Legislature(1993 - 1994)
03/12/1994 01:00 PM House HES
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
TAPE 94-46, SIDE A
Number 000
CHAIR BUNDE called the meeting to order at 1:10 p.m., noted
members present and announced the calendar. He brought HB
414 to the table.
HB 414 - COMPREHENSIVE HEALTH CARE
CS FOR HOUSE BILL NO. 414(HES): "An Act creating the Alaska
Health Commission; relating to the delivery, quality,
access, and financing of health care; relating to health
insurers, health maintenance organizations, and medical
service corporations; relating to certain civil actions
against health care providers and health insurers; amending
Alaska Rules of Civil Procedure 26 and 27 and Alaska Rules
of Evidence 802, 803, and 804; repealing Alaska Rule of
Civil Procedure 72.1; and providing for an effective date."
CHAIR BUNDE said the committee substitute (CS) for HB 414
(version 8-GH2024\E) was before the committee. He asked
Commissioner Usera to address the CS.
Number 005
NANCY USERA, Commissioner, Department of Administration,
testified on the proposed CS for HB 414. She stated that
she had just received the CS and had not had time to review
it. She said she assumed that it included the five
amendments that were adopted last week. She then said it
appeared that there were a number of other provisions in the
bill that she was unaware of.
(Chair Bunde indicated for the record that Rep. Pete Kott
arrived at 1:12 p.m.)
CHAIR BUNDE asked Commissioner Usera to take some time to
review the bill. He then indicated that there was one
person who would be testifying via teleconference.
Number 083
REP. TOOHEY said Commissioner Usera seemed to think that
there were additional provisions in the proposal and asked
if the CS was not her amendment packet through legal
services.
COMMISSIONER USERA said she had in her possession the CS for
HB 414.
REP. OLBERG indicated that the new CS was five pages longer.
Number 086
LYNNE SMITH, Committee Aide, House HESS Committee, stated
that the CS contained the amendments that were adopted on
the Wednesday prior and that it was also reorganized.
COMMISSIONER USERA said that she did not recall the language
on page 2, line 10: GROUNDS FOR IMPOSITION OF DISCIPLINARY
SANCTIONS.
REP. TOOHEY asked if there was anyone present from the
Division of Legal Services.
COMMISSIONER USERA continued to read the unfamiliar language
and said she could still not recall its origin.
CHAIR BUNDE offered that it was discussed previously what
should be done if health providers did not post their rates.
COMMISSIONER USERA again stated that the language was
unfamiliar.
CHAIR BUNDE suggested that the committee address the
amendments and then look at the CS in the near future.
COMMISSIONER USERA said again there were unfamiliar
provisions.
Number 172
JACK HEESCH, Lobbyist, Alaska Nurses Association, offered an
answer as to the origin of the provisions in the CS for HB
414. He stated that the provisions specified that the board
should impose sanctions for the subsequent infractions.
REP. VEZEY asked if the proposal had been completely
reorganized.
REP. TOOHEY said yes.
CHAIR BUNDE stated that Mr. Heesch had provided the
committee with a statute that was relative to the provision
that requires sanctions to be imposed if health care
providers fail to comply with the proposed law. He then
said that the CS more than likely reflects the inclusion of
amendments that were adopted and also the reorganization of
language.
COMMISSIONER USERA agreed.
REP. TOOHEY asked Ms. Smith if the added provisions and the
reorganization was at the discretion of the drafter of the
bill.
MS. SMITH said yes. She indicated that the drafter
addressed some problems that he saw within the language of
the bill.
Number 239
CHAIR BUNDE said again that the provision addresses
sanctions and what they will be. He asked to move on to the
amendments. He stated that Amendment 5 was before the
committee.
COMMISSIONER USERA indicated that Deputy Commissioner Jay
Livey was present also to answer any questions.
CHAIR BUNDE called on Reed Stoops to address Amendment 5.
REP. OLBERG asked if Amendment 5 would amend the CS or the
original bill.
CHAIR BUNDE replied that it was aimed at the CS.
REP. TOOHEY asked if the there should be a motion to adopt
the CS.
CHAIR BUNDE indicated that amendments cannot be adopted if
the CS is not adopted. He assumed the CS was reflective of
the committee's wishes and also indicated that there is
nothing that restricts the committee from reversing their
decisions regarding the CS at a later date.
REP. OLBERG made a motion to adopt the CS for HB 414.
CHAIR BUNDE, hearing no objections, stated that the CS was
so moved. He further stated that Amendment 5 was before the
committee. He asked Reed Stoops to address the amendment.
Number 380
REED STOOPS, Lobbyist, Aetna Life Insurance Company,
addressed Amendment 5 to CSHB 414. He stated that he would
like to address an issue regarding Section 6 of the
legislation that provides for arbitration of insurance
claims. He said Aetna had reviewed the provision and
recommended that a binding arbitration provision would be
more effective. He maintained that there would be no
incentive to accept the results of arbitration and it would
be preferable to allow someone who has a claim the option of
either going into binding arbitration or to go to the
courts. He felt the subject was more of a judicial issue
and said he had no proposed amendments.
Number 403
CHAIR BUNDE reminded the committee that there was discussion
pertaining to voluntary and binding arbitration in a
previous meeting that addressed HB 492 and HB 493. He
maintained that the same concerns that were expressed in
that meeting more than likely were germane to the
arbitration provisions within CSHB 414.
MR. STOOPS continued with his testimony. He indicated that
his concern was with insurance rate regulation, which was in
Sections 7,9, and 11 of the bill. He indicated that Aetna
and other private insurers are addressed in Section 7,
Health Maintenance Organizations (HMO), of which there
currently are none in Alaska, are addressed under Section 9,
and medical hospital service corporations, which refers to
Blue Cross, are treated under Section 11. He said that Blue
Cross has a nonprofit status.
MR. STOOPS said the proposed amendment would delete the
aforementioned sections. He explained that there are two
different types of insurance rates. One rate is for large
groups which is predominately the market for Aetna in the
state of Alaska, and cited Alyeska and Arco as customers.
He explained that in a large group market, the insurance
rate that is set for an individual customer is based on the
experience of the group from the prior year and also a
medical trend component that estimates the cost of medical
inflation for the upcoming year. He asserted that with a
large group the odds are that there will be some
comparability on the experience if the benefit package
remains the same. He then indicated that the medical trend
was based on the Alaska and national market for medical
rates which is subject to some controversy. He further
explained that the administrative costs are the companies'
proposed rate for processing a large number of claims
throughout the year.
MR. STOOPS said if the rate turns out to be too high because
payments made out were less than they were estimated to be,
the customer would benefit from the surplus at the end of
the year. Aetna would return a check to the state plus
interest. He then said if the estimates based on prior
experience fall short, it would be the insurer's loss.
Number 532
REP. TOOHEY asked Mr. Stoops what the chances would be of
the state terminating insurance with Aetna because "you've
under charged."
MR. STOOPS explained that the state is required to bid every
five years and the situation would arise in a year where
they intend to bid. He said Aetna would incur losses if the
state did not accept the bid or if claims spiked up in a
year where there were many catastrophic claims. He then
said, "...for that reason the state decided to change its
policy and there was a bid as a result to that; again the
insurance company would be the loser. If it's a self-
insured product, if it's the state taking the risk, or Arco
or any other large customer, then it's the company or the
client that's taking the risk instead of the insurance
company."
Number 561
REP. TOOHEY asked Mr. Stoops if it is only the
administrative costs that Aetna is concerned about.
MR. STOOPS said administrative costs are the main variable.
REP. TOOHEY said, "So the rate, give or take, is going to
come back and even itself out."
MR. STOOPS agreed, but said it is different for the small
group market because if there are only ten people in a
company there is a greater fluctuation, making it difficult
to rate on experience, especially if one person in the group
has a catastrophic loss. There would not be much of a
difference if there are 5,000 employees. He said those
rates are developed differently and generally an annual fee
is paid. If the estimate is low, the company bears the
entire risk and if it's high, the insurance company keeps
the difference. He further explained that small employers
bid frequently, sometimes every year, and because of the
competitive market, they will take the lowest bid for the
year.
MR. STOOPS stated that Sections 7, 9 and 11 would give power
to the new Alaska Health Commission to regulate rates by
determining whether the rates submitted by the insurance
companies are acceptable. He asserted that a commission
should not have that type of authority. He said if the
legislature thinks that it's in the best interest of the
state to grant that type of authority, he recommended giving
it to Director Walsh or whoever the Director of Insurance is
at the time. He maintained that the commission would not
have the expertise to make those decisions.
MR. STOOPS further indicated that if the state is trying to
reduce health care costs by regulating insurers, the
providers should also be regulated. He explained that more
than 90% of quoted rates are based on "the actual pass
through of costs, medical costs..." He said it is obvious
the bulk of the cost to the system is being generated. He
said the legislation does not propose to regulate doctors'
rates or hospital rates, only insurers rates. He stated
that regulating either the insurance company or the
providers won't work and suggested that if disclosure for
provider rates would be required, the disclosure of insurer
rates should also be required so that consumers will know
what rates are available and how they were put together.
MR. STOOPS said, "The other, I guess, concern about rate
regulation is that where you give that power, and you have
an activist commission or an activist director that takes
full advantage of that authority and essentially uses it to
use the insurance company as a way of driving down doctors'
costs. By saying we're going to cap you at your current
rate, we're not going to allow any increases; therefore,
your only option is to tell the doctors and hospitals that
you're going to get paid less for services, because that's
the only way you can make the system work. You're going to
create a situation where at some point the insurers,
particularly the smaller ones, aren't going to want to do
the business, because you have a cap on them and there's not
any way for them to pass through any increased cost." He
indicated that there was a study done by Millen and Roberts
that looks at states with insurance rate regulation and most
states end up with less insurers after a period of time and
also with a greater number of uninsured people as a result
of less competition.
Number 703
REP. TOOHEY asked how many competitors there are on the
state level for group insurance.
COMMISSIONER USERA said the last time the state went out to
bid there was only one bidder.
REP. TOOHEY said that is dangerous and asked why there was
only one bidder.
COMMISSIONER USERA stated that due to the size of the
account for the state of Alaska, there just are not that
many insurance companies making bids.
REP. TOOHEY asked if Alaskan claims are any higher or if
there is any difference because Alaska is a small state.
She asked what would make the state unattractive to an
insurance company.
MR. STOOPS suggested that perhaps it would be better to ask
his competitors. He said Blue Cross indicated that in one
case they did not bid because the state was not self-insured
and that was an insurance risk they did not want to handle.
He submitted that whether there is competition or not for a
large group, it is not the same situation where there is
lack of competition for a small group. He offered that
there would be many problems if there was no competition in
small groups and suggested that there should be insurance
rate regulations for that specific situation.
Number 769
REP. TOOHEY asked what would happen if Aetna doesn't bid the
next time. She asked if the state would be forced into a
single payer system.
COMMISSIONER USERA said that alternatives would be explored
and suggested that perhaps self-insuring would be an option.
She mentioned that Alaska is a difficult state to insure
because of the eleven different bargaining units and other
complications. She also indicated that there are few
insurers that insure large blocks like the state system and
Aetna has done an excellent job and has been very flexible.
Number 817
REP. TOOHEY stressed how unhealthy she felt it was to have
one insurance company bidding on the state contract.
MR. STOOPS, to bring the discussion back to the context of
rate regulation, asked what would happen if Aetna was the
only bidder and quoted a rate to the commission that was
unacceptable to them. He said in that case the state would
then have no other options except to self-insure. He felt
that rate regulation would not solve that particular problem
for a large group market.
CHAIR BUNDE observed that the free market economy was at
work.
Number 860
MR. STOOPS said if rate regulation authority is granted to
the commission, he suggested that the legislature look to
other states for more mainstream rate regulation, citing
that California's Director of the Division of Insurance
requires the filing of rates, but does not have unlimited
authority to decide that rates are not adequate. He felt
there are simpler ways to accomplish the same thing. He
reiterated that Aetna supported HB 414.
Number 894
CHAIR BUNDE said that everyone must become part of the
solution.
REP. TOOHEY clarified by saying that rates are refigured and
presented to the state each year. She asked, if and when
the country becomes covered with a socialized, universal
insurance, would the rate being offered to the state be
reduced? She said she assumes that rates are so high
because people who do pay are also paying for those who are
irresponsible or too poor to pay for insurance.
MR. STOOPS said that is true in respect to the individual
client who pays for a part of uncompensated care that
hospitals provide. He maintained that hospitals will not
turn a patient away, but they do have to recover the cost
just like any other business. The way hospitals
traditionally recover costs is to charge differential rates
so privately insured people pay a premium to pay for those
who are not insured. It's a hidden subsidy that is in the
system. He felt there would be some other form of
compensation in the form of tax in lieu of the premiums of
those privately insured.
Number 968
(Chair Bunde stated for the record that Rep. Nicholia
arrived at 1:30 and welcomed the participation of Rep.
Willis.)
Number 969
CHAIR BUNDE indicated that Amendment 5 was before the
committee. He asked for testimony from the Department of
Administration (DOA).
COMMISSIONER USERA said the administration knew that the
inclusion of rate regulation within the legislation would be
controversial. She said Alaska is one of few states that
does not use some form of a rate approval process. She
explained that the DOA felt the final decision should reside
with the commission and not the Division of Insurance so
that the final approval would lie with a board who is seeing
it in the context of the entire health care system. She
said the legislation is designed to have a public hearing
process associated with it and also to capture information
associated with the rate review process.
MR. STOOPS further indicated that she personally became
involved with the issue of comprehensive health care because
she represents one of the largest employers in the state and
has been fighting with union organizations for over a year
over health care benefits and their costs. She said the
state has no official mechanism to validate the accuracy of
the information that was being submitted by the insurance
carriers.
REP. TOOHEY asked if the rate is really a concern if the
state is being reimbursed for being overcharged.
COMMISSIONER USERA said, "In the case of the state of
Alaska, we are for all intents and purposes a self-insured
account and then we pay an administrative fee on top of
that. The way it works systemically is that the actuaries
get together and they say... based on your most recent
experience, this is what we think the rate would be to even
things out. And, you're right, the rates are just a way of
providing a level payment." She said there is a reserve
account for the state that has a minimum of $10 million in
it, much like an over-insured account. She said over the
past few years there has been some build up and now "we've
been working down on the account."
REP. TOOHEY said it was her understanding that there is $26
million in that account and that it will supposedly pay for
the proposed legislation.
COMMISSIONER USERA said no. She said premium tax would pay
for the legislation. She said insurance premiums are based
on experience and what benefits have been utilized over the
prior year. She said "hard numbers" are needed to indicate
specifically how much each individual person has used of
their benefits. Currently, the state receives gross
utilization numbers and must take the insurance company's
word that they have exercised the correct level of usage for
those benefits and what the benefits went to pay for. She
said there is no mechanism to verify the accuracy of the
information upon which the rates are based.
REP. TOOHEY asked if there was someone in the administration
that collects and analyzes that type of information.
COMMISSIONER USERA said yes, but the DOA is an interested
party.
REP. TOOHEY said, "You don't do it Outside?"
COMMISSIONER USERA replied that the state has an insurance
consultant, but they also are an interested party.
TAPE 94-46, SIDE B
Number 000
REP. TOOHEY asked how much the mechanism will cost.
COMMISSIONER USERA answered that it would be approximately
$157,000, but the fiscal note was being reevaluated because
of some discrepancies that have recently been pointed out.
She indicated that the rate approval system would be one of
the more expensive pieces of the proposal.
REP. TOOHEY asked if Commissioner Usera would still be as
concerned about rate verification if there were four
insurance companies bidding for the state instead of just
the one.
COMMISSIONER USERA maintained that the state does not feel
that they are being taken advantage.
Number 045
(Chair Bunde indicated that Rep. Vezey joined the meeting at
1:45 p.m.)
COMMISSIONER USERA said the administration believes in the
accuracy of the numbers that Aetna has presented, but when
dealing with union representatives that represent labor and
management on the other side, the issue is one of a
collective bargaining. She explained that one of the top
dollar items associated with the collective bargain
agreements is health care benefits and costs.
Number 099
REP. TOOHEY said, "If you put cost caps, then aren't you
doing the same thing that Medicaid is doing?"
COMMISSIONER USERA stated that in some instances the state
has done that and cited the vision program where there are
provisions that will pay up to a certain amount. She said
the state has been able to negotiate agreements on
prescription drugs and has also explored a number of cost
containment pieces.
Number 149
(Chair Bunde indicated that Rep. Nordlund joined the meeting
and welcomed his expertise.)
CHAIR BUNDE asserted that Commissioner Usera said she was
satisfied with Aetna as an insurer but had not yet said how
rate regulation would save money.
COMMISSIONER USERA said for the record, "Let's not for a
second think that the state employee health plan is
representative of what is going on in the health insurance
industry in the rest of the state, for small employers, and
for individuals. We are an aberration. Now, we may drive
the market because we cover 65,000 employees because it
includes employees and retirees and their dependents." She
said the scope of the legislation goes further than the
current state plan. She then said it was her understanding
that all other lines of insurance in the state are subject
to rate approval. She further stated that HB 414 was not
put together as a compromise bill and if not rate approval
then rate review makes sense, as an objective third party
would review the rates. Commissioner Usera further stated
that the administration feels that health insurance rates
should have the same scrutiny as all other insurance
coverages.
Number 251
CHAIR BUNDE clarified that it was not so much a cost saving
measure but more a matter of checks and balances.
COMMISSIONER USERA said yes and it would require
accountability and would also be a way to collect
information on the health care system.
CHAIR BUNDE asked Commissioner Usera why only health
insurance would be regulated and suggest that perhaps people
be regulated. He asked why he should have to pay for people
who smoke.
COMMISSIONER USERA indicated that the proposal is not rate
setting or regulating. It would verify the information upon
which the rates are based and would approve or disapprove of
the basis.
CHAIR BUNDE clarified that it was more of a rate review
process.
REP. TOOHEY asked what items are included in the figuring of
rates.
COMMISSIONER USERA deferred to Deputy Commission Livey.
Number 325
JAY LIVEY, Deputy Commissioner, Department of Health and
Social Services, answered questions on HB 414. He stated
that the age of the group, the relative mix of males and
females, the size of the group, and many other factors
figure into an insurance rate.
Number 334
MR. STOOPS said that part of the commission's role would be
in determining the solvency and ability of the insurance
companies involved. She said the administration's concern
is the pricing of the premium. There is much more to the
rate process other than cost and utilization.
REP. TOOHEY asked if it would be cheaper to insure with a
nonprofit company.
COMMISSIONER USERA said not necessarily.
CHAIR BUNDE quoted a bumper sticker slogan that said, "If
you enjoy the post office's efficiency, than you'll love
socialized medicine." He asserted that the profit motive
encourages an improvement in the quality of the product
because the better the product the higher the profit. He
asked, if it is nonprofit, what would be the motive to
improve?
REP. TOOHEY agreed with Chair Bunde's perspective.
REP. G. DAVIS indicated that there have been requests to
have rate regulation deleted from the legislation and stated
that health insurance, provider fees, and public health and
prevention are key to the proposal. He said that the
commission should be very knowledgeable in the field of
health insurance and that direction be given through
amendments to public health concerns. He said the effort
and the work of the commission would be reduced by giving
them such specific directions as to how the issue of
insurance will be addressed. Rep. G. Davis submitted that
perhaps rate regulation should be deleted from the proposal
to allow the commission to deal with the issue of insurance
themselves.
Number 463
CHAIR BUNDE directed the committee's attention back to
Amendment 5.
REP. NICHOLIA asked why there was no one from the Division
of Insurance to testify.
CHAIR BUNDE indicated that they were invited.
REP. TOOHEY said that a representative was unable to attend.
REP. OLBERG asked if the amendment had been moved.
CHAIR BUNDE said it had not. He reminded the committee that
the amendment would delete Sections 7, 9 and 11.
REP. OLBERG made a motion to adopt Amendment 5 to narrow the
discussion.
CHAIR BUNDE asked for objections.
REP. B. DAVIS objected to the amendment as written. She
said "...because the amendment that is written deletes it
out and doesn't say what will happen to it. And, the only
way that I would be supportive of it, if it's not in here
for the commission to do it, it would have to be in the
Division of Insurance. Or, I'd be willing to make another
amendment, friendly amendment, to say that it will be done
by the Division of Insurance."
REP. G. DAVIS said the amendment would have to be an
inclusion under the duties of the commission if it is not
already indicated.
COMMISSIONER USERA said she understood Rep. B. Davis to say
that rather than deleting the sections altogether, the final
approval authority would be converted from the commission
over to the Division of Insurance. She said the DOA did not
find the concept to be optimum; however, it would be
acceptable.
REP. B. DAVIS said she would not vote for the amendment if
everything is deleted and the final approval decision is not
addressed.
CHAIR BUNDE indicated that the amendment was before the
committee for discussion. He then asked for further
testimony.
Number 537
JERRY REINWAND, Lobbyist, Blue Cross of Washington & Alaska,
testified on Amendment 5. He stated that the thrust of the
bill is to have a commission review and access health care
reform. The only part of the bill that is a vehicle for
reform is the insurance rate review. He said, "...it ought
to be part of the commission's job to include as part of the
total package and come back... and I don't know how you can
jump to the conclusion that that's needed now, if this is
really a reform bill. If it's the insurance rate reform
issue, put it in a separate bill and let's talk about that,
number one. Number two, the way this is structured, for
what ever it's worth, is our view, the way it's structured
in the bill, we got to answer to two masters. We have a
commission that has some or all the authority and a division
that has some of the authority. And finally we really do
think that having rate approval or the semantics that the
commissioner mentioned is the same thing as saying yes or no
to rates. So, we must look, but right now the way it is
it's the worst of all worlds. We have two masters instead
of one. We still suggest that if the issue before the
committee is health care reform, then insurance, and there
are lots of other insurance related issues, not just the
rates, should be part of the commission's task to look at it
and report back to the legislature."
Number 585
CHAIR BUNDE asked for further testimony.
Number 587
BONNIE NELSON, Representative, Alaska Public Interest
Research Group (AKPIRG), testified via teleconference on
Amendment 5 for CSHB 414. She indicated that the
Legislative Information Office (LIO) had not yet received
copies of the CS or the amendments. She stated that rate
regulation should be included in the legislation and that
AKPIRG preferred the language as written in the original
bill. She indicated that there should be a public process
within the Division of Insurance and suggested that perhaps
the commission could take an active part in rate regulation.
CHAIR BUNDE stated that Amendment 5 refers to language that
is the same in the original bill and the CS. He then
indicated that his intention was not to move the bill out of
committee.
REP. G. DAVIS suggested that the administration has decided
from the plans that have come forth to date that the bill
and its inclusions (Sections 7, 9 and 11) are workable and
should be included in statute now.
DEPUTY COMMISSIONER LIVEY indicated that the original Health
Resources Access Task Force recommended that the Division of
Insurance should be given rate approval so that health
insurance is treated like all other lines of insurance in
the state. He indicated that the concept has been around
for quite some time.
CHAIR BUNDE said if the amendment does not achieve its
purpose, there are other options available and cited a rate
review process that is used in California.
Number 703
GORDAN EVANS, Lobbyist, Health Insurance Association of
America, testified on Amendment 5. He stated that the
Director of Insurance testified in the Senate that there are
four levels of rate approval, no regulation which is what
Alaska has, use and file, file and use (there's a difference
in those terminologies), and rate approval. He indicated
that the most stringent level is rate approval. He asserted
that the proposal would take Alaska from the least amount of
coverage to the most stringent. He said of the companies
that he works with, most would not object to some
regulation, perhaps file and use, and offered to submit
language to specify that in the bill. He further indicated
that rate approval has been attempted but has continually
been opposed.
Number 750
CHAIR BUNDE agreed with Mr. Evans that the state is at zero
and the legislation would bring it to ten as far as the
degree of regulation on rates. He said the committee can
decide if there is some step that would allow for a happy
medium and asked that the committee be furnished with more
information regarding rate review and the process that
California uses.
REP. TOOHEY suggested that decisions be postponed until the
committee has had time to study the CS, the submitted
amendments, and to talk to other people about the
implications of any changes. She cautioned that the
committee not act hastily.
CHAIR BUNDE reiterated that Amendment 5 was before the
committee, which would delete Sections 7, 9 and 11 and would
delete any type of regulation of health insurance within the
bill. There being no further testimony, Chair Bunde closed
public testimony and asked the pleasure of the committee.
REP. B. DAVIS associated herself with Rep. Toohey and asked
that all decisions be delayed until more could be learned
about the CS and the proposed amendments.
REP. VEZEY made a motion to adopt Amendment 5.
CHAIR BUNDE indicated that the amendment had already been
moved.
REP. TOOHEY objected and asked that the amendment be tabled
until the next meeting.
Number 803
CHAIR BUNDE called for the vote. Representatives G. Davis,
Vezey and Olberg voted Yea; and Representatives Toohey,
Bunde, Kott, B. Davis and Nicholia voted Nay. Chair Bunde
indicated that Amendment 5 failed. He then indicated that
it was his intent to further discuss and perhaps address
future potential amendments regarding the issue of rate
regulation/review.
COMMISSIONER USERA said she would ensure that someone from
the Division of Insurance would be present for those
discussions.
Number 833
REP. OLBERG asked Commissioner Usera the meaning of the
phrase "Upon review and recommendation by the Division of
Insurance, the commission can approve changes to health
insurance premiums."
COMMISSIONER USERA replied that the final authority for the
approval would lie with the commission rather than the
Director of Insurance.
REP. OLBERG asked if the commission was whom she was
purporting to be a disinterested third party.
COMMISSIONER USERA said yes, the Division of Insurance would
do the actuarial and investigatory work, and the commission
would be the final decision maker.
CHAIR BUNDE asked the committee to number the amendment
before them as Amendment 6, as submitted by Rep. Kott.
Number 859
REP. KOTT made a motion to adopt Amendment 6 and also
objected for purposes of discussion.
CHAIR BUNDE asked Rep. Kott to speak to his amendment.
REP. KOTT referred to page 14, line 9, of the CS and said
the amendment would ensure that the commission is not
dominated by certain occupational groups. He further
indicated that the amendment offers three combinations that
would be afforded as options. He said one member would be a
provider and the remaining two would neither be providers or
employed by an insurance company. The second option would
allow for one member to be a member of an insurance company
and the two remaining members would neither be employed by
an insurance company or a provider. He indicated that the
third option would be that none of the members would be
members of an insurance company or the health care field.
He maintained that the amendment would allow for balance and
would ensure that one group could not be dominate.
Number 888
REP. TOOHEY asked if past health care providers could be on
the commission; i.e., retired doctor, retired nurse, or a
retired occupational therapist.
REP. KOTT said that by law a licensed doctor who is not
practicing would satisfy the requirements within the
amendment. There could be a current practicing physician
and one retired physician on the commission.
REP. TOOHEY asked if the retired doctor or nurse must have
an active license.
REP. KOTT said yes.
Number 922
CHAIR BUNDE suggested that the word current be included in
the language to ensure that those members would not be
current health providers or currently employed by health
insurance companies.
TAPE 94-47, SIDE A
Number 000
COMMISSIONER USERA maintained that those people appointed to
the commission will be full time state employees that will
not be employed elsewhere. She clarified that the amendment
addresses specifically the time at which the person is
appointed that they cannot be actively providing health care
and\or employed by an insurance company. She also indicated
that the commission requires legislative confirmation and
suggested that the legislature would make the ultimate
decision of who is on the commission.
Number 079
CHAIR BUNDE explained that there could be a person who quit
their job yesterday and would not be currently employed. He
then suggested that the legislative confirmation process
would perhaps deter those types of "games."
REP. KOTT said he agreed with the confirmation process but
pointed out that the confirmation process generally occurs
quite late in the session and that there would be very
little time for a new nominee to be appointed and have a
hearing. He said a situation would be created where the
appointee would be nonconfirmed for perhaps as long as eight
months.
Number 118
REP. VEZEY said that the amendment would eliminate all the
people who would have a background to understand the issue.
He assumed that if the commission is a totally neutral
board, it would result in a "totally neutral, bland result."
He felt the legislative confirmation process was sufficient.
REP. OLBERG stated that he felt the amendment had merit and
suggested a friendly amendment that would exclude lawyers
from being on the commission.
REP. KOTT quipped that he would be most amenable to Rep.
Olberg's muse.
CHAIR BUNDE indicated that there was an amendment to the
amendment before the committee if it was not meant in jest.
REP. OLBERG said, "Let's vote it up or down. That would add
to Rep. Kott's Amendment 6 that in appointing members to the
commission the Governor shall ensure that a majority of the
members are not health care providers or employed by a
health insurance company, nor shall any member of the
commission be an attorney."
REP. TOOHEY quipped that she wished to add legislators to
the list.
REP. OLBERG indicated that he would consider Rep. Toohey's
suggestion a friendly amendment to the amendment.
CHAIR BUNDE indicated that before the committee was an
amendment to Amendment 6 that would include the words
attorney or legislator. He asked for further discussion or
comments.
Number 222
JACK PHELPS, Legislative Aide to Rep. Pete Kott, said that
he was unsure if legislators are already excluded by law to
be members of any commissions.
CHAIR BUNDE said, "Article 5 of the constitution says you
shall not have two positions of profit with the state...,"
and it would preclude a legislator from being appointed.
DEPUTY COMMISSIONER LIVEY recommended that the Chair may
want to discuss with an attorney as to whether or not an
occupational group can be excluded for no particular public
policy reason.
Number 242
CHAIR BUNDE, hearing no further discussion on the amendment
to the amendment, called for the vote to include the
categories of attorneys or legislators. Representatives
Kott and Olberg voted Yea; and Representatives Bunde, G.
Davis, Vezey, Nicholia and Toohey voted Nay. The amendment
to the amendment failed.
CHAIR BUNDE stated that Amendment 6 was before the
committee. Hearing no further discussion, he called for the
vote. Representatives Kott and Olberg voted Yea; and
Representatives G. Davis, Vezey, Nicholia, Toohey and Bunde
voted Nay. Chair Bunde announced that Amendment 6 failed.
CHAIR BUNDE then asked Rep. Kott to address his Amendment 7.
Number 328
REP. KOTT said the amendment would allow for only one health
care provider and one member from a health insurance company
to serve on the commission. He said the third member would
be a "user." He asserted that in many established
commissions the membership is specified by similar
guidelines.
COMMISSIONER USERA said, "As I read this, it's a de facto
designated seat or limiting seats. I presume if you want
this at the same time that you can't have more than one
provider and more than one insurance person serving on the
commission at the same time." She said the language would
need to be clarified. She then indicated that the amendment
was better than the others and she would not have an
objection to it as long as the words "at the same time" are
included.
Number 427
REP. KOTT indicated that the legislative attorney that
drafted the amendment said the language addresses
Commissioner Usera's concern.
CHAIR BUNDE said it was his understanding that the amendment
does not require any of the members to be health care
providers or insurance people and suggested that they all
could be "civilians."
REP. TOOHEY referred to the Alaska Public Utilities
Corporation (APUC) and asked if there are other regulations
similar to the amendment in statute pertaining to other
commissions.
COMMISSIONER USERA explained that other boards have
designated seats; i.e., the APUC which requires that there
be an engineer, an attorney, and a representative of
consumers. She said, "By naming one or the other, we felt
that that was at the exclusion of people who have a broader
background." She asserted that the best people to serve on
the commission would be those who are knowledgeable about
the overall system. Commissioner Usera said she understood
the concept that Rep. Kott was advocating but again reminded
the committee that the appointees would be confirmed by the
legislature.
Number 495
CHAIR BUNDE suggested that the concern is more than that of
the commission being dominated by one interest or another or
even lack of ethics and said it would encourage public
confidence. He then asked if there was further public
testimony. There being none, Chair Bunde closed public
testimony and asked the pleasure of the committee regarding
Amendment 7.
REP. KOTT made a motion to adopt Amendment 7.
REP. TOOHEY objected. She then asked if an employee of a
health insurance company would have to quit his/her job.
CHAIR BUNDE interjected and said once the person becomes a
member of the commission, that will be their only job.
REP. TOOHEY asked if there would be a time frame for them to
quit and suggested that the amendment is moot as they would
no longer be employed.
REP. KOTT indicated that the amendment would ensure that
there would not be two members of the medical community or
the insurance industry on the commission. He said one of
each could be an option.
Number 572
REP. OLBERG supposed that it would be theoretically possible
for a person to hold both jobs until they are confirmed and
cited that someone could be on the commission and be on
retainer from an insurance company.
CHAIR BUNDE said Rep. Olberg made an interesting point. He
asked for further discussion. He said, "For the record, I
want it understood that that is concurrently. That doesn't
say one serves once in the commission's life and then never
again do we have a health... Laura Lee, would you call the
roll?" Representatives Kott, Olberg, Toohey and Bunde voted
Yea; and Representatives Vezey, Nicholia and G. Davis voted
Nay. Chair Bunde declared that Amendment 7 was so moved.
He then asked for Rep. Kott's last amendment.
Number 621
REP. KOTT made a motion to adopt Amendment 8. He then
referred to page 13, line 20.
CHAIR BUNDE indicated that the amendment was being
distributed to the committee and asked the members to
renumber it accordingly.
REP. KOTT explained that the amendment requires that all
persons with preexisting conditions be addressed in whatever
proposal the commission brings forth.
COMMISSIONER USERA stated that she felt the amendment would
be a fine addition. She felt the universal coverage should
be portable and should cover those with preexisting
conditions.
REP. TOOHEY said, "I would like to see it reworded somewhat
to say including a benefit package that contains preexisting
conditions."
Number 674
REP. KOTT said he viewed Rep. Toohey's recommendation as a
friendly amendment.
CHAIR BUNDE asked Rep. Toohey to suggest the intended
language.
REP. TOOHEY said, "...defining a range of potential benefit
packages for universal health care coverage for residents
including a package that does not omit preexisting
conditions for residents of the state of Alaska."
CHAIR BUNDE stated that the provision says that a benefit
may not limit the covered health services on the basis of
preexisting conditions.
REP. TOOHEY said it was her preference to add the word
"including."
CHAIR BUNDE stated that Rep. Toohey wanted to use more
proactive language by adding the words "must include."
REP. TOOHEY said, "Including a benefit package would be
fine..."
Number 714
COMMISSIONER USERA suggested that the phrase read: "the
benefit package must include coverage for preexisting
conditions."
CHAIR BUNDE reiterated that the verbiage would read: "a
benefit package must include coverage for preexisting
conditions."
REP. OLBERG said, "Does it say that instead of what the
amendment says? Have we deleted this...?"
CHAIR BUNDE explained that the committee is attempting to
amend the amendment and felt that it was becoming too
substantial to be a friendly amendment. He said it was his
preference to have the exact amendment written out to
clarify what is before the committee.
REP. NICHOLIA asked Rep. Kott if the proposed language would
be a friendly amendment.
REP. KOTT reminded the committee that the original language
would not limit the coverage of health care insurance on the
basis of preexisting conditions.
CHAIR BUNDE clarified that the intent of the proposed
friendly amendment would make Amendment 8 more proactive by
saying "it will include..." He then asked if Rep. Kott
would rather have the amendment written up by legal
services.
COMMISSIONER USERA, for clarification said, "That as this
commission is designing benefit packages under this
universal coverage, that your intent is to make sure that
each of those has a component that includes preexisting
conditions. So that we're not going to say O.K. we end up
with this universal benefit package that the reason we're
keeping the price down is because we've excluded preexisting
conditions." She said the intent could be achieved with
language that says each benefit package must include
coverage for preexisting conditions.
REP. TOOHEY agreed.
Number 799
CHAIR BUNDE asked if the committee understood the amendment.
REP. KOTT said it was his understanding that the friendly
amendment would delete the words "may not limit" and insert
the words "must include." He felt that would be the easiest
way to address the concern. He further stated that he had
no objection to the friendly amendment.
CHAIR BUNDE indicated that the amendment to Amendment 8 was
before the committee. He asked for further discussion.
There being none, he then asked the pleasure of the
committee.
REP. OLBERG objected.
Number 819
CHAIR BUNDE called for the vote. Representatives Kott,
Nicholia, Toohey, Bunde and G. Davis voted Yea; and
Representative Olberg voted Nay. Chair Bunde indicated that
Amendment 8 was so moved. He then asked if there were any
more amendments to be addressed or for further amendments.
Seeing no further business before the committee, CHAIR BUNDE
ADJOURNED the meeting at 2:50 p.m.
| Document Name | Date/Time | Subjects |
|---|