Legislature(1997 - 1998)
01/30/1998 09:00 AM Senate HES
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
SCR 14 - PARITY FOR MENTAL HEALTH TASK FORCE
CHAIRMAN WILKEN announced this issue was considered last session,
and then reviewed by a steering committee of participating
organizations. The steering committee's recommendations were
incorporated into CSSCR 14(HES), version F.
SENATOR LEMAN moved to adopt CSSCR 14(HES), version F, as the
working document of the committee. The motion carried with no
objection. There being no discussion, the committee took
testimony.
WALTER MAJOROS, Executive Director of the Alaska Mental Health
Board, stated the Alaska Mental Health Board brought forth this
legislation in partnership with the Building Bridges Campaign for
mental health consumers. He reviewed the changes in the committee
substitute as follows.
The first change is to the representation on the task force and who
is responsible for the appointments. Senator Ward's concerns were
addressed and the task force will have broad representation. The
legislation states that there will be no expenditure of state funds
to support the task force; the Alaska Mental Health Trust Authority
has pre-funded the task force in the amount of $50,000. The
purpose of the resolution is to create the task force to study the
issue of parity; not to introduce parity legislation.
MR. MAJOROS made the following comments about the issue of parity.
Congress passed the Mental Health Parity Act of 1996, which is a
step in the direction of equalizing mental health care coverage
with physical health care coverage. Currently 90 percent of
insurance coverage offers a higher level of benefits for physical
health coverage than for mental health coverage. The federal
legislation equalizes lifetime and annual benefits only. It does
not obligate employers to provide mental health coverage and
contains no rules regarding deductibles, co-payments or out of
pocket limits. Because of these limitations, 15 states have passed
mental health parity legislation and 25 others have introduced
legislation in the past year. Because of this activity many new
studies have been conducted. Those studies are reporting either
no, or a nominal, increase in cost. The Rand Study showed that
equalizing annual limits is costing $1.00 per person per year.
Comprehensive coverage is costing $7.00 per year per person. Most
states are finding there is no need for differential treatment of
people with mental illnesses versus people with physical illnesses.
The basic belief is that mental illnesses are treatable brain
disorders in a cost-effective manner, and in many cases are treated
with a better success rate than physical illnesses. He asked
committee members to support the resolution.
SENATOR LEMAN referred to the section of the resolution that
contains the cost of mental health disorders to the American
economy, and asked if any figures are available specific to Alaska.
MR. MAJOROS said he believes the state would reflect the national
trend.
SENATOR LEMAN thought the number might be in the tens to hundreds
of millions for Alaska. MR. MAJOROS stated some people with mental
illnesses are unable to leave medicaid coverage to take jobs in the
private sector because if they do so, they lose mental health
coverage for medications. Private insurance coverage often does
not cover those medications. SENATOR LEMAN asked that an estimate
be calculated for Alaska. MR. MAJOROS said he would attempt to do
so.
SENATOR GREEN asked if Alaska complies with the federal legislation
he referred to. MR. MAJOROS answered that legislation just became
effective January 1,1998, so no track record of compliance has been
established yet. In order for an organization to request an
exemption, it must demonstrate six months of providing the
coverage.
CHAIRMAN WILKEN noted he passed out the synopsis of the federal
legislation to committee members.
SENATOR GREEN asked if a large corporation that provides coverage
for its employees is able to opt out if it can show an increase in
costs. MR. MAJOROS explained there are many ways an organization
can opt out under the federal legislation. Businesses with 50 or
less employees can choose to not carry mental health coverage.
Businesses with more than 50 employees can get an exemption if they
can demonstrate that their costs increased by greater than one
percent.
SENATOR GREEN questioned whether the consequences of the
possibility of many businesses opting out of the program completely
has been reviewed. MR. MAJOROS replied that Senator Green's
concern demonstrates the need to take a look at how the federal
legislation may impact Alaska and how to best respond to that
legislation.
SENATOR GREEN said she is very fearful that the task force will
begin to mandate mental health coverage if a large number of
businesses opt out. The Legislature has mandated insurance
coverage of three or four procedures since she has been in office,
and she believes establishing a piecemeal approach to national
health insurance is wrong. MR. MAJOROS pointed out that he worked
directly with Senator Ward regarding the composition of the task
force and who will be appointed by the Legislature. He believes
that composition reflects a balanced and consensus-building
approach.
SENATOR WARD confirmed that he did work with Mr. Majoros on that
provision of SCR 14 but he agreed with Senator Green's concern.
MR. MAJOROS responded this resolution establishes a task force to
study the issue. If the task force came to that conclusion, it
would bring that information to the Legislature for its
consideration.
SENATOR GREEN noted the clause that states that a simple majority
of the members of the task force constitute a quorum for the
transaction of business, and all actions of the task force shall
require the affirmative vote of a majority of the members present,
requires only four votes to create a majority. She asked if this
language is typical for task force business. MR. MAJOROS answered
that the Steering Council took standard boiler plate language for
task force construction and its decision making process.
CHAIRMAN WILKEN stated the resolution will be held in committee and
that question can be answered before the next hearing.
SENATOR WARD said it was his understanding that task force members
can participate via telephone and teleconference. MR. MAJOROS said
nothing in the resolution prevents it. CHAIRMAN WILKEN said staff
will follow up on that concern also.
JAN MCGILLIVARY, Chief Executive Officer of the Alaska Mental
Health Association (AMHA), and coordinating agency leader for the
Building Bridges Campaign for Mental Health, gave the following
testimony. The issue of mental health parity is not new to those
who work in the field. Two efforts to champion parity by AMHA have
failed in recent years. The issue has been studied extensively by
the National Mental Health Association, the National Alliance for
the Mentally Ill, the Bazelon Law Center and the National Institute
of Mental Health. She hoped the committee will advance the bill so
this issue can be studied in earnest and produce an up-to-date
report. Numerous recent reports make the statement that the
increased costs to the employer in regard to insurance benefits is
generally less than one percent. Also when mental health coverage
is on par with physical health coverage, after a five to ten year
period, the industry perceives an overall decline in the use of the
mental health benefit overall.
SENATOR GREEN remarked that when she was on the Governor's Council,
the federal definition of "developmentally disabled" changed. She
asked if the state has a definition of the scope and types of
illnesses that would be covered and whether that includes those who
have developed mental illnesses as the result of alcohol and
substance abuse. MS. MCGILLIVARY answered that over the year
during the Alaska Mental Health Association's Lands Trust
litigation, this question was on the front burner. Judge Green
finally answered the question when she defined the beneficiary
group for the Trust Authority. She said when she thinks of mental
health parity, she is thinking of people who experience major
mental illnesses, and alcoholics with psychosis qualify under that
definition.
SENATOR GREEN asked if it would detract from this resolution to
include limiting language. MS. MCGILLIVARY did not know.
Number 047
MARY ELIZABETH RIDER, a planner for the Mental Health Trust
Authority, stated last summer, when the Trust was making its budget
recommendations for fiscal year 99, the Mental Health board brought
up the concept of a task force. The Trust is interested in
supporting a study conducted by a diverse task force of the type
proposed, to help make decisions about the best way to finance
mental health services. She offered to take questions back to the
Trust members from the committee.
BOB IRVINE, the Chief Executive Officer of Lifequest, the community
mental health center in the Mat-Su Borough, testified in support of
SCR 14. Throughout his career with the mentally ill he has found
that population has has been stigmatized by the work force and
insurance industry. When behavioral health and physical health
are integrated, an overall savings occurs on total health care
costs. The artificial boundary between body and mind is
disappearing and people are realizing they need to be treated
together. In terms of the cost of mental illness to the State of
Alaska, the Alaska Mental Health Association has been in a
leadership position with the depression awareness treatment
campaign for many years. If established, the task force could
answer that question. The cost of depression alone is enormous
when one factors in the number of lost work days, the amount of
lost work productivity, and the effect on family members.
TAPE 98-7, SIDE A
DON DAPCEVICH, Executive Director of the State Advisory Board on
Alcoholism and Drug Abuse, made the following statements. The
Board supports the formation of this task force, although it has
not taken a position on the issue of whether parity should occur,
and in what form. The Board encourages the Legislature to form a
task force to look at the issues involved. The Board's concern is
access to services for Alaskans, in the best way possible. The
insurance limitations placed on services provided for clients has
effectively discouraged the private, for-profit market from
providing services in Alaska. He imagined the Board would support
parity, but only if it is cost-effective.
CHAIRMAN WILKEN agreed with Mr. Dapcevich and said he couldn't
imagine the task force would convene and not quantify the issue.
SENATOR GREEN suggested requiring it to do so.
GINA MCDONALD, representing the Division of Mental Health and
Developmental Disabilities, DHSS, stated support for SCR 14. The
Division is not taking a position on parity, but believes it is
important for the task force to study the issues of cost and equity
and to establish and informed process for decision making.
CHAIRMAN WILKEN noted there was no more discussion or testimony on
SCR 14, and that it was his intention to hold the legislation until
next Wednesday to work on several changes. He announced there
would be no meeting scheduled on Monday, and informed committee
members that he and Senator Ward attended a demonstration the
previous day on a new machine that, through ion and microprocessor
technology, can discover the presence of illicit drugs being
brought into the State. He hoped the Legislature has the ability
and creativity to help our communities to get more of the machines
because they are truly a deterrent to drug trafficking. He
adjourned the meeting at 10:50 a.m.
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