Legislature(1999 - 2000)
02/22/2000 03:36 PM House HES
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* first hearing in first committee of referral
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HB 298 - REQUIRE HEALTH INSURANCE COVERAGE FOR DIABETES Number 1241 CHAIRMAN DYSON announced the next order of business as House Bill No. 298, "An Act requiring that health care insurers provide coverage for treatment of diabetes." Number 1250 REPRESENTATIVE LISA MURKOWSKI, Alaska State Legislature, came forward to present HB 298 as the sponsor. She informed the committee that diabetes affects over 30,000 Alaskans. She has willingly brought forward this legislation that would require insurance carriers to provide for diabetes coverage for diabetes equipment which would include things such as pumps and meters, supplies such as test strips, medication and insulin, and training and education. It has become apparent that the training and education aspect of diabetes is the key. Diabetes is a disease without a cure, but it can be controlled and maintained through proper education by training people how to deal with their disease on a daily basis. REPRESENTATIVE MURKOWSKI noted the controversy surrounding this bill is that insurance is being mandated. If the disease is treated and dealt with on a daily basis, the long-term insurance costs will be reduced by education and preventive maintenance. Similar legislation has been passed in 37 states; 35 of those have passed legislation that would require the coverage as opposed to just offering the coverage. Studies were done in those states looking at whether or not the cost of insurance is increasing or in the long run reducing health care costs; those studies are coming back very heartening and supporting the position that the American Diabetes Association has taken. Number 1462 REPRESENTATIVE GREEN commented that he is reluctant to force an industry to do something that the industry should see is to their benefit anyway. REPRESENTATIVE MURKOWSKI replied she doesn't disagree with him. However, many insurance companies have chosen not to follow the good advice, and sometimes they just need to be encouraged a little bit more. Many of the major insurance carriers do provide for the education, equipment and supplies. This coverage is addressed under the state's insurance program, but about 30 percent of the insurers in the state do not provide for this kind of coverage. There is discussion at the federal level that would require the coverage as well. She admitted she sponsored this bill with trepidation because it goes against the grain of doing the right thing because it is the right thing, rather than having the government direct people to do it; however, she was moved by the statistics that maybe the insurance carriers need just a bit of a kick. Number 1631 REPRESENTATIVE BRICE made a motion to adopt the proposed committee substitute (CS) for HB 298, version 1-LS1218\D, Ford, 2/17/00, as a work draft. There being no objection, that proposed CS was before the committee. REPRESENTATIVE BRICE commented that he is also uncomfortable about a mandate, but sometimes the insurance company just needs a nudge. He asked Representative Murkowski what kind of general ailments and sicknesses are associated with diabetes when it is not addressed. Number 1740 REPRESENTATIVE MURKOWSKI answered that it is blindness, renal failure, amputation and all the bad and ugly things people don't want to happen to themselves or their loved ones. Number 1788 GLORIA TOKAR testified via teleconference from Anchorage. She told the committee that she has her diabetes covered, but there are many people with diabetes who are not as fortunate to have insurance coverage. There are people who don't have the professional help she enjoys through her insurance carrier. She doesn't want people to die for a lack of education. The help is available in the community, but people need to be able to afford it. She shared experiences from her personal life. She is a Type 2 diabetic. She does not have to be on insulin but does have to monitor her glucose three times a day, and that gets to be costly. Number 1924 GORDON EVANS, Lobbyist, Health Insurance Association of America (HIAA), came forward to testify. He read the following testimony: [Health Insurance Association of America] HIAA is a national trade association of commercial health insurance companies which provide health insurance for approximately 55 million Americans. I would like to preface my remarks on House Bill 298 by saying that when Representative Brice introduced a similar bill, HB 420, two years ago, I told him my client could support the bill so long as it called for a mandated offering and did not mandate that the benefit had to be included in all health insurance policies issued in the state. [House Bill] HB 420 at that time did indeed call for a mandated offering -- that is, all insurers at least had to offer policyholders the opportunity to purchase coverage for the particular need. Unfortunately, HB 420 was not considered. As I have noted on previous occasions in testimony before this committee, HIAA favors the preservation of a system that allows the prospective purchaser of health insurance free choice of which risks he or she wishes to cover from among the various coverages offered by competing insurance carriers. [Health Insurance Association of America] HIAA also believes that the choice of how the policyholder spends funds available for health insurance should be free of government decree, and we continue to adamantly oppose the proliferation of benefits through government mandates. Anytime the government requires or mandates certain coverage, that mandate becomes one of the rating factors which insurance companies use in making their underwriting decisions. Mandated benefits can impose significant burdens on health insurance carriers and drive up premium costs for consumers. Studies have shown that mandated benefits discourage small employers from offering health benefits to their employees. The result is a large and more costly uninsured population. One recent study indicates that with each 1 percent increase in premiums, small business sponsorship of health insurance drops by 2.6 percent. People can find studies to support whatever position they advocate. Mandates also affect the cost of, and therefore, the number of individual health insurance policies as well as group policies. Finally, on that topic, just for your information, a 1999 study ... showed that nationwide the number of state mandates has increased dramatically, almost 25- fold, during the last two decades, making health insurance disproportionately more expensive for small companies and causing as many as one in four Americans now to be uninsured. In Alaska, we currently have, to my knowledge, seven mandated benefits ... mental health, 48-hour hospitalization after birth, nurse midwife, alcohol/drug abuse, mammograms, PKU [phenylketonuria], and prostate and cervical cancer detection. We also have two mandated offerings ... acupuncture and dental, vision and hearing. Number 2096 MR. EVANS continued by saying his client would like to support this legislation, but unfortunately HIAA can't because of the mandate. The mandate would not affect all self-insured employers or others that are covered by ERISA [Employee Retirement and Income Security Act]. In Alaska that could include Safeway/Carrs, BP {British Petroleum] Amoco, the Municipality of Anchorage and other municipalities around the state. The state has covered most of the mandates in its policy. It is hard to know how many of the 30,000 Alaskans with diabetes are under ERISA regulations. The cost of dialysis is one of the most expensive procedures, so the savings of $917 dollars pointed out in the sponsor statement, while it affects those that do have the coverage, can raise the premiums considerably for those that don't have it. MR. EVANS noted one of the good things about this bill is that it does provide that the diabetes treatment can only be covered if it is recommended by a health care provider. Because of the status of the proposed CS as a mandated coverage, his client must oppose the bill. Number 2188 REPRESENTATIVE COGHILL asked Mr. Evans why don't the insurance companies already offer coverage at a premium rate if it will reduce costs. MR. EVANS answered that he assumed that the insurance companies have studies that show there isn't a reduction in costs. REPRESENTATIVE COGHILL commented he is reluctant on mandates as well. He asked Mr. Evans if page 1, line 11 would give enough room to adjust the deductible and co-pay to make it compatible to those who might have various needs. He asked if this bill would give the industry enough room to say under certain conditions a co-pay is better, and the company can decide what the scale is even though it is mandated insurance. MR. EVANS said he would have to ask his client about that. It is his understanding that the deductible and co-pay apply to the entire policy and not to a specific coverage. REPRESENTATIVE COGHILL mentioned he would like to see some of the competing studies. TAPE 00-19, SIDE B Number 2344 REPRESENTATIVE GREEN asked Mr. Evans if there are insurance companies operating in the state now that cover this; has he checked the competition to see how much higher the premiums are for the coverage. Representative Green wondered if it is a minor or fairly significant difference. MR. EVANS indicated he had not checked with other companies. There are not many companies that offer health insurance in Alaska as compared to other states. At one time there were 10-12 other companies that provided health insurance in Alaska. He noted that Blue Cross is not a member of HIAA, so he cannot speak for them, and most individual policies in the state are issued by Blue Cross. He is not sure there is any way to find out because the companies do not report to HIAA. The companies do report their charges to the Division of Insurance. Alaska is lucky because Wisconsin has 47 mandates, and the premiums there are out of sight; Alaska is on the low end right now. REPRESENTATIVE GREEN said it would be interesting to know if by mandating this, they are creating either a general increase to all those insured by companies who don't presently offer this service, or if those who are offering it now are doing so at an elevated premium. MR. EVANS agreed to try to find out that information. Number 2234 REPRESENTATIVE BRICE asked Mr. Evans how many companies are selling policies in Wisconsin. It sounds like there shouldn't be but one or two if the idea is the more mandates put in, the more it drives people out. MR. EVANS answered he didn't know how many. He has seen a list of what mandates various states do have. The membership of HIAA consists of all these companies. REPRESENTATIVE BRICE asked Mr. Evans what was the difference in the mandates he could support and HB 298. Number 2192 MR. EVANS said he couldn't give an answer for what the official line would be, but his personal feeling is that those mandates were so popular and so heavily wanted by the public that the public was willing to pay. CHAIRMAN DYSON asked Mr. Evans if the industry didn't oppose the mandate of cervical cancer and prostate cancer, why didn't the insurance companies get ahead of the curve and start offering it. MR. EVANS said he couldn't answer that question. CHAIRMAN DYSON asked Mr. Evans if he heard correctly that the Municipality of Anchorage insurance carrier doesn't cover diabetes. MR. EVANS clarified that the Municipality of Anchorage and other municipalities are self-insured so they do not necessarily have to follow mandates. They can, but they don't have to. He doesn't know whether or not the Municipality of Anchorage insurance carrier covers diabetes. Number 2108 CHAIRMAN DYSON told Mr. Evans his client needs to answer the question and refute the presupposition that good education, well- equipped and well-trained self-care is a financial bargain for the insurance companies, the society and the patient. Those people who are well trained and educated to take care of themselves can continue to work and avoid costly disabilities and hospitalizations and care. Money is saved for the individuals, the carrier and society. MR. EVANS said he would contact his client and tell them the committee's concern and see what HIAA can do. REPRESENTATIVE COGHILL noted that the pool of people in ERISA should be known. Number 2022 MR. EVANS indicated that someone from the Division of Insurance could best speak to that. REPRESENTATIVE COGHILL asked if there were more than two types of diabetes. Number 1954 MARY LOU KELSEY came forward to testify. She and her daughter, Lauren Bell, came for "show and tell" of what people with diabetes have to deal with on a daily basis. She explained there are two types of diabetes. Childhood diabetes, Type 1, is insulin dependent where the person must either inject shots or use an insulin pump on a daily basis because the pancreas no longer functions. Characteristically, Type 1 is a juvenile disease through life, although a few adults get Type 1. Type 2 is insulin-resistance or adult onset diabetes. There can be a combination of those two types. Number 1893 LAUREN BELL came forward to testify. She is 11 years old and has had Type 1 diabetes for about three years. She has been on an insulin pump for about two years. She showed the committee her supplies that she uses about six times per day. She said it would be very helpful if insurance would cover those products. Those products are the only way to keep her blood sugar under control. MS. KELSEY had Lauren show the committee her insulin pump which provides continuous infusion. She indicated that their family has insurance coverage, but it is difficult to find out answers about how much premiums cost when shopping for insurance. All the data needs to be submitted through the employer, or personally, to find out anything about premium numbers. She fears for her daughter coming of age to buy her own insurance and not having insurance available that covers diabetes. They have had difficulty under their family coverage: the insurance company eliminated the prescription coverage and arbitrarily decided it cost too much and, that ended the coverage of supplies and medicines. Their family can afford the $300-$500 per month for supplies and medicines, but Ms. Kelsey wants to focus on diabetes being a self-managed disease. If people can pay for supplies and want to buy private insurance that has that option available, it makes sense to standardize coverage. MS. KELSEY referred to Representative Coghill's question about why diabetes wouldn't be covered. It seems like the focus has changed from coverage for hospitalization and inpatient care. Now they would like it to focus on outpatient self-care because that is what people with diabetes do on a daily basis. REPRESENTATIVE COGHILL asked if it would be helpful to Ms. Kelsey to understand there was a co-pay provision on a particular item for diabetes, not on the whole policy. He asked that so the insurance companies get the message that that kind of information is better. Number 1729 MS. KELSEY agreed that would be helpful. She pointed out there is still language in the bill that says "subject to standard policy provisions," so the insurance company could still say to her that her policy does not cover insulin, but it will cover the test strips. If that were outlined in the policy she bought, it would allow differences in policies in terms of the standard policy provision. REPRESENTATIVE COGHILL asked Ms. Kelsey if her insurance carrier gives her any description of what equipment, supplies, self- management or training would be covered. He asked her how she deals with her insurance company on those issues now. MS. KELSEY said she basically submits her claims and waits to see what is accepted and what isn't. When they got the insulin pump, they were denied twice and had to go back to the insurance company and inform the company about a study out of England that shows people who have good control will not have complications of pregnancy, blindness and kidney failure. Ms. Kelsey had to write the letter twice to say "please help pay for this insulin pump now." The difficulty seems to be getting the insurance company to pay now instead of paying for more expensive care later. REPRESENTATIVE COGHILL asked Ms. Kelsey if education is something a health care provider can say is necessary. MS. KELSEY answered yes. MICHELLE CASSANO, Alaska Executive Director, American Diabetes Association (ADA), came forward to testify. She is a nurse and has been with ADA since 1984. She pointed out that many other states have gone with this coverage, and the majority are mandates. In regard to the insurance industry, it is not being said that the premiums might not go up. The Wisconsin study, mentioned earlier by Mr. Evans, says it goes up .1 percent. Another study was done three years after the mandate, and it says of all the insurance money spent in Wisconsin over those three years, the money spent for diabetes was less than 1 percent. As the states have mandated coverage for diabetes, she has gone back and talked to numerous colleagues to ask if their legislators or their insurance industry were asking for those studies. The savings on the back end are so dramatic that Maine is just now doing a study. MS. CASSANO pointed out that a lot of the mandates have come forth with technology. She would like to say that diabetes is a well understood disease, but it is very serious; untreated diabetes ultimately ends in death. MS. CASSANO noted that in her 16 years, the number one advocacy issue with her constituents has been insurance, even for well- developed procedures. In the fall the federal government picks a carrier, and January 1 the carriers that covered certain items for federal employees start denying those claims. The insurance companies just need to be nudged to get back into the coverage mode. Insulin, except for one very new kind, is a non- prescription item which companies don't cover. Insulin is life- sustaining; there is no issue. Medicare and Medicaid have increased what they cover in diabetes care over the past few years. Medicare now covers testing supplies, meters, education and has just added pumps. The public sector people are being taken care of for diabetes. There is just a wedge of private sector people who aren't getting consistent care. MS. CASSANO indicated that the American Diabetes Association has generally been accepted as leaders in providing standards of care. They have a huge research division, second only to the National Institute of Health. She also noted that those standards are a very integral part of the state diabetes plan. This legislation is necessary to protect a large portion of people. The insurance companies have not kept up with the technology. Self-management are very key words in this bill; that is what keeps people working and producing. She asked the committee to support this bill. Number 1357 JANEL WRIGHT, Attorney, Disability Law Center of Alaska, came forward to testify. She has had diabetes for 25 years. She passed out a quiz to committee members which tells if they are at risk of having diabetes. She reiterated that there are over 30,000 Alaskans diagnosed with diabetes, but that number does not include the people who have not been diagnosed. One in seven health care dollars in the United States are spent on treatment of diabetes and its complications. The importance of this bill is it will reduce the complications for people who have been diagnosed with diabetes because diabetics will be able to manage their own care. MS. WRIGHT told the committee that before she moved to Alaska, her insurance policy did not cover a blood test machine or test strips or syringes; her parents basically funded her care. She didn't use a blood machine or the test strips because the cost for her family was prohibitive. Her blood sugar was so out of control when she went to college, she almost got sent home. She begged her parents to let her stay to get her education. She went to law school but couldn't see the blackboard. She had no idea her eyes were failing because of her diabetes; she had never been educated and didn't have a way to monitor her blood sugar. She moved to Alaska and her life changed. She got health insurance and got a blood test machine, test strips, an insulin pump and attended diabetes education. MS. WRIGHT reported when she had her first hemoglobin A1C (HA1C), which is the test that shows control over the previous three months, her HA1C was 8.5, which meant her average blood sugar was probably over 250. That was in February 1988. She just got a report from her doctor on February 8, 2000, and her HA1C was 5.4 which means her blood sugar is on the average, 94. Good control is between 90 and 120. MS. WRIGHT spoke not only from her personal perspective, but as a staff attorney with the Disability Law Center of Alaska. Through her job she meets a lot of people with diabetes. Her office assists people with disabilities to get benefits and entitlements if they have been denied. A lot of people with diabetes have been denied social security, and they are no longer able to work because their diabetes is so out of control, and they can't afford to take care of themselves. MS. WRIGHT sees this bill as something that will enable not only those with diabetes who can't afford to maintain their control, but it will also enable others to gain control and go back to work. Number 1156 MS. WRIGHT referred to the concern about forcing insurance companies to do something that they should see the value in doing anyway. Unfortunately the insurance companies are not seeing the value; they need that extra push. This bill should be passed to help the constituents with diabetes. It is impossible for anyone to control diabetes without access to blood test machines, syringes, insulin and test strips. Once diabetes is under control, there is a significant reduction in the cost of health care utilization and fewer individuals will be in need of public benefits. MS. WRIGHT referred to the concern about increased insurance premiums. The studies that have been done have shown that there is no appreciable impact on the cost of health insurance and it has only gone up about .01 percent. New Mexico and Maine reported no increase in health insurance premiums. After the legislation was passed in Maine, there were 32 percent fewer hospitalizations due to complications from diabetes. In Maryland there were 50 percent fewer visits to the emergency room, and in Rhode Island there were 60 percent fewer visits to the emergency room. That shows that the cost of insurance is going to decrease once diabetes is under control. Ms. Wright noted that the American Diabetes Association has a goal for all 50 states to pass legislation such as this. Number 1007 DONALD NOVATNEY came forward to testify. He spent ten years in the Army but was kicked out when he was diagnosed with diabetes. He has had diabetes for 22 years and works as a registered nurse. He has not had the complications because he had good control. Ten percent of Alaska Natives, 10 percent of the Hispanic population, and 10 percent of Blacks will have diabetes in their lifetime. For the 80 percent of the people with Type 2 diabetes in their lifetime, 58 percent of them will need insulin. Many people are not doing the minimum amount to prevent complications. The standards of practice need to be checked. He would like to see everyone have the opportunity to have insurance that is reimbursed. Number 0838 REPRESENTATIVE COGHILL asked Mr. Novatney if his insurance covers the diabetes education and training. MR. NOVATNEY answered it was covered for the first time. As time goes on, things have improved and the insurance won't pay for a second time for his self-management classes. REPRESENTATIVE COGHILL asked if there was some way Mr. Novatney can suggest to the insurance company that under a mandate it is going to be paying a substantial amount and wondered if this would be heading in the direction of creating a roadblock. Number 0763 MR. NOVATNEY said he would hope that the insurance companies would provide the same coverage, 80 percent, for his medicines like other prescriptions. There shouldn't be a distinction. It should be fair across the board for everyone. The committee took an at-ease from 5:03 p.m. to 5:05 p.m. Number 0716 REPRESENTATIVE BRICE made a motion to move CSHB 298, version 1- LS1218\D, Ford, 2/17/00, out of committee with individual recommendations. Number 0702 REPRESENTATIVE COGHILL objected. CHAIRMAN DYSON distributed the written testimony from Rick Mystrom to the committee. Mr. Mystrom wasn't able to call in to testify. Number 0661 REPRESENTATIVE WHITAKER wished to make a statement: I too am a Republican and a proud Republican. I don't particularly like the notion of mandates, but that seems to be the hinge point that we're concerned with. We live under a lot of mandates. Many of us choose to live under the mandates, or try to anyway, of the Ten Commandments, and we do that by our choice, but it is nonetheless a mandate. There's another pesky little book full of mandates that occasionally we have to deal with. This is called the Constitution of the State of Alaska, Article VII, Section 4, Public Health. "The legislature shall provide for the promotion and protection of public health." That's easy; that's a mandate. We swore an oath to uphold that mandate, and I'm going to do that. I'm going to vote in favor of this. Number 0580 A roll call vote was taken. Representatives Brice, Kemplen, Whitaker, Green, Morgan and Dyson voted in favor of moving the bill. Representative Coghill voted against it. Therefore, CSHB 298(HES) moved from the House Health, Education and Social Services Committee by a vote of 6-1.
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