4:19:51 PM                                                                                                                    
MR. STRANNIGAN said he is  hearing two questions. One question is                                                               
about  the network  adequacy  requirements  under the  Affordable                                                               
Care   Act  and   the  second   question  is   about  the   state                                                               
requirements.                                                                                                                   
                                                                                                                                
4:20:14 PM                                                                                                                    
SENATOR  HUGHES replied  that  she primarily  wants  to know  the                                                               
federal requirements and  how Alaska compares to  other states if                                                               
SB 122 is passed.                                                                                                               
                                                                                                                                
4:20:34 PM                                                                                                                    
MR.  STRANNIGAN  said  the proposal  would  set  uniquely  strict                                                               
network adequacy  standards, including a 100  percent requirement                                                               
for  facilities and  a 95  percent  requirement for  specialties,                                                               
effectively  forcing   insurers  to  contract  with   nearly  all                                                               
providers.  He   noted  that  no   other  state   has  comparable                                                               
requirements  and offered  to provide  information on  Affordable                                                               
Care Act standards if requested.                                                                                                
                                                                                                                                
4:21:56 PM                                                                                                                    
SENATOR HUGHES requested the additional information.                                                                            
                                                                                                                                
4:22:00 PM                                                                                                                    
SENATOR  CLAMAN said  the bill  is  often described  as a  narrow                                                               
network  bill. He  asked  whether there  are  states with  narrow                                                               
network laws  that are acceptable from  an insurance perspective,                                                               
or as  a representative of  Premera are all narrow  network bills                                                               
unacceptable.                                                                                                                   
                                                                                                                                
4:22:28 PM                                                                                                                    
MR. STRANNIGAN  replied that Premera  operates in  Washington and                                                               
Alaska,  with  Washington's  insurance department  proud  of  its                                                               
robust network adequacy laws. He  suggested there is currently no                                                               
need for  narrow network laws  in Alaska  if there are  no narrow                                                               
networks. He offered  to research narrow network  laws to provide                                                               
a clearer overview of available options.                                                                                        
                                                                                                                                
4:23:33 PM                                                                                                                    
SENATOR CLAMAN asked if he could  provide an overview in a couple                                                               
of days.                                                                                                                        
                                                                                                                                
MR. STRANNIGAN replied  that he could deliver some data  in a few                                                               
days.                                                                                                                           
                                                                                                                                
4:24:10 PM                                                                                                                    
CHAIR DUNBAR closed public testimony on SB 122.                                                                                 
                                                                                                                                
4:24:23 PM                                                                                                                    
CHAIR DUNBAR held SB 122 in committee.