Legislature(1993 - 1994)
03/04/1994 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 Number 062 DONALD NOVOTNEY, Representative, Alaska Nurses Association, testified in Juneau on HB 414. He read a statement from Jackie Pflaum, Legislative Chair for the Alaska Nurses Association (AaNa). Ms. Pflaum felt that more than ample data had already been collected and should be used to move forward with a specific plan for health care reform. The statement conveyed the support of the AaNa for universal health care coverage for all Alaskans. The association supports a single payer approach that would ensure a basic set of benefits for every citizen of Alaska. MR. NOVOTNEY said the association further believes that HB 414 should be amended to require the Alaska Health Commission to develop a plan of universal coverage for all Alaskans within the same time line outlined in the bill. The commission should have to present a preferred plan and alternative plans which guarantees universal health care under a single payer system. The plan should detail the benefits package of coverage, costs, financing mechanisms, cost containment measures, and other features which the commission deems necessary. MR. NOVOTNEY said the AaNa would support a strong consumer presence on the Alaska Health Commission. The AaNa strongly urged the legislature to consider a larger number of commissioners which would more broadly represent the concerns of the health care consumer. MR. NOVOTNEY stated concerns were expressed that there is not a plan to provide for a strong public health structure within HB 414. The AaNa strongly recommended that the provisions of HB 332, which outline the need for a strong public health component in health care reform, be incorporated into HB 414. It was further noted that prevention strategies would address the goals of cost containment and improved health outcomes. MR. NOVOTNEY said the statement indicated the AaNa's support of Section 7 regarding review and approval rates and rating factors. The health insurance industry should receive the same public scrutiny as other insurance providers in the state. They believe that public review will aid in forthcoming deliberations. CHAIR BUNDE asked if the AaNa supports the concept of the state setting doctors' fees. MR. NOVOTNEY deferred to Jackie Pflaum on teleconference from Anchorage. CHAIR BUNDE indicated that if indeed the setting of doctors' fees was supported, then also nurses' salaries should be set, too. MR. NOVOTNEY said he would defer to Ms. Pflaum for that answer also. CHAIR BUNDE asked Mr. Novotney to speak to the cost of $1 million for a health care commission. MR. NOVOTNEY stated on behalf of himself that duplication of services needs to be eliminated at the level of administration and mid-level management. He indicated that he collects data for the Alaska Hospital Trauma Registry. He explained that up to 20% of trauma patients; i.e., gunshot wounds, car accidents, are self-pay patients. He said those individuals are not insured and one day it may be that hospitals will not take care of those people. Number 329 CHAIR BUNDE asserted that those trauma patients are insured, but they are not paying the premiums. MR. NOVOTNEY agreed. REP. VEZEY asked if the AaNa was advocating that competition be eliminated in health care services. MR. NOVOTNEY maintained that there is only one hospital in Juneau. He stated that competition is good and bad. He felt competition would not affect health care negatively. Number 371 CHAIR BUNDE indicated that Commissioner Usera had joined the meeting and asked her if she would like to comment. Number 373 COMMISSIONER USERA, Department of Administration (DOA), testified in Juneau on HB 414. She said that she would oblige any questions. Number 383 CHAIR BUNDE asked if her interpretation of limiting fees would mean that the state would set the price of an operation or the cost of a nurse's salary. COMMISSIONER USERA said the bill does not include rate setting. She said there would be provisions in the form of an amendment that would require doctors to disclose their rates upon request by the consumer, which would allow for a consumer oriented market. She stated that the amendment was still in the draft phase. She further indicated that if under the new amendment a doctor fails to provide a request for rates, the consumer could file a complaint and the provider would be fined. CHAIR BUNDE stated that the consensus of the medical community is that most doctors have a fee schedule already available or are not in opposition to the concept. COMMISSIONER USERA said the medical community feels that it is good business. She further stated that the administration feels that steps should now be taken in that direction as opposed to implementing a huge regulatory structure. Number 463 CHAIR BUNDE indicated that there were people participating via teleconference from Sitka, Fairbanks, and Anchorage. He asked Marie Darlin to testify. Number 465 MARIE DARLIN, President, National Association of Retired Federal Employees of Alaska (NARFE/AK), testified in Juneau in opposition to HB 414. She stated that the association is concerned that Alaska has a state health plan in effect by January 1, 1998, when the federal employee health benefits program is due to end. She said, at that time, federal retirees and employees are to be folded into the state plans. She said the organization has over 1,000 members from a total of 5,300 civilian federal annuitants and their surviving spouses. MS. DARLIN said that in a recent survey of those annuitants, two of the recommendations to the legislature were to provide long term care and health care facilities planning to meet current and future needs. They also recommended that provisions be made for more community-based home health services to allow retirees to remain in their homes as long as possible. She said the survey shows that 65% of the retirees are married, equalling 8745 persons. She indicated that 4968 persons are under Medicare as first payer. She said that 424 persons, including their spouses, are over 80 years of age and need or will need community-based services or long term care. She said that a report of this information was provided to each legislator at the beginning of the last session. She urged the committee to review it. MS. DARLIN further stated that a comprehensive health care plan for Alaska will help keep retirees in the state. She said it would result in monthly annuities of over $ 7 million, and further indicated that as of January 1994 the amount was $97 million per year for just the civilian federal annuitants. She said it is worth keeping them in the state. MS. DARLIN said there are also 5000 military retirees plus the Veterans Administration and the Indian Health Service, all of which have a federal health plan that will be folded into the state plans as well. She stated that all three programs will require their clientele to choose between their current plan or a state plan. She said the deadlines of January 1, 1996, for continued work and studies seems to be a postponing even further of any specific action on work that has already been done over the past five years. MS. DARLIN further explained that Section 44.19.622, concerning the commission, lists qualifications in the title, yet she saw nothing that listed the qualifications for the three members of the commission. She said that item E does refer to statutes, but when checked, it turned out to be a listing of conflicts of interests. She felt that would indicate that anyone with ties to the medical, hospital or provider community could not be a member. She was unsure of the intent. She further stated that there is no indication that consumers would be represented on the commission. Page 4, line 24, is confusing, she commented. She asked if it meant the commission will be providing and charging for services, and indicated the phrase "...services by the commission." She asked what those services would be. She stated page 7, line 28, is defined similarly in another statute which does not speak to many issues, such as long term care, community-based services, medications, and mental health concerns. MS. DARLIN indicated that page 8, line 11, addresses statutes for issues of mandatory arbitration, which she felt would be better addressed in regulation. She indicated that the NARFE/AK does not endorse the bill as it is written, and the association supports HB 451. Number 609 CHAIR BUNDE asked that Ms. Darlin submit those questions in writing to Commissioner Usera. COMMISSIONER USERA stated that the DOA would take those questions and concerns into consideration. REP. NICHOLIA said she would like a copy of Commissioner Usera's response to those questions sent to her office. CHAIR BUNDE indicated that Senator Jim Duncan joined the meeting. Number 636 JOHN SHAFFER, Representative, State Legislative Committee, American Association of Retired Persons (AARP), testified via teleconference on HB 414. He stated that their concern is not only for senior citizens, but is also for children, adults, those who are insured and those who are not. He said the State Legislative Committee endorses the concept of health care reform contained in HB 451 and SB 284. He suggested that HB 414 be amended significantly before being passed out of committee. He explained that much of the ground work for health care reform has been completed and submitted to the legislature in the final report of the Health Resources and Excise Tax Task Force. He said that the groundwork has been done and indicated that a plan should be put into effect before the federal government's plan. CHAIR BUNDE spoke for the committee and said that they wanted to have a plan in place before a federal program is mandated. Number 700 MARLENE LEAK, Concerned Citizen, testified via teleconference on HB 414. She stated that HB 414 should be two separate bills. She felt that the issue of arbitration is a judicial function and should be addressed within one bill, and the rest of the issues in HB 414 are executive issues that should be addressed in another bill. MS. LEAK further stated that a chart from Time Magazine, the July 24, 1993, edition indicates that in 1987 the cost of inflation of medical care suddenly "went through the roof" up until 1990 where the rate dropped considerably. She also said that in 1986 the federal government passed COBRA which mandates that all emergency rooms treat all people without questioning the ability to pay and that nonprofit hospitals admit and treat the patients. She said the result put a great burden on medical care in the country in the form of an unfunded mandate. However, she said that the graph shows that the medical communities "did absorb the hit" and with the responsiveness inherent in a free market was able to find ways to maintain control. Ms. Leak said the government has never been able to cut costs and improve services at the same time. MS. LEAK explained that there was portability of insurance at one time, and individuals did not have to worry about inclusion of preexisting conditions prior to the Congress passing ERISA (Employee Retirement and Income Security Act), which gave large tax breaks to businesses to set up risk pools. Prior to that time, in regards to individual policy, the entire nation served as an actuarial risk pool and there was no worry that people would be excluded from coverage, or that preexisting conditions would be excluded. She said after ERISA the nation became divided into "little risk pools," which resulted in the loss of portability of insurance. She suggested that Congress should make major modifications to ERISA, which would pass on to individuals the same type of tax breaks that was afforded to businesses. She also suggested eliminating the possibility of businesses providing risk pools. She felt the suggestions would address the issues of portability and exclusions of preexisting conditions. MS. LEAK felt that inherent problems within these policies were being solved with laws that created even more problems and that the direction was going further away from a responsive market system that addresses the needs of the individual. She felt that the policies to date responded only to special interests and not to individual need. Number 869 KATHLEEN DOVE, Concerned Citizen, testified via teleconference in support of HB 414. She stated that prevention is a very important part of any health care plan. She asserted that it is much easier to raise a healthy child than it is to repair a broken adult. She said it is her hope that the commission formed under HB 414 would include prevention as a major part of their purview. CHAIR BUNDE asked if Ms. Dove was familiar with the Oregon plan that prioritizes the coverage of different illnesses. MS. DOVE said she is not familiar with the plan in depth. CHAIR BUNDE indicated that he was handing the gavel over to Rep. Toohey who arrived at 3:35 p.m. He also indicated that Rep. Kott arrived at 3:37 p.m. Rep. Toohey presided over the remainder of the meeting. CHAIR TOOHEY asked for testimony from Anchorage. Number 932 JACKIE PFLAUM, Legislative Chair, Alaska Nurses Association, testified via teleconference on HB 414. She stated that she was reading testimony into record on behalf of Daryl Young. She said it was his hope that the committee go farther than what HB 414 allows for in its present form. The letter indicated that Mr. Young is a family nurse practitioner and the manager of the University of Alaska Anchorage Student Health Center. The Student Health Center is currently staffed by two family nurse practitioners, a mental health nurse practitioner, and two office support personnel. An overage of 60 students are provided with health care services daily. MS. PFLAUM stated the vast majority of those students do not have health insurance or financial resources to secure necessary health care services, such as lab work, diagnostic procedures or prescription drugs. The letter indicated that students that have not had health care for five to ten years frequently come to the Health Center and tell him they have been unable to afford health care. Women who have not had a pap test for ten years often come in. The test can detect cancer of the cervix, which is treatable before becoming a life threatening disease. An advanced cervical or uterine cancer will cost a tremendous amount of money to maintain a reasonable quality of life for the victim of a detectable and treatable disease. Students often let their illness go until they must go to the emergency room. MS. PFLAUM said there is a health care crisis that must be resolved by a collaborative effort. Number 011 CHAIR BUNDE said there are some people who confuse the issue of those who don't have health care and those who don't want health care. MS. PFLAUM said she did not believe that was the intent of Mr. Young's letter. Number 027 DENNY DEGROSS, Representative, Alaska Public Health Association and the Alaska Health Care Coalition, testified on HB 414. He stated that he generally favors the bill but has several large reservations. He said the most distressing issue is that there is nothing in the bill that addresses public health and prevention. He felt the government should have the tools they need to make the most logical decisions about resources and decisions about the medical care system. He argued that the bill does not go far and expressed his concern about the tremendous amount of work that has already been put into HB 451. He said that he was concerned that perhaps a tremendous amount of work would be disregarded in order to address HB 414. Number 110 CHAIR TOOHEY said, "there obviously has to be one vehicle to take a bill on. Whether we use this bill or another bill, we have actually five bills out there that are all dealing with health care... So I think it's... a little premature... your anxiety." She asked Mr. DeGross to follow the process. Number 115 MR. DEGROSS said that he hoped there would be an effort to bring elements of other legislation, including the compromise bill, into HB 414. CHAIR TOOHEY handed out Amendment #1 and asked for discussion before adopting it. She said the amendment does deal with public health. Number 139 BRUCE MOORE, Insurance Broker, testified via teleconference on HB 414. He stated that the bill continues the process of debate on the subject of health care. He referred to Rep. Bunde's comment that everybody has health insurance, but it's just a matter of who pays for it. He clarified and said that everybody has health care, but people pay for it through cost shifting. He said there are three different categories of uninsured people in Alaska. The first category is for those who are uninsurable. He related to the committee his encounter with a gentleman who has Parkinson's disease. The second area is for those who are truly unable to afford the premiums for health insurance. CHAIR TOOHEY indicated that Parkinson's disease is usually a disease of the elderly and asked how old the gentleman with Parkinson's disease was. MR. MOORE said he was 54 years old. He continued on with his testimony. He said there has been a general feeling that the purpose of insurance is to provide the amount of insurance in such a way as guarantee that the insured person will use it. TAPE 94-37, SIDE B Number 000 MR. MOORE suggested that an individual could buy a $100 deductible plan that would respond to the most minute claims that they have during the year, instead of buying catastrophic coverage. He said that the difference in cost could be up to 70% of premium. He said the third area of the uninsured is what he calls "irresponsible individuals." He stated that the Division of Insurance did a study that indicated there were people who were unwilling to pay just $25.00 per month for health insurance. He said those types of people do not hold a job on a regular basis and they do not want to pay a premium because they believe they will never get sick. He felt that there should be some type of law to enforce personal responsibility, and he felt it was unreasonable for those people to walk out of the hospital and never be responsible for their bills. Number 061 CHAIR TOOHEY interjected that she has a son who would rather put money into a kayak than into health insurance, and sympathized with Mr. Moore's concern. MR. MOORE indicated that in regards to those who want insurance but cannot afford it, the state of Florida has introduced legislation that would allow people that are within a certain poverty level to buy into the state Medicaid system on a sliding scale basis. He felt that approach would solve a big problem in the area of health care. CHAIR TOOHEY asked Mr. Moore to send her a copy of that information. Number 095 CHAIR BUNDE asked Mr. Moore if he would endorse collecting health premiums from the permanent fund dividend. MR. MOORE said he felt the process of insurance should be voluntary. He said the government should have no business in enforcing a person to buy insurance. CHAIR BUNDE said that statement contradicts Mr. Moore's previous statement that people should have to pay their hospital bills after they leave. MR. MOORE said he would endorse the ability to allow doctors and hospital to have a first lien on the permanent fund to pay for the bill that the person has already incurred. He did not endorse the ability of the state to use the permanent fund to buy insurance. CHAIR TOOHEY interjected and said the state does not allow people to drive without proof of insurance. She then said it was not her intention to pass HB 414 out of committee and the committee would work on it further in the coming weeks. Number 164 DAVID FRAZIER, Insurance Agent, testified via teleconference in support of HB 414. He stated that he felt there were areas that needed to be worked on in the bill, but for the most part he felt favorable to HB 414. He expressed concern in the area of arbitration and felt perhaps it should be addressed in a separate bill. He said he felt more comfortable with HB 414 because it does have a fiscal note attached to it, whereas HB 451 does not have a fiscal note. He further stated that he attended a number of meetings where the compromise bill (HB 451) was worked out. He felt that about six people monopolized that process, therefore he felt it did not represent the majority of individuals in Alaska. He said there should have been more consumer input. Mr. Frazier suggested that a definition has not been discerned between health care and health insurance. He felt that issue should be addressed before moving on. Number 296 BONNIE NELSON, Representative, Alaska Public Interest Research Group, testified via teleconference on HB 414. She stated that the Alaska Public Interest Research Group has taken a position in support of SB 284 conditional to nine principles that the group has submitted to Senate HESS. She said she would send a copy of the principles to Chair Toohey. She further indicated that she had given copies of her proposed amendments to Rep. Kott and asked him if she had also given him a copy of the principles. REP. KOTT said yes. MS. NELSON asked if the committee had a copy of the principles. CHAIR TOOHEY said no. MS. NELSON stated that the group feels that HB 414 does not go far enough. She said the recommendations from the task force are good and suggested that Governor Hickel consider clarifying and adding more to HB 414. She said she appreciated the testimony of Commissioner Usera on HB 414, but said she cannot find much of what Commissioner Usera said actually in the bill. MS. NELSON indicated that the first principle would allow for coverage of all Alaskans, and explained that health care is a right for all Alaskans. She suggested perhaps a coverage better than Medicaid or better than Indian Health Services could be available for all Alaskans. She felt that there needed to be clarification of what universal coverage should be and that it should have a time line. MS. NELSON said that principle #2 would address the concerns of preexisting conditions and that any preexisting condition restrictions would result in discrimination, inequality, and would prevent portability. She further stated that the third principle addresses consumer involvement and consumer control and that they both are of vital interest to health policy reform. MS. NELSON stated that no one with a conflict of interest should be appointed to the commission. She said no health care providers or anyone employed by a health insurance company should be on the commission. Number 450 CHAIR BUNDE asked who would be on the board if there could be no one on it that is knowledgeable about health care. MS. NELSON said that she contacted the United States Public Interest Research Group and they feel that the principle is consistent with President Clinton's position on alliances that provides for only a consumer-based commission or board. She also said that legal advisors told her the principle is not unconstitutional. She explained that a retired doctor could be on the commission. CHAIR TOOHEY agreed with her and said that there are no electricians on the Alaska Public Utilities (APUC) board. CHAIR BUNDE indicated that there are doctors on the State Medical Board. CHAIR TOOHEY asked Commissioner Usera to respond. Number 506 COMMISSIONER USERA stated that the state receives $26 million in premium insurance taxes (premium tax) annually which goes into the general fund. She said HB 414 would convert approximately $1 million of those funds into program receipts to fund the commission. She maintained that all who are participating in the process of finding a health care plan are vehemently agreeing that there be access to affordable quality health care with universal coverage. COMMISSIONER USERA explained that the important issue that is missing is what can the state afford to do now. She said the reason why Governor Hickel proposed the legislation is because all other proposed bills have been "all or nothing" legislation. She said none have provided for the interim. She said the DOA has come forward with an approach that will move forward, that is affordable within the context of the budget, that doesn't foreclose other options, and does cost things out. She further explained that the commission would not study health care, it would figure out how to implement it. She maintained that it would be the commission's role to develop management plans on how to implement the comprehensive proposals that are before the legislature. Commissioner Usera felt that in the future reform measures will create cost savings, but the budget will still be a major concern in the next two years. Number 633 CHAIR BUNDE thanked Commissioner Usera for acknowledging that the funds would come out of the general fund and that there is no "new money out there." REP. G. DAVIS said that Commissioner Usera's testimony refers to the implementation of a plan and he then indicated that she said whatever the plan is. He said that he hoped the DOA would look at all the existing and proposed plans that are out there and combine them into an economically feasible health care plan. COMMISSIONER USERA said the DOA allowed for much flexibility within HB 414 because the policies affecting health care will be so dynamic and will change very rapidly. She explained that two or three major plans will "float to the top" in the next few months. She indicated that all the proposals of the past few months have been heard, amended, and priced out. She said until the benefit packages are as proposed in the various bills, nothing can be priced out. Management analysis for the choice of plans is laid out in HB 414. She said the commission members, by majority vote, can select which plans they want to evaluate. She specified that HB 451 would likely surface in the next few months as the premier single payer proposal. She further stated that when all plans have been considered by the DOA, HB 414 would then enable the department to inform the legislature of the options in plans, the cost of each plan, and how each one would be implemented. She also indicated that HB 414 would "start making immediate niche changes, enhancements to the current system as we know it today." Number 774 REP. G. DAVIS jokingly asked why Commissioner Usera did not say that in the first place. CHAIR TOOHEY agreed and said, "it is my intent that we do something of this nature." She further stated that a lot of work and commitment would be needed by everybody. She thanked all who testified and urged them to continue to participate in the solution. Seeing no further business before the committee, CHAIR TOOHEY ADJOURNED the meeting at 4:15 p.m.
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