03/26/2002 08:07 AM House STA

HB 315-GROUP HEALTH INSURANCE FOR PRIVATE GROUPS                                                                              
                                                                                                                                
CHAIR COGHILL announced that the  last order of business would be                                                               
SPONSOR  SUBSTITUTE FOR  HOUSE  BILL NO.  315,  "An Act  allowing                                                               
employers   that   are    small   businesses,   small   nonprofit                                                               
organizations, or  small associations  for insurance  purposes to                                                               
join state employee insurance coverage  as a group; and providing                                                               
for an effective date."                                                                                                         
                                                                                                                                
REPRESENTATIVE   NORMAN  ROKEBERG,   Alaska  State   Legislature,                                                               
testified as the sponsor of HB 315.                                                                                             
                                                                                                                                
TAPE 02-32, SIDE A                                                                                                              
Number 0001                                                                                                                     
                                                                                                                                
REPRESENTATIVE ROKEBERG began  by pointing that he  has spent the                                                               
last  eight  years working  on  health  insurance issues  in  the                                                               
legislature.   He related his  finding that the inability  of the                                                               
private sector market to provide  affordable cost effective plans                                                               
for  specific businesses  with higher  interest rates  is pricing                                                               
them out of the private market.                                                                                                 
                                                                                                                                
REPRESENTATIVE ROKEBERG noted his  sensitivity to the competition                                                               
with the private  sector.  He explained his  goal of establishing                                                               
a climate  inviting insurance underwriters into  the state rather                                                               
than  forcing them  out.   "On first  blush this  legislation may                                                               
appear   to  be   that  change   in  philosophy,"   he  remarked.                                                               
Representative Rokeberg  commented that  there's such  a problem,                                                               
especially  knowing that  Premera  Blue Cross  of Washington  and                                                               
Alaska holds  over 50 percent  of the entire covered  lives under                                                               
private  health   insurance  in   the  State   of  Alaska.     He                                                               
characterized   Alaska's   [health   insurance   market]   as   a                                                               
contracting market.                                                                                                             
                                                                                                                                
Number 0195                                                                                                                     
                                                                                                                                
REPRESENTATIVE ROKEBERG  explained that  originally the  plan was                                                               
to open the state plan such  that other small businesses would be                                                               
invited in.  A few years  ago the administration decided to allow                                                               
the bargaining units  to "step out on their own."   He noted that                                                               
the legislature  was never  asked about this,  and he  has always                                                               
opposed  it.   He acknowledged  the  notion that  the larger  the                                                               
pool, presumably the  lower the rates can be  adjusted.  Although                                                               
he recalled  the belief  that 300-500 people  can be  an adequate                                                               
size  for a  pool,  one [critical  case] can  result  in a  large                                                               
annual bill.  This original  form of the legislation created much                                                               
protest,  which is  the reason  for the  sponsor substitute  that                                                               
doesn't  include the  bargaining units.   The  sponsor substitute                                                               
also  raised the  number of  employees [required  to comprise  a]                                                               
small business from 50 to  300.  However, Representative Rokeberg                                                               
noted  he is  having misgivings  about  that change  and thus  he                                                               
requested that  the committee consider  lowering that  limit back                                                               
to  50  employees  because  that's   consistent  with  the  state                                                               
definition of a  small business and is less  competitive with the                                                               
private market.                                                                                                                 
                                                                                                                                
REPRESENTATIVE  ROKEBERG  explained   that  currently  the  state                                                               
enjoys a  government exception under the  Employee Retirement and                                                               
Income  Security  Act  of  1974  (ERISA).    Therefore,  bringing                                                               
private sector people in [under  ERISA] would jeopardize that and                                                               
thus  the bill  may need  to  be modified.   With  regard to  the                                                               
effective   date,  the   nonprofits  have   requested  that   [be                                                               
extended].    Representative  Rokeberg concluded  by  noting  the                                                               
importance of this legislation.                                                                                                 
                                                                                                                                
Number 0820                                                                                                                     
                                                                                                                                
CHAIR COGHILL  announced his intention  to bring SSHB  315 before                                                               
the committee on  Thursday, March 28, 2002.   Therefore, SSHB 315                                                               
was held over.