Legislature(1993 - 1994)
03/23/1993 01:40 PM Senate 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
SENATOR KELLY announced SB 40 GROUP HEALTH INS. FOR SMALL EMPLOYERS to be up for consideration. KEN ERICKSON, Aide to Senator Pearce, said SB 40 promotes availability of health insurance coverage for small employers and reforms the small employer health insurance market. It provides guaranteed availability of health insurance regardless of health risk and without added expense to the state. Number 458 JAN MEISELS, Health Insurance Association of America, said the reason this bill focuses on small employers is because they have some unique problems. One of them is the high turn over rate of employees; 90% of Alaskan are employed by a small employer with 2 - 25 employees. She said this bill does not mandate anything, but allows an employer who wishes to provide insurance to be able to get that insurance. Insurance companies will no longer "cherry pick." Groups will be guaranteed renewed coverage, even with high risk and high health claims. The pre-existing 12-month exclusion period goes with the employee if he changes jobs or companies. Number 396 There are also premium pricing limits, which doesn't mean the state is setting insurance company rates. It means there is a limit for every carrier who sets their premiums on what they can charge from their best group to their worst group. She then did a sectional analysis of the bill. She said there are provisions for reinsurance of high risk individuals. The insurance company has to pay the first $5,000 claim before the reinsurance board goes into it. There is a premium for the reinsurance that the insurance company pays. They are constrained within the premium pricing limits in how much they recoup from the policy holders. MS. MEISELS explained SB 40 established a Health Benefit Committee that would recommend to the Reinsurance Board what benefits should be included in the basic and standard plan. This bill sets up a fair marketing standard by preventing "gaming" by insurance companies who may want to drop a high risk group for a year. It also prevents agents from being rewarded for not bringing in a "bad group." Number 232 MS. MEISELS reviewed the proposed amendments which were pro- consumer and technical (see attachment). She said they were from the National Association of Insurance Carriers (NAIC) model. She explained that "capitation" means per-head. So an HMO would pay a physician a certain amount a month whether you see the physician or not. SENATOR SALO asked her to further explain the 12 month pre- existing clause. MS. MEISELS said this meant that an insurance company could exclude coverage for a pre-existing condition for up to 12 months, but would have to cover everything else and would have to cover the pre-existing condition after the 12 months and this exclusion is portable to another job and another insurance company. TAPE 93-23, SIDE A Number 001 JAY FRANK, representing State Farm and Allstate Insurance Companies, supported SB 40 wholeheartedly. SENATOR KELLY noted that John George, representing the American Council of Life Insurers, supported SB 40. JOE POOR, Executive Director, Juneau Chamber of Commerce, supported SB 40 and encouraged it's passage. Number 62 REED STOOPS, representing AETNA Insurance Company, supported SB 40. SENATOR SALO asked what you could anticipate as a premium for some sort of basic coverage. MS. MEISELS said she didn't have a specific figure, but referred her to the "Market Test Report" which lead her to believe the cost was not going to be as high as assumed.
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