Legislature(2011 - 2012)BARNES 124
03/12/2012 03:15 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB275 | |
| HB337 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 275 | TELECONFERENCED | |
| *+ | HB 337 | TELECONFERENCED | |
HB 275-RETIREE BENEFITS:COLORECTAL/DRUG BENEFITS
3:20:40 PM
CHAIR OLSON announced that the first order of business would be
HOUSE BILL NO. 275, "An Act requiring that a policy of group
health insurance offered by the state and certain local
governments include coverage for colorectal screening, allow
retirees to choose between brand-name and generic drug products,
and limit certain prescription drug benefit payments to an
amount based on the cost of the generic drug product."
3:21:03 PM
REPRESENTATIVE BOB LYNN, Alaska State Legislature stated that
this bill is about saving money and saving lives. He related a
scenario in which in which he filled a prescription at a Fred
Meyer pharmacy. The pharmacist talked to him about the cost of
brand name prescription drugs.
3:22:36 PM
MIKE SICA, Staff, Representative Bob Lynn, Alaska State
Legislature, on behalf of the sponsor, Representative Bob Lynn,
stated that this bill would affect about 14,000 public retirees
that are pre-Medicare age or under the age of 65.
3:22:48 PM
REPRESENTATIVE LYNN stated that the cost difference between
using brand name and generic drugs is staggering. He passed out
a list of drugs his pharmacist gave him. Everyone probably
takes one or more of these drugs, he said. He compared the cost
of brand name drugs to the generic drug for several drugs, as
follows: Zofran, $3,204 for brand name drug as compared to
$10.35 for generic; Effuxor, $1,375 for brand name drug as
compared to $23.40 for generic; Prilosec, $714.24 for brand name
drug versus $20.85 for generic; Glucophage, $91.68 for brand
name drug versus $1.32 for a 90-day prescription of the generic
drug. He characterized the price difference as amazing. Thus
the potential for savings is great. This bill proposes that
retired state employees must use the generic drug, although if
the retiree wanted to use the brand name the retiree could pay
the difference. He pointed out that the only exception would be
if a doctor or pharmacist designates the drug must be a brand
name or if a [generic] drug is not available. He turned to the
second portion of the bill, which relates to colorectal
screening and is a life-saving measure. Currently, retired
state employees under the ages of 65 are not eligible for
insurance coverage for colorectal screenings; however, Alaskans
who are incarcerated do receive the benefit of screening. He
concluded that HB 275 will save money and save lives.
3:25:46 PM
MR. SICA referred to page 1, which would add a new paragraph to
extend colorectal screening as a preventive measure and is
similar to a measure the committee considered last year. He
stated that this would extend health care coverage of colorectal
screening for cancer to a group of retirees, including public
retirees, the judicial system, the Teachers' Retirement System
(TRS), the public employees. About 14,000 people, not including
dependents would be affected by the bill, and this group
comprises the only major group in Alaska without this important
coverage. He stressed this as a lifesaving technique. He
pointed out that the Department of Corrections advises that
inmates also have colorectal screening using American Cancer
Society guidelines and inmates have coverage.
He turned to paragraph (14) of the bill, which would offset the
cost of colorectal screening by requiring the same group to use
generic rather than brand name drugs unless their doctor or
pharmacist recommends a brand name since some drugs, such as
cardiac or psychiatric medicines differ from the generic brand
or may not be available. If the retiree beneficiary wants to
use the brand name the individual must pay the difference.
3:28:15 PM
MR. SICA recalled the sponsor's earlier testimony. He
emphasized that the sponsor thought it would be useful to use
the savings to cover colorectal screening, which is a high
priority for many people. He pointed out that the sponsor has
worked with the American Cancer Society, the Retired Public
Employees' Association (RPEA), the AARP, and the administration,
including the Division of Retirement and Benefits. He hopes the
fiscal impact reductions will fund the cost of colorectal
screening.
MR. SICA referred to the three fiscal notes. He related that
the Division of Insurance submitted a zero fiscal note. He
referred to the 2012 Buck Consultants study dated January 18,
2012, which shows the cost of colorectal screening would be
$3.19 million and the savings resulting from using generic drugs
would be $3.23 million. The sponsor estimated the possible
costs savings at $40,000 in the first year. The Division of
Retirement and Benefits submitted a one-time cost of $26,000 to
change brochures. He referred to the Department of Health and
Social Services fiscal note just received, which is a little
complicated, but discussed Medicaid benefits for brand name
prescription drugs. He pointed out that in 2010 a Medicaid task
force recommends the state move more toward generic drugs.
3:30:19 PM
REPRESENTATIVE SADDLER asked for the cost for the colorectal
screening.
MR. SICA answered that individual cost for colonoscopy would
range from $1,800 to $6,000 depending on what the doctor
discovers. He suggested that the Division of Retirement and
Benefits used a cost of $3,000-4,000, but he was not certain.
3:31:43 PM
REPRESENTATIVE HOLMES answered whether the sponsor considered
applying generic drugs to current public employees.
MR. SICA answered that the sponsor was trying to take advantage
of the savings by using generic drugs and use it to cover the
colorectal screening. In 2010, the Division of Retirement and
Benefits' newsletter explained substantial savings by using the
voluntary use of generic drugs. The active state employees
saved about $414,000, whereas the retirees saved $7.6 million.
He surmised that the higher the copay the higher the generic
drug usage. He related his understanding that the retiree plan
has a difference of $8-4 dollars between using the brand name or
the generic drug.
CHAIR OLSON remarked that the contract negotiation for state
employees may prevent mandating it.
3:33:44 PM
MR. SICA provided a brief sectional analysis of the bill.
Section 1 paragraph (13) would extends the coverage to cover
colorectal screening to municipal and state employees and
officers who retire under the Public Employees' Retirement
System (PERS), the Judicial Retirement System, the Teachers'
Retirement System, or the former Elected Public Officers
Retirement System health coverage would include colorectal
screening, which is the one group not covered in Alaska.
MR. SICA related that Section 1, paragraph (14) would increase
the use of generic drugs by allowing the beneficiary to choose
between generic and brand name drugs unless the doctor or the
pharmacist indicates a brand name must be used or that it is not
available. He explained that Section 2 amends the definition of
generic drug as in AS 08.80.480. He read:
An equivalent drug product means a drug product that
has the same established name, active ingredients,
strength or concentration, dosage form and route of
administration. It is formulated to contain the same
amount of active ingredients in the same compendia or
other applicable standards for strength, quality,
purity, and identity, but may differ in
characteristics such as shape, scoring configuration,
packaging, excipients including colors, flavors,
preservatives, and expiration time;
3:35:25 PM
MR. SICA added that generic drugs are a lot cheaper. He
referred to handout in the members' packet that indicates
generic medicine is 70 to 90 percent less expensive.
3:35:42 PM
GARY MILLER, Vice President, Southeast Region, Retired Public
Employees of Alaska (RPEA) read a letter from Bob Doll, as
follows [original punctuation provided]:
The Retired Public Employees of Alaska (RPEA) is
gratified to offer its support for your draft bill, HB
275, to require that retiree medical insurance
coverage include colorectal screening and
colonoscopies. In fact, providing this coverage has
been a major objective of RPEA for several years. We
hope that the Alaska legislature will seize this
opportunity to offer coverage for both retirees and
the state. The bill will also include use of generic
prescription drugs, a goal that RPEA has pursued among
its members for many years in our continuing efforts
to increase the cost of health care.
Some of our members are concerned with the mechanism
to trade-off the cost of colonoscopies against the
savings from increased use of generic drugs. While we
applaud the effort to increase both health concepts,
the dollar values resulting will have an uncertain
impact on our members. Accordingly, we hope that the
final version of HB 275 will incorporate a sunset
provision of five years in order to ensure a future
review of the results it has produced. Buck
Consultants in their letter of November 29, 2007,
reported on their efforts to estimate return-on-
investment (ROI) for adding colonoscopy coverage to
the retiree plan. That letter concluded, in part,
"...we believe an explicit colon screening diagnostic
provision in the retiree plan will prove financially
positive over time (p.4)."
As long ago as August 29, 2005, the American Cancer
Society, Alaska Office, wrote to then Commissioner of
Administration ray Matiashowski reporting the results
of a study by the Lewin Group, a nationally recognized
health policy consulting firm located in Washington
D.C.
3:38:19 PM
MR. MILLER continued to read, as follows:
Based on the results of that study the Society
reported, "Our final conclusion is that there is no
economic reason for insurance plans not to cover the
full range of colorectal cancer screenings and there
are tremendous life-saving benefits for doing so."
The Congress has included in the Affordable Care Act
of 2010 coverage for colorectal cancer screenings.
For state retirees covered by Medicare, such
screenings are a major step forward in the effort to
combat this disease. Retirees under 65 years of age,
covered only by the state medical plan, are left to
combat this threat at their own expenses, an
inconsistency that we find difficult to understand.
While the Buck analysis is useful in supporting the
goals of HB 275, it is merely a statistical and
financial document. It does not include any
consideration for the number of fellow retirees -
among who will eventually be included all current
members of the Alaska State legislature - who will
contract colorectal cancer and whose prospects for
survival will be vastly enhanced if that cancer can be
detected early. While the financial rational for HB
275 should be enough to draw the support for the bill,
I hope that the legislature will not overlook the
important humanitarian dimension of a condition which
all of us may face at some time.
RPEA is proud to have the opportunity to endorse HB
375.
3:41:07 PM
PAUL W. DAVIS, MD, FAAFP, Medical Director, Colorectal Cancer
Screening Program, Alaska Native Medical Center (ANMC), said
that he is the medical director, Alaska Native Medical Center
Colorectal Cancer Screening Program, and works in the screening
program for the Yukon Kuskokwim Health Corporation. He has
worked in Dillingham, Seward, and many parts of the state
providing colonoscopies and colorectal cancer screening for
Alaska Native and other Alaskans. He stated that colon cancer
is a major killer, and the second highest cancer killer of
Americans, in particular, this cancer hits the Alaska Native
population hard. He said 1 of 19 Americans will be diagnosed
with colon cancer before they die, but the rate of 1 of 8-9
indicates twice the risk for the Alaska Native population. This
cancer is preventable, unlike lung cancer which cannot be
screened. This cancer can be found in a stage, similar to
cervical cancer or pap spears, but the test is even more cost
effective than pap smears. In 1960, cervical cancer killed more
women than any other cancer, but with screening women no longer
need to die of cervical cancer. He also said that colon cancer
is similar since people start to grow precancerous polyps in
their 40s and for the average population are at risk by age 50.
He said colorectal screening is lifesaving. The medical
community has known for some time that removing polyps helped
prevent colon cancer. However, two weeks ago in the New England
Journal of Medicine, Dr. Sidney Winawer, a gastroenterologist,
and his colleagues in Boston published a study in Boston
indicates more than a 50 percent decrease in death rate from
cancer is achieved by having a single colonoscopy to remove
polyps between the ages of 50-65. In 2007, former Governor
Frank Murkowski signed into law that any insurance company doing
business in Alaska is required to offer colon cancer screening.
Yet our own retirees between the ages of 50-65 are not given
that benefit, which is required by law. He recalled in 2007
saying, "Finally our Alaska State Governor was paying attention
to the Alaska gas pipeline that really needs to be scoped out."
3:44:59 PM
DR. DAVIS characterized the second part of the bill, which
addresses brand name drugs versus generic drugs as trading
something that has no benefit to retirees. He explained that
generic prescription drugs are as good and are equivalent to the
brand name prescription drugs. He offered his belief that
ordering brand name medicines drives up health care costs. He
stated that since health care dollars are limited these dollars
need to be spent wisely. He emphasized that colorectal cancer
screening is a wise use of health care dollars and spending them
on brand name drugs that have no proven benefit over generic
drugs is not a wise use of health care dollars. Even if the
tradeoff did not exist, colorectal cancer screening not only
saves lives and prevents colon cancer, but in the long run saves
the state a huge amount of money. He pointed out that it is far
less expensive to screen people and prevent diseases than it is
to take care of colon cancer when it develops. He said, "It is
an extremely expensive disease to take care of and patients
always suffer and die."
3:46:31 PM
MOLLY MCCAMMON stated that in 1997 she was a 45-year-old state
employee, when she was diagnosed with stage one colorectal
cancer following a colonoscopy paid for by her State of Alaska
health insurance coverage. She stated that she knew her
grandfather had died of colon cancer at the age of 45. A
grandfather is a second-degree relative and while that alone is
not significant in terms of colon cancer her doctor recommended
a colonoscopy due to some very minor symptoms. She expressed
her belief that she would have ignored the symptoms completely
if her insurance had not covered the procedure. She had the
procedure and the doctor discovered the tumor and surgically
removed it. Her colon cancer was discovered early enough to
surgically remove it and she did not even need radiation or
chemotherapy. However, now that she is 60 and a state retiree,
she discovered that screening colonoscopies are not covered by
her health insurance. She offered her belief that this is
absurd since preventing colorectal cancer and not just early
diagnosis should be a major reason for supporting routine
colorectal cancer screening. She emphasized that colorectal
cancer screening is the only effective test and early detection
is very treatable. She related as humans our tendency is to
postpone or even avoid expensive procedures like a colonoscopy
until either a tumor is too large to ignore or the cancer has
spread to other parts of the body. Treatment for colorectal
cancer has improved significantly over the past few years, which
has resulted in more than a million colorectal cancer survivors
in the U.S. She said, "I really consider myself fortunate to be
one of them and I know it's because I was able to have my
colonoscopy covered by health insurance. I urge you to support
this legislation so that there will be more survivors like me.
Thank you very much."
3:48:47 PM
PATRICK LUBY, Advocacy Director, AARP Alaska, said that AARP is
in strong support of HB 275. Medicare now covers all colorectal
cancer screening without any copay or deductibles. Through
research the federal government has discovered that colorectal
cancer screening saves lives and money. Early detection and
treatment make good economic sense and good health preventive
policy. Our active public employees and inmates in the
correctional system can have colorectal cancer screening
coverage. He stated that AARP thinks it makes sense for PERS
and TRS retirees too young for Medicare to also have health care
coverage. He concluded by saying that AARP urges members to
support HB 275.
3:50:04 PM
EMILY NENON, Alaska Government Relations Director, American
Cancer Society Action Network, stated that she has worked on
this issue for some time and wrote her first letter on this
issue on behalf of the American Cancer Society in 2005. She
said she hopes this issue will get resolved before she is ready
to retire. In 2006, the legislature passed House Bill 393,
which required all state-regulated insurance plans to cover
colon cancer screening according to the American Cancer Society
guidelines. At the time, the society found a number of other
plans not covered by the state added colorectal cancer screening
coverage, such as Providence Health System, which is self-
insured. In 2011, Medicare changed rules its rules to cover 100
percent of the colorectal cancer screening without any copay.
She highlighted that remaining are those retirees ages 50-64.
She recalled previous testimony that colonoscopies are
expensive, which is true. However, colonoscopies are
recommended once every ten years and if averaged out become
cheaper than mammography screening. She highlighted that
colorectal cancer is the second leading cause of cancer deaths
in Alaska and across the nation. She emphasized that it is true
that Alaska Natives have the highest incidence of colorectal
cancer of any population group in the nation. She pointed out
that with early detection, the five-year survival rate from
colon cancer is over 90 percent, but if colorectal cancer is not
caught until it reaches organs, when symptoms are most likely to
occur, the five-year survival rated drops to 11 percent. She
estimated that with regular screening half of colorectal cancer
deaths could be prevented. She urged support for HB 275.
3:53:05 PM
RICHARD BENEVIEDES stated that most of the points he raised at
the hearing last April are applicable points. He offered the
reason he is not currently in Juneau is since he had a
colonoscopy as part of routine physical in 2008. The
colonoscopy revealed that he had stage four colon cancer that
had spread to his liver. His doctor told him that a person with
stage four colon cancer has a life expectancy of two years. He
offered his belief if he had not had the colorectal cancer
screening in 2008 that he probably would not have survived
without this detection. He has had two surgeries and radiation,
plus five months of IV chemotherapy and three months of oral
chemotherapy as part of his treatment. He continues to work to
rebuild his core strength. He characterized this bill as an
incredibly important bill. He said once he becomes a retiree he
would like to have another colonoscopy. He said he thinks that
it is important for retirees over 50 to get this coverage. He
also said that this bill makes sense and will save thousands of
dollars by detecting colon cancer before it becomes more
serious. He said, "Even though I have this great insurance, I
pay at least $10,000 out of pocket every year for my
percentage...for treatments and drugs. He implored members to
pass this bill. He pointed out that somewhere right now a
retiree has colon cancer, but has no idea they have colon
cancer. He stated that he would like to help that person.
3:56:29 PM
DAVID OLEWILER stated that he is a 56-year-old PERS retiree. He
worked for the Municipality of Anchorage for 31 years. He
related that five years ago he received his first colonoscopy
and a noncancerous polyp was removed. This year his doctor
recommended a follow-up colonoscopy; however, Alaska Care
excluded this retiree health care benefit in 2010. The cost of
his colonoscopy was also estimated between $1,800 and $6,000,
depending on the results of the procedure; however, he is not
able to budget 100 percent of the costs out of pocket. Without
insurance benefits he must delay the colonoscopy from one to two
years to budget for it. Additionally, most colon cancers do not
exhibit symptoms until latter stages of the disease, which makes
him extremely uneasy about delaying the test. He stressed that
with every passing month he feels as though he is rolling the
dice with his own health. He pointed out that he has nine more
years before Medicare will pay for his colonoscopy. All of the
information provided in members' packets documents the life-
saving benefits of colorectal cancer screening and others have
testified to that end. Each medical document he has read urges
Americans over the age of 50 to have a colorectal cancer
screening prior on a scheduled basis. Every article urges
screenings before any symptoms arise. He listed his sources as
the American Cancer Society, the American College of Physicians,
FightColorectalCancer.org, and Colon Cancer Alliance. He
characterized HB 275 as an important piece of legislation. This
bill would restore a component for a life-saving procedure along
with a mechanism to recover the costs of the test. He
emphasized that this bill is a win-win for the state and for
retirees. He concluded by saying, "It's also the right thing to
do." He thanked Representative Lynn and Gara, and Mr. Sica.
3:59:53 PM
CHAIR OLSON left public testimony open.
[HB 275 was held over.]