Legislature(2015 - 2016)BELTZ 105 (TSBldg)
04/12/2016 01:30 PM Senate LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| SB203 | |
| SB118 | |
| HB125 | |
| HB314 | |
| SB206 | |
| HB254 | |
| SB55 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 203 | TELECONFERENCED | |
| += | SB 118 | TELECONFERENCED | |
| += | SB 156 | TELECONFERENCED | |
| += | HB 125 | TELECONFERENCED | |
| += | HB 314 | TELECONFERENCED | |
| += | SB 206 | TELECONFERENCED | |
| + | HB 254 | TELECONFERENCED | |
| += | SB 55 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
SB 206-REINSURANCE PROGRAM; HEALTH INS. WAIVERS
2:06:57 PM
CHAIR COSTELLO reconvened the meeting and announced the
consideration of SB 206. She noted this is the second hearing
and public testimony is closed. She relayed the intent to hear
from the administration, take questions, and look to the will of
the committee.
2:07:36 PM
FRED PARADY, Deputy Commissioner, Department of Commerce,
Community and Economic Development (DCCED), stated that SB 206
addresses the fragile condition of Alaska's individual health
insurance market. This segment of the insurance market has
experienced back-to-back increases of about 36 percent. There
are just two remaining insurance carriers in the state and one
has been significantly stressed this year. He said SB 206
provides a restructure of the ACHIA program that is grounded in
prior Alaska statute.
CHAIR COSTELLO welcomed Senator Stevens.
MR. PARADY directed attention to the highlighted table in the
packets from the Division of Insurance 2015 annual report. It
shows 236,000 covered lives; the federal reinsurance program -
Affordable Care Act 2016 annual fee per member per month of
$2.25; and a 3 percent tax that averages $30 per member per
month for an individual and $18 per month for a group. For the
purposes of the analysis, those two items sunset at the end of
2016.
Page 2 reflects a $19.36 per month assessment - the rough
equivalent to the expiring federal taxes and fees for ACHIA - on
the 236,000 covered lives that would generate about $55 million.
The premium impact on the individual market would reduce costs
to individuals roughly 15 percent to 18 percent. The division
anticipates another year of 36 percent to 40 percent increases
so SB 206 would substantially moderate those ongoing cost
increases for the 22,000 Alaskans that are insured in the
individual market. SB 206 offers a straightforward and doable,
but not perfect, solution.
CHAIR COSTELLO mentioned the $19.38 per member per month
estimated reinsurance limit and asked Ms. Wing-Heier if the
division had identified the higher cost codes it would capture
through the reinsurance.
2:11:19 PM
LORI WING-HEIER, Director, Division of Insurance, Department of
Commerce, Community and Economic Development (DCCED), explained
that the division asked the insurance companies and reinsurance
companies that were writing in the individual market at the time
to submit their claim data and they quantified it for the first
10 highest cost claims, the top 20, the top 30, and the top 40.
Those are the claims that are identified as set 1, 2, 3, and 4.
The final page of the set of documents titled "Annualized
Adjustment Estimate" shows all the data combined. The claims
themselves are identified by hierarchical claim condition (HCC)
code throughout the document. On each of the last 4 pages, 10
more conditions are added; those are top drivers in the market.
CHAIR COSTELLO asked her to describe the nature of the problem
and what SB 206 attempts to achieve.
MS. WING-HEIER said the bill was introduced because the
individual insurance market in Alaska is very small and has
experienced nearly 40 percent rate increases the last two years.
There is no reason to believe that there won't be a third year
of rate increases in the individual market of close to 40
percent. There are two remaining insurers in Alaska and one has
been financially stressed this year. The insured population is
about 23,000 and there is no reason to think it's going to grow
at this time. Alaska has had a high risk pool for a number of
years, and the idea is to take the individuals that would have
been in the high risk pool had it not been for the Affordable
Care Act, and place them back into the high risk pool. They will
be funded in the high-risk ACHIA pool as they were funded before
the Affordable Care Act. This will spread the cost over the
entire marketplace (covered lives) as was done before the
implementation of the Affordable Care Act. What that hopefully
will do is drive the cost down of the individual market or at
least stabilize it so people can afford to keep their premiums.
She acknowledged that for some there may be a few dollars per
month increase, but for those in the individual market there
will be a stabilization. Hopefully this will result in insurers
staying in the market in Alaska or attract other business.
She shared that since SB 206 was introduced it has received
press in the Lower 48. She listed the states that have called
asking what is being done with this reinsurance bill because
they are experiencing the same struggles.
2:18:08 PM
At ease
2:18:48 PM
CHAIR COSTELLO reconvened the meeting and invited Ms. Tallman to
comment on the bill.
2:18:59 PM
SHEELA TALLMAN, Legislative Policy Manager, Premera Blue Cross
Blue Shield of Alaska, testified in support of SB 206. She
described the individual health insurance market in Alaska as in
crisis. The average benchmark plan premium is the highest in the
country at over $700 per month; the next highest cost state is
$468 per month. Premium increases of 40 percent for the past two
years have a significant impact when the premium is already so
high.
She said the subsidies will help many, but over 1,200
individuals with Premera coverage do not qualify. She expressed
concern that premiums will continue to skyrocket due to the
small size of the individual pool and the small but significant
number of individuals in the pool that have high-cost
conditions. These individuals destabilize the pool and
dramatically impact costs.
MS. TALLMAN noted that while some insurers have opted to exit
the individual market, Premera and MODA Health have been working
collaboratively to come up with a sustainable option for
Alaskans. Premera supports a balanced assessment that will not
place undue burdens on the group market and will also provide
some relief to the individual market. SB 206 aims to do this.
She urged the committee to support the legislation.
2:21:16 PM
JASON GOOTEE, Director, MODA Health, Anchorage, Alaska, stated
that MODA supports SB 206 as a way of addressing the variability
inherent in the Alaska individual insurance market. He said the
expansion of the individual market has been difficult for many
insurers because the health of the population nationally is
worse than expected and Alaska is no exception. Of particular
concern in Alaska is the relatively small number of people in
the individual market over which to spread the risk.
He reported that MODA has collaborated with the Division of
Insurance, Premera Blue Cross Blue Shield of Alaska and ACHIA on
a reinsurance program aimed at helping to stabilize this market.
MODA and Premera have provided detailed claims data through
ACHIA to an actuarial consulting firm to model the impact of
such a program. MODA's actuaries have been reviewing the
analysis and providing feedback to ensure that the results are
sound. He restated support for SB 206 as a means of improving
the predictability of the individual pool when setting future
rates.
2:23:11 PM
CHAIR COSTELLO closed public testimony and solicited a motion.
She noted the bill has a finance referral.
2:23:48 PM
At ease
2:23:59 PM
SENATOR GIESSEL moved to report SB 206, labeled 29-GS2126\A,
from committee with individual recommendations and attached
fiscal note(s).
CHAIR COSTELLO announced that without objection, SB 206 is
reported from the Senate Labor and Commerce Standing Committee.