Legislature(1997 - 1998)

02/10/1998 03:04 PM House HES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
         HOUSE HEALTH, EDUCATION AND SOCIAL                                    
            SERVICES STANDING COMMITTEE                                        
                 February 10, 1998                                             
                     3:04 p.m.                                                 
MEMBERS PRESENT                                                                
Representative Con Bunde, Chairman                                             
Representative Joe Green, Vice Chairman                                        
Representative Al Vezey                                                        
Representative Brian Porter                                                    
Representative Fred Dyson                                                      
Representative J. Allen Kemplen                                                
Representative Tom Brice                                                       
MEMBERS ABSENT                                                                 
All members present                                                            
COMMITTEE CALENDAR                                                             
* HOUSE BILL NO. 353                                                           
"An Act relating to adoption by reference in regulations; and                  
providing for an effective date."                                              
     - HEARD AND HELD                                                          
* HOUSE BILL NO. 350                                                           
"An Act requiring that the cost of contraceptives and related                  
health care services be included in health insurance coverage."                
     - HEARD AND HELD                                                          
* HOUSE BILL NO. 344                                                           
"An Act relating to paternity establishment and child support;                 
relating to the crimes of criminal nonsupport and aiding the                   
nonpayment of child support; and amending Rule 37(b)(2)(D), Alaska             
Rules of Civil Procedure; and providing for an effective date."                
     - HEARD AND HELD                                                          
(* First public hearing)                                                       
PREVIOUS ACTION                                                                
BILL: HB 353                                                                   
SPONSOR(S): REPRESENTATIVES(S) KELLY, Dyson                                    
Jrn-Date    Jrn-Page           Action                                          
01/26/98      2138     (H)  READ THE FIRST TIME - REFERRAL(S)                  

01/26/98 2138 (H) HES 02/10/98 (H) HES AT 3:00 PM CAPITOL 106 BILL: HB 350 SHORT TITLE: INSURANCE COVERAGE FOR CONTRACEPTIVES SPONSOR(S): REPRESENTATIVES(S) CROFT, Phillips, Bunde, Green, James, Berkowitz, Davies, Elton Jrn-Date Jrn-Page Action




01/23/98 2115 (H) HES, JUDICIARY, FINANCE


01/23/98 2115 (H) 3 ZERO FNS (2-ADM, REV)

01/23/98 2115 (H) GOVERNOR'S TRANSMITTAL LETTER 02/10/98 (H) HES AT 3:00 PM CAPITOL 106 WITNESS REGISTER REPRESENTATIVE PETE KELLY Alaska State Legislature Capitol Building, Room 411 Juneau, Alaska 99801-1182 Telephone: (907) 465-2327 POSITION STATEMENT: Testified as sponsor of HB 353. JONATHAN SHERWOOD, Program Officer Division of Medical Assistance Department of Health & Social Services P.O. Box 110660 Juneau, Alaska 99811-0660 Telephone: (907) 465-3355 POSITION STATEMENT: Testified on HB 353. RAY GILLESPIE, Lobbyist Charter North Hospital 9478 Riverbend Court Juneau, Alaska 99801 Telephone: (907) 463-3375 POSITION STATEMENT: Testified on HB 353. REPRESENTATIVE ERIC CROFT Alaska State Legislature Capitol Building, Room 430 Juneau, Alaska 99801-1182 Telephone: (907) 465-2116 POSITION STATEMENT: Testified as sponsor of HB 350. GORDON EVANS, Lobbyist Health Insurance Association of America 211 4th Street, Suite 305 Juneau, Alaska 99801 Telephone: (907) 586-3201 POSITION STATEMENT: Testified in opposition to HB 350. KAREN PEARSON, Deputy Director Division of Public Health Department of Health & Social Services P.O. Box 110610 Juneau, Alaska 99811-0610 Telephone: (907) 465-3090 POSITION STATEMENT: Testified on HB 350. LAUREE HUGONIN, Director Alaska Network on Domestic Violence and Sexual Assault 130 Seward Street, Room 501 Juneau, Alaska 99801 Telephone: (907) 586-3650 POSITION STATEMENT: Testified in favor of HB 350. SID HEIDERSDORF P.O. Box 020658 Juneau, Alaska 99802 Telephone: (907) 789-9858 POSITION STATEMENT: Testified in opposition to HB 350. BARBARA J. MIKLOS, Director Child Support Enforcement Division Department of Revenue 550 West 7th Avenue Anchorage, Alaska 99501 Telephone: (907) 269-6800 POSITION STATEMENT: Testified in favor of HB 344. PHIL PETRIE, Operations Manager Child Support Enforcement Division 550 West 7th Avenue Anchorage, Alaska 99501 Telephone: (907) 269-6803 POSITION STATEMENT: Answered questions on HB 344. JIM NORDLUND, Director Division of Public Assistance Department of Health & Social Services P.O. Box 1106420 Juneau, Alaska 99811-0640 Telephone: (907) 465-3347 POSITION STATEMENT: Testified in support of HB 344. ACTION NARRATIVE TAPE 98-5, SIDE A Number 0009 CHAIRMAN CON BUNDE called the House Health, Education and Social Services Standing Committee meeting to order at 3:04 p.m. Members present at the call to order were Representatives Bunde, Green, Porter and Dyson. Representative Kemplen arrived at 3:05 p.m.; Representative Brice arrived at 3:12 p.m.; and Representative Vezey arrived at 3:44 p.m. Chairman Bunde announced the committee would be hearing House Bill 353, House Bill 350 and House Bill 344. CHAIRMAN BUNDE welcomed students from Valdez, Akiak and Akiachak who were participating in the Close-Up Program. HB 353 - REFER IN HSS REGS TO OTHER DOCUMENTS Number 0124 CHAIRMAN BUNDE announced the first order of business was HB 353, "An Act relating to adoption by reference in regulations; and providing for an effective date." He asked Representative Kelly to present House Bill 353. Number 0157 REPRESENTATIVE PETE KELLY, Alaska State Legislature, Sponsor, explained that currently the Department of Health & Social Services is required to adopt regulation standards changes, or standardized codes. Each time the standardized codes change, the Administrative Procedures Act requires the department to promulgate regulations. This legislation changes that process, so it could be done by reference. The intent of the legislation is to save time for the department by eliminating the cumbersome regulation process each time the standardized codes are changed by the federal government. He introduced Jon Sherwood from the Department of Health & Social Services, who was available to answer questions. Number 0244 JONATHAN SHERWOOD, Program Officer, Division of Medical Assistance, Department of Health & Social Services, said the department tries to use the industry standards in terms of billing codes when people submit claims that are to be paid by Medicaid. The codes are updated at all times of the year and a new book is published every year. The regulations process, however, is not particularly speedy and in order to incorporate the standards into the department's regulations, the department needs to make a regulations change every time the book is updated. He explained that it's very cumbersome and time consuming for the department, and burdensome for the providers. The codes are used because they are industry standards. Number 0351 CHAIRMAN BUNDE referred to the zero fiscal note and said if the proposed process is as efficient as it sounds, there should actually be a savings. MR. SHERWOOD explained that currently most of these regulation changes are bundled with other regulation changes, so he doesn't expect it will reduce the department's regulations process, but it will allow the department to get the changes in the books and on record in a timely fashion so the providers know what information the department is using. Number 0397 REPRESENTATIVE JOE GREEN asked if the department is required to follow the codes and had there ever been changes the department didn't agree with. MR. SHERWOOD responded the department is not absolutely required to follow these standards, but from a practical standpoint it's what is used. If the department used anything different, there would be a risk of losing providers willing to participate in the Medicaid programs. Number 0448 REPRESENTATIVE KELLY noted that Mr. Chenoweth from the Legislation & Regulations Section of the Department of Law had recently advised that the first portion of the bill probably would be more appropriate in Title 44 IN the Administrative Procedures Act. CHAIRMAN BUNDE suggested Representative Kelly draft a committee substitute which would be adopted by the committee. Number 0503 RAY GILLESPIE, Lobbyist, Charter North Hospital, testified that Kathy Cronen, Administrator of Charter North Hospital had reviewed HB 353 and asked Mr. Gillespie to convey her endorsement for this legislation. It will have the effect of simplifying and streamlining the process for Charter North Hospital. Number 0535 CHAIRMAN BUNDE closed public testimony. He noted that HB 353 would be heard again on Thursday at which time the committee would be addressing a committee substitute. HB 350 - INSURANCE COVERAGE FOR CONTRACEPTIVES Number 0573 CHAIRMAN BUNDE announced the next item on the committee calendar was HB 350, "An Act requiring that the cost of contraceptives and related health care services be included in health insurance coverage." He invited Representative Croft to present his bill. Number 0656 REPRESENTATIVE ERIC CROFT, Alaska State Legislature, testified as the sponsor of HB 350. He began his presentation with a slide show and explained this legislation was the result of discussions with a number of pro-choice and pro-life people on how to reduce the number of abortions. He then began to look at where most of the elective abortions come from; i.e., what types of pregnancies. He learned the vast majority of elective abortions come from unintended pregnancies. This information led to the question of what is the best public policy initiative to reduce unintended pregnancies. The result was HB 350. Number 0735 REPRESENTATIVE CROFT directed the committee's attention to the sponsor statement and letter of intent which simply makes clear this legislation does not mandate abortion; it speaks to contraception. He noted that it's unclear technologically how some devices work in terms of whether they are primarily an early abortion or a late contraception. Number 0774 REPRESENTATIVE CROFT displayed a slide with information from a 1987 U.S. Department of Health study which indicated that of the 43 percent of intended pregnancies resulting in live births, an almost negligible amount resulted in abortions. In absolute numbers, of unintended pregnancies, about half ended in abortion. A review of how insurance companies cover these indicated that almost all insurance policies, without any mandate of any kind, cover abortion, probably for fiscal reasons. When an insurance company has a policyholder who is pregnant, the cost of having an abortion is much less than the cost of bringing that child to term. CHAIRMAN BUNDE mentioned that concerns had been expressed to him about the very high level of teen pregnancies in Alaska. He asked if Representative Croft had statistics for Alaska. REPRESENTATIVE CROFT explained that he had 1994 information for Alaska, as well as various studies across the nation, but the information was for different years, so it really doesn't match. Number 0927 REPRESENTATIVE CROFT displayed information which reflected that of the 57 percent of unintended pregnancies, 81 percent were teens 15 to 19 years of age and 75 percent were women at or below the poverty level. He said the issue is that people who most need to plan families are having the least success. REPRESENTATIVE CROFT next displayed information specific to Alaska. Data from a federally required Pregnancy Risk Assessment Monitoring System (PRAMS) indicates that 41 percent of births were unintended pregnancies and 90 percent of women who had an unintended pregnancy were not using, or were improperly using, a birth control method. His chain of reasoning is that if the vast majority - statistically all - of the elective abortions are based on unintended pregnancies and 90 percent of the unintended pregnancies come from improper use of or lack of access to birth control, how can we increase the availability of birth control? Number 1025 CHAIRMAN BUNDE said in his opinion, there was a difference between not using a birth control method and a lack of access to birth control. REPRESENTATIVE CROFT agreed with Chairman Bunde and added that is the most difficult number to come up with. He has good numbers that show fairly conclusively that the overall health costs are much cheaper when a family has access to and uses a contraceptive method. It becomes difficult to decide how much of this is cost and how much is attributed to other reasons. He believed that a common sense conclusion can be reached that at least some aspect of it is the cost. Other studies have shown that women have significantly higher health care costs which is mostly due to their paying for the non-insurance of some of these costs. REPRESENTATIVE CROFT stated besides numbers, there are many societal benefits to families having families when they can take care of them. Statistically, unplanned children have a much harder time in life. That doesn't apply to every family, of course, but statistically, unplanned children have higher levels of abuse and poverty and there are greater social costs. Number 1136 REPRESENTATIVE CROFT referred to statistics from the April 1995 edition of the American Journal of Public Health which he believed attributed to the conclusions reached by insurance companies that it is much cheaper for an induced abortion than it is to carry the child to term. The information reflects that an induced abortion costs $416 while a term pregnancy cost $8,619. The information does not address the continuing health care obligation after the child is born. Condensing all those factors, a Department of Health study showed that family planning or allowing people to do this sort of planning, shows about a 4 to 1 ratio of savings. Number 1188 REPRESENTATIVE CROFT referred again to a study from the Journal of Public Health, which showed over a five-year period, the known failure rates of the various different methods of contraception, the cost of the method itself, and the cost to the insurance company of the unintended pregnancy. He pointed out the difference in cost between the oral contraceptive method and no method. In reference to Chairman Bunde's question, he said this is using or not using, and there's a significant, about 7 to 1, financial savings for the insurer. The question then becomes, "How many would use even if they had to pay for it?" Based on a statistical analysis of whether it is cheaper to provide contraceptives or to not from a health care basis, it's clearly cheaper to provide them. Number 1247 REPRESENTATIVE CROFT displayed Alaska statistics which indicated that of 10,222 births in Alaska in 1995, 55 percent of Medicaid- funded births were unintended. Medicaid does cover contraceptive use, so it can be concluded that providing contraceptives is not a complete panacea; that is, without education or the willingness to use and use correctly, simply providing contraceptives is not going to cure everything. He drew a correlation between the previously mentioned nationwide study which showed that about 75 percent of births for people under the poverty level were unintended and the 55 percent of Alaska Medicaid-funded unintended births. Number 1305 CHAIRMAN BUNDE pointed out that no method of contraceptive is 100 percent effective and even with access to contraception, there will be unintended pregnancies. REPRESENTATIVE CROFT next discussed the cost of Medicaid-funded births in Alaska. The prenatal care and follow-up care based on 1993 data, and the first year of life care based on 1995 data, indicate about a $10,000 cost from prenatal care through the birth and the first year of life compared to a cost of about $300 a year for oral contraceptives. He directed the committee's attention to some of the additional yearly costs to the state of Alaska for an unintended pregnancy of a Medicaid-eligible woman. REPRESENTATIVE CROFT reiterated that it is not a panacea but the starting point of effective child abuse prevention is pregnancy planning. He discussed the consequences, statistically speaking, of an unplanned pregnancy in terms of the social costs; e.g., more likely to drop out of school, more encounters with the criminal justice system, and to becoming teen parents. One of the consequences listed that was particularly disturbing to him was the abortion rate in the United States is two to four times higher than other countries. Number 1463 REPRESENTATIVE FRED DYSON said based on information he had seen, there is no correlation between whether a child was intended or unintended and child abuse; however, there may be on the neglect side. He said he'd be interested in seeing Representative Croft's data on that issue. REPRESENTATIVE CROFT responded he would be happy to furnish that information to Representative Dyson. He continued his discussion with the state of health plan coverage for contraceptives. He pointed out that 97 percent of health plans cover prescription drugs, but 49 percent fail to cover contraceptives, and only 15 percent cover all five reversible methods. Many of the policies don't include contraceptives even if it's prescribed for a medical condition other than birth control. He said that besides the expected long-term financial savings societally, and the expected social benefits by families having more ability to control and choose when they have families, there is also an equity issue. He quoted from an article, "Women's Health Insurance Cost and Experiences 1994" in the Women's Research and Education Institute, "On average, women of childbearing age pay more for their health care than their male counterparts. Women between the ages of 15 and 44 pay 68 percent more in out-of-pocket medical costs, with reproductive health services accounting for much of the difference." Number 1619 REPRESENTATIVE CROFT reiterated there are more uncovered medical expenses for women. It's a team effort to create the child and it should be a team effort to take care of the child. Unfortunately, it's not a team effort in paying for it or paying for the planning. In contrast, most insurance policies offer full coverage for drugs and devices for men. Number 1659 REPRESENTATIVE CROFT said in summary, there is a dramatic difference in the abortion rates and the social statistical future between intended and unintended pregnancies. Insurance coverage is currently not covering the family planning option and it is known that family planning saves money. The goal is that all pregnancies will be intended and that people will only have families when it's a family decision. CHAIRMAN BUNDE thanked Representative Croft for his presentation and inquired if there were questions of the sponsor. Number 1718 REPRESENTATIVE BRIAN PORTER presumed that some insurance companies were not providing coverage for contraceptives and asked Representative Croft if he could explain why. REPRESENTATIVE CROFT said insurance companies have cost concerns. It's a matter of some guesswork as to the savings as well as how much it would cost insurance companies to provide this service. He contends that it might save the insurance companies money in the long run. It is interesting to note that Health Maintenance Organizations (HMOs) cover contraceptives at a much higher rate. He thought the reason may be that HMOs see a whole community and the whole community cost and those people are less likely to move from carrier to carrier. An HMO can see the cost on a more global level. Representative Croft said to his knowledge, there is no Alaska insurance carrier providing this coverage as a part of their regular package. Some carriers provide it as options; but it's generally not available. Number 1774 CHAIRMAN BUNDE noted that contraception is a concern or prohibition in some religions and asked if Representative Croft had received any feedback about public funds being used for a form of behavior which may be in conflict with religious feelings. REPRESENTATIVE CROFT responded he had not had any of those discussions. He was of the opinion there was a distinction between mandating something and offering it as an option. He noted that currently, contraceptive services are provided under Medicaid. This would not be public money, but private money. Also, it's distinguishable from some of the recent cases in that this legislation does not mandate that any particular doctor or hospital provide it if they don't want to. It simply means that it would be a covered care; a person might have to look around to find it in the community, but it would be an insured cost. Number 1828 REPRESENTATIVE DYSON said his immediate concern with this legislation was the propriety of a state requiring a private company to add a line to its business that it chooses not to. He likened that to the state telling Fred Meyers they have to start selling cars and asked Representative Croft to comment. REPRESENTATIVE CROFT said that at some time in the development of cars, the installation of seat belts were mandated and each state then mandated the use of them. He believed mandating the installation of seat belts could be viewed as an interference in a car manufacturer's freedom to sell cars without them. It made good social sense; it was not a huge burden on the design; and it was made available for everyone to use for preventive measures which would have great societal benefits. He commented that he has been talking with the insurance industry about whether contraceptive services would be a substantial cost. The industry doesn't view it as a huge cost, but the concern is more so with being told what to do. The discussions have included how the insurance companies assess and whether it's proper to put a mandate on a stream of factors looked at. Representative Croft said, "I think we fit under even their definitions of when it's appropriate -- what you should look at before putting a mandate on the insurance industry." In his opinion, this is an appropriate protective device which may have a cost savings, or a small cost, but the societal health implications that sometimes go unseen by the industry, make it justified. Number 1933 REPRESENTATIVE DYSON asked what factors were used in the evaluation by the insurance companies. REPRESENTATIVE CROFT noted that would be discussed in-depth in the House Labor and Commerce Committee, but some of the factors discussed were how large the cost would be for each of the payers, what other procedures might it supplant, how available is it, is this a need that is being unmet, how great are the costs to society of it being unmet, et cetera. REPRESENTATIVE DYSON said, "My sense is that insurance companies are in business to make money. Aside from sounding good in their publicity brochures, why the heck do they think -- why should we think they really care about what's best for society." REPRESENTATIVE CROFT responded, "... I think that's largely right. I don't know that I want every particular company pursuing their view of public policy - and probably don't if I'm an investor. I'd like them to see that profit motive. And to some extent, it's our goal to guide that, put fence posts on it. And as long as we're not shutting them in, closing down business, or unnecessarily restricting it, if we're directing it the way we want it to go, that's better than other types of interference." Number 2027 REPRESENTATIVE J. ALLEN KEMPLEN asked if Representative Croft had determined if other states had passed similar legislation or would the result in Alaska be on the cutting edge. REPRESENTATIVE CROFT responded that it had been introduced, but not passed yet, on the federal level; Washington had passed legislation passed out of the House but not the Senate; and California passed legislation, but Governor Wilson vetoed it, with the stipulation that if changes were made, he might pass it. Alaska would be on the cutting edge, but other states are actively considering similar legislation. CHAIRMAN BUNDE noted that a number of people wished to testify. He asked Gordon Evans to come forward to present his testimony. Number 2078 GORDON EVANS, Lobbyist, Health Insurance Association of America, (HIAA), testified the Health Insurance Association of America is a trade association of commercial health insurance companies who provide health insurance for approximately 55 million Americans. The HIAA opposes HB 350 for a number of reasons, not the least of which is that the provisions mandate a specific coverage of something that is not basic health care treatment; the consequence of which in the long run would be to increase the costs and reduce the efficiencies of managed care. The HIAA favors the preservation of a system which allows the prospective purchaser of health insurance free choice of which risks that individual wishes to cover from among the various coverages offered by competing insurance carriers. The HIAA also believes that the choice of how the policyholder spends what funds are available for health insurance should be free of government decree and continues to oppose the proliferation of benefits through a government mandate. The coverage mandated by HB 350 is generally considered to be elective services. If the coverage for contraceptive services is mandated, it will affect both individual and group policies and premium costs will be increased even for people who have no use for or do not want the coverage. Number 2134 MR. EVANS commented that he was not aware that most health insurance plans "routinely cover abortions, sterilization and tubal ligations." Like vasectomies, these are generally considered to be elective services. As written, this bill could have a much wider application than he believed was intended. In addition to major medical insurance policies, it could include Medicare Supplement insurance policies, long-term care insurance, specific service policies such as dental or disability income, and hospital policies. MR. EVANS said according to his research, only one state has enacted contraceptive coverage into law; that being Virginia. California's legislation was carried over to this year; the legislation died in Connecticut and Oregon; Hawaii carried over two bills; and Illinois, Massachusetts and New York have bills pending. Number 2192 REPRESENTATIVE PORTER asked if Mr. Evans was aware of any cost analysis being done between the two options. MR. EVANS was not aware of any, but said he would get back to the committee. Number 2202 REPRESENTATIVE KEMPLEN noted the sponsor had presented significant data documenting the cost to society of not providing contraceptives to the citizenry. He was of the impression it would be in the best interest of society to seek to minimize these costs. Since he has been in the legislature, he has routinely heard about reducing costs and doing things more efficiently and effectively. Based on the sponsor's statements, this proposed legislation achieves that purpose. It does present a more cost effective approach to the use of resources in our society. He asked Mr. Evans for his comments. MR. EVANS said there have been numerous attempts in this state and in the country on a whole, to bring in "socialized medicine" and the country has not accepted the idea of having society pay for health care for everyone. The only state that has come close to that is Washington State, which ended up repealing most of what was passed. Number 2294 REPRESENTATIVE KEMPLEN said he was somewhat confused by Mr. Evans' response in that he didn't understand how this legislation, which only requires that contraceptives and related health care services be included in health insurance coverage with existing health insurance, moves in the direction of "socialized medicine" for everyone. He was of the opinion this proposed legislation makes contraceptives and related health care services a legitimate item to be covered by health insurance. MR. EVANS replied that any time a service is mandated, the cost of the insurance policy will increase, whether it's a group policy or individual policy. A mandated offering on the other hand, is where individuals have the option of selecting the coverage, and paying for it, if they choose the coverage. The biggest insurer in the state ... TAPE 98-5, SIDE B Number 0001 MR. EVANS ... of Alaska, is self-insured, and if this coverage is mandated, the state's costs will definitely increase. CHAIRMAN BUNDE thanked Mr. Evans for his comments and asked Karen Pearson to come forward to present her testimony. Number 0022 KAREN PEARSON, Deputy Director, Division of Public Health, Department of Health & Social Services, testified the division's interest is always access to care and providing information to committee members to assist in deliberations. She provided a handout to committee members on Alaska demographic, birth, pregnancy intendedness and contraceptive access/cost information. She said most of the data is from 1995, which is the most current. Number 0063 CHAIRMAN BUNDE commented that over a period of time he has heard reports that Alaska has one of the highest teen pregnancy rates in the United States, if not in the world, and in fact, has been compared with Third World countries in teen pregnancy rates. He asked Ms. Pearson if those statements were accurate. MS. PEARSON responded that Alaska is not at the top, but in the top one-third of the United States. If those statistics are broken down by population, the young Native girls have one of the highest rates in the world; it's about double the national average. Number 0101 REPRESENTATIVE KEMPLEN asked if the department had any data which showed where a particular type service had been mandated and had resulted in a lower cost? MS. PEARSON couldn't respond at this time, but offered to get back to the committee. Number 0123 REPRESENTATIVE VEZEY asked if the Alaska Native Health Service provided birth control? MS. PEARSON replied that federal funding is available. REPRESENTATIVE VEZEY asked through what agency was it available? MS. PEARSON responded through the various delivery systems. REPRESENTATIVE VEZEY observed that Alaska's population of Native teenage females has the highest rate of teenage pregnancies and yet they have access to federally-funded birth control. MS. PEARSON replied that finance isn't the only access issue; there has to be a provider on-site to fill prescription contraceptives. She didn't know what role some of those barriers may play in the utilization versus just the funding. REPRESENTATIVE VEZEY confirmed that Ms. Pearson was saying that it's not just the cost of health care, but it's the availability of service, as well. MS. PEARSON explained that cost is just one of several barriers, and availability of service could be a barrier for certain populations. REPRESENTATIVE VEZEY asked if funding was a problem for the Alaska Native teenage female population. MS. PEARSON said it would depend on where they lived. Access issues would be different for young Native women in a more urban area than it would be in a remote rural area. Number 0215 CHAIRMAN BUNDE thanked Ms. Pearson for her testimony and called on Lauree Hugonin to present her comments. Number 0231 LAUREE HUGONIN, Director, Alaska Network on Domestic Violence and Sexual Assault, testified the Network has about 20 member programs of which 13 have joined together to participate in a health insurance program administered by the Network. There are 184 employees, along with spouses and children, participating in the program and NYLCARE is the health insurer. She testified in favor of HB 350 stating that most of the employees are women who are employed and would like to take advantage of having contraceptives covered with their health insurance program. The Network has been looking for several years to find a way to provide that benefit, but has been unsuccessful. She pointed out that employees are willing to pay an increased cost to have the benefit because they perceive the increased cost to be less than what is being paid out- of-pocket currently. Number 0283 MS. HUGONIN surmised that insurance companies will not absorb the increased cost; it will be passed on to the consumer. She reiterated the willingness of participating members to absorb the increased cost. Lastly, she pointed out that contraceptives are not only used to prevent pregnancy; sometimes there are other medical reasons women need to take contraceptives. MS. HUGONIN concluded that there are employers across the state who have employees who would very much appreciate having this benefit covered. Number 0312 REPRESENTATIVE VEZEY inquired if Ms. Hugonin was talking about employees or clients. MS. HUGONIN replied employees. REPRESENTATIVE VEZEY wanted to know why the Network, as an employer, didn't offer this benefit to employees. The Network could pay the cost of this benefit out of the operating budget. Speaking as an employer, Representative Vezey said he didn't need the permission from anyone, including the Internal Revenue Service, to give his employees a benefit. MS. HUGONIN responded that it would probably be cost prohibitive because the programs wouldn't be able to pick up the cost. Having it through health insurance, even though it may increase the premium, would be a way for more employees to take advantage. Number 0381 SID HEIDERSDORF testified in opposition to HB 350. He said presumably the driving force behind this legislation is limiting and reducing unwanted pregnancies, especially teen pregnancies. He had several reasons for opposing this legislation. First, it is just one more example of government making demands on private enterprise. It is his opinion that insurance companies have the right to decide what kind of coverage to provide in health plans. The insurance company should have the freedom to negotiate with clients and not have specific coverage mandated by the state; especially something like contraceptives. Number 0443 MR. HEIDERSDORF said that some of his comments may seem foreign to many individuals, but he believes that it is time to come to grips with the harmful effects in the sexually permissive society today and one of the cornerstones is the availability of contraceptives. He discussed the social consequences including increased sexual activity, fornication, adultery, divorce, teen pregnancy, sexually transmitted diseases, abortion, et cetera. The one aspect of contraceptive use he wanted to address was its relationship to abortion. The conventional wisdom is that contraceptives will reduce unwanted pregnancies and therefore, by extension, will reduce abortion. It's a seductively simple argument which sounds very logical; however, in the real world he believes it is false. Mr. Heidersdorf provided quotes from co-developers of the birth control pill and a former medical director of the International Planned Parenthood Federation. Number 0543 MR. HEIDERSDORF stated there has been unlimited availability of contraceptives for many years and things have spiraled downward. With respect to teenage pregnancies, the argument has been the need for better, more explicit and earlier sex education during the school years. The results have been a breakdown in normal sexual inhibitions of children and more sexual encounters. As people were having more sexual encounters, more contraceptive failures, or nonuse of a contraceptive, the result was more abortions. While he didn't have statistics to substantiate this, he spoke with certainty that with the availability of contraceptives during the last 20-30 years, there has been a drastic increase in teen pregnancies and many unwanted pregnancies. MR. HEIDERSDORF maintained there is a contraceptive/abortion connection on many levels. First, confusion exists with many of the things called contraceptives; they are not contraceptives in the real sense of the term, but abortifacients. Clearly, the interuterine device (IUD) is an abortifacient, as are many pills. The effect occurs after conception but before implantation of the fertilized egg. In addition, there are also categories of chemical contraceptives which no one really understands how they work. There are true contraceptives which do not permit ovulation or some other method where the sperm and the egg cannot join. MR. HEIDERSDORF views contraception and abortion as vastly different. With contraception, it's keeping the egg and the sperm separate; there is no human being. However, once conception takes place, there is a human being and it is early abortion if that's the effect of the "contraceptive." Number 0713 MR. HEIDERSDORF said there's also a certain contraceptive mentality which has made abortion more possible: Sex without procreation; sexual freedom with responsibility; the widespread use of contraceptives has crystallized the concept that babies are a burden; and when pregnancy occurs, abortion is the logical solution to the problem. Number 0729 MR. HEIDERSDORF concluded that the widespread availability of contraceptives has led to more sexual promiscuity and all the harmful effects that have gone with it. Certainly, insurance companies should not be required to pay for something which he views as part of the problem, not part of the solution. Number 0776 REPRESENTATIVE KEMPLEN referred to the statement that contraceptives lead to sexual promiscuousness and asked Mr. Heidersdorf if he had researched the social policies and sexual permissiveness in the European countries. MR. HEIDERSDORF indicated he had not. The information he presented was based on what he has seen transpire over the years and talking with his children. He assumed that if contraceptives are available, it more or less allows an individual to have sex without responsibility, which increases permissiveness. Number 0828 REPRESENTATIVE KEMPLEN suggested that would be important data to examine because the European countries do have social policies that provide contraceptives more widely without having sexual permissiveness running rampant through communities. In his opinion, the media and Madison Avenue, and the constant barrage of advertisements that use sex to sell products are more relevant to America. MR. HEIDERSDORF agreed that what children see on television certainly has an influence. Number 0877 CHAIRMAN BUNDE asked if there was further public testimony. Hearing none, he announced that HB 350 would be held in committee for further deliberation. HB 344 - PATERNITY/CHILD SUPPORT/NONSUPPORT CRIMES Number 899 CHAIRMAN BUNDE announced the next bill to be heard was HB 344, "An Act relating to paternity establishment and child support; relating to the crimes of criminal nonsupport and aiding the nonpayment of child support; and amending Rule 37(b)(2)(D), Alaska Rules of Civil Procedure; and providing for an effective date." He asked Barbara Miklos to come forward to discuss HB 344. Number 0934 BARBARA J. MIKLOS, Director, Child Support Enforcement Division (CSED), Department of Revenue, testified the Governor requested that HB 344 be introduced on behalf of the Child Support Enforcement Division. She explained that in 1996, Congress passed the Personal Responsibility and Work Opportunity Reconciliation Act, which from here on she would refer to as welfare reform legislation. This legislation changed welfare as it was known, from an ongoing, long-term potential for the rest of someone's life to a temporary program. In making these sweeping changes, Congress realized that in order for this to happen in people's lives, additional tools and resources were necessary in order to survive without public assistance payments. Congress changed many programs, but one program that was changed dramatically was the child support program. The intent was to give child support agencies more tools, more opportunities, and more ways to work efficiently in collecting support; therefore, help people who are on welfare get off of welfare, and to help people who are not on welfare, stay off of welfare. Number 1000 MS. MIKLOS said that some of these major changes were passed in legislation last year, Senate Bill 154. There were major provisions in that legislation, some of which the legislature felt, and rightfully so, could be postponed to this year. House Bill 344 takes care of those provisions that were left out last year as well as things that have been amended by Congress. While the legislation is complex, it contains nothing that isn't required in welfare reform legislation. According to Congress, if these provisions are not passed, the state of Alaska is at risk of losing nearly $70 million. Number 1061 MS. MIKLOS highlighted some of items contained in HB 344. Currently, there is existing legislation for large employers to report new hires to the Child Support Enforcement Division. Welfare reform requires that all employers report all new hires within 20 days to the division. Along with that, the sanctions have been reduced dramatically and it is the intent of Congress and CSED to work with employers as much as possible and to make the process as easy as possible. Number 1089 MS. MIKLOS continued that another provision is the requirement of some type of sanction that involves recreational licenses, which was a controversial issue last year. The division compromised so that it would only be used as a sanction in the case where someone has been criminally charged with a crime involving child support or is in contempt of court. Number 1124 MS. MIKLOS said another provision is that social security numbers are mandated for child support purposes on applications for driver's licenses and hunting licenses. These were both technical amendments to welfare reform that weren't in existence last year. Other provisions are to give child support liens from other states the same standing as Alaskan liens; give courts authority to hold a person in contempt for failing to honor an administrative child support subpoena; amend the definition of support order; allow the entry of default judgments in administrative paternity cases; permit child support agencies of other states to make electronic requests for high volume enforcement assistance; clarify which state law an employer must follow when served with an interstate income withholding order; provide a method for Alaska's Child Support Enforcement Division to help a child support obligor's children receive health care coverage; repeal the sunset provision; and two technical changes required in order to be consistent with the Uniform Interstate Family Support Act. Number 1241 CHAIRMAN BUNDE commented the committee heard a bill last week dealing with uniform child custody interstate. He asked if these bills are interrelated or redundant in any case. MS. MIKLOS responded the two bills are similar, but deal with different topics. Some of the provisions have the same intent which is to make things uniform throughout the states. REPRESENTATIVE DYSON said Ms. Miklos had indicated that some of the provisions kick in if a person is guilty of a criminal child support case separate from contempt of court. MS. MIKLOS replied it could be either. REPRESENTATIVE DYSON said he understood the contempt of court, but inquired what the other crime would be. MS. MIKLOS responded there are two crimes related directly to child support; one is criminal nonsupport, and the second is aiding and abetting in the nonpayment of child support. REPRESENTATIVE KEMPLEN referred to page 2, lines 25-26 and asked if this had been examined to determine how it relates to the right to privacy clause in the Alaska Constitution. MS. MIKLOS said it was a controversial issue that was researched last year, and research is continuing. She commented that Dan Branch from the Department of Law was present and could speak to the research done last year with respect to social security numbers being required for occupational licenses and other items already passed. It is the division's position that it doesn't affect the privacy right. Number 1391 CHAIRMAN BUNDE noted that would be useful information for the committee. MS. MIKLOS indicated the division would furnish something in writing to the committee. Number 1421 REPRESENTATIVE VEZEY recalled that a few years ago there were reporting requirements placed on hiring halls and he inquired if that was being amended. PHIL PETRIE, Operations Manager, Child Support Enforcement Division, confirmed that about five years ago, Alaska was one of the test states that implemented a grant program paid for by the federal government, which implemented the current statute. He said this is the same statute, but it's being repealed and re-enacted with additional provisions. That program was in operation for three years, and on the basis of that program in the other states, the federal government concluded it was a valuable tool, as did Alaska. Number 1475 REPRESENTATIVE VEZEY asked Mr. Petrie to explain those requirements. MR. PETRIE explained the original bill passed by the legislature required that any employer designated by the division was required to report. Not all employers were required, but the division chose employers in a graduated fashion. First were employers that had the most employees with the largest number of child support cases, and then over a three year period, additional employers were added until there were approximately 300 employers. There had to be 20 or more employees or the individual had to work more than 360 hours during the year, so temporary and fast turnover employees were not covered in the original bill. There was a provision that employers could withhold $1 for each person reported. The division worked with employers and allowed employers as much freedom as possible on how to report; e.g., fax, tapes or diskettes. The division used a standard computer protocol to input the information into the system. A child support enforcement employee matched the information against cases, and if there was a match, the employer was entered into the system and a withholding order was issued. If there was no match, the information was immediately destroyed and dropped from the system until reported by a new employer. MR. PETRIE said all of those provisions are contained in HB 344, but expanded to include every employer and it eliminates the temporary nature. Another key piece is that it requires CSED to forward everyone reported to a national new hire database, which the federal government will link up to a national case registry. An example of how that works is if an individual leaves Alaska and goes to work in Louisiana, Louisiana will report to the national level, the national level will compare that to the case registry, discover there's a case in Alaska, and send that information back to Alaska. Within about 10-14 days, Alaska will know who the employer is in Louisiana and be able to issue a withholding order. Number 1615 REPRESENTATIVE VEZEY inquired if HB 344 becomes law, would every employer be required to report every new hire to CSED. MS. MIKLOS confirmed that. REPRESENTATIVE VEZEY asked how frequently the employer would need to report. MS. MIKLOS replied within 20 days of hire or rehire. Number 1638 REPRESENTATIVE VEZEY referred to the situation where an employer rehires the same individual within 2 weeks, 6 months or 1 year and asked if that person would be considered a new hire. MR. PETRIE responded that technically a 2-week lapse would require a rehire report, but he was more comfortable deferring that question to legal counsel. Number 1682 REPRESENTATIVE VEZEY asked for an explanation on how the process works in hiring halls. MR. PETRIE commented there hadn't been a lot of reports from hiring halls under the previous program because the union hiring halls were primarily dispatch locations. Of those hiring halls designated by CSED, only permanent employees were targeted because those employees fell under the 360-hour provision. Under HB 344, hiring halls will be required to report information for permanent employees through any of the methods available; e.g., fax, electronic filing, telephone, or just sending a copy of the W-4 form; however, for dispatch employees, hiring halls will be required to provide the name of the person and to whom they are being dispatched. CHAIRMAN BUNDE observed that CSED had submitted a zero fiscal note, and yet it appeared the division's workload would significantly increase. MS. MIKLOS indicated that much of the work would be done electronically. In addition to the one designated staff person, the division has requested additional staff in the Governor's budget; however, if the request is not granted, existing staff will be used. Number 1808 REPRESENTATIVE VEZEY inquired if Ms. Miklos was inferring the division's efficiency in handling data is such that the amount of data could double, triple, or quadruple without any additional cost. MS. MIKLOS noted that a Request for Proposal (RFP) will be issued shortly using a capital appropriation received from the legislature last year. It is anticipated the majority of this workload, which is expected to increase especially with small employers sending in W-4s, will be handled electronically and through the computers. REPRESENTATIVE VEZEY assumed the capital appropriation was for additional hardware and software, not additional staff. MS. MIKLOS responded there is no additional staff tied to this legislation. REPRESENTATIVE VEZEY inquired if the division had pursued the possibility of outsourcing the handling of the data. He was aware of a number of major data processing firms performing this function. MS. MIKLOS replied that with the RFP, the division is hoping to work with a data processing firm in setting up the system. The expectation, however, is that most of it will be automatic. Number 1901 CHAIRMAN BUNDE noted that failure to comply with federal child support mandates may result in a significant reduction in federal financial participation. He asked if Ms. Miklos could estimate what the financial reduction would be. MS. MIKLOS responded it was almost $70 million, with the bulk of it from the Division of Public Assistance budget, and all the federal money that goes into the Child Support Enforcement Division budget. TAPE 98-6, SIDE A Number 0001 JIM NORDLUND, Director, Division of Public Assistance, Department of Health & Social Services, testified in support of HB 344. The Division of Public Assistance will be a great beneficiary if this legislation passes; or a victim of the federal government, if it does not pass. The Division of Public Assistance is the primary agency that has been charged with implementing the welfare reform plan in Alaska. He explained that welfare reform is really about helping families move off public assistance and being able to support their families on their own. In this endeavor, there has been much focus on helping people go to work. It is important, however, not to lose sight of an equally important way of helping families become self-sufficient, and that is making sure that both parents responsible for bringing children into the world are also responsible for supporting those children. House Bill 344 provides additional tools for the Child Support Enforcement Division to collect support payments that are owed on behalf of those children. It also would help the Division of Public Assistance in that almost dollar for dollar to the extent that child support payments can be collected from the responsible parents, it will reduce the amount of money being paid out in public assistance benefits. It's a good thing from a budget standpoint, as well as from a public policy standpoint, and the federal government is basically mandating the state of Alaska to do this. Number 0167 MR. NORDLUND referred to the penalties, and said the Division of Public Assistance faces a potential 5 percent penalty to the federal block grant. He explained the block grant is basically the amount of money the state receives from the federal government, which is the federal share of participation of paying benefits to recipients, as well as administration of the program. In the upcoming year, the amount of that grant will be about $65 million, so a 5 percent penalty amounts to approximately $3 million. He noted that any state facing that penalty is required to make up the difference from the state general fund. Number 0239 MR. NORDLUND concluded that if this conforming legislation is not passed by the time Alaska resubmits the plan which allows the state to draw down federal money, Alaska could potentially face the loss of the entire federal block grant, or approximately $65 million. Number 0293 REPRESENTATIVE KEMPLEN understood that Alaska's Constitution is one of the most powerful of all the states in terms of an individual right to privacy. He speculated that the requirement of having to furnish a social security number when applying for a driver's license or hunting license could be in direct conflict with the strong right to privacy clause. He asked if the nature of the Alaska Constitution and how this requirement comes into conflict with the right to privacy clause had been pointed out to the federal government, and if not, were there any plans to do so. MR. NORDLUND deferred that question to Ms. Miklos. Number 0474 REPRESENTATIVE KEMPLEN asked if Mr. Nordlund was aware of any state that had not complied with these requirements and faced the penalties. MR. NORDLUND responded that Ms. Miklos would be the appropriate person to answer that question. MS. MIKLOS responded the state of Idaho has been put on notice. CHAIRMAN BUNDE asked if there was further public testimony. Hearing none, he asked Representative Porter to explain Amendment 1. REPRESENTATIVE PORTER made a motion to adopt Amendment 1, 0- GH2007/A.1, Lauterbach, 1/29/98, which read: Page 1, following line 10: Insert a new bill section to read: *Sec. 2. AS 09.10.040(a) is amended to read: (a) A [EXCEPT AS PROVIDED IN (b) OF THIS SECTION, A] person may not bring an action upon a judgment or decree of a court of the United States, or of a state or territory within the United States, and an action may not be brought upon a sealed instrument, unless the action is commenced within 10 years." Renumber of following bill sections accordingly. Page 11, following line 20: Insert a new bill section to read: *Sec. 30. AS 09.10.040(b) is repealed." Renumber the following bill sections accordingly. Renumber internal references to bill sections in accordance with this amendment. Internal bill section references occur in the following places: Page 11, line 22 Page 11, line 23 Page 11, line 26 Page 11, line 27 Number 0551 CHAIRMAN BUNDE objected for discussion purposes. REPRESENTATIVE PORTER explained the amendment fits within the title and has basically nothing to do with the intent of the bill. He had discussed the amendment with Ms. Miklos, and while not pleased about it, she has no problem with the adoption of the amendment. He explained he is offering the amendment because of a constituent, who after paying child support for 20+ years, was sued by his ex- spouse claiming that no payments had been paid through the entire span of child support period. He was able to come up with documented evidence through receipts and checks, and prove this claim false for about 95 percent of the time involved. However, he was not able to do so for the first few years. Representative Porter recalled there is a presumption within the law that if payment can't be verified, payment wasn't made. Even though the complaint alleged that no payments had been made, which was obviously false, one particular provision of law allows the Child Support Enforcement Division an exception to the statute of limitations. He explained that by deleting that provision, it allows CSED the ability to go back probably 5 years, and maybe more for good cause shown. He noted these kinds of cases will drop off in terms of having any relevance because now all the payments go through the Child Support Enforcement Division. In any case, this will have some effect for the next 2 or 3 years. Number 0715 CHAIRMAN BUNDE clarified that previously, child support payments were paid directly to the recipient rather than through CSED, and the individual making those payments was required to maintain records for protection. CHAIRMAN BUNDE asked if there was further discussion about Amendment 1. Chairman Bunde withdrew his objection and Amendment 1 was adopted. CHAIRMAN BUNDE noted this was the first hearing on HB 344 and a number of questions had been raised, so HB 344 would be held in committee. ADJOURNMENT Number 0772 CHAIRMAN BUNDE adjourned the House Health, Education and Social Services Standing Committee at 4:46 p.m.

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