Legislature(2007 - 2008)SENATE FINANCE 532
02/20/2008 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB170 | |
| SB226 | |
| SB247 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 170 | TELECONFERENCED | |
| + | SB 226 | TELECONFERENCED | |
| + | SB 247 | TELECONFERENCED | |
| + | TELECONFERENCED |
SUMMARY
SB 170 "An Act requiring that health care insurers
provide insurance coverage for well-baby exams."
SB 170 was HEARD and HELD in Committee for further
consideration.
SB 226 "An Act relating to litigation brought by a
vexatious litigant; amending Rules 3, 4, 12, and
41, Alaska Rules of Civil Procedure; and providing
for an effective date."
SB 226 was HEARD and HELD in Committee for further
consideration.
SB 247 "An Act relating to missing persons and
unidentified human remains."
SB 247 was HEARD and HELD in Committee for further
consideration.
9:15:11 AM
SENATE BILL NO. 170
"An Act requiring that health care insurers provide
insurance coverage for well-baby exams."
SENATOR LESIL MCGUIRE provided an overview of SB 170
requiring private insurers in the State of Alaska to offer
insurance coverage for well-baby exams. She maintained that
regular exams and vaccination schedules are critical to the
long term health of a child. She indicated that coverage
exists for many adult exams but not always for children.
Senator McGuire pointed out that the American Academy of
Pediatrics has been able to access results of these exams,
such as, neglect, malnutrition, parental lack of knowledge,
and also determine the child's basic skills and development.
She believed the philosophy behind this bill is to show that
Alaska cares about its youngest and most vulnerable. Senator
McGuire covered ideas from the sponsor statement:
The first 24 months of a newborn's life is perhaps the
most critical period in a child's life. Routine medical
checkups during this vulnerable stage are necessary in
order to monitor and assess a baby's normal, healthy
development. These checkups - commonly referred to as
"well-baby" exams - not only provide a professional
medical assessment of a newborn's health and
development, but they also provide the opportunity to
educate parents in proper child care.
SB 170 would require health insurance carriers in the
State of Alaska to include in their standard coverage
for dependents "well-baby" exams. These exams,
considered a part of routine pediatric health
supervision, are estimated to cost between $125 and
$250 per visit. The American Academy of Pediatrics
recommends a schedule that includes 10 exams in the
first 24 months of a baby's life. A typical "well-baby"
exam includes monitoring development and growth rates,
hearing, vision, language skills, motor development,
diet, general and preventative health care,
immunizations, and infectious diseases.
There is evidence to suggest that preventative
healthcare coupled with early detection of health
related problems not only improves health outcomes but
is also cost-effective over the long run. Although
"well-baby" exams may increase short-term costs to
insurance providers, they inevitably save money in the
long run. By averting severe and more costly health
problems, including serious illness and emergency care,
"well-baby" exams make sense.
9:20:56 AM
TREVOR FULTON, STAFF, SENATOR LESIL MCGUIRE, provided data
supporting the bill. He observed that a major question of
the well-baby exams is who pays for them. His research
indicated that there is an increase of .1 to .3 percent in
insurance policies that contain the well-baby coverage. That
coverage would equal a thirty-seven cent to eighty-four cent
increase per employee per month. He reported the employer
would be contributing an additional $1.40 to $1.87 per
member per month. Mr. Fulton stressed that among children
with incomplete well-child care there is an increased risk,
in first six months, of having an emergency room visit.
9:23:05 AM
Senator McGuire offered to present well-baby research to the
Committee members. She submitted this bill for the
philosophical belief that Alaskan's have a commitment to
their children. Senator McGuire acknowledged that in the
last committee meeting (Health, Education, and Social
Services Committee) there were questions if well-baby exams
were really a cost saving. She reported a nationalized move
among employers to shift to more value based budgeting
strategies as opposed to budget based allocations. She
referenced an information booklet for employers to help them
think about what to include in their insurance coverage
(Investing in Maternal and Child Health: An Employer's
Toolkit, National Business Group on Health, 2007, copy on
file). Senator McGuire recognized that costs are important,
but emphasized that regular health exams and treatments
would give the children of Alaska the best shot at a good
life.
9:25:00 AM
Senator Dyson agreed that it was a good idea to get early
intervention to recognize health or abuse issues in young
children. He remarked that he has voted for insurance
mandates before but has been rethinking those decisions. As
the exploration continues to get more insurance companies in
Alaska offering a wider variety of coverage, new mandates
can cause problems. Alaska is a small market and the
cost/benefit ratio for them is marginal. He proposed that in
an insurance company's evaluations a major factor is how
many mandates are present that limit the kinds of packages
they can offer. Alaska's mandates, in the middle or higher
range, can make the state an unattractive place for
insurance companies to cover. Senator Dyson cautioned
against spending "other people's money" to do good things.
He thought it was a good idea for taxpayers to assume cost
for indigent care as opposed to shifting it to third party
payers. He believed well-baby exams are good but this bill
does not cover the indigent, who do not have insurance and
would ultimately force it on to the insurance companies.
Senator Dyson stressed that if Alaskans, as a culture,
decide to take care of everybody then the only fair to make
this part of our tax base for all citizens to contribute.
9:29:01 AM
Senator Dyson acknowledged the bill was based on good
intentions, but judged there can be significant potential
for unintended consequences which do not get at the core
problem.
9:29:16 AM
Senator Thomas observed that statistics point to a cost
savings for these exams and wondered why employers did not
look at the long range.
9:30:19 AM
Senator McGuire indicated that there is movement among
businesses to look at the broader field. She proposed that
businesses are better at dealing with the insurance
companies since most individual subscribers are seen as a
number, not a person. Employers who know their employees and
policy makers are the ones who have to make this push to
make things happen. She noted that prevention saves
individuals and contributes to a healthier civilization.
Senator McGuire agreed that the smaller market in Alaska may
not attract as many insurance companies as desired, but this
should not discourage well-intentioned mandates. She pointed
out that mandated bills often help to interject new ideas
into the discussion.
9:32:27 AM
Senator Huggins wondered if Denali KidCare performed well-
baby exams. Senator McGuire responded "yes." Mr. Fulton
replied he would follow-up on information about Denali
KidCare provisions.
Senator Huggins asked the bill sponsors if they thought
about requesting tax breaks or incentives to small
businesses that provide this coverage.
9:33:43 AM
Senator McGuire responded that since there is no state tax,
tax breaks are not possible. She indicated that the federal
government has improved in offering some incentives to
insurance companies. She pointed out that the indigent are
usually covered by other means and individuals more
financially secure can afford higher insurance packages so
this bill is aimed at the middle income class who experience
the most financial difficulty.
9:34:56 AM
Senator Huggins commented that in Alaska there was a
tendency to tax the "other person" or shift the burden. This
is a sensitive issue to many.
Senator McGuire allowed that both sides have valid points
and she is willing to offer a later repeal to this bill. She
requested that the insurance companies return to the
committee within a year's time to respond to the cost
differential; if it has been a significant burden for
employers and employees then she would agree to repeal the
bill. She maintained her belief that adding the costs of
well-baby exams should not significantly raise insurance
rates or drive small businesses out of town.
9:36:14 AM
Senator Olson remarked that lowering the state business tax
could provide an incentive to insurance companies. He asked
how many other states have implemented this type of program.
Senator McGuire replied that twenty-one states have
implemented a well-baby program.
Senator Dyson cautioned against being captured by the
argument of "doing something now to save more at a later
time." He agreed this can be a valid argument but he has
been not hearing this from the companies involved. He would
like to see a time when employers and employees have many
insurance choices, but is not convinced that mandating rules
is the way to go.
9:39:38AM
LINDA HALL, DIRECTOR, DIVISION OF INSURANCE, remarked that
the Division of Insurance has not taken a position on the
bill.
Co-Chair Stedman wondered if this bill applies to the state
employee insurance plan. Ms. Hall replied that it does not.
Co-Chair Stedman asked why not. Ms. Hall stated the Division
of Insurance has not supported mandates as they usually only
apply to a small segment of the population. She remarked
that during a prior hearing outside experts analyzed
Alaska's population. They found that about 350,000 Alaskans
were covered by some type of private insurance, but only
about 150,000 of the 350,000 Alaskans were in plans
regulated under Title 21. Mandates do no apply to any
insurance program governed by the federal government and
state plans can be regulated by the state legislature
imposing statutes if they choose.
9:43:02 AM
Co-Chair Stedman asked about the potential impact on private
insurance. Ms. Hall researched health insurance forms filed
within the Divisions of Insurance and found that there are
few restrictions on well-baby coverage in private insurance.
She illustrated that a restriction might be an employer,
small or large, who chooses a plan that, may or may not,
cover certain things. She proposed that these plans are
tailored to the wishes or needs of that particular group of
employees with the employer having the final option to cover
or not cover certain things. She added that problems can
ensue when it is not a broad enough coverage for the larger
group of people to be insured. She gave an example of "over
50" employees not necessarily wanting a provision like
maternity coverage in their plan.
9:44:47 AM
Co-Chair Stedman referred to a footnote in the Legal
Services memo, stating that "most state employees do not
receive health coverage through the state's health care
plan. Instead, they receive coverage through union trusts
plans" and asked Ms. Hall to elaborate on this (Legal
Services, Division of Legal and Research Services,
Legislative Affairs Agency, State of Alaska, p. 2, copy on
file). Ms. Hall remarked that there are different plans for
different employees depending on the bargaining unit; most
of the coverage is done through the collective bargaining
process. The state plan is a select benefit plan that
applies to legislators, exempt employees, the supervisory
unit, and retirees.
9:45:37 AM
Senator Olson inquired if the same segment of the population
who might not want maternity leave coverage might also not
want the well-baby exam portion. Ms. Hall responded that,
when looking for insurance coverage, it is optimal to have a
pool of "healthy" and "unhealthy" people paying premiums so
any major health issue, like a major surgery, would be
spread over a larger group. In the individual market, when
coverage is mandated, people can then elect to not have the
coverage.
9:46:45 AM
Senator Dyson requested further elaboration on the impact of
mandates to the attractiveness of Alaska as a market for
insurance companies. Ms. Hall responded that the more
difficult Alaska makes doing business here, fewer insurance
companies will be attracted. The market place is balanced
at the moment to attract companies. She maintained that more
mandates will affect the flexibility to tailor programs in
the employer markets. She added that, although it is hard to
put a cost value on mandates, insurance companies have
responded with figures of one to five percent of the
premium. Ms. Hall regarded mandates as not particularly
expensive but with the continued addition of new mandates,
insurance costs are increased for a small group. She
indicated that research shows that as premiums continue to
rise, fewer people will purchase the insurance.
9:49:36 AM
STEPHANIE BIRCH, SECTION CHIEF FOR WOMAN'S, CHILDREN'S AND
FAMILY HEALTH, DIVISION OF PUBLIC HEALTH, testified via
teleconference and provided information and statistics in
support of this bill. She observed that most self-insured
major private employers in Alaska, such as, Carr Safeway,
and health care institutions, such as, Providence Alaska
Medical Center and Alaska Regional Medical Center, provide a
complete array of child health care visits through age
twenty-one. (copy on file in Senator McGuire's office).
9:54:50 AM
SUSAN JOHNSON, DIRECTOR, COMPENSATION, BENEFITS, AND HUMAN
RESOURCES INFORMATION SYSTEMS, PROVIDENCE HEALTH AND
SERVICES ALASKA, testified via teleconference and offered
that Providence's self-funded plan provides the well-baby
coverage as recommended by the American Academy of
Pediatrics. Ms. Johnson reported that about seventy percent
of claims submitted are from twenty percent of those
covered. The twenty percent usually marks the unhealthiest
portion of the group. She believes it is in everyone's best
interest to keep a healthy population healthy in order to
keep health care costs down and to provide a better quality
of life. During early routine exams, potentially serious
illnesses can be detected, treated, and managed to reduce
costs in future emergency room visits for the employer and
the family involved.
9:57:06 AM
DR. JODY BUTTO, PEDIATRITION, PRESIDENT OF THE AMERICAN
ACADEMY OF PEDIATRICS, ALASKA CHAPTER, ANCHORAGE, testified
via teleconference in support of SB 170, on behalf of
herself and the Alaska Chapter of the American Academy of
Pediatrics. She reminded the Committee that studies have
shown this to be cost effective care and stressed that a
"well" population only uses a small amount of the resources
available.
9:58:54 AM
DENNIS DEWITT, STATE DIRECTOR, NATIONAL FEDERATION OF
INDEPENDENT BUSINESSES opposed SB 170. He asserted that it
is not an issue about the value of well-baby visits; it is
an issue of who pays. He pointed out that employers have
limited funds for employee compensation and this should be
left to the employer to decide how that compensation is
decided. Each mandate added by an external force limits the
choices that employers and employees have for providing and
obtaining insurance. The issue of this bill is if there
should be mandates for how those benefits are decided. This
bill covers a very small portion of Alaska's population.
State employees are not covered under this bill, along with
the big box stores. Mr. DeWitt commented that the big box
stores are often in direct competition with small
independent businesses. He maintained that this bill would
force a very small group of employers to fund a decision
made by the legislature for coverage that employees may or
may not want. He estimated a one to three percent increase
in the cost of insurance and often new smaller employers are
opting not to offer any health insurance coverage at all,
because of the cost.
10:01:57 AM
Senator Olson requested the dollar amount to be paid by the
employer or the employee when looking at the percentage
increase. Mr. DeWitt replied that he did not have that
number but believed the numbers would be close to the
sponsor's numbers.
Senator Thomas understood Mr. DeWitt's concern about
mandates but wondered if he had ever negotiated with
insurance companies on behalf of small businesses to not
raise rates every time there was a new mandate, especially
if statistics showed there were cost savings in the long
run.
10:03:21 AM
Mr. DeWitt responded that the Alaska Chapter of the National
Federation of Independent Businesses has not been active in
doing this, although it has occurred on the national level.
He reminded the committee that his membership is small. He
believed a better avenue for negotiation would be for the
State Of Alaska, who represents a larger group and has more
power, to get involved.
10:05:16 AM
Senator Elton observed that it is easy to identify cost to
an insurance plan with mandates but more difficult to
identify the benefits that can accrue with having a healthy
family. He wondered if there had been a debate among his
membership about making employers recognizes the importance
of having a healthy workforce.
10:06:31 AM
Mr. DeWitt agreed that small business employers are
interested in having healthy employees since the loss due to
sickness can have a greater impact. In making insurance
decisions, there are many factors, such as, employee health,
age, money, and small children. They are not suggesting the
well-baby mandate is not a valid program only that such
decisions should be made by the employers and employees, not
a legislative mandate.
10:08:48 AM
Senator McGuire encouraged members to understand that when
earlier mandates have passed, insurance companies have not
astronomically raised their rates or left the state. She
reminded them that she was open to having the bill repealed
if it did not prove cost efficient and successful.
10:11:03 AM
SB 170 was HEARD and HELD in Committee for further
consideration.
10:11:20 AM
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