SB 217 - GENETIC PRIVACY Number 0050 CHAIR McGUIRE announced that the first order of business would be CS FOR SENATE BILL NO. 217(JUD), "An Act relating to genetic privacy." Number 0055 JOHN L. GEORGE, Lobbyist for American Council of Life Insurers (ACLI), said that the life insurance industry believes that genetic information ought to be protected. However, should genetic information be protected more than health information? The ACLI is of the opinion that it should not; instead, there ought to be really strong safeguards on both types of information, but not for one more than the other. By the very nature of disability and long-term-care insurance, insurers have personal and confidential relationships with policyholders. He surmised that most members have probably applied for a life insurance policy and so know that questions are asked regarding family history of blood disease and cancer; that information is genetic information, but the bill does not precluded insurers from asking those types of questions. MR. GEORGE noted that additionally, if one is applying for a large policy, an insurer may require a physical examination including blood tests; this allows insurers to categorize people with similar risks and charge an "appropriate" premium. He characterized the bill's definition of genetic information as fairly broad, so broad that [information about] any disease might be considered genetic [information]. The ACLI, however, believes that there is a crossover between "normal" health information and genetic information. Insurance companies like things that are pretty standard and pretty inexpensive, and so will not spend $500 to do a [genetic] test; instead, the tests required by insurers are fairly simple and are used for underwriting purposes. MR. GEORGE said that the ACLI is strongly committed to the principle that individuals have a legitimate interest in the proper collection and handling of their personal information and that insurers have a responsibility to keep that information confidential and secure. He offered his belief, however, that insurers must be able to obtain, use responsibly, and share information; these functions are essential in order for insurers to write and service insurance policies. REPRESENTATIVE GARA pointed out, though, that if the bill only addresses DNA (deoxyribonucleic acid), then the bill won't interfere with anything the insurance industry wants to do except to the extent that it wants to use somebody's DNA for some reason. Number 0377 MR. GEORGE acknowledged that point, but suggested that the definition of what constitutes DNA information needs work. For example, if one were to find out through a DNA test that he/she has high blood pressure, the insurance company ought to be able to get that information. He mentioned that there are a number of tests that could fall under "that" classification, and indicated that the insurance industry is not interested in doing extensive DNA testing and analysis. REPRESENTATIVE GARA pointed out, however, that the bill only makes DNA information private and specifies that a DNA analysis doesn't include regular, more broadly used diagnostic testing. MR. GEORGE suggested that his client's concerns could be addressed by changing the definition of DNA. As an alternative, perhaps written authorization from the individual to obtain and share genetic information could be required of the insurance industry. But if insurers are unable to share information or keep underwriting information intact, they would be forced to cancel policies. Because the bill specifies that a person can retract permission to use his/her genetic information, if a person elects to do that, an insurance company would be forced to redact that person's file. "Once we get the information, we need to be able to hold on to it and use it for ... limited purposes; failing that, we would have to cancel the policy because we can't appropriately service the policy," he added. MR. GEORGE assured the committee that the Division of Insurance has regulations governing the protection of health information, as does the federal government via Health Insurance Portability and Accountability Act (HIPAA) regulations. There really is adequate protection, he opined. He then turned attention to a proposed amendment, which read [original punctuation provided]: Page 2 line 30. Add a new section to chapter 18.13 as follows: The requirements of this chapter do not apply to a "covered entity" as defined by and subject to the federal health insurance portability and accountability privacy rules (45 CFR Parts 160 and 164) or to licensees subject to regulations adopted under AS 21.36.162. MR. GEORGE said this proposed amendment offers an exemption to those entities that are subject to HIPAA regulations and Division of Insurance regulations as they apply to licensees. He suggested that a consent form pertaining to all information could be created by the Division of Insurance. REPRESENTATIVE OGG asked whether there is anything in the bill that stops an insurer from entering into a contractual relationship with a person. Number 0808 MR. GEORGE said yes. Before a policy is written, the person provides certain information to the insurer, and as long as the insurer has that information and can use it as described in the contract, everything is fine. But since the bill allows the person to retract his/her permission to use the information, the insurer would have to redact the file and this could affect whether the insurer is able to reinsure the person, sell the company, or be able to provide full information for examination by the Division of Insurance. "As long as you don't ever withdraw your permission once you've given it, that's not a problem; it's when you pull that back that it creates the [difficulty]," he added. REPRESENTATIVE OGG pointed out, however, that the contract could simply stipulate that withdrawal of permission to use/share DNA information will result in the policy being canceled; that stipulation could be part of the contractual relationship. He indicated that he did not see where the bill causes a problem with regard to entering into contractual agreements. MR. GEORGE acknowledged that such a stipulation could be part of a contract, but questioned whether canceling policies is really in the public's best interest. REPRESENTATIVE GARA surmised that they might not be able to agree on this issue. He asked whether DNA is currently being used without its owner's consent. MR. GEORGE said that since the ACLI considers DNA information to be health information, consent is still required. The bill, however, creates a private property right. CHAIR McGUIRE asked how the insurance industry currently uses DNA information. MR. GEORGE offered that the results of certain blood tests could be considered genetic information. CHAIR McGUIRE said she is concerned that if genetic information reveals whether a person has traits or tendencies towards cancer, for example, or other hereditary diseases, then the insurance industry will use that information to deny a person health or life insurance. Number 1138 REPRESENTATIVE HOLM offered his understanding that there are a number of illnesses and disabilities that can be seen via the genetic code. It is a difficult fence to straddle, he remarked, because the legislature wants to be able to protect people's rights without interfering with an insurance company's ability to write policies. He echoed some of Representative Ogg's comments regarding changes in contractual agreements, and predicted that the legislature will want to err on the side of people's personal freedoms. He said SB 217 appears to be the right kind of bill at this point in time, though things could change as new scientific advancements are made. He suggested that the insurance industry accept the changes proposed via SB 217, see if any problems arise and, if they do, then come back to the legislature and request assistance. It's to no one's benefit to drive the insurance industry away, he concluded. MR. GEORGE noted that insurance companies make money by writing insurance, not by denying insurance. There is a proper rate for everyone, he remarked, and suggested that the question comes down to whether there ought to be cross subsidy - those that live a long time pay a little more so that those that won't live a long time pay a little less. He noted that statistically, women live longer than men, and Caucasians live longer than African Americans. Ought there to be a different rate for those that statistically live longer? The state of Massachusetts decided that there shouldn't be a difference based on sex, and the insurance industry decided, as a policy decision, that there shouldn't be a difference based on race. Therefore, some groups do subsidize others. CHAIR McGUIRE, after thanking Mr. George for coming and remarking that he has provided the committee with food for thought, suggested that the committee consider the issue of possible amendments. The committee took an at-ease from 1:25 p.m. to 1:26 p.m. Number 1433 REPRESENTATIVE GRUENBERG [made a motion to adopt] Amendment 1, a handwritten amendment with corrections that read [original punctuation provided]: page 2 line 10. After "section" insert: "Any written consent must clearly inform the person of the nature of the genetic testing requested and the right of privacy that is being waived." REPRESENTATIVE GRUENBERG suggested that Amendment 1 be treated as a conceptual amendment. CHAIR McGUIRE indicated that she likes [Conceptual] Amendment 1. Number 1480 REPRESENTATIVE SAMUELS objected. He expressed concern that amending the bill might cause it to fail due to a lack of time. Number 1483 DAVID GRAY, Staff to Senator Donny Olson, Alaska State Legislature, sponsor, on behalf of Senator Olson, said that if the committee wishes to amend SB 217, it has the right to do so, and that doing so will give the House a bit of ownership in the bill. REPRESENTATIVE GARA said that after reading the section that [Conceptual] Amendment 1 proposes to change, he believes his concern is addressed by the fact that a separate form will be required. Number 1551 REPRESENTATIVE GRUENBERG withdrew [Conceptual] Amendment 1. MR. GEORGE expressed a preference for just having one consent form, created by the Division of Insurance, that encompasses all information. CHAIR McGUIRE noted that page 2, lines 10-12, read in part, "The Department of Health and Social Services may by regulation adopt a uniform informed and written consent form to assist persons in meeting the requirements of this section". Number 1597 REPRESENTATIVE SAMUELS moved to report CSSB 217(JUD) out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, CSSB 217(JUD) was reported from the House Judiciary Standing Committee. Number 1627 REPRESENTATIVE HOLM moved to report the Senate Judiciary Standing Committee's letter of intent out of committee along with the bill. REPRESENTATIVE GRUENBERG expressed a preference for including an intent section in the bill itself, rather than just having a letter of intent. Number 1649 CHAIR McGUIRE asked whether there were any objections to reporting the letter of intent along with the bill. There being none, the letter of intent was also reported from the House Judiciary Standing Committee. [CSSB 217(JUD) was reported from committee.]