Legislature(1997 - 1998)

01/30/1998 09:00 AM Senate HES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
          SCR 14 - PARITY FOR MENTAL HEALTH TASK FORCE                         
CHAIRMAN WILKEN announced this issue was considered last session,              
and then reviewed by a steering committee of participating                     
organizations.  The steering committee's recommendations were                  
incorporated into CSSCR 14(HES), version F.                                    
SENATOR LEMAN moved to adopt CSSCR 14(HES), version F, as the                  
working document of the committee.  The motion carried with no                 
objection.  There being no discussion, the committee took                      
WALTER MAJOROS, Executive Director of the Alaska Mental Health                 
Board, stated the Alaska Mental Health Board brought forth this                
legislation in partnership with the Building Bridges Campaign for              
mental health consumers.  He reviewed the changes in the committee             
substitute as follows.                                                         
The first change is to the representation on the task force and who            
is responsible for the appointments.  Senator Ward's concerns were             
addressed and the task force will have broad representation. The               
legislation states that there will be no expenditure of state funds            
to support the task force; the Alaska Mental Health Trust Authority            
has pre-funded the task force in the amount of $50,000.  The                   
purpose of the resolution is to create the task force to study the             
issue of parity; not to introduce parity legislation.                          
MR. MAJOROS made the following comments about the issue of parity.             
Congress passed the Mental Health Parity Act of 1996, which is a               
step in the direction of equalizing mental health care coverage                
with physical health care coverage.   Currently 90 percent of                  
insurance coverage offers a higher level of benefits for physical              
health coverage than for mental health coverage.  The federal                  
legislation equalizes lifetime and annual benefits only.  It does              
not obligate employers to provide mental health coverage and                   
contains no rules regarding deductibles, co-payments or out of                 
pocket limits.  Because of these limitations, 15 states have passed            
mental health parity legislation and 25 others have introduced                 
legislation in the past year.  Because of this activity many new               
studies have been conducted.  Those studies are reporting either               
no, or a nominal, increase in cost.  The Rand Study showed that                
equalizing annual limits is costing $1.00 per person per year.                 
Comprehensive coverage is costing $7.00 per year per person.  Most             
states are finding there is no need for differential treatment of              
people with mental illnesses versus people with physical illnesses.            
The basic belief is that mental illnesses are treatable brain                  
disorders in a cost-effective manner, and in many cases are treated            
with a better success rate than physical illnesses.  He asked                  
committee members to support the resolution.                                   
SENATOR LEMAN referred to the section of the resolution that                   
contains the cost of mental health disorders to the American                   
economy, and asked if any figures are available specific to Alaska.            
MR. MAJOROS said he believes the state would reflect the national              
SENATOR LEMAN thought the number might be in the tens to hundreds              
of millions for Alaska.  MR. MAJOROS stated some people with mental            
illnesses are unable to leave medicaid coverage to take jobs in the            
private sector because if they do so, they lose mental health                  
coverage for medications.  Private insurance coverage often does               
not cover those medications.  SENATOR LEMAN asked that an estimate             
be calculated for Alaska.  MR. MAJOROS said he would attempt to do             
SENATOR GREEN asked if Alaska complies with the federal legislation            
he referred to.  MR. MAJOROS answered that legislation just became             
effective January 1,1998, so no track record of compliance has been            
established yet.  In order for an organization to request an                   
exemption, it must demonstrate six months of providing the                     
CHAIRMAN WILKEN noted he passed out the synopsis of the federal                
legislation to committee members.                                              
SENATOR GREEN asked if a large corporation that provides coverage              
for its employees is able to opt out if it can show an increase in             
costs.  MR. MAJOROS explained there are many ways an organization              
can opt out under the federal legislation.  Businesses with 50 or              
less employees can choose to not carry mental health coverage.                 
Businesses with more than 50 employees can get an exemption if they            
can demonstrate that their costs increased by greater than one                 
SENATOR GREEN questioned whether the consequences of the                       
possibility of many businesses opting out of the program completely            
has been reviewed.  MR. MAJOROS replied that Senator Green's                   
concern demonstrates the need to take a look at how the federal                
legislation may impact Alaska and how to best respond to that                  
SENATOR GREEN said she is very fearful that the task force will                
begin to mandate mental health coverage if a large number of                   
businesses opt out.  The Legislature has mandated insurance                    
coverage of three or four procedures since she has been in office,             
and she believes establishing a piecemeal approach to national                 
health insurance is wrong.  MR. MAJOROS pointed out that he worked             
directly with Senator Ward regarding the composition of the task               
force and who will be appointed by the Legislature.  He believes               
that composition reflects a balanced and consensus-building                    
SENATOR WARD confirmed that he did work with Mr. Majoros on that               
provision of SCR 14 but he agreed with Senator Green's concern.                
MR. MAJOROS responded this resolution establishes a task force to              
study the issue.  If the task force came to that conclusion, it                
would bring that information to the Legislature for its                        
SENATOR GREEN noted the clause that states that a simple majority              
of the members of the task force constitute a quorum for the                   
transaction of business, and all actions of the task force shall               
require the affirmative vote of a majority of the members present,             
requires only four votes to create a majority.  She asked if this              
language is typical for task force business.  MR. MAJOROS answered             
that the Steering Council took standard boiler plate language for              
task force construction and its decision making process.                       
CHAIRMAN WILKEN stated the resolution will be held in committee and            
that question can be answered before the next hearing.                         
SENATOR WARD said it was his understanding that task force members             
can participate via telephone and teleconference.  MR. MAJOROS said            
nothing in the resolution prevents it.  CHAIRMAN WILKEN said staff             
will follow up on that concern also.                                           
JAN MCGILLIVARY, Chief Executive Officer of the Alaska Mental                  
Health Association (AMHA), and coordinating agency leader for the              
Building Bridges Campaign for Mental Health, gave the following                
testimony.  The issue of mental health parity is not new to those              
who work in the field.  Two efforts to champion parity by AMHA have            
failed in recent years.  The issue has been studied extensively by             
the National Mental Health Association, the National Alliance for              
the Mentally Ill, the Bazelon Law Center and the National Institute            
of Mental Health.  She hoped the committee will advance the bill so            
this issue can be studied in earnest and produce an up-to-date                 
report.  Numerous recent reports make the statement that the                   
increased costs to the employer in regard to insurance benefits is             
generally less than one percent.  Also when mental health coverage             
is on par with physical health coverage, after a five to ten year              
period, the industry perceives an overall decline in the use of the            
mental health benefit overall.                                                 
SENATOR GREEN remarked that when she was on the Governor's Council,            
the federal definition of "developmentally disabled" changed.  She             
asked if the state has a definition of the scope and types of                  
illnesses that would be covered and whether that includes those who            
have developed mental illnesses as the result of alcohol and                   
substance abuse.  MS. MCGILLIVARY answered that over the year                  
during the Alaska Mental Health Association's Lands Trust                      
litigation, this question was on the front burner.  Judge Green                
finally answered the question when she defined the beneficiary                 
group for the Trust Authority.  She said when she thinks of mental             
health parity, she is thinking of people who experience major                  
mental illnesses, and alcoholics with psychosis qualify under that             
SENATOR GREEN asked if it would detract from this resolution to                
include limiting language.  MS. MCGILLIVARY did not know.                      
Number 047                                                                     
MARY ELIZABETH RIDER, a planner for the Mental Health Trust                    
Authority, stated last summer, when the Trust was making its budget            
recommendations for fiscal year 99, the Mental Health board brought            
up the concept of a task force.  The Trust is interested in                    
supporting a study conducted by a diverse task force of the type               
proposed, to help make decisions about the best way to finance                 
mental health services.  She offered to take questions back to the             
Trust members from the committee.                                              
BOB IRVINE, the Chief Executive Officer of Lifequest, the community            
mental health center in the Mat-Su Borough, testified in support of            
SCR 14.  Throughout his career with the mentally ill he has found              
that population has has been stigmatized by the work force and                 
insurance industry.   When behavioral health and physical health               
are integrated, an overall savings occurs on total health care                 
costs.  The artificial boundary between body and mind is                       
disappearing and people are realizing they need to be treated                  
together.  In terms of the cost of mental illness to the State of              
Alaska, the Alaska Mental Health Association has been in a                     
leadership position with the depression awareness treatment                    
campaign for many years.  If established, the task force could                 
answer that question.  The cost of depression alone is enormous                
when one factors in the number of lost work days, the amount of                
lost work productivity, and the effect on family members.                      
TAPE 98-7, SIDE A                                                              
DON DAPCEVICH, Executive Director of the State Advisory Board on               
Alcoholism and Drug Abuse, made the following statements.  The                 
Board supports the formation of this task force, although it has               
not taken a position on the issue of whether parity should occur,              
and in what form.  The Board encourages the Legislature to form a              
task force to look at the issues involved.  The Board's concern is             
access to services for Alaskans, in the best way possible. The                 
insurance limitations placed on services provided for clients has              
effectively discouraged the private, for-profit market from                    
providing services in Alaska.  He imagined the Board would support             
parity, but only if it is cost-effective.                                      
CHAIRMAN WILKEN agreed with Mr. Dapcevich and said he couldn't                 
imagine the task force would convene and not quantify the issue.               
SENATOR GREEN suggested requiring it to do so.                                 
GINA MCDONALD, representing the Division of Mental Health and                  
Developmental Disabilities, DHSS, stated support for SCR 14.  The              
Division is not taking a position on parity, but believes it is                
important for the task force to study the issues of cost and equity            
and to establish and informed process for decision making.                     
CHAIRMAN WILKEN noted there was no more discussion or testimony on             
SCR 14, and that it was his intention to hold the legislation until            
next Wednesday to work on several changes.  He announced there                 
would be no meeting scheduled on Monday, and informed committee                
members that he and Senator Ward attended a demonstration the                  
previous day on a new machine that, through ion and microprocessor             
technology, can discover the presence of illicit drugs being                   
brought into the State.  He hoped the Legislature has the ability              
and creativity to help our communities to get more of the machines             
because they are truly a deterrent to drug trafficking.  He                    
adjourned the meeting at 10:50 a.m.                                            

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