03/28/1996 01:38 PM Senate L&C

                                                                               
            SB 288 ALASKA HEALTH PURCHASING ALLIANCE                          
                                                                              
 SENATOR KELLY announced  SB 288  to be up for consideration.                  
 SENATOR DUNCAN, sponsor, said this legislation takes some steps               
 toward increasing access to Alaskans to health care and helping               
 reduce costs.  The purpose of an alliance is to provide the                   
 economies of a large purchaser of a health insurance benefits to              
 all Alaskans.  Other states have been successful using this type of           
 cooperative.  It is also likely that there will be a number of                
 different benefit packages and risk pools to maintain the current             
 level of benefits for public employees, for example.                          
                                                                               
 Number 310                                                                    
                                                                               
 MS. BURKE, Division of Insurance, testified that this goes to the             
 heart of insurance by establishing an alliance that would be open             
 to State employees, municipal employees, school district and                  
 university employees, and other groups.  It also provides that                
 medicaid patients would also be eligible on a sliding scale.                  
                                                                               
 Her concern with this concept is that with a larger group you get             
 a more diverse demand for packages.  This would have a dampening              
 effect on the economies of scale in purchasing benefits.                      
                                                                               
 SENATOR KELLY asked her to explain what fees for services means.              
 MS. BURKE explained that this is what we have historically had - an           
 insurance policy that would provide services for a procedure and a            
 usual and customary fee would be paid for that service.  The                  
 concept behind managed care is an antithesis to that.                         
                                                                               
 SENATOR DUNCAN added that he thought this was a needed piece of               
 legislation that gives another tool to increase access to health              
 care for Alaskans and to decrease costs.  It has been proved to               
 work and it could be successful here.                                         
                                                                               
 SENATOR KELLY said they would set SB 282 aside and bring it up                
 another time.  He adjourned the meeting at 2:12 p.m.