HB 1 - POLICY FOR SECURING HEALTH CARE SERVICES 1:40:07 PM VICE CHAIR THOMPSON announced that the next order of business would be HOUSE BILL NO. 1, "An Act stating a public policy that allows a person to choose or decline any mode of securing health care services." [Before the committee was CSHB 1(HSS), as amended on 4/1/11.] 1:40:17 PM REPRESENTATIVE PRUITT moved to adopt the proposed committee substitute (CS) for HB 1, Version 227-LS0006\B, Bailey, 4/1/11, as the working document. REPRESENTATIVE GRUENBERG objected. 1:40:46 PM KAREN SAWYER, Staff, Representative Carl Gatto, Alaska State Legislature, on behalf of Representative Gatto, one of the bill's joint prime sponsors, explained that Version B incorporates an amendment made to CSHB 1(HSS) during the bill's last hearing. Under that amendment - which altered both proposed AS 44.99.130(a) and the title - the word, "choose" was replaced with the word, "accept", and the word, "offered" was added. The proposed state policy under Version B now says in part, "a person has the right to accept or decline any offered mode of obtaining health care services". REPRESENTATIVE GRUENBERG removed his objection. VICE CHAIR THOMPSON, noting that there were no further objections, announced that Version B was before the committee. MS. SAWYER, to briefly recap, explained that HB 1 pertains to the federal Patient Protection and Affordable Care Act (PPACA), and offered her belief that the PPACA is going to mandate that all individuals have qualifying healthcare insurance or pay a tax penalty. Specifically, HB 1 is proposing to establish a state policy that a person has the right to accept or decline any offered mode of obtaining healthcare services without penalty or threat of penalty. She also noted that a change made in a prior committee specifies that as used in proposed AS 44.99.130, the term, "penalty" does not mean liability for the cost of healthcare services. VICE CHAIR THOMPSON, offering his understanding that the bill is intended to address the issue of [healthcare] insurance, expressed dissatisfaction that the bill's language instead focuses on healthcare services, and characterized this discrepancy as confusing. MS. SAWYER indicated that the bill was written as it was in order to specifically address provisions of the PPACA. REPRESENTATIVE HOLMES, offering her understanding that the stated goal of the bill is to ensure that no one be required to have healthcare insurance, pointed out that that's not what the language of the bill actually says. Unintended consequences, therefore, could result from passage of HB 1. MS. SAWYER, relaying that HB 1 is based on model legislation produced by the American Legislative Exchange Council (ALEC) and being used by other states, agreed to research the issue further. In response to a question, she said HB 1 was written as if the PPACA is going to be found to be constitutional. REPRESENTATIVE HOLMES pointed out, though, that if the PPACA is found to be constitutional, HB 1 would be preempted, and if the PPACA is found to be unconstitutional, then HB 1 won't be necessary. Either way, isn't it that the bill will have no actual effect? MS. SAWYER offered her understanding that over 40 other states thus far have either passed or are considering passing similar legislation. The hope is that "all off this" will illustrate that a number of states disagree that the federal government has the right to mandate that a person either have healthcare insurance or pay a tax penalty. 1:48:44 PM SIGNE ANDERSON, Chief Assistant Attorney General - Statewide Section Supervisor, Commercial/Fair Business Section, Civil Division (Anchorage), Department of Law (DOL), concurred that if the PPACA is found to be constitutional, federal preemption would be an issue, but relayed that she was not prepared at this point in time to say that the bill would have no effect at all. REPRESENTATIVE HOLMES pointed out that regardless of whether the PPACA is found to be unconstitutional, if passed, HB 1 would still be in effect and therefore could still have unintended consequences, particularly given that its language broadly refers to healthcare services in general. If the bill is intended as a statement of disagreement over provisions of the PPACA, Alaska is already a party in the federal lawsuit, Florida et al v. United States Department of Health and Human Services, and so what more of a statement of disagreement than that is necessary? REPRESENTATIVE GRUENBERG asked why the bill, via Section 1, is proposing to add a short title to uncodified law. He offered his understanding that except in situations involving interstate compacts and uniform Acts, providing for a short title was just not done. He asked whether the [joint prime sponsors] would object to deleting Section 1 of HB 1. MS. SAWYER, noting [the joint prime sponsors'] absence, relayed that she would be unable to speak for [them] on this issue at this time. REPRESENTATIVE GRUENBERG expressed a preference for not including a short-title provision. Observing, then, that proposed AS 44.99.130(b)(2) says that the proposed state policy may not impair a contract right that provides healthcare services, he asked whether any federal law requiring a person to have or purchase healthcare insurance would simply become part of [employment] contracts as an "implied-in-law" provision, thereby rendering HB 1's proposed state policy inapplicable. MS. ANDERSON - noting that under Alaska's insurance laws, such a requirement by the state would be implied in [employment] contracts - relayed that due to her nescience regarding federal jurisprudence, she is unable to say whether such would also be the case with federal law. REPRESENTATIVE GRUENBERG surmised, then, that that issue still needs clarification, particularly if the PPACA does contain such a requirement. REPRESENTATIVE HOLMES asked whether the Department of Health and Social Services has any concerns that HB 1 would have a negative impact on other federal programs such as Medicaid or Medicare. 1:57:07 PM JON SHERWOOD, Medicaid Special Projects, Medicaid and Health Care Policy, Division of Health Care Services, Department of Health and Social Services (DHSS), said he is unable to speak to the question of whether Medicare would be impacted, because it's a federal program that the DHSS is not involved in the administration of, but with regard to the question of whether the bill would impact other state, and state and federal programs - such as Medicaid - he said he'd specifically asked the Department of Law (DOL) whether the exemption provided for via proposed AS 44.99.130(b)(1) would be adequate for the DHSS's purposes, including its child support enforcement efforts - a linked requirement for certain assistance programs - and the DOL assured him that the exemption was adequate for the purpose of allowing the DHSS to continue administering its programs. In response to another question, he said it was his understanding that the PPACA's tax penalty would apply to someone who doesn't have health insurance or some other means of obtaining healthcare - such as through the Indian Health Service (IHS), for example - and that that's why the bill uses [the phrase, "mode of obtaining health care services"]. REPRESENTATIVE HOLMES shared her concern that regardless of the joint prime sponsors' intent, the language of the proposed state policy could be interpreted as allowing for something that's contrary to public policy or current law. VICE CHAIR THOMPSON, reiterating his concern that the proposed state policy doesn't specifically reference healthcare insurance, again characterized this lack as confusing. REPRESENTATIVE GRUENBERG questioned whether the bill isn't simply stating legislative intent. MS. SAWYER said she is unable to speak to whether that's what the drafter intended when he chose to address [the joint prime sponsors' concerns about the PPACA] via the proposed state policy. REPRESENTATIVE GRUENBERG said that's how he is interpreting the bill, and is therefore questioning how, as a practical matter, [the proposed state policy] would be applied and whether it establishes a statutory right. MR. SHERWOOD indicated that because of the exemption laid out in proposed AS 44.99.130(b)(1) and because the programs offered by [the DHSS] are generally authorized via statute, the DHSS would not be bound by HB 1's proposed state policy, and this is why the DHSS submitted a zero fiscal note for HB 1. 2:07:01 PM REPRESENTATIVE GRUENBERG asked what the joint prime sponsors intend for the bill to actually do. MS. SAWYER, in response, said the joint prime sponsors don't believe an individual should be mandated by the federal government to purchase a particular product, and instead believe that to then penalize that individual for not doing so would be another error. REPRESENTATIVE GRUENBERG pointed out, though, that it's the federal courts that are responsible for addressing the provisions of the PPACA and any constitutional questions that arise. Given that under the Supremacy Clause, the state is required to follow federal mandates, wouldn't the joint prime sponsors' beliefs regarding the PPACA be better addressed via a house joint resolution urging the federal government to change the PPACA, or urging the state to challenge the provisions of the PPACA? "I don't think that this has any authority -- we can't ... have the kind of effect on federal law and the federal Constitution that you're saying you want this bill to have," he concluded. MS. SAWYER offered [the joint prime sponsors' belief] that healthcare insurance isn't something the federal government should be mandating, that that duty instead lies with the state. To address the concern about the language of the proposed state policy possibly being interpreted as allowing for something that's contrary to public policy or current law, she noted that proposed AS 44.99.130(c)(2) defines the term, "mode of obtaining" in part as meaning directly purchasing healthcare services from a healthcare provider. 2:11:17 PM PATRICK LUBY, Advocacy Director, AARP Alaska, stated that the AARP opposes HB 1. He then offered his belief that individuals, businesses, and government entities/programs that have, offer, or administer a healthcare insurance plan, end up picking up the shifted healthcare costs incurred by the uninsured. Not complying with the provisions of the PPACA will only allow this practice of cost-shifting to continue, and for this reason, the AARP is requesting a "No" vote on HB 1. In response to a question, he offered his belief that the possible benefits afforded by the provisions of the PPACA won't be realized unless everyone participates - that's the whole purpose of group healthcare insurance; the more people who have healthcare insurance, the less healthcare services and healthcare insurance will cost everybody. In response to other questions, he said he agrees that everyone should be mandated to have healthcare insurance, but acknowledged that to some extent, cost-shifting also occurs when particular individuals - regardless of whether they already have healthcare insurance - require expensive/extensive healthcare services. REPRESENTATIVE KELLER suggested that because the AARP offers supplemental Medicare insurance, Mr. Luby has a conflict of interest. REPRESENTATIVE HOLMES pointed out, though, that those on Medicare would be considered to already have healthcare insurance and thus wouldn't be required under the PPACA to purchase more healthcare insurance, either through the AARP or elsewhere. 2:17:32 PM VICE CHAIR THOMPSON, after ascertaining that no one else wished to testify, closed public testimony on HB 1, and announced that HB 1 would be held over. REPRESENTATIVE KELLER offered his belief that under HB 1's proposed state policy, a person employed by a company that provides its employees with healthcare services would have the right to either accept or decline such services without penalty or threat of penalty. In conclusion, he said he would like the legislature to establish the right policy for Alaska and its citizens. [HB 1, Version B, was held over.]