Legislature(1993 - 1994)

04/14/1993 01:40 PM HES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
  CHAIRMAN RIEGER  called the Senate Health, Education and Social              
 Services (HESS) Committee to order at 1:40 p.m.  He then                      
 brought  SSSB 114  (STATE HEALTH RESOURCES AUTHORITY) and  SB 123             
 (CIVIL LIABILITY: MEDICAL MALPRACTICE) before the committee,                  
 stating that both pieces of legislation were the                              
 recommendations of the Health Resources and Access Task Force.                
 SENATOR DUNCAN, prime sponsor of SSSB 114, said the two pieces                
 of legislation are the health care reform proposals                           
 recommended by the task force that worked over the past two                   
 years.  They are designed to bring about a comprehensive                      
 reform plan to bring health care costs under control, as well                 
 as to provide universal access of health care to Alaskans.                    
 The task force made recommendations that centered around cost                 
 containment, improvements in the access and service delivery                  
 system, as well as medical malpractice reforms.                               
 Senator Duncan noted that SSSB 114 contains one provision that                
 does not appear in the task force recommendations, which is                   
 the requirement that there be a comprehensive long-term care                  
 plan developed.  He believes the development of a                             
 comprehensive long-term care plan is an important component                   
 of comprehensive reform of the state's health care system.                    
 Senator Duncan said basic health care is not available to all                 
 Alaskans.  The task force concluded that there are                            
 approximately 76,000 non-elderly, non-native Alaskans who have                
 no health care coverage.  About 21,000 of that 76,000 are                     
 under the age of 18 and it is a serious problem for these                     
 young people.  The task force also found that nearly nine out                 
 of ten Alaskans without health care coverage are "working                     
 uninsured" and their dependents.                                              
 Senator Duncan said the rising cost of health care and health                 
 insurance in Alaska is one of the most critical problems                      
 facing the state.  It is projected that if the inflationary                   
 trends continue unabated, in ten years Alaskans will pay $5.6                 
 billion annually for health care services, up from the $1.5                   
 billion in 1991.  Enactment of meaningful health care reform                  
 as contained in SB 114 will significantly reduce the rate of                  
 increase and provide access to health care for more Alaskans,                 
 he stated.                                                                    
 Number 100                                                                    
 Senator Duncan explained that SB 114 establishes the Alaska                   
 Health Care Authority to manage the health care cost                          
 containment and access initiatives proposed by the task force.                
 Some of the specific duties of the Authority will be to:                      
 design and establish a statewide health care expenditure                      
 limit; establish state sponsored health insurance pooling                     
 arrangements; and design a single-payer health care financing,                
 uniform billing and claims system.                                            
 Senator Duncan outlined the following reasons why the task                    
 force concluded that the single payer approach was preferable:                
  (1)  The current mix of public, employer, and individual                     
 financing inevitable creates coverage gaps for some people,                   
 particularly when their employment status changes.                            
  (2)  Health care financing plans that require all                            
 businesses to provide health care benefits, or that levy                      
 additional taxes on employers who do not provide benefits, may                
 threaten the economic viability of many small businesses in                   
  (3)  Multiple-payer systems would not necessarily address                    
 the problems of cost shifting that exist in our current                       
 system, and                                                                   
  (4)  Systems that are built upon existing public-private                     
 financing arrangements can be expected to inherit the                         
 inefficiencies of those systems.                                              
 The task force has recommended that until universal access is                 
 attained, interim steps be taken to provide increased health                  
 care access to unserved or underserved groups through the                     
 following statutory changes which are included in SB 114:                     
  (1)  General reform of the small employer health                             
 insurance market to prevent abusive rating practices, require                 
 disclosure of rating practices, regulate policy renewal, and                  
 limit exclusion of preexisting medical conditions.                            
  (2)  Phase in a community rating system for establishing                     
 premiums in the small group insurance market, and                             
  (3)  Implement publicly subsidized coverage of uninsured                     
 low-income pregnant women and children who are not eligible                   
 for Medicaid.                                                                 
 Number 200                                                                    
 Addressing SB 123, Senator Duncan explained that it includes                  
 a recommendation made by the task force which reduces the                     
 statute of limitations for birth-related injuries from the                    
 current law up to the eighth birthday of the child.  It also                  
 includes the recommendation by the task force that the state's                
 existing pretrial screening process for medical malpractice                   
 suits be replaced with a court ordered non-binding arbitration                
 process.  Further, it recommends that there be a change in the                
 level of prejudgment interest charged in medical malpractice                  
 cases from the 10.5 percent, which is currently in statute,                   
 to the prevailing interest rate.                                              
 Senator Duncan added that as the task force was doing its work                
 there was a lot of interest and concern, especially among the                 
 provider community, to try to put everything into one piece                   
 of legislation, but the attorneys advised that those two items                
 could not be rolled together because of the violation of the                  
 single subject rule.  He noted that the effective dates on                    
 both bills have been tied together so that they go through as                 
 a package and not as individual pieces of legislation.                        
 Number 241                                                                    
 CHAIRMAN RIEGER commented that as the committee moves into the                
 health care issue, there are several other approaches that he                 
 believes are important for the committee to have before it to                 
 have the benefit of seeing what the various approaches are.                   
 Number 275                                                                    
 SENATOR LEMAN noted that  SB 161  (INTEREST RATES:                            
 JUDGMENTS/TAXES/ROYALTIES) also relates to both prejudgment                   
 interest and postjudgment interest, and he is hopeful that it                 
 will pass this session.                                                       
 Number 307                                                                    
 SENATOR ELLIS, Co-chair of the Health Resources and Access                    
 Task Force, commented that one of the most startling things                   
 he learned during the approximately 18 months of the task                     
 force's work is that competition can be a startling success                   
 in some facets of health care reform and can be an incredible                 
 nightmare in other areas, that market forces are extremely                    
 distorted in this arena.  He also noted that so much of what                  
 is read about the national debate on health care is not                       
 applicable to the State of Alaska and, in the task force work,                
 they found just how different Alaska is from most other                       
 Number 365                                                                    
 MARY LOU MEINERS, Chairperson for the State Legislative                       
 Committee for the American Association of Retired Persons,                    
 stated their organization advocates the creation of an Alaska                 
 health care plan which includes comprehensive long-term care                  
 that provides for a continuum of home, community and                          
 institutional services.                                                       
 In the interest of achieving these reforms, AARP advocates:                   
  (1)  The creation of an authority to manage the access,                      
 delivery, quality, planning and financing of health care in                   
 Alaska, and establish a voluntary health care procurement and                 
 financing tool to maximize the purchasing power for state and                 
 local governments and political subdivisions, for state                       
 residents who uninsured and underinsured and for public and                   
 small employer plans.                                                         
  (2)  The collection and analysis of state health care                        
 utilization and data cost.                                                    
  (3)  The expanding, monitoring and certifying of                             
 facilities expansion and substantial equipment technology                     
 purchases to assure the need and eliminate duplication of                     
 unnecessary expenses which would require certificate of                       
 statutes now in place.                                                        
  (4)  Promoting health awareness, preventative medicine                       
 and quality health care for all state residents.                              
  (5)  Providing quality, affordable health care access for                    
 underinsured and uninsured Alaska residents.                                  
  (6)  Continuing evaluation of the effect of federal                          
 program changes and maximizing the use of federal funds.                      
  (7)  Promoting health care professional training and                         
 retention in Alaska, and developing a program for recruitment                 
 of health care professionals.                                                 
  (8)  Developing a way for the sole proprietor and small                      
 employer to provide health coverage to employees and to their                 
      (9)  Continuing to evaluate alternative and self-funding                 
 as the option for state employees' and retirees' plans, and                   
     (10)  Formation of a cross-section focus task force to                    
 continue to study and make recommendations to assure quality,                 
 affordable health care for all Alaskans.                                      
 Number 432                                                                    
 KAREN PERDUE, a former Health Resources & Access Task Force                   
 member who is currently in private business with her husband                  
 in Fairbanks, said they are being saddled with costs for                      
 health care insurance that are unbelievable, so her interest                  
 in this subject has changed over time to understanding the                    
 needs of people who are having an ongoing problem managing the                
 cost of health care premiums in Alaska.                                       
 Ms. Perdue said over the past four or five years there has                    
 been a tremendous amount of activity at the state level to                    
 explore what's right for certain states, and there have been                  
 two categories of things that have been done:  some states                    
 have moved forward with their own plans, such as the State of                 
 Washington and the State of Oregon; and there have been states                
 who have chosen to wait for the federal government to come                    
 forward with their plan, and Alaska is in the later plan.                     
 Ms. Perdue cautioned that Alaska really needs to start                        
 thinking about what kinds of plans it is going to make for the                
 day that the Clinton Administration releases its plan.  She                   
 said there are some good experts in the state system, but we                  
 are not organized in a way to fully analyze some of the                       
 proposals that will be coming down from the federal                           
 government.  She stressed that the health care authority would                
 provide the state with the tool to do that.                                   
 Number 485                                                                    
 DR. RODMAN WILSON, a retired internist living in Anchorage and                
 a member of the Health Resources and Access Task Force, said                  
 his main criticism of the task force report and SSSB 114 is                   
 that it emphasizes the primacy of cost, which he agrees with,                 
 but it doesn't stress access quite enough.                                    
 Mr. Wilson also stressed that the state needs to be ready to                  
 respond to what will be coming from Washington, D.C., and the                 
 more sound proposals that are on the table for discussion, the                
 better.  It is his hope that something can be fashioned that                  
 is a hybrid between SSSB 114 and the CHIPRA bill (HB 273).                    
 Mr. Wilson also noted that the Clinton Administration is                      
 talking about doing away with Medicaid and incorporating it                   
 into state plans, which is something that could be part of                    
 either SB 114 or HB 273 or an amalgamation of those issues.                   
 Number 562                                                                    
 CHAIRMAN RIEGER commented that one of reasons that managed                    
 competition seems like an interesting idea is that it seems                   
 to address some of the principles which make sense.  He said                  
 if there is going to be a health care policy of some sort, it                 
 is necessary to guard against adverse selection.  Without                     
 mandatory participation, there is always the possibility of                   
 adverse selection and the healthy people end up being insured                 
 and the others are left out.  The high risk pool tends to                     
 become higher and higher risk as the dynamics of the system                   
 work themselves through.                                                      
 Chairman Rieger said there are number of other medical issues                 
 that should be addressed such as the philosophy of treating                   
 illness rather than prevention, high markups for distribution                 
 of health care, tort law, as well as reviewing some of the                    
 things that the State of Oregon has addressed.                                
 TAPE 93-36, SIDE B                                                            
 Number 012                                                                    
 CHAIRMAN RIEGER said it was his intention to have the CHIPRA                  
 measure introduced and before the committee, as well as other                 
 proposals before the committee for its consideration.                         
 There being no further business to come before the committee,                 
 the meeting was adjourned at 2:27 p.m.                                        

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