Legislature(2003 - 2004)
04/01/2004 09:07 AM Senate FIN
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* first hearing in first committee of referral
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+ teleconferenced
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CS FOR SENATE BILL NO. 357(L&C)
"An Act relating to the regulation of insurance, insurance
licenses, qualifications of insurance producers, surplus
lines, fraud investigations, electronic transactions, and
compliance with federal law and national standards; and
providing for an effective date."
This was the second hearing for this bill in the Senate Finance
Committee.
Co-Chair Wilken stated that this legislation which is referred to
as "the insurance omnibus bill," would make numerous changes to
current language in order to ensure that State statutes remain in
compliance with federal law and Model Act standards and guidelines.
Amendment #2: This amendment inserts the word "genetic" after the
word "Medical" in Section 2 subsection (a) on page two, line 13.
In addition, on line 16 of that same section, the word "public" is
deleted and, following the word "disclosure", the words "without
the expressed consent of the enrollee or applicant" are inserted.
Senator Olson moved for the adoption of Amendment #2.
Co-Chair Green objected.
Senator Olson voiced that this amendment would address concerns
relating to medical confidentiality as identified in Section 2,
subsection (a) beginning on page two, line 13.
SFC 04 # 65, Side B 09:54 AM
Senator Olson stated that, in addition, there is concern regarding
the bill's repealing of AS 21.34.280 as specified in Section 52, on
page 29, beginning on line 13. [NOTE: Senator Olson inadvertently
referenced line nine in his testimony.] He noted that Members'
packets contain a copy of the language pertaining to Sec.
21.86.280. Confidentiality of medical information. [copy on file]
as currently mandated in State statute. He noted that as a result
of technological advances, the confidentiality of such things as
genetic information should be addressed. Therefore, inserting the
word "genetic" into Section 2, subsection (a) would address this
concern. Inserting the language "without the expressed consent of
the enrollee or applicant" would further address public disclosure
concerns in the absence of AS 21.86.280.
LINDA HALL, Director, Division of Insurance, Department of
Community and Economic Development, stated that the Division is not
opposed to the amendment. The intent of the bill's language in
Section 2 and the repealing of AS 21.86.280 were "to bring
consistency to privacy regulations" pertaining to medical records.
The repealing of AS 21.86.280 is included because other sections in
the bill provide the same coverage, specifically in addressing
regulation pertaining to Health Management Organizations [HMOs]. In
addition, the Division recently underwent "a regulatory project and
adopted regulations dealing with privacy with input from all
consumers." These regulations are currently under review by the
Department of Law. She stressed that the State has adopted privacy
regulations that would require that the consumer "opt in" to
approve the sharing of their medical information. She stressed that
while the Division supports the ability of insurance companies
being able to collect medical information, it also upholds the
position that insurance companies should be prohibited from sharing
the information, "generally." The understanding is that this is the
concern being addressed by Amendment #2.
Co-Chair Green asked whether the definition of "genetic" is
included in State Statute. Furthermore, she asked whether the
confidentially of medical genetic information and financial
information is recognized "at the same level of seriousness." In
addition, she asked whether there is "a technical method" whereby
information would be considered "routine" as opposed to being
considered "invasive or intrusive" personal information.
Ms. Hall responded that the definition of the term "genetic" has
not been addressed in the Insurance chapter of State regulations.
It is unknown as to whether the term might already be included
under medical information.
Ms. Hall informed that the privacy of financial information is
treated differently than medical information in that individuals
are provided "an opt-out standard" for financial information rather
than "an opt-in standard" for medical information. The Opt-In
Standard would prohibit the sharing of medical information unless
an individual actively agreed. The Opt-Out standard would allow a
person's financial information to be shared with affiliates rather
than the public, unless the person actively elected to prohibit it.
Co-Chair Green voiced concern regarding the lack of a "genetic"
definition in State Statute, as the words "medical", "genetic," and
"financial" have very different levels of meanings, "intensity and
seriousness." She voiced being unsure that addressing these issues
in this manner is appropriate. She also acknowledged that the
procedures required to distribute and acquire consent forms in this
regard is "cumbersome" for both the provider and the individual.
She voiced concern that action relating to this bill might further
create inefficiencies in this regard.
Ms. Hall agreed that the requirement of any consent form would
create an additional step on the part of providers and insurers,
both of whom have requested that the State refrain from
implementing any steps that would make the consent form process for
Alaska different from the national standard, as this would require
an additional expense and burden and would prevent business
efficiency.
Co-Chair Green declared, "that this is a bigger issue than it might
appear at first glance." Therefore, she would oppose the amendment.
Senator Olson moved to withdraw Amendment #2.
There being no objection, Amendment #2 was WITHDRAWN from
consideration.
Co-Chair Wilken noted that Amendment #2 is being withdrawn with the
understanding that Senator Olson, Co-Chair Green, and the Division
of Insurance would work together to address Committee concerns in
its regard.
Co-Chair Wilken ordered the bill HELD in Committee.
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