Legislature(1999 - 2000)
03/17/2000 03:25 PM House L&C
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 298-REQUIRE HEALTH INS COVERAGE FOR DIABETES CHAIRMAN ROKEBERG announced the first order of business would be HOUSE BILL NO. 298, "An Act requiring that health care insurers provide coverage for treatment of diabetes." [Before the committee was CSHB 298(HES)]. Number 0143 REPRESENTATIVE LISA MURKOWSKI came forward to testify as the sponsor of HB 298. She stated: Thanks for hearing HB 298. It is an Act that will require health care insurers to provide coverage for treatment of diabetes and this includes the educational component, diabetes equipment, supplies and, as I said, training and education. The issue of diabetes in the state of Alaska is one of some consequence. There are over 30,000 Alaskans that have diabetes. This is one of those just practical, makes-good-sense issues that if you control and work with the disease, through education and through proper maintenance, basically you can stave off the ugly side-effects, the bad things that can happen that are associated with diabetes such as liver disease, such as blindness, amputation. Those are the real, very costly, very difficult things that are associated with diabetes. And, as I say, with diabetes, if one is able to, [you] can get yourself into a maintenance situation with it, you can lead a productive, relatively healthy lifestyle without some of the major, major complications that are often times associated with it. When this bill was presented in the HESS [Health, Education and Social Services] Committee, we just dealt with the mandate issue head on, and I'm sure that because this is the Labor and Commerce Committee, that's going to be the issue here. Why are we mandating it? Why is it necessary that we mandate? And the response that I have to that is sometimes you just need a little kick in the pants to be encouraged to do the right thing. We, as a state, have chosen to do the right thing when it comes to mammograms for women, breast cancer screening, and prostate screening. We've got a bill on that coming up this afternoon. It's makes good, sound, fiscal sense to require that the insurance companies cover it up front. It may be one of those where the up-front costs may be minimal, but when you look at the long-range aspects of the disease, it's well worth the investment up front. Number 0361 CHAIRMAN ROKEBERG commented that he and the committee have worked diligently to try and provide the most affordable, and the best quality health care and health insurance in the state. One of the biggest problems in Alaska, even though there are approximately 130 to 150 registered health insurers, is this is a market where as few as eight companies actually participate. He indicated there is one company that has more than 50 percent of the business in Alaska. In addition, the committee passed legislation last year to mandate the Division of Insurance to determine the number of people in Alaska who are non-ERISA [Employee Retirement Income Security Act] covered lives. CHAIRMAN ROKEBERG said that under federal law, the ERISA pension plan exempts individuals who are self-insured or covered under large group plans from regulation by state governments. Therefore, they are exempt from any State mandates or any actions of the Legislature. There is an estimated 155,000 people who are covered as individuals or small-group plans, or under non-ERISA plans. Approximately 24 percent of Alaska residents would be affected by any mandate. Enforcing a mandate could result in shifting costs to individuals that are non-ERISA covered. He said it is a matter of fairness and cost. He also pointed out that by enacting mandates, states may create barriers for the entry of new insurance companies to provide service in Alaska. A cost-benefit analysis needs to be done to determine whether or not the insurance industry is currently providing this service and can do so in a cost-effective manner. Number 0599 RICK MYSTROM, Mayor of Anchorage, testified via teleconference from Anchorage. He stated: I am a Type I juvenile diabetic. I have had diabetes now for 38 years and, essentially, I think most of you know, it's a disease in which the pancreas stops producing insulin and, therefore, diabetics who are juvenile diabetics have to put in their own insulin on a daily basis, sometimes two, three times a day or be on a pump like I do. We have to continually try to match the amount of food we take in; the different types of food, whether it's protein, carbohydrates or fats, match the calories, and, therefore, keep our blood sugar at an acceptable level...Now, if we are unsuccessful at it, and if blood sugars are continually too high, within about five years or so, some very debilitating issues can come about especially kidney failure, blindness, circulatory problems, amputation of legs and other obviously debilitating results. Number 0698 On the other hand, if your blood sugar is too low, if you fail on the other end and give yourself too much insulin, you'll end up having seizures, insulin shock and other things that can indeed be life threatening. During the course of the 38 years I've had diabetes, I've probably had five or six or seven seizures that have resulted from low blood sugar on that end. I've been very successful with managing my diabetes...I'm 55 years old and have no [degenerative] signs at all; no kidney problems, no eye problems, no circulatory problems at all, and the reason is because I've been able to do it and manage it well with my insulin pump which I've had since 1981...and by testing my blood about 10 times a day. So, I have blood testers, Glucoscans in my case. I have one in each bathroom at our house. I have one in my bathroom in the office. I have one in a wallet that I keep with me during the course of the day. Now, whenever I'm traveling, I have it so I can test it about eight or 10 times a day. That's more than most people have, but...if I didn't test my blood sugar, and these are not extraordinarily expensive items, but they do cost around $70, $80, $90, $100 a piece, and to buy the test strips is quite expensive, and if I didn't do that, I would have spent a lot of time at the hospital. I certainly would not be productive. I may not be healthy. I may not be alive. For better or worse, I wouldn't be mayor of Anchorage now. There's some of you who may cheer that, others may not. In all seriousness, if you can keep a positive attitude and if you have the tools to monitor it and keep your blood sugars in control, you can live a healthy lifestyle and ultimately save hundreds of thousands of dollars, millions of dollars in hospital care in the long run, and that really gives a person a great opportunity for a good lifestyle. Without insurance, the management of my diabetes, as I have managed it over the past 20 or 30 years, would probably cost...$500 a month or so just to manage it, not dealing with any negative consequences, but just to manage it. That's the kind of money that would discourage most people from that good education and management care. The insurance that I've had has kept me healthy and, quite frankly, is probably going to save my life. I really encourage this. It can make a huge difference in the quality of lives of diabetics and provide healthy, productive people as citizens of Alaska. So, I would really encourage it. I appreciate your initiative on this and certainly do support it. Number 0957 MICHELLE CASSANO, Executive Director, American Diabetes Association [ADA], came forward to testify on HB 298. She said: Everyone on this committee has been more than diligent in learning what diabetes is, the statistics of diabetes, the cost of diabetes and what the savings potentially can be for diabetes by the passage of this bill. Today I'd like to be here as a resource for this committee for questions [and] just to make a very few points as to how important the education component of this bill is. The cost will vary per individual and we at the ADA feel there is no need to restrict people from their education. There are standards as to what they have done studies on as to how much education will help lead to the results of studies such as the Diabetes Complications and Control Trial [DCCT] and the UK Study which has shown that when people are in good control with self- management, they stave off the complications of stroke, blindness, amputations and such by an aggregate of almost 58 percent and that's not a percentage of good health care that can be ignored. Diabetes, for those of you who do not know, is a disease that has no cure, and people who live with diabetes never get to take a day off. This is not an unusual legislation. As of this week, we are now up to 38 states that have passed legislation. And just this week, the state of Washington repealed the sunset clause after three years unanimously in both their House and Senate with no opposition from any industry. This is important because very few consumers actually get the chance to make a choice on what their coverage is. It's very often a human resource issue, and so we have done studies and have gotten some information from other agencies like American Association of Diabetes Educators, the American Dietetic Association. They seem to think there's less than a 1 percent aggregate increase in insurance premiums. In the state of Maine, they applied these standards to their Medicare population and the savings were over $3,000 per person in the very first year. So, when you get beyond the quality of life which is important to all of us who help treat people with diabetes, there are some real economic standards that work in this field. Number 1130 REPRESENTATIVE MURKOWSKI referred to Washington's repeal of the sunset date and wondered if there are any statistics with respect to a noticeable increase in insurance costs and premiums. MS. CASSANO replied that only New Hampshire has recently commissioned a study regarding this. The savings have been so obvious that there have been no requests for studies in this field either by hospitals or the insurance industry. She said: In terms of Washington State statistics, we pretty much have what the Milliman [& Robertson] study shows, and I think Shan [Shan Han, Legislative Staff to Representative Murkowski] has a study that was done by Doctor Robert Mecklenberg, who actually comes to Juneau to conduct an endocrinology clinic and they happen to call theirs the Diabetes Cost Reduction Act for Washington, but that plan has been in place for three years, it had a sunset clause, they went back to repeal it this year, and it passed unanimously in both houses and had no opposition. Number 1200 CHAIRMAN ROKEBERG asked if Blue Cross of Alaska covers this. MS. CASSANO replied that it is pertinent to each individual plan. She said the insurers are not being asked to impose a particular component to a plan to cover items that are deemed necessary to self-management of care. She anticipates HB 298 would affect about 30 percent of insurance policies because state and municipal policies do cover these items quite well. She commented: We often see this kick up with federal employees the first of every year. They get to bid and change carriers and, inevitably, a carrier who may have covered something one year, if it's a new person and their plan, we'll have to stomp our foot a little bit, but we not only want good insurance coverage for today, but we want good insurance and good health for Alaskans for the future. Number 1277 DONALD NOVOTNEY came forward to testify on HB 298. He stated: I am a person with diabetes. I'm a registered nurse and I'm chair-elect for the Alaska Affiliate of the American Diabetes Association. I sit on the Pacific Northwest Board of the American Diabetes Association. Thank you, Chairman, for allowing me to speak. I've had diabetes since 1979. I was discharged from the service because they said I wasn't fit for duty, got out, went to school, and I've been working since 1983 as a registered nurse. I've not missed any days of work because of my diabetes. I keep it in very good control. I had a nurse when I first was diagnosed that spent time with me and helped [me] to learn about the disease and to control it. And I thank her for that education she gave me. And "Intense Management" by Harris (ph) in 1995, in a published study on health insurance and diabetes and diabetes in America, found intensive management and education reduce the cost of diabetes care and keep workers in the workplace for many more years. And since we have small business in Alaska, I'm also concerned about that. If one person is sick, who's coming in? They're going to call the boss, the owner. They're going to come in and work. And people with diabetes don't want to be a burden. They want to get out there and work. They want to benefit our society. And if they don't have the insurance, they're going to be a burden on the State of Alaska. If you don't make enough money, the state covers it. If you're 65, the state covers it. We expect the same from our private insurers in the state. CHAIRMAN ROKEBERG asked why the state covers those over 65 years of age. MR. NOVOTNEY explained that he is referring to Medicare, which provides coverage for those people 65 years and older. He said Medicaid also provides coverage for diabetes. CHAIRMAN ROKEBERG asked, "So, Medicare does provide [coverage]?" MR. NOVOTNEY indicated that if a person is 65 years or older, then Medicare will pay for insulin, test equipment and education. They will also pay for a continuous insulin infusion pump which mimics the pancreas. CHAIRMAN ROKEBERG asked if the insulin pump is the type of item Medicare would fully reimburse for. MR. NOVOTNEY replied, "Usual, customary, and that's what we would like from the private insurers." Number 1452 KATHY JACQUES, Registered Nurse and Certified Diabetes Educator, testified via teleconference from Anchorage. She said: I want to thank you, Mr. Chairman. And I'd also like to thank Representative Murkowski for sponsoring HB 298. I am a registered nurse and I have been a certified diabetes educator for 14 years. My grandfather died from complications of diabetes. My mother has diabetes. She takes three insulin injections and four to six blood sugars a day and, after 15 years and a lot of perseverance, my mother has no serious complications and she credits the education and support that I've been able to provide. At this time, 38 states require health insurance to directly reimburse diabetes out-patients' health management training. Diabetes is the leading cause of kidney failure, blindness, nerve damage, limb amputation, and diabetes is also a leading cause of heart disease and stroke. And when an individual in Alaska dies from complications of diabetes, the cause of death is usually listed as a fatal heart attack or stroke or kidney failure and, therefore, the lay population, mostly, misunderstands the impact of diabetes. Our government spends billions of dollars on no-smoking programs, cholesterol and blood pressure lowering programs, all to reduce the risk of blood vessel damage. Diabetes management and training is all about blood vessel preservation. Number 1524 No one expects a person to know how to build a house or use a computer without supplies and training. We must not expect someone who has just been told that they have diabetes to be able to control it without education and supplies. If diabetes isn't controlled and the individual is often labeled non-compliant -- this usually happens because a lack of knowledge or a lack of understanding -- does this individual know that all types of diabetes are serious? Does the person know that they have a lot of control over their disease or did they watch a loved one die young or lose limb after limb and assume they best live it up now because the same fate awaits them? I have seen hundreds of people with diabetes in the last 14 years. A person who is told that they have diabetes can make many different assumptions. First, the person may feel fine. They conclude that they must not have the serious kind of diabetes, not the kind that their grandmother had because she went blind and could no longer live at home and take care of herself. Another person may think that they don't have the serious kind that their next door neighbor has because he takes insulin and his kidneys have failed. Or maybe this person is newly diagnosed with diabetes. He feels horrible for months before the diagnosis is made. Burning pain in his legs so severe that he can't sleep at night for weeks or months. Then the doctor puts him on a pill for his diabetes and he feels like a million bucks within a few days or weeks. He thinks he's cured and all that's needed to control his diabetes is to take his pill everyday. The person must get training in management skills in order to learn how to maintain diabetes control for the rest of his life. Number 1610 There have been three major studies completed in the 1990s that have overwhelmingly proven that diabetes can and must be controlled. The reduction and the occurrence and severity of diabetes complications was dramatic and it was through access to supplies and education and follow-up with their diabetes team that these thousands of people were able to control their diabetes over the 10 and 20-year studies. The American Diabetes Association has established quality standards of care and education for all people with diabetes...People need to know how to take their medication properly, how to take their insulin properly and how to adjust the insulin on a daily base. They need to learn how to prevent dangerously low blood sugar spells, how to do the blood sugar monitoring and how to use that information to control their diabetes everyday. Medical nutrition therapy is also crucial because nutrition is the foundation of blood sugar control. We teach foot exams to prevent amputation, pregnancy and pre-pregnancy recommendations. If a woman with diabetes has no diabetic complications and has excellent blood sugar control at conception and throughout her pregnancy, she can have a healthy pregnancy and baby. Often our patients arrive with much fear and anxiety. It is our job to offer (indisc.) and current, accurate information. Often people are filled with misinformation from well- meaning friends and relatives. I'd just like to say that I think we should be able to share the information that we have available for everybody with diabetes, that all people should have access and that we can teach them to live healthy and live well and that they should not have to sacrifice the kind of life that they want to enjoy or sacrifice good blood sugar control. Number 1714 JANEL WRIGHT testified via teleconference from Anchorage. She stated: I am one of 30,000 Alaskans with diabetes, and I've had Type I insulin-dependent diabetes for 25 years. Thank you for considering this very important legislation. I am here today to share my personal experience and ask that each of you support diabetes insurance reform in Alaska. The importance of this bill is that it will ensure that Alaskans have access to the medication, equipment, supplies and education that are necessary to treat and control diabetes. With such access, diabetes can be self-managed and the complications of diabetes very minimized, consequently reducing health care costs. To illustrate the importance of access to effective treatment for diabetes, I'll tell you my story. Before obtaining insurance that covers the cost of treatment of diabetes, my life with diabetes was an absolute nightmare. I was nearly sent home from college due to uncontrolled diabetes and still bound and determined to get my education, after graduating from college, went on to law school. While at law school, I could not see the board and requested to be moved to the front of the class which was quite unusual. When that didn't help, I finally went and got glasses. My vision was severely impaired. Law school was very stressful and I did not know from one day to the next what would happen with my diabetes or my blood sugar. The insurance plan I was under did not cover the cost of syringes, of blood test machines, test strips or education. It covered only the costs of insulin. Being a poor law school student, I scraped together funds to buy syringes so I could inject the insulin upon which my existence depended. The cost of a blood test machine, test strips and patient education were not within my budget. Number 1793 I moved to Alaska in 1988. At that time, I finally had insurance coverage that funded my blood test machine, test strips, patient education and it also covered an insulin pump and supplies that go along with the pump. There's a test called Hemoglobin A1C [HgA1C] and the results of this test show how well one controls their blood sugar over the previous three months. Ideally, I aim to keep my blood sugars between 90 and 120. My first Hemoglobin A1C after coming to Alaska was 8.5. This meant that my blood sugars were usually 250 or above. Studies have been shown that when blood sugars are this high, the costly complications of diabetes such as impaired vision or blindness, nerve damage, kidney disease, amputation, heart disease and stroke are much more likely to occur. Recently, at the beginning of February, I received the results of my latest Hemoglobin A1C which is now 5.4. This means that my blood sugar average over the past three months was 94. I attribute this to having insurance coverage that allows access to those supplies necessary to control my diabetes. I no longer need glasses. With improved blood sugar control, my vision impairment is gone. Chairman Rokeberg asked if the mandate is cost- effective. As you've learned, 38 states have passed similar legislation and studies from these states have shown that good blood glucose control resulting from insurance coverage has reduced hospitalizations and (indisc.) by 32 percent, 50 percent lower frequency in emergency room visits in Maryland, 63 percent reduction in emergency room visits in Rhode Island and a cost savings of approximately $917 per patient per year. I urge you to help Alaskans with diabetes lead healthier and more productive lives by supporting this legislation. Number 1900 YOUNG SHIN, Registered Dietician, testified via teleconference from Anchorage. She specializes in diabetes education and has been involved in this type of education since the first day of her clinical practice. She explained: Diabetes mellitus is a costly and devastating disease. Medical nutrition therapy, the cornerstone of treatment, can prevent or postpone the onset or decrease the incidence of costly implications. The Diabetes Control and Complications Trial, known as DCCT, a multi-center 10-year study of Type I diabetes mellitus, demonstrated that optimal glycemic control reduced the risk of diabetes complications by 60 percent. Registered Dietitians, key members of the DCCT diabetes management teams, were able to identify and promote specific diet related behavior associated with improved glycemic control. Also, there was a study conducted in 1994 by the International Diabetes Center in Minneapolis, Minnesota for The American Dietetic Association showed that persons with Type II diabetes can better control their blood glucose levels, weight and cholesterol with medical nutrition therapy. At all phases of the six-month study, medical nutrition therapy provided by a Registered Dietitian resulted in improvements in patient's fasting plasma glucose [FPG] and glycated hemoglobin A1C levels compared to the levels at the onset of the study. Medical nutrition therapy is a cornerstone of self management training and has been proven to significantly save health care costs by reducing the incidence of complications including lower extremity amputations, kidney failure, blindness, heart attacks and frequent hospitalization. An internal analysis of nearly 2,400 cases studies submitted by The American Dietetic Association members shows that an average of more than $9,000 per case can be saved in Type I diabetes cases with intervention and diabetes education, as well as medical nutrition therapy. Intervention in Type II diabetes cases showed savings of nearly $2,000 per case. Medical nutrition therapy plays an important role in multi-disciplinary teams helping people with diabetes self-manage their disease and lead a quality life. Quality, comprehensive, multi-disciplinary education in the early stages of diabetes is a necessary investment to prevent costly complications that are unavoidable without this investment. From my experience with many who do not have insurance coverage, they are less likely to come back for further education and follow-ups and most of them do not succeed in the long run, but those who have [an] education component covered by their insurance companies tend to have more significant success in managing their diabetes. Thank you for your time. Number 2024 CHAIRMAN ROKEBERG asked what the normal cost of the diabetes education program is. He wondered if the cost varies depending on the individual. MS. SHIN said the cost depends on the individual and the facility attended. Some individuals may only require one or two visits. Other individuals may require more education due to barriers such as language or ability to learn. There are no cases which show an abuse of this education system. The typical cost per one-to-two-hour session is $70 to $100. The cost also depends on who is providing the education, whether it is a Registered Dietitian or a Diabetes Educator. There are comprehensive, hospital-based programs which meet the guidelines set by The American Diabetes Association. The cost for these programs varies. CHAIRMAN ROKEBERG wondered how long a typical education session for a patient would last and how much the cost would be. MS. SHIN replied that the education would require between six to 15 hours. She reiterated the cost would vary depending on the facility. CHAIRMAN ROKEBERG speculated that the cost could be anywhere between $500 to $2,000 for education. MS. SHIN agreed. Number 2144 JULIE BURNS came forward to testify on HB 298. She stated that her 17-year-old son has had diabetes and was diagnosed with it six years ago. She referred to Ms. Shin's testimony regarding education. She added that education is not necessarily required every year. A diabetic might meet the maximum for education right away or may go five or six years with only an hour or two of education every year. CHAIRMAN ROKEBERG asked, "Why would you do that, changes in technology or health, or what?" MS. BURNS said, "Definitely, change in technology. They're getting better all the time. ... As time goes by, you change, your body changes and how you use your insulin...." She indicated she has been lucky enough to have health insurance for her son. She said most insurers do not have a problem paying for insulin because it is an absolute necessity. She has encountered problems obtaining coverage for all of the other accessories. She stated: The test strips, ... those are like 75 cents apiece, and you can either test once or twice a day or seven or eight times a day, depending on what you're at. And the more you test, then obviously the better control that you're in [of] your diabetes. Syringes,... a lot of times they're covered, but you pay for them in advance and then you send all the information into your health insurance which is mounds and mounds and mounds of paperwork. Then you might get reimbursed or they might think that, you know, from the last time you sent in for reimbursement, you've used too many insulin strips or too many syringes and they'll only pay you back for part of them. In fact [in] December, Christopher, my 17-year-old, he just got a new insulin pump, and so when were getting that, I went out and I got him a bunch of new test strips, you know, got him set up on his supplies, and I spent $140 just before Christmas. Just on Monday, I received a check from my insurance company for $70.... That's half of what I paid.... I'm not complaining, but I'm lucky in that aspect: I did get something back. But the hard part of that ... is that I have a ten- year-old daughter and, of course, everybody's tight on money, especially if you're a single parent. ... My daughter she's been really good about things, but you have to kind of sit back and look at her and laugh because, you know, you say, "Money's tight, money's tight. You can't have this. No, you can't have a new bike. No, you can't go to the movies." And, but, yet, at the exact same moment or five minutes [later], you're writing a check out for $150 for insulin supplies. ... You and I understand that there's nothing you can do about it, you have to do that, but to a four- or five- or six-year old that just wants to go to the movies or just wants a new bike, "My big brother's getting, not only is he getting to do the same things I am, but mom just spent $150 on him and I didn't get anything out of this." Granted, she understands now, but several years ago she didn't. And I think that's something that a lot of people don't think about. It's the money out of the pocket that's constant. It never goes away. MS. BURNS continued, saying her son is getting to the point where he is going to have to worry about what kind of a job he gets in order to have insurance. She stressed that he has to pick his profession based on the amount of insurance offered. She pointed out that small businesses many times do not have good enough insurance coverage. She does not think a person should pay for everything he needs for his diabetes because it is something that he has to live with. She it would be nice to have someone to help and someone to provide him with the necessary education. She sees a difference in her son since Christmas. His moods have changed and his blood sugar is under better control. She attributes much of this to the education he received. Number 2398 REPRESENTATIVE HALCRO said he thinks Ms. Burns' testimony highlights the difficult position of dealing with these types of health mandates. He referred to her comment that her son's employment will be dictated by the type of health coverage he can obtain. This might automatically eliminate some options with small businesses. He said this is really a problem in Alaska because 86 percent of the businesses are classified as small businesses with of 20 or fewer employees. He stated: We have heard some very positive statistics earlier about how this has actually helped save costs which is very positive, but I think you, in your testimony, highlight the problem that we have when we address these things about mandating specific coverages through health policies because you have some employers that are really struggling to provide coverage for their employees and you get into a situation of making exceptions for one or the other and then pretty soon at the end of the day, the employer can't afford any coverage, can't afford the premiums, and so they in turn drop their coverage and aren't able to provide coverage. MS. BURNS agreed. She reiterated that education saves way more money than any increase in insurance would ever come close to doing. She spent several days on the telephone when getting her son's insulin pump set up. [Some testimony was not included due to tape change.] TAPE 00-29, SIDE B MS. BURNS said she had spent an outrageous amount of time and effort dealing with the insurance company to get an "okay" for her son's insulin pump. She noted the insulin pump has already made a huge difference in his life. She cannot articulate how much time and effort they have spent so that he can go on with his life. She said he needs to be able to lead a normal life. Diabetes has not stopped him from doing anything, but it has put a damper on things because of the lack of education, as well as the financial burden. She pointed out that insurers will pay for her son's education, but education is something that is necessary for others involved. She said, "I need to have the education because I need to know how to cook for him. My daughter, she needs to have the education. ... What happens if she comes home from school and he's passed out from a low blood sugar? She has to know what to do." Number 0069 CHRIS HOLZWORTH came forward to testify on HB 298. He developed diabetes about six years ago. He slept constantly, drank copious amounts of fluids and lost almost 25 pounds in two days. He has spent easily three to four weeks in the emergency room over the past seven years. Two years ago, he spent three days in the hospital as a result of dehydration from the flu. He pointed out there are many complications with diabetes. Part of the problem he attributes to lack of education. MR. HOLZWORTH explained that he was with his father when he was first diagnosed with diabetes. His father was in the military at the time, and the military was helpful and provided both he and his father with the necessary education. His mom was in Alaska during that time and had to pay for her own education. He initially had six hours of education which he indicated is not enough to know how to begin to live with diabetes. He has spent much of his own time learning about diabetes. He has written many reports for school on diabetes. He does this to better his own life and help inform other people. MR. HOLZWORTH said when he was first diagnosed with diabetes, his hemoglobin A1C level was over 17. Last year, his level was 13.9 and six months ago it was 10.9. With the use of his insulin pump, his blood sugar has been lower and he has not been as sick. He misses a significant amount of school every year. He missed an average of 30 days of school last semester. The year before, he missed approximately 50 days of school. He thinks HB 298 would be very helpful for himself, his family and his friends, in terms of education. CHAIRMAN ROKEBERG asked if Mr. Holzworth plays any sports. MR. HOLZWORTH replied that he played basketball as a freshmen in high school. Currently, he is participating in weight lifting and basketball. Number 0187 REPRESENTATIVE HALCRO wondered how he manages his diabetes at school. MR. HOLZWORTH explained that he has spoken with his teachers about his diabetes. He tests his own blood sugar during class. Number 0230 GORDON EVANS, Lobbyist for the Health Insurance Association of America (HIAA), came forward to testify on HB 298. He stated that HIAA is opposed to mandates because they generally raise insurance premiums whether they are one percent or 10 percent. Mandates also cause an increase in the number of people who are not insured because employers end up dropping insurance coverage on that basis. He has looked over the amendments to HB 298 that Representative Murkowski is proposing to offer. He believes the amendments strengthen the bill somewhat. MR. EVANS indicated that the proponents of HB 298 point out that over 36,000 Alaskans are affected by diabetes. The accuracy of this figure is not being questioned. However, it is not known how many of that number actually would be affected by passage of HB 298 because many may already be covered by health plans or by other coverage that this particular mandate would not affect such as self-insured employers or others covered by ERISA. In Alaska, that includes, besides the military, the Native health services, and other governmental agencies, large self-insured employers such as Safeway/Carrs, BP/Amoco, the Municipality of Anchorage and other major oil companies. MR. EVANS said even though HB 298 calls for a mandated coverage, HIAA would not oppose this particular legislation if it would provide for a temporary cap on how much will be paid for coverage of the outpatient self-management training or education. He heard the testimony today about the importance of education and also referred to the testimony regarding the state of Washington eliminating their cap. He is not sure he agrees with how this was done. He thinks insurance in Washington is very different than that in Alaska and should not be used as a comparison of what is best for Alaska. In that vein, HIAA urges the committee to consider an amendment to HB 298 which reads: Page 2, line 1, insert new subsection (b) to read: (b) The amount of coverage for the cost of diabetes outpatient self-management training or education is limited to $1,000.00 per year. Re-letter following subsection Page 2, line 6, add new Sec. 2 to read: * Sec. 2. AS 21.42.390(b) is repealed January 1, 2004. MR. EVANS explained that the amendment would place a $1,000 cap, per person, per year, on coverage for outpatient self-management training or education for three full insurance years; after that time period, the cap would be repealed. That would give both the health insurance industry and proponents of this legislation ample time to review actual costs of such coverage over that period and determine whether the cap should be reinstated, either in a higher or lower amount, or permanently removed. CHAIRMAN ROKEBERG wondered, "Doesn't your amendment permanently repeal it?" MR. EVANS responded no. He clarified that it does, but the idea is that it would then come back before the legislature in order to ask that it be reinstituted. CHAIRMAN ROKEBERG said, "It's a de facto sunset." MR. EVANS said that is correct. He reiterated that HIAA does not have a problem with the amendments that Representative Murkowski will be proposing. CHAIRMAN ROKEBERG asked, "Do her amendments please you or displease you, or are you neutral?" MR. EVANS replied that HIAA is neutral. He stated, "It's still a mandated bill, and because it is a mandate, I have to officially be against the bill because of that. But at least I think that our amendment would soften the blow, so to speak." CHAIRMAN ROKEBERG wondered how much it would soften the blow. Number 0478 MR. EVANS said if the cost of diabetes education runs between $500 and $2,000, then a $1,000 cap would cover the majority of people who need it. He did not understand Ms. Burns' testimony about whether the education cost is meant to cover every member in a family or just the person with diabetes. It sounds to him that in some circumstances the entire family should be educated. He is not sure how insurance companies would cover that. Number 0513 MS. CASSANO commented that it is her experience that hospital- based programs or physician office-based programs put the charge in for the client. She does not know of any hospital-based program in Alaska that does not openly invite family members, friends and support members at no charge. CHAIRMAN ROKEBERG said, "Presumably, your amendment's okay because it'd be for the covered life and, therefore, extended to the family members of the covered life." MR. EVANS replied yes. MS. CASSANO said she is not aware of any other mandate that has a capping requirement. She would not like to see a cap introduced. MR. EVANS pointed out that mental health does have a cap. REPRESENTATIVE HALCRO stated that it appears to him that self- management training and education is one of the most important components in treating and keeping diabetes under control. He said: Why don't we reverse this a little bit, your proposed amendment? Why don't we not put a cap and put a sunset clause and we can revisit it in three or four years and if, at that point in time, we have realized savings, that's great. If it has caused to have negative ripples throughout the insurance world, we can address it at that time, but it sounds to me, given prior testimony and statistics from other states, that it's sometimes revenue neutral. In one case, Vermont, I believe, the state actually saved money. So, would you be acceptable to simply not having a cap, but just revisiting the idea in three or four years and seeing how it shakes out? Number 0621 MR. EVANS asked if Representative Halcro was referring to putting the repealer on the entire bill and eliminating the cap. REPRESENTATIVE HALCRO said yes. MR. EVANS commented that seems all right to him, but he needs to check with HIAA. CHAIRMAN ROKEBERG said he thinks one of the concerns is the potential for abusing this particular situation because it would involve discretionary use by an individual or family members. The course or type of training might also be longer or shorter. MR. EVANS stated that Representative Murkowski's amendments would require that education be prescribed by a physician. He said: Leaving it wide open, one of the problems that I could foresee is the cost of the pumps, for instance. There's not just one pump at one price. You can get from the Chevrolet to the Cadillac version of them I understand, and so is there going to be a limit on something like that? Number 0695 REPRESENTATIVE HALCRO explained that the cap only pertains to self-management training and education. He stated: I don't believe that somebody is going to go out and load up on education because they don't have anything to do. As we heard testimony from Christopher, it sounds to me like he takes it upon himself to do a lot of research himself through his school work, but, you know, in another point, Ms. Cassano was absolutely right. I had the opportunity to, at the recommendation of my doctor, in January before I came down here to visit a nutritionist, and I went with my fiancé and they charged just me, and they didn't have any problem with people sitting in.... I think that, obviously, we, as opposed to other mandates that we have seen in this committee, or at least my brief time here, this is one that actually has some statistics that prove that this kind of an investment or mandating this kind of coverage actually saves money down the road. I certainly, myself, ... would not support a cap, because I think the training and education is the foundation to treating this disease. MR. EVANS referred to the statistics discussed. He said he has asked HIAA for some confirmation of those statistics, but they have not been able to provide them. He said: The lady that I report to in Washington, D.C., also covers the states of Vermont and New Hampshire, and she says that those statistics were news to her. Now, I don't know whether they, and I specifically asked her for the diabetes statistics, and so I can't respond to those. I can't say that they're not true or not. And, as I indicated in a previous committee, it's always easy to say that statistics show this or that. ... I can't respond to that. Number 0814 CHAIRMAN ROKEBERG wondered, "Well, Mr. Evans, on that point, if in fact the mandate of this type of coverage on the insurance industry save the insurance industry money, your insurance industry would probably know about it, wouldn't they?" MR. EVANS said he hopes so. REPRESENTATIVE CISSNA asked if some of the insurance companies cover supplies. MR. EVANS said he is sure that some do cover supplies. REPRESENTATIVE CISSNA expressed curiosity about the different types of insulin pumps and wondered where that information comes from. MR. EVANS indicated he has been informed that there are several different types of pumps. He does not know personally what the different types are. REPRESENTATIVE CISSNA asked Ms. Cassano to address her question. Number 0909 MS. CASSANO said she believes three main companies produce pumps. She thinks there is a standard pump that is approved the federal Food and Drug Administration. She stated: I think information that would be beneficial to the committee is - if I had Janel White here, who wears an insulin pump, she's a woman who has diabetes, of child-bearing age. By being in good control with this insulin pump, she's 85 percent less likely, when she has her child, for that child to go to a neonatal intensive care. If she was taking multiple insulin injections every day, it would almost be assured that upon delivery, that child would go to neonatal intensive care. REPRESENTATIVE CISSNA wondered if that cost would be covered by insurance. MS. CASSANO affirmed it would be. The cost of neonatal intensive care is approximately $1,500 to $2,000 dollars per day. Medicaid will pay for an insulin pump for a woman of child bearing age who has diabetes because the initial $3,000 pre- pregnancy investment will save money. She added, "All the different states' bills and the supporting interest is on our web-site." MR. EVANS referred to testimony that no other states have caps on their mandates. He clarified that three other states do have caps. REPRESENTATIVE CISSNA stated: I guess my point is that it sounds like, in a way, that there's not - if, in fact, you have spin-off costs from progressing problems - there would be a social component too; we would start picking up, as a society, some of the costs for diabetes that's not carefully managed. MR. EVANS said, "The fewer insured people there are in the state, those costs are going to be higher for them." CHAIRMAN ROKEBERG said the issue is whether there is a willingness to put the increased costs on the 25 percent of the people who will be paying the tab. Number 1065 REPRESENTATIVE MURKOWSKI referred to the sunset issue. She wondered if the long-term, positive effects will be noticed in a three-year time period. She is curious about Washington's sunset clause. She said: If it's something like health care costs where you're going to notice your savings not in the immediate, short term, but what is a reasonable long term? I'm not suggesting that I'm totally opposed to caps or I'm totally opposed to a sunset, but I'm suggesting to you that both would have to be reasonable and realistic. MR. EVANS stated that HIAA's idea of the cap is to provide a handle on what the costs are immediately for diabetes education. He does not know if there is any way to determine what the eventual savings will be. He said it is unpredictable. REPRESENTATIVE HALCRO wondered if HIAA has any statistics on the number of insureds who had to drop coverage because of a mandate on diabetes. MR. EVANS said he was not aware of any statistics. REPRESENTATIVE CISSNA commented: Excuse me, Mr. Evans, but I believe you said it was unpredictable. And actually, having had a member of my family with diabetes, it can become progressively worse and worse, unmanaged. So, it isn't unpredictable in one sense. It's very predictable and it can get worse. It's not like it accidentally goes away. MR. EVANS said that is not what he meant. He thinks it is clear to everyone that if you do not treat diabetes, there will be disastrous results. He clarified that the cost cannot be predicted. CHAIRMAN ROKEBERG said that is the point, even though studies have shown a substantial savings. Those studies do not relate to a discrete group of insurers. The studies are broader and relate to several different areas. Number 1256 BOB LOHR, Director, Division of Insurance, Department of Community and Economic Development, testified via teleconference from Anchorage. He explained the Division has traditionally had concerns regarding mandated benefits and the possible impacts on rates and the availability of coverage. He stated: The study that we've seen most recently, however, from the U.S. General Accounting Office on the potential impact of mandate benefits on coverage, is inconclusive. It does not reach a firm conclusion that there is a negative impact on availability of coverage. Each potential mandate is, of course, a judgment call for the Legislature or the governor to make, but this one certainly has the weight of a lot of evidence in support of it. It does (indisc.) that there are potential savings available given the widespread availability of coverage under this mandate in other states. I think the indication was 38 states. The division believes that this is a worthwhile subject for (indisc.) a possible mandate. REPRESENTATIVE HALCRO asked how this relates with respect to possible savings to other proposed mandates. MR. LOHR replied that they need to be analyzed on a case-by-case basis. He said it is hard to argue against prevention in any case. He thinks if the costs of prevention become in excess of any kind of discounted cash-flow analysis or discounted future benefit-cost analysis, then you would have to take a hard look. It appears to him to be a case-by-case assessment of what the cost-savings benefits of prevention would be. The division would be willing to participate in an effort to document those in this case. He believes doing this would play a role in implementation as opposed to some kind of a demonstration project. CHAIRMAN ROKEBERG closed public testimony on HB 298. Number 1518 REPRESENTATIVE MURKOWSKI made a motion to adopt Amendment 1 [to CSHB 298(HES)], which read [typographical errors corrected]: Page 1, line 1, following "that": Insert "certain" Page 1, line 6, following "plan": Insert "that includes coverage for pharmacy services" Page 1, line 8, following "supplies" Delete "," Insert "." Page 1, line 8, before "outpatient" Insert "For all health insurance plans, such coverage shall include" Page 1, line 8, following "and": Insert "medical" Page 1, line 9: Delete "recommended" Insert "prescribed" Page 1, line 12, following "of": Insert "medical" REPRESENTATIVE HALCRO objected for the purposes of discussion. Number 1556 REPRESENTATIVE MURKOWSKI explained that the amendment tightens up the language. The language changes were recommended by Blue Cross. The amendment requires that diabetes treatment be prescribed by a health care provider. With respect to nutrition therapy, the amendment clarifies that medical nutrition therapy is being referred to. It also provides that the existing insurance plan must include coverage for pharmacy services. CHAIRMAN ROKEBERG asked if the objection to Amendment 1 was maintained. REPRESENTATIVE HALCRO replied no. CHAIRMAN ROKEBERG stated that Amendment 1 was adopted without objection. He indicated the amendment offered by Mr. Evans would be marked Amendment 2. He made a motion for the adoption of Amendment 2. REPRESENTATIVE BRICE objected. CHAIRMAN ROKEBERG explained that Amendment 2 places a $1,000 cap on diabetes training and education. He said: I think that the indications about cost savings here, while clearly are true in a broader sense, I don't think they've been sufficiently demonstrated to myself empirically in the Alaska setting for our 24 percent of cost-shift payers. That's my problem. REPRESENTATIVE BRICE indicated that it has not been proven either. He appreciates the intent of the amendment, but he feels it hampers access to care for the most complicated cases of diabetes. He said: And if what we're trying to do is help the least complicated at the expense of the most complicated, then I think we need to really step back and take a look at what we're doing with this amendment. So, that's what we're doing. The easier the case, the cheaper the cost of education. The more complicated the case, ... the more expensive it's going to be. That, and they're the ones who run the highest risk, Mr. Chair, for the medical complications that will be covered. So, I think, basically, what we end up doing in the long run, by (indisc.) the education, is establishing a system for failure and for higher costs. REPRESENTATIVE HALCRO agreed with Representative Brice. He referred to Ms. Shin's testimony that education could cost between $500 to $2,000 and could be a one-time hit. He commented: If you're over $1,000, and it's more or less an arbitrary figure, especially when you consider that, as I said earlier, self-management training and education is one of the most important components of mandating this coverage. REPRESENTATIVE HALCRO moved to adopt an amendment to Amendment 2, "to delete page 2, line 1, and all of the referenced change there." He added, "Simply leave page 2, line 6, which is the repealer in January 1, 2004." Number 1900 REPRESENTATIVE CISSNA indicated she had a problem with the sunset date. She also had a problem with the cap on diabetes training and education. It is her experience that diabetics are autonomous types of people who take the initiative to self- management. She said: I mean, just this population doesn't seem to me to be the type that are going to be jacking up the cost because they want. It's only going to be because they need to...I think putting an arbitrary number, when in fact the industry doesn't seem to have numbers that we know of. CHAIRMAN ROKEBERG asked Ms. Cassano what she believes is a typical estimate for annual costs. MS. CASSANO stated that a person newly diagnosed with diabetes would need approximately 12 to 15 hours of education through a recognized program. In addition, an hour with an educator and an hour with a dietician are possibly needed. In some cases, this is not enough because people are so overwhelmed. She would hate to see HB 298 inflation-proofed. She said many of these benefits are being offered with no reimbursement to health care professionals, which makes the industry to enter into diabetes care as a business. She said $1,000 might be sufficient, but she is not sure. Some of the group classes offered at hospitals range from $125 to $200 for a certain number of sessions. Number 2106 CHAIRMAN ROKEBERG commented that he wants to know what the overall typical cost is, not just for education. MS. CASSANO answered that the typical cost of medicine and maintenance for a diabetic without an insulin pump is approximately $2,100 annually. CHAIRMAN ROKEBERG wondered if that includes insulin. MS. CASSANO replied that it includes insulin but not education. CHAIRMAN ROKEBERG asked, "Does that work in Alaska?" MS. CASSANO noted that insulin is cheaper in Alaska than in California. CHAIRMAN ROKEBERG wondered if the range with education would be between $2,700 to $5,000. MS. CASSANO stated that it depends on the individual. CHAIRMAN ROKEBERG said he thinks it is important to understand what the amendment does. MS. CASSANO said: Costs are fairly consistent in New Hampshire, and I pay my mother's pharmaceutical bills in New Hampshire because she was a non-working woman without insurance, and my cost was over $300 a month, and she takes insulin. CHAIRMAN ROKEBERG asked if insurance companies charge extra premiums for people with the pre-existing conditions of diabetes. MS. CASSANO said she does not know. CHAIRMAN ROKEBERG asked if these people get turned down. MS. CASSANO affirmed this. She said that is why they worked on the comprehensive insurance pool a number of years ago. She explained: There has been some federal legislation that in some instances where once someone is in an insurance pool of some sort and they change employment, that they cannot be dropped...due to pre-existing conditions...Nobody has ever lost a job due to a diagnosis of breast cancer or prostate cancer. The amount of public misperception about diabetes, there's still a considerable amount of discrimination that goes along. So, when Representative Cissna says, you know, people who have diabetes tend to be very introspective and they take care of themselves...that's because they have had difficult times at schools. CHAIRMAN ROKEBERG reiterated that the question is the cost issue. TAPE 00-30, SIDE A REPRESENTATIVE HALCRO made a motion to remove his amendment to Amendment 2. CHAIRMAN ROKEBERG stated that Amendment 2 was before the committee. Number 0039 REPRESENTATIVE MURKOWSKI stated she is against Amendment 2. She commented: I think we need to recognize that this is not a situation where, on the first of every year, a person with diabetes goes in for an annual check and then you're done and over with and that it's an annual educational process as was indicated. There's highs and lows in a person's diabetes. There's highs and lows. There's changes in the technology. It's not a constant so just to say that it's $1,000 per year and if you don't spend any this year, you've blown your $1,000...I think what needs to be recognized is that the only way we're going to recognize a cost benefit with the diabetes issue, is if education is promoted and the way that you promote it is you allow the person who has diabetes to take what is needed in terms of education. CHAIRMAN ROKEBERG indicated his preference to hold over HB 298. REPRESENTATIVE BRICE said he thinks Amendment 2 needs to be disposed of. CHAIRMAN ROKEBERG clarified that he believes Amendment 2 should be withdrawn and HB 298 held over. REPRESENTATIVE BRICE expressed that he would like to make a motion on HB 298 and believes good testimony has been heard. He thinks the labor and commerce aspects of HB 298 have been adequately explored. CHAIRMAN ROKEBERG pointed out that he would like to have some time to make sure the industry and cost aspects are thoughtfully addressed. REPRESENTATIVE BRICE said he understands. He said: But the questions you were asking and have been asking very vigilantly for the past four years, some very important questions, have not been answered in four years. Hopefully the department in the future might be able to come up with the specific questions on how mandates impact coverage. I think the bottom public policy that we must make, and we can make with the information presented, is whether or not coverage for diabetes is an important issue for insurance to be involved in. REPRESENTATIVE MURKOWSKI stated: Mr. Chairman, just to let you know, you've asked for some additional time to kind of look at the numbers, if you will. And when we heard this bill in the HESS [Health, Education and Social Services] Committee, ... we did not move to schedule this immediately because we wanted to make sure that the players that were involved had an opportunity to get the numbers to get the information and the discussions that we had had, the only real ones in opposition to this have been from Mr. Evan's clients. It has been kind of a cap figure that's been pulled out of the air. There are three other states which, in fact, do have caps. As I understand, there's really not a lot of rhyme or reason as to how that cap has come about and nobody's clearly established that those caps are proving to be effective. So, I question what additional information we'll be able to get between now and Monday. CHAIRMAN ROKEBERG asked, "Representative Murkowski, did I ask you to do something?" REPRESENTATIVE MURKOWSKI replied, "You did." She said he had asked for things in writing. CHAIRMAN ROKEBERG explained to the committee that he had asked Representative Murkowski to check with the top six to eight insurance companies that write approximately 85 percent of the policies in Alaska and to find out what their position is on HB 298. REPRESENTATIVE MURKOWSKI explained that Amendment 1 is a direct result of the communication with those insurance companies. Number 0513 REPRESENTATIVE HALCRO stated: This is the second committee of referral and, as we have seen in this committee and I've seen in other committees, when there's been associations or affected industries that have been opposed to a bill or cried about potential negative impacts, they have been very present, not just in the first committee of referral, but all the way down the line. If this is one of those things where, you know, let sleeping dogs lie and they haven't come to the table with any complaints other than Mr. Evans, who does a fine job, you know, I would say, obviously, they're probably taking a neutral position because I would bet dollars to doughnuts that if this had a negative impact on the bottom line, they'd be sitting at this table telling us that they're going to lose X amount of their coverage... CHAIRMAN ROKEBERG interjected. He clarified that there are eight insurers in Alaska, but the problem is there are not enough health insurers underwriting health insurance in Alaska. He said, "You don't get it." REPRESENTATIVE HALCRO said he does get it. He thinks if it was of great interest to these insurers, they would have sent a representative. CHAIRMAN ROKEBERG indicated HB 298 would be held over.
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