Legislature(1993 - 1994)
02/15/1994 03:00 PM House HES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 414 - COMPREHENSIVE HEALTH CARE CHAIR TOOHEY informed the committee that Commissioner Usera would do an overview and indicated there were teleconference observers in Anchorage and Fairbanks. Number 058 NANCY USERA, Commissioner, Department of Administration, testified in support of HB 414. She said that she was there to present Governor Hickel's health care commission bill. She stated that Governor Hickel has continued to be concerned that there be solutions tailored to the needs of Alaskans. She stated that the department needed to know what is happening in Alaska regarding the use and services provided to health care recipients before any ultimate decisions are made in the area of comprehensive reform. She felt it was important to say that Governor Hickel's legislation does not represent comprehensive reform. She said that until only three days previous, she would have said that the proposal was a "10% firm step forward," for putting a mechanism into place that would deal with health care reform issues. She further stated that as a comparative analysis to the compromise bill that was introduced, she felt HB 414 would be a 30% step forward. COMMISSIONER USERA said HB 414 would accomplish three things. First, costs would be contained and there would be easier access to health care systems being provided. She said insurance pools, universal claim forms, and mandatory nonbinding arbitration for settlements would be utilized to contain costs. She explained that the legislation provided for insurance rate review. She stated that over the last three years, in her role as commissioner representing management for one of the largest employers of the state, it has been very difficult to get verification and rate information from insurance companies. Secondly, the comprehensive reform proposals would be evaluated. In order to accomplish that, there must be available information and data that is specific to Alaska and also there must be a defined benefit package. She questioned what President Clinton's universal health package would look like in Alaska. She said until it is known what that package is, no proposals that are before the legislature can be priced. COMMISSIONER USERA stated that the goal of HB 414 was to collect and analyze data, define the benefit package, and then based on that information an implementation plan would be created. It is a management planning process for comprehensive reform. She said the major proposals on the table would be developed into a management planning tool that would include a cost benefit analysis. She said the third goal of the proposal was to take the recommendations derived from the information and data gathered and present them to the legislature. COMMISSIONER USERA explained that many of the provisions within HB 414 were similar to HB 451. She said HB 414 stopped at "phase I," which is the management planning, the cost benefit data collection, and the "niche" fixes. HB 414 does not go on to presuppose a specific outcome of which a comprehensive reform proposal will emerge from the state. She said HB 414 would make recommendations and that the legislature would make that determination. Number 327 CHAIR TOOHEY asked how can the process of HB 414 start when the roles of Indian health, the veteran's administration, Medicare, and other health concerns and their data have not been taken into consideration. Number 344 COMMISSIONER USERA responded by saying the commission was modeled closely to that of the public utility commission. She said there were two reasons for that decision. First, there was a growing recognition that all Alaskans have a right to affordable and quality health care, which she said was not dissimilar to the need for electricity. Secondly, there would be three commissioners working full time and there would be a stronger global view of the issue of health care. Number 443 REP. BUNDE, in reference to Commissioner Usera's analogy of health care and electricity, commented that people pay for the electricity they use. He indicated the sizable fiscal note accompanying the proposal. He asked Commissioner Usera to perhaps ask Governor Hickel to consider paying for the commission out of the permanent fund dividend, citing that although it is a service and a right to everyone, they also have a responsibility to pay for it. Chair Bunde encouraged Commissioner Usera to discuss the Oregon Plan with Governor Hickel. The Oregon plan keeps costs under control by covering a list of common illnesses and not covering more "exotic" sicknesses. Number 489 CHAIR TOOHEY related to Chair Bunde that perhaps he was speaking of a newspaper article from the previous day that said the Oregon plan had made parameters on Medicaid and Medicare billings, not on the state's health care plan. Number 495 REP. BUNDE said, on the contrary, that it was indeed a list of the most common diseases. Number 501 CHAIR TOOHEY stated that the article did make mention of the Oregon plan in Medicaid and Medicare funds. Number 503 REP. BUNDE suggested to Commissioner Usera that perhaps the proposals in HB 414 and HB 451 be rolled into one. Number 519 COMMISSIONER USERA stated for the record, in regard to the public utility commission, that the department supported the right to access affordable health care, not free health care. She said the payment scheme for the commission would come from premium tax, which currently is directed into general fund. She further stated that the benefit plan is designed after the Oregon plan. Number 547 CHAIR TOOHEY suggested creating a glossary of terms, noting that access can mean two different things when a person lives 800 miles from the nearest clinic. She also stated that cost is a factor in accessibility. Number 568 REP. VEZEY said he has not found anyone in the Fairbanks North Star Borough who has been denied access to medical care, citing that there are signs in every health care facility in Fairbanks that says: We do not refuse service based on the ability to pay. Number 582 COMMISSIONER USERA said the proposal looks to find more efficient ways to provide current services. She said everyone recognizes the cost shifting, the rationing of health care and the reality that some people go bankrupt when they need catastrophic care. She felt the rural areas do not have equal access to the same type of care as urban areas. Number 615 REP. VEZEY stated again that he has never known anyone to be denied medical care. He said that people voluntarily make the decision to live in a very remote area and less or no accessibility is by their choice. Number 624 COMMISSIONER USERA suggested that there have been numerous people that have testified at public hearings that indicated strong concerns that quality and affordable health care is not accessible. Number 628 REP. VEZEY commented that he wished those people who had been denied medical access would come forward. Number 632 REP. B. DAVIS asked if the legislative health care task force that she was a part of was also the task force that worked with the Comprehensive Health Care Reform Act (CHIPRA) that now has a proposal before the legislature. Number 654 COMMISSIONER USERA replied yes. Number 655 REP. G. DAVIS stated that Deputy Commissioner Livey was a part of that task force and asked who else in the DOA was a part of the task force. Number 657 COMMISSIONER USERA, after some discussion, stated that the original task force was comprised of three administration representatives, DOA, Department of Health and Social Services, and the Department of Commerce and Economic Development. She said the group that worked on the compromise bill, between the CHIPRA proposal and the original bill sponsored by Senator Jim Duncan, was an ad hoc group. Number 673 REP. G. DAVIS asked which member from the Department of Commerce (DOC) participated. Number 674 COMMISSIONER USERA replied it was Dave Walsh from the DOC. Number 677 REP. G. DAVIS suggested that the state had spent a lot of time, effort, and money to look at health care reform and to some degree has come up with a proposal. He stated that President Clinton has a proposal on the federal level and the Kenai Borough has also spent a lot of time, effort and money in developing a plan. He further stated that CHIPRA has spent much time also. He stated that much weight would be considered from those proposals, but he felt the state had perhaps spent enough time, effort, and money on researching the problem. Number 723 COMMISSIONER USERA responded by saying that the DOA was not ready to make a substantial investment in comprehensive reform that would "go from zero to 100 in a single piece of legislation." She said if DOA was to guess wrong in regards to the correct manner in which to address health care reform, the implications would be far reaching. She said that an alternative would be to make all the decisions that need to be made in one piece of legislation. She also stated that everything is incremental in its development, and that over time, both proposals incrementally have reached critical mass. Number 786 REP. BRICE commented that public health is the cornerstone of a healthy population and that he did not see the issue addressed in HB 414. He also relayed a scenario where a person was in a serious automobile accident, taken to the hospital, and once the staff discovered that the person had no insurance, was transported to another hospital. He said that he was tired of 60% of people paying for the 40% of people who use emergency and catastrophic care through insurance. He felt there were enough studies to approach the goal that needed to be obtained. He then asked Commissioner Usera if she was saying that HB 414 is mutually exclusive to any other proposals. Number 955 COMMISSIONER USERA said the proposal was a different approach to the same problem. She said the difference in the two proposals is that HB 414 is a "phase I" approach and HB 451 "goes beyond phase I to phase III." She agreed with Rep. Brice that public health is the cornerstone of health care areas. She indicated that on page 4, subsection 2, line 19, there is a provision to establish advisory committees to the commission to conduct research or investigation and report back to the commission on findings. She said public health would fall under this provision. She further commented that the DOA would be amenable to have that specifically outlined and charge given. Number 897 CHAIR TOOHEY stated that the only legislation that could really be discussed at the time was HB 414, because no one had seen the compromise bill, HB 451. She said HB 451 would be heard next week. Number 913 REP. SITTON said that the total cost of health care last year was close to $3 billion for the 500,000 people in Alaska. He said clearly something is wrong, and it is imperative that prevention be promoted. Number 933 REP. VEZEY said that the total numbers for the cost of health care are all different. He said the gross state product is approximately $6 billion and he found it difficult to believe that 50% of the economy is being spent on health care. He said it would be even more difficult for him to believe that in ten years the total for health care will be $6 billion. He wished there were more reliable statistics. Number 953 COMMISSIONER USERA agreed and said that many of the proposals are based on different assumptions. She said as a result it is difficult to know what the outcomes will be. She then stressed that more data would strengthen the assumptions. Number 964 CHAIR TOOHEY stated that step one would be collecting data. Number 970 REP. SITTON said the state advised him of the aforementioned figures. He also said a great amount of the $3 billion is federal money. Number 980 CHAIR TOOHEY asked Commissioner Usera for a sectional analysis of HB 414. Number 985 COMMISSIONER USERA said the intent of Section 1 is promotion of access to affordable, quality health care. She stated that Section 3 sets up a commission and lays out the relative duties and responsibilities of the three paid commission members. The section would also require the director of insurance to establish uniform forms and procedures for health claims. She further stated that time frames would be established for the activity of the commission. She said that Section 4 provided for nonbinding mandatory arbitration to reduce litigation costs. She then stated that further on in the legislation is a provision for resolving disputes between insurance companies and beneficiaries. She said, to her knowledge, that no other state includes this provision in their health care plan. COMMISSIONER USERA clarified for Rep. Vezey that Alaska would be the first state, to her knowledge, that provided nonbinding arbitration between the insurance companies and those they insure. COMMISSIONER USERA continued with the sectional analysis. She said Section 5 would convert the current panel of five malpractice reviewers to one expert adviser. She said this would aid cost containment and cost efficiency. She said Section 6 was the provision for mandatory, nonbinding arbitration. Section 7, she explained, is the provision for review and approval of rates and rating factors, indicating that the function of the committee was primarily to verify rates. She said that the Division of Insurance would do the actuarial assumptions and revues and would make a recommendation to the commission, who would then approve the rates after public hearings. Number 132 CHAIR TOOHEY asked Commissioner Usera to explain in more layman terms what she had just said. Number 136 COMMISSIONER USERA related a scenario to the committee. She said if AETNA, who provides the state's insurance, came to the DOA and said they were going to increase health premiums by $25, she would have no way of knowing if the rating factors they quoted to justify the increase were accurate. CHAIR TOOHEY said the cost increase could perhaps include the cost of the hospital, the doctor, the cleaning woman, etc. Number 148 COMMISSIONER USERA said it would also include the cost of the insurance company's corporate "set up." She felt there was a need for some way to determine that the rate is based on accurate information. Number 164 CHAIR TOOHEY asked if a benefit package would require the same determination of rate factors in regards to the cost of medical procedures, the cost of the doctor and nurses, etc. Number 170 COMMISSIONER USERA said that was not provided for in the legislation. TAPE 94-20, SIDE B Number 000 COMMISSIONER USERA stated that most people would not need to know the cost of something that they would never use, and questioned as to how many people pay for a benefit they never use. Number 008 REP. BUNDE shared the analogy that if a person knew they were going to die there, the person would not go there. Number 025 CHAIR TOOHEY asserted that there were many people who feel that they are going to end up with a better system than the one in place now. She felt that those people are unaware of what is to come, and that they need to be educated, and that all people are obliged to educate themselves on the issue. Number 047 COMMISSIONER USERA rhetorically asked if the legislature was making proposals just to do something different or to do something better. Number 050 COMMISSIONER USERA continued with the analysis. She said Section 7 would also provide for insurance pools. She indicated that there were no mechanisms to implement past insurance pools, referring to the "high risk pool" set up by the legislature, and the small business insurance pool. She stated that Sections 13 and 14 would allow that the commission would not be subject to all the rules of the procurement code, but will establish its own procedures, allowing expediency for implementation. She stated that the commission members are 26C level, which is a program director level. Number 146 REP. BRICE said that it would be interesting to hear at a later date more in depth testimony pertaining to the procurement procedures that would be used. COMMISSIONER USERA said there are many models that could be used for the procurement process. COMMISSIONER USERA proceeded with the sectional analysis. She said the sunset provision allows for six years. She continued on by saying that in order to repeal a court rule, the court can take action or the legislature can take action pertaining to the arbitration and medical expert provisions. She said the court rule does require a two-thirds majority vote in each house to pass. COMMISSIONER USERA said she would be glad to provide other expert testimony for a future meeting. Number 252 REP. BUNDE asked Commissioner Usera to clarify the fiscal note from the Office of the Governor and the fiscal note from Commerce and Economic Development. Number 267 COMMISSIONER USERA she said that the fiscal note from the Division of Insurance includes the technical expertise that they would need to do the actuarial work on rate review and approval. Number 282 CHAIR TOOHEY said the cost would be covered by the tax on the insurance. Number 285 COMMISSIONER USERA said, "what we do is make that program receipt on the taxes. It's important to note that it still comes out of the general fund." Number 293 JACK PHELPS, Legislative Aid to Rep. Pete Kott, commented and asked questions on HB 414. He asked if the collection data for the insurance rating factors could be reported to the Division of Insurance and then the division would simply report the data, instead of it being channeled through the commission. Number 327 COMMISSIONER USERA stated that the work would be done by the Division of Insurance so as not to increase the staff of the commission to do the review process or analysis. She felt that the establishment of rate factors needed to be addressed in a public forum to educate the public. Number 374 BILL CRAIG, Interim President, Alaska Native Blind, asked questions on HB 414. He asked if there would be a public hearing where people who had been refused medical care could testify either in person or by teleconference. CHAIR TOOHEY stated that would be the type of data collected by the commission. She asked Mr. Craig to clarify further what the intent of the question was. Number 399 MR. CRAIG stated that people are in fact turned down for medical services for lack of insurance. Number 403 CHAIR TOOHEY said that some people would be covered by Medicaid, but there are gaps that need to be addressed. Number 412 MR. CRAIG said that emergency rooms have turned down uninsured people. Number 424 CHAIR TOOHEY stated that if it is a private hospital that does not accept state funding, people can be turned away. Number 443 MERRIT OLSON, Member, American Association of Retired Persons, asked questions on HB 414. He asked if the proposal would fit under the federal guidelines. Number 460 COMMISSIONER USERA stated that the DOA should not be in competition with the federal government. She felt that whatever congress came up with for health care would have a "state opt-out feature." She said that from all the information she has heard that has come from Washington, D.C., indicates that there will be universal coverage, portability, and provisions for states. Number 496 MR. OLSON asked if the federal government would give the state time to design a health care plan before implementing the federal plan. Number 501 COMMISSIONER USERA replied that she was unsure of the answer. She said the state will only do what is right for Alaska, and that she did not want the federal government driving state decisions. Number 521 CHAIR TOOHEY closed public testimony and asked for further questions from the committee. There were none. Seeing no further business before the committee, CHAIR TOOHEY ADJOURNED the meeting at 4:20 p.m.
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