SB 122-HEALTH INSURANCE NETWORK STANDARDS  3:47:29 PM CHAIR DUNBAR announced the consideration of SENATE BILL NO. 122 "An Act relating to insurance; establishing standards for health insurance provider networks; and providing for an effective date." 3:48:03 PM CHAIR DUNBAR invited the sponsor to give a recap of SB 122. 3:48:09 PM SENATOR GIESSEL recapped the purpose of SB 122 stating it is a consumer protection bill. SB 122 would require insurance companies to maintain adequate provider networks in their policies. 3:49:14 PM CHAIR DUNBAR said the committee would hear two amendments. 3:49:27 PM CHAIR DUNBAR solicited a motion. 3:49:29 PM SENATOR GIESSEL moved to adopt Amendment 1, work order 34- LS0281\N.1. 4-LS0281\N.1 Wallace 3/25/25 A M E N D M E N T 1 OFFERED IN THE SENATE BY SENATOR GIESSEL TO: SB 122 Page 1, lines 5 - 10: Delete all material and insert: "Sec. 21.07.035. Minimum provider network  standards. (a) A health care insurer shall take the network requirements of this section into account when calculating the benefits of, or other contractual requirements applicable to, a covered person's health care insurance policy that, as determined by the director, (1) requires the covered person to use a limited network of health care providers, as defined in regulation by the director; or (2) creates a substantial financial or other incentive or disincentive for the covered person to use a limited network of health care providers." 3:49:32 PM CHAIR DUNBAR objected for purposes of discussion. 3:49:40 PM SENATOR GIESSEL explained that in the original SB 122, section 21.05.035 emphasizes its core purpose as consumer protection by establishing minimum provider network standards. The bill directs the Division of Insurance to assess network adequacy, clarifying that insurers must consider network breadth when calculating benefits. She said the director will evaluate whether networks are so narrow or low-cost that consumers may be misled or lack meaningful choice and will weigh whether consumers are fully informed when selecting between limited, lower-cost networks and broader, higher-cost options. 3:51:47 PM SENATOR HUGHES asked for clarification on why Amendment 1 is needed if 90 percent of providers are required to be in-network. 3:52:06 PM SENATOR GIESSEL responded that the example is used to illustrate the risk that insurers may intentionally offer extremely narrow networks to attract consumers seeking low premiums. SB 122 is intended as a safeguard to prevent consumers from unknowingly choosing low-cost plans that later limit access to needed specialists, resulting in inadequate coverage when medical needs arise. 3:53:35 PM SENATOR HUGHES reiterated that she doesn't understand the need based on large percentages in SB 122. She requested the Division of Insurance Director speak to the committee for further understanding. 3:54:09 PM HEATHER CARPENTER, Director, Division of Insurance, Department of Commerce, Community and Economic Development (DCCED), Juneau, Alaska, answered questions about SB 122. She introduced herself. SENATOR HUGHES asked whether she sees the amendment as necessary. 3:54:53 PM MS. CARPENTER replied that how Senator Giessel described it is probably accurate. She said Alaska doesn't have a narrow network and she doesn't know if it would apply to someone who doesn't have privileges at a hospital because of how the networks look. 3:55:37 PM SENATOR HUGHES asked whether the amendment would hurt the consumer. 3:55:47 PM MS. CARPENTER answered that she doesn't think it will hurt the consumer. She stated she agrees with Senator Giessel that consumers need to be more informed. 3:56:10 PM CHAIR DUNBAR removed his objection. He found no further objection and Amendment 1 (N.1) was adopted. 3:56:25 PM CHAIR DUNBAR solicited a motion. 3:56:31 PM SENATOR CLAMAN moved to adopt Amendment 2, work order 34- LS0281\N.2. 34-LS0281\N.2 Wallace 4/1/25 A M E N D M E N T 2 OFFERED IN THE SENATE BY SENATOR CLAMAN TO:SB 122 Page 3, line 3: Delete "85" Insert "70" Page 3, line 7: Delete "85" Insert "70" Page 3, line 10: Delete "90" Insert "75" Page 3, line 14: Delete "90" Insert "75" Page 3, line 18: Delete "95" Insert "80" Page 3, line 22: Delete "95" Insert "80" 3:56:36 PM CHAIR DUNBAR objected for purposes of discussion. 3:56:43 PM SENATOR CLAMAN described Amendment 2 stating it reduces the required provider network coverage percentages in all six regions by 15 percent, such as lowering 85 percent to 70 percent and 90 percent to 75 percent, while maintaining the bill's consumer protections and making the requirements more acceptable to insurers. 3:57:39 PM JERRFERY DAVIS, Principal, Weston Group Consulting, Wenatchee, Washington, answered questions concerning SB 122. He stated that the revised percentages are intended to preserve the bill's consumer protection goals and apply only to narrow network plan designs, particularly those with little or no out-of-network coverage. He said in cases where consumers may be drawn to lower-cost plans without fully understanding network limitations, SB 122 requires insurers offering such plans to meet specified network adequacy percentages, which are believed to still fulfill the bill's original intent. 3:59:27 PM CHAIR DUNBAR removed his objection. He found no further objection and Amendment 2 (N.2) was adopted. 3:59:45 PM CHAIR DUNBAR opened public testimony on SB 122. 4:00:33 PM At ease. 4:00:49 PM CHAIR DUNBAR reconvened the meeting and resumed public testimony. 4:01:03 PM BRENDA SNYDER, Director, State Government Affairs, CVS Health, Tacoma, Washington, testified in opposition to SB 122. She explained that health carriers offer employers and plan sponsors various cost-saving tools, including network design, to balance access, cost, and quality while improving outcomes and controlling expenses. She said carriers already must meet ACA and CMS network adequacy standards, overseen by the Alaska Division of Insurance, and have expanded provider networks significantly in recent years. She argued that the bill's proposed changes to network adequacy percentages would disrupt this balance, weaken quality safeguards, increase provider leverage in negotiations, raise costs and out-of-pocket expenses, and potentially put patient safety at risk. 4:03:33 PM STEVE COMPTON, MD, representing self, Anchorage, Alaska, testified in opposition to SB 122. He emphasized that Alaska already suffers from severe provider shortages across multiple specialties, including pulmonology, endocrinology, cardiology, pediatric neurosurgery, and primary care, forcing some patients to leave the state for care. He argued that insurers' cost- control strategies often reduce access to care, that there is currently no clear standard for network adequacy, and that consumer protections are lacking, particularly in light of statements by a dominant out-of-state insurer indicating plans to implement a new network strategy in Alaska. 4:07:00 PM CHAIR DUNBAR closed public testimony on SB 122. 4:07:13 PM SENATOR HUGHES asked why SB 122 references Medicare Advantage, noting that it is not available in Alaska and primarily serves individuals over age 65. She asked whether the reference is merely to identify a list of specialties and, if so, how pediatric care would be accounted for. 4:07:57 PM SENATOR GIESSEL suggested that Mr. Davis answer the question. 4:08:14 PM MR. DAVIS replied that the reference is to a list of specialties and acknowledged the point brought up about pediatrics. 4:08:32 PM SENATOR HUGHES asked whether this is something that needs to be fixed. MR. DAVIS replied that adding pediatrics would be a good addition but it's referencing a list not products. 4:08:50 PM SENATOR HUGHES stated that the amendment improves SB 122 but remains concerned that it adds another layer of network adequacy requirements beyond those already mandated by the Affordable Care Act. She questioned the use of percentage-based standards rather than provider-to-population ratios. She stated that she is worried that the thresholds may still be too high given Alaska's limited specialists, and cautioned that mandated percentages could increase provider leverage, raise health care costs, and discourage insurer participation, ultimately reducing competition and harming consumers. 4:11:00 PM CHAIR DUNBAR solicited the will of the committee. 4:11:03 PM SENATOR GIESSEL moved to report SB 122, work order 34-LS0281\N, as amended, from committee with individual recommendations and attached fiscal note(s). 4:11:19 PM CHAIR DUNBAR found no objection and CSSB 122(HSS) was reported from the Senate Health and Social Services Standing Committee.