Legislature(2017 - 2018)ADAMS ROOM 519
04/09/2018 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB129 | |
| HB233 | |
| HB399 | |
| SB165 | |
| HB306 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 233 | TELECONFERENCED | |
| + | SB 165 | TELECONFERENCED | |
| + | HB 306 | TELECONFERENCED | |
| += | HB 399 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 129 | TELECONFERENCED | |
SENATE BILL NO. 165
"An Act relating to the Alaska comprehensive health
insurance fund; and providing for an effective date."
4:02:03 PM
Co-Chair Foster invited Senator MacKinnon and her staff to
the table.
SENATOR ANNA MCKINNON, SPONSOR, read the bill sponsor
statement:
In 2015, the individual health care market in Alaska
was in a precarious state. There were only two
insurers with current enrollees in individual
healthcare plans in Alaska, and each insurer was
experiencing significant losses. Average premium rate
increases in 2015 were 38.7 percent for one insurer
and 39.9 percent for the other. In 2016, one of
Alaska's only two remaining insurers gave notice that
they would be withdrawing from the Alaska individual
market effective January 2017.
Senator MacKinnon noted that at the time the state's
insurance division came up with a suggestion - a way to
address folks that were driving up the costs of the
insurance market in Alaska. They were looking at those high
utilizers and trying to do something different. She
continued reading the sponsor statement:
The 29th Legislature passed HB 374 in 2016, which
created the Alaska Reinsurance Program, and allowed
the Division of Insurance to apply for a federal
Section 1332 state innovation waiver under the
Affordable Care Act (ACA). That legislation included a
sunset date of June 30, 2018 to ensure that the
diversion of insurance premium taxes from the general
fund was not relied upon as a long-term funding
mechanism. In July 2017, the waiver was approved by
both the Department of Health and Social Services and
the Department of Treasury based on the application
submitted by the division, which requested pass-
through funding for the Alaska Reinsurance Program.
The federal award for this waiver was approximately
$322 million over five years. The award is to be used,
in conjunction with the Alaska Reinsurance Program, to
continue to stabilize the individual healthcare market
in Alaska.
This legislation extends the sunset provision on the
Alaska comprehensive health insurance fund by six
years, from June 30, 2018 to June 30, 2024 to allow
for the continuation of the Alaska Reinsurance Program
and receipt of the federal funding.
Senator MacKinnon reported that the federal money and the
approval was contingent on the passage of SB 165. The
federal funds were guaranteed for 5 years. However, the
bill requested a 6-year extension. It would provide time
for the state to true up all claims that might remain in
the system should the state not have the 1332 waiver
extended and because the center for Medicaid and Medicare
Services had indicated that they might extend the 1332
waiver for another year. Other states were following
Alaska's lead in providing cost savings to the federal
government. The bill would reroute or take the diverted
insurance premium taxes that were currently being deposited
in the Alaska Comprehensive Health Insurance Fund and place
them back where they were into the general fund. It would
create $63 million of general fund revenue in the current
year. She reminded the body that the program had already
brought to the state, through the supplemental process, a
return of $205 million from Premera Blue Cross - one of the
insurers experiencing significant losses in the Alaska
market.
The bill also removes the requirement that funds
collected under AS 21.09.210 (tax on insurers), AS
21.33.055 (unauthorized insurance premium tax), AS
21.34.180 (surplus lines tax) and AS 21.66.110 (annual
tax on title insurance premiums) are to be deposited
into the Alaska comprehensive health insurance fund
within the general fund.
Passage of HB374 by the 29th Legislature has resulted
in stabilization of the individual insurance market.
The Section 1332 state innovation waiver provides
funding for the Alaska Reinsurance Program, through
the Alaska comprehensive health insurance fund. Now
this legislation is necessary to ensure the continued
effectiveness of the Alaska Reinsurance Program, meet
the intent of the waiver, and receive the federal
funding.
Co-Chair MacKinnon was open to questions.
Representative Guttenberg asked if the bill simply kept it
extending with no other changes. Co-Chair MacKinnon
responded that it also diverted the insurance premiums from
the insurance fund to the general fund. Co-Chair Foster
indicated that the director of the Division of insurance,
Ms. Wing-Heier, was available for questions.
4:07:14 PM
Co-Chair Foster OPENED and CLOSED public testimony.
Representative Guttenberg had been at a legislative
conference and had received positive feedback from
legislators of other states about Alaska's program.
Co-Chair Foster asked Co-Chair Seaton to read the fiscal
notes into the record.
Co-Chair Seaton reviewed the first fiscal note from DOA
which had an appropriation of Centralized Administrative
Services and an allocation of Finance. The OMB component
number was 59. The second fiscal note was from the
Department of Commerce, Community and Economic Development
(DCCED). It had an appropriation and allocation of
Insurance Operations. The component number was 354. The
note reflected no expenditures and a change in other
revenues of $61.537 million in FY 19. Revenues were
expected to increase to $75.859 million in FY 22.
Representative Wilson asked if there was anything tied to
the money that would be going into the general fund. She
wondered if the money could be used in the budget as
needed. Co-Chair MacKinnon replied that it went to the
general fund and could be allocated at the will of the
legislature.
MS. LORI WING-HEIER, DIRECTOR, DIVISION OF INSURANCE,
DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT,
offered thanks for the waiver. There had been significant
support of the bill from both bodies. There had been
significant thought given to it because the state did not
want it to become a permanent reinsurance program unless
the waiver could be obtained. She was happy the waiver went
through and thought it was showing the benefits that had
been discussed in 2016.
Co-Chair Seaton MOVED to report SB 165 out of Committee
with individual recommendations and the accompanying fiscal
notes.
There being NO OBJECTION, it was so ordered.
SB 165 was REPORTED out of committee with a "do pass"
recommendation and with two previously published fiscal
notes, one zero fiscal note: FN1 (ADM); and one fiscal
impact note: FN3 (CED).
4:11:00 PM
AT EASE
4:11:46 PM
RECONVENED
Co-Chair Foster indicated the committee would be hearing
HB 306. It was the committee's first hearing on the bill.
He invited DOA's representatives to the table.