HB 275-RETIREE BENEFITS:COLORECTAL/DRUG BENEFITS  3:20:40 PM CHAIR OLSON announced that the first order of business would be HOUSE BILL NO. 275, "An Act requiring that a policy of group health insurance offered by the state and certain local governments include coverage for colorectal screening, allow retirees to choose between brand-name and generic drug products, and limit certain prescription drug benefit payments to an amount based on the cost of the generic drug product." 3:21:03 PM REPRESENTATIVE BOB LYNN, Alaska State Legislature stated that this bill is about saving money and saving lives. He related a scenario in which in which he filled a prescription at a Fred Meyer pharmacy. The pharmacist talked to him about the cost of brand name prescription drugs. 3:22:36 PM MIKE SICA, Staff, Representative Bob Lynn, Alaska State Legislature, on behalf of the sponsor, Representative Bob Lynn, stated that this bill would affect about 14,000 public retirees that are pre-Medicare age or under the age of 65. 3:22:48 PM REPRESENTATIVE LYNN stated that the cost difference between using brand name and generic drugs is staggering. He passed out a list of drugs his pharmacist gave him. Everyone probably takes one or more of these drugs, he said. He compared the cost of brand name drugs to the generic drug for several drugs, as follows: Zofran, $3,204 for brand name drug as compared to $10.35 for generic; Effuxor, $1,375 for brand name drug as compared to $23.40 for generic; Prilosec, $714.24 for brand name drug versus $20.85 for generic; Glucophage, $91.68 for brand name drug versus $1.32 for a 90-day prescription of the generic drug. He characterized the price difference as amazing. Thus the potential for savings is great. This bill proposes that retired state employees must use the generic drug, although if the retiree wanted to use the brand name the retiree could pay the difference. He pointed out that the only exception would be if a doctor or pharmacist designates the drug must be a brand name or if a [generic] drug is not available. He turned to the second portion of the bill, which relates to colorectal screening and is a life-saving measure. Currently, retired state employees under the ages of 65 are not eligible for insurance coverage for colorectal screenings; however, Alaskans who are incarcerated do receive the benefit of screening. He concluded that HB 275 will save money and save lives. 3:25:46 PM MR. SICA referred to page 1, which would add a new paragraph to extend colorectal screening as a preventive measure and is similar to a measure the committee considered last year. He stated that this would extend health care coverage of colorectal screening for cancer to a group of retirees, including public retirees, the judicial system, the Teachers' Retirement System (TRS), the public employees. About 14,000 people, not including dependents would be affected by the bill, and this group comprises the only major group in Alaska without this important coverage. He stressed this as a lifesaving technique. He pointed out that the Department of Corrections advises that inmates also have colorectal screening using American Cancer Society guidelines and inmates have coverage. He turned to paragraph (14) of the bill, which would offset the cost of colorectal screening by requiring the same group to use generic rather than brand name drugs unless their doctor or pharmacist recommends a brand name since some drugs, such as cardiac or psychiatric medicines differ from the generic brand or may not be available. If the retiree beneficiary wants to use the brand name the individual must pay the difference. 3:28:15 PM MR. SICA recalled the sponsor's earlier testimony. He emphasized that the sponsor thought it would be useful to use the savings to cover colorectal screening, which is a high priority for many people. He pointed out that the sponsor has worked with the American Cancer Society, the Retired Public Employees' Association (RPEA), the AARP, and the administration, including the Division of Retirement and Benefits. He hopes the fiscal impact reductions will fund the cost of colorectal screening. MR. SICA referred to the three fiscal notes. He related that the Division of Insurance submitted a zero fiscal note. He referred to the 2012 Buck Consultants study dated January 18, 2012, which shows the cost of colorectal screening would be $3.19 million and the savings resulting from using generic drugs would be $3.23 million. The sponsor estimated the possible costs savings at $40,000 in the first year. The Division of Retirement and Benefits submitted a one-time cost of $26,000 to change brochures. He referred to the Department of Health and Social Services fiscal note just received, which is a little complicated, but discussed Medicaid benefits for brand name prescription drugs. He pointed out that in 2010 a Medicaid task force recommends the state move more toward generic drugs. 3:30:19 PM REPRESENTATIVE SADDLER asked for the cost for the colorectal screening. MR. SICA answered that individual cost for colonoscopy would range from $1,800 to $6,000 depending on what the doctor discovers. He suggested that the Division of Retirement and Benefits used a cost of $3,000-4,000, but he was not certain. 3:31:43 PM REPRESENTATIVE HOLMES answered whether the sponsor considered applying generic drugs to current public employees. MR. SICA answered that the sponsor was trying to take advantage of the savings by using generic drugs and use it to cover the colorectal screening. In 2010, the Division of Retirement and Benefits' newsletter explained substantial savings by using the voluntary use of generic drugs. The active state employees saved about $414,000, whereas the retirees saved $7.6 million. He surmised that the higher the copay the higher the generic drug usage. He related his understanding that the retiree plan has a difference of $8-4 dollars between using the brand name or the generic drug. CHAIR OLSON remarked that the contract negotiation for state employees may prevent mandating it. 3:33:44 PM MR. SICA provided a brief sectional analysis of the bill. Section 1 paragraph (13) would extends the coverage to cover colorectal screening to municipal and state employees and officers who retire under the Public Employees' Retirement System (PERS), the Judicial Retirement System, the Teachers' Retirement System, or the former Elected Public Officers Retirement System health coverage would include colorectal screening, which is the one group not covered in Alaska. MR. SICA related that Section 1, paragraph (14) would increase the use of generic drugs by allowing the beneficiary to choose between generic and brand name drugs unless the doctor or the pharmacist indicates a brand name must be used or that it is not available. He explained that Section 2 amends the definition of generic drug as in AS 08.80.480. He read: An equivalent drug product means a drug product that has the same established name, active ingredients, strength or concentration, dosage form and route of administration. It is formulated to contain the same amount of active ingredients in the same compendia or other applicable standards for strength, quality, purity, and identity, but may differ in characteristics such as shape, scoring configuration, packaging, excipients including colors, flavors, preservatives, and expiration time; 3:35:25 PM MR. SICA added that generic drugs are a lot cheaper. He referred to handout in the members' packet that indicates generic medicine is 70 to 90 percent less expensive. 3:35:42 PM GARY MILLER, Vice President, Southeast Region, Retired Public Employees of Alaska (RPEA) read a letter from Bob Doll, as follows [original punctuation provided]: The Retired Public Employees of Alaska (RPEA) is gratified to offer its support for your draft bill, HB 275, to require that retiree medical insurance coverage include colorectal screening and colonoscopies. In fact, providing this coverage has been a major objective of RPEA for several years. We hope that the Alaska legislature will seize this opportunity to offer coverage for both retirees and the state. The bill will also include use of generic prescription drugs, a goal that RPEA has pursued among its members for many years in our continuing efforts to increase the cost of health care. Some of our members are concerned with the mechanism to trade-off the cost of colonoscopies against the savings from increased use of generic drugs. While we applaud the effort to increase both health concepts, the dollar values resulting will have an uncertain impact on our members. Accordingly, we hope that the final version of HB 275 will incorporate a sunset provision of five years in order to ensure a future review of the results it has produced. Buck Consultants in their letter of November 29, 2007, reported on their efforts to estimate return-on- investment (ROI) for adding colonoscopy coverage to the retiree plan. That letter concluded, in part, "...we believe an explicit colon screening diagnostic provision in the retiree plan will prove financially positive over time (p.4)." As long ago as August 29, 2005, the American Cancer Society, Alaska Office, wrote to then Commissioner of Administration ray Matiashowski reporting the results of a study by the Lewin Group, a nationally recognized health policy consulting firm located in Washington D.C. 3:38:19 PM MR. MILLER continued to read, as follows: Based on the results of that study the Society reported, "Our final conclusion is that there is no economic reason for insurance plans not to cover the full range of colorectal cancer screenings and there are tremendous life-saving benefits for doing so." The Congress has included in the Affordable Care Act of 2010 coverage for colorectal cancer screenings. For state retirees covered by Medicare, such screenings are a major step forward in the effort to combat this disease. Retirees under 65 years of age, covered only by the state medical plan, are left to combat this threat at their own expenses, an inconsistency that we find difficult to understand. While the Buck analysis is useful in supporting the goals of HB 275, it is merely a statistical and financial document. It does not include any consideration for the number of fellow retirees - among who will eventually be included all current members of the Alaska State legislature - who will contract colorectal cancer and whose prospects for survival will be vastly enhanced if that cancer can be detected early. While the financial rational for HB 275 should be enough to draw the support for the bill, I hope that the legislature will not overlook the important humanitarian dimension of a condition which all of us may face at some time. RPEA is proud to have the opportunity to endorse HB 375. 3:41:07 PM PAUL W. DAVIS, MD, FAAFP, Medical Director, Colorectal Cancer Screening Program, Alaska Native Medical Center (ANMC), said that he is the medical director, Alaska Native Medical Center Colorectal Cancer Screening Program, and works in the screening program for the Yukon Kuskokwim Health Corporation. He has worked in Dillingham, Seward, and many parts of the state providing colonoscopies and colorectal cancer screening for Alaska Native and other Alaskans. He stated that colon cancer is a major killer, and the second highest cancer killer of Americans, in particular, this cancer hits the Alaska Native population hard. He said 1 of 19 Americans will be diagnosed with colon cancer before they die, but the rate of 1 of 8-9 indicates twice the risk for the Alaska Native population. This cancer is preventable, unlike lung cancer which cannot be screened. This cancer can be found in a stage, similar to cervical cancer or pap spears, but the test is even more cost effective than pap smears. In 1960, cervical cancer killed more women than any other cancer, but with screening women no longer need to die of cervical cancer. He also said that colon cancer is similar since people start to grow precancerous polyps in their 40s and for the average population are at risk by age 50. He said colorectal screening is lifesaving. The medical community has known for some time that removing polyps helped prevent colon cancer. However, two weeks ago in the New England Journal of Medicine, Dr. Sidney Winawer, a gastroenterologist, and his colleagues in Boston published a study in Boston indicates more than a 50 percent decrease in death rate from cancer is achieved by having a single colonoscopy to remove polyps between the ages of 50-65. In 2007, former Governor Frank Murkowski signed into law that any insurance company doing business in Alaska is required to offer colon cancer screening. Yet our own retirees between the ages of 50-65 are not given that benefit, which is required by law. He recalled in 2007 saying, "Finally our Alaska State Governor was paying attention to the Alaska gas pipeline that really needs to be scoped out." 3:44:59 PM DR. DAVIS characterized the second part of the bill, which addresses brand name drugs versus generic drugs as trading something that has no benefit to retirees. He explained that generic prescription drugs are as good and are equivalent to the brand name prescription drugs. He offered his belief that ordering brand name medicines drives up health care costs. He stated that since health care dollars are limited these dollars need to be spent wisely. He emphasized that colorectal cancer screening is a wise use of health care dollars and spending them on brand name drugs that have no proven benefit over generic drugs is not a wise use of health care dollars. Even if the tradeoff did not exist, colorectal cancer screening not only saves lives and prevents colon cancer, but in the long run saves the state a huge amount of money. He pointed out that it is far less expensive to screen people and prevent diseases than it is to take care of colon cancer when it develops. He said, "It is an extremely expensive disease to take care of and patients always suffer and die." 3:46:31 PM MOLLY MCCAMMON stated that in 1997 she was a 45-year-old state employee, when she was diagnosed with stage one colorectal cancer following a colonoscopy paid for by her State of Alaska health insurance coverage. She stated that she knew her grandfather had died of colon cancer at the age of 45. A grandfather is a second-degree relative and while that alone is not significant in terms of colon cancer her doctor recommended a colonoscopy due to some very minor symptoms. She expressed her belief that she would have ignored the symptoms completely if her insurance had not covered the procedure. She had the procedure and the doctor discovered the tumor and surgically removed it. Her colon cancer was discovered early enough to surgically remove it and she did not even need radiation or chemotherapy. However, now that she is 60 and a state retiree, she discovered that screening colonoscopies are not covered by her health insurance. She offered her belief that this is absurd since preventing colorectal cancer and not just early diagnosis should be a major reason for supporting routine colorectal cancer screening. She emphasized that colorectal cancer screening is the only effective test and early detection is very treatable. She related as humans our tendency is to postpone or even avoid expensive procedures like a colonoscopy until either a tumor is too large to ignore or the cancer has spread to other parts of the body. Treatment for colorectal cancer has improved significantly over the past few years, which has resulted in more than a million colorectal cancer survivors in the U.S. She said, "I really consider myself fortunate to be one of them and I know it's because I was able to have my colonoscopy covered by health insurance. I urge you to support this legislation so that there will be more survivors like me. Thank you very much." 3:48:47 PM PATRICK LUBY, Advocacy Director, AARP Alaska, said that AARP is in strong support of HB 275. Medicare now covers all colorectal cancer screening without any copay or deductibles. Through research the federal government has discovered that colorectal cancer screening saves lives and money. Early detection and treatment make good economic sense and good health preventive policy. Our active public employees and inmates in the correctional system can have colorectal cancer screening coverage. He stated that AARP thinks it makes sense for PERS and TRS retirees too young for Medicare to also have health care coverage. He concluded by saying that AARP urges members to support HB 275. 3:50:04 PM EMILY NENON, Alaska Government Relations Director, American Cancer Society Action Network, stated that she has worked on this issue for some time and wrote her first letter on this issue on behalf of the American Cancer Society in 2005. She said she hopes this issue will get resolved before she is ready to retire. In 2006, the legislature passed House Bill 393, which required all state-regulated insurance plans to cover colon cancer screening according to the American Cancer Society guidelines. At the time, the society found a number of other plans not covered by the state added colorectal cancer screening coverage, such as Providence Health System, which is self- insured. In 2011, Medicare changed rules its rules to cover 100 percent of the colorectal cancer screening without any copay. She highlighted that remaining are those retirees ages 50-64. She recalled previous testimony that colonoscopies are expensive, which is true. However, colonoscopies are recommended once every ten years and if averaged out become cheaper than mammography screening. She highlighted that colorectal cancer is the second leading cause of cancer deaths in Alaska and across the nation. She emphasized that it is true that Alaska Natives have the highest incidence of colorectal cancer of any population group in the nation. She pointed out that with early detection, the five-year survival rate from colon cancer is over 90 percent, but if colorectal cancer is not caught until it reaches organs, when symptoms are most likely to occur, the five-year survival rated drops to 11 percent. She estimated that with regular screening half of colorectal cancer deaths could be prevented. She urged support for HB 275. 3:53:05 PM RICHARD BENEVIEDES stated that most of the points he raised at the hearing last April are applicable points. He offered the reason he is not currently in Juneau is since he had a colonoscopy as part of routine physical in 2008. The colonoscopy revealed that he had stage four colon cancer that had spread to his liver. His doctor told him that a person with stage four colon cancer has a life expectancy of two years. He offered his belief if he had not had the colorectal cancer screening in 2008 that he probably would not have survived without this detection. He has had two surgeries and radiation, plus five months of IV chemotherapy and three months of oral chemotherapy as part of his treatment. He continues to work to rebuild his core strength. He characterized this bill as an incredibly important bill. He said once he becomes a retiree he would like to have another colonoscopy. He said he thinks that it is important for retirees over 50 to get this coverage. He also said that this bill makes sense and will save thousands of dollars by detecting colon cancer before it becomes more serious. He said, "Even though I have this great insurance, I pay at least $10,000 out of pocket every year for my percentage...for treatments and drugs. He implored members to pass this bill. He pointed out that somewhere right now a retiree has colon cancer, but has no idea they have colon cancer. He stated that he would like to help that person. 3:56:29 PM DAVID OLEWILER stated that he is a 56-year-old PERS retiree. He worked for the Municipality of Anchorage for 31 years. He related that five years ago he received his first colonoscopy and a noncancerous polyp was removed. This year his doctor recommended a follow-up colonoscopy; however, Alaska Care excluded this retiree health care benefit in 2010. The cost of his colonoscopy was also estimated between $1,800 and $6,000, depending on the results of the procedure; however, he is not able to budget 100 percent of the costs out of pocket. Without insurance benefits he must delay the colonoscopy from one to two years to budget for it. Additionally, most colon cancers do not exhibit symptoms until latter stages of the disease, which makes him extremely uneasy about delaying the test. He stressed that with every passing month he feels as though he is rolling the dice with his own health. He pointed out that he has nine more years before Medicare will pay for his colonoscopy. All of the information provided in members' packets documents the life- saving benefits of colorectal cancer screening and others have testified to that end. Each medical document he has read urges Americans over the age of 50 to have a colorectal cancer screening prior on a scheduled basis. Every article urges screenings before any symptoms arise. He listed his sources as the American Cancer Society, the American College of Physicians, FightColorectalCancer.org, and Colon Cancer Alliance. He characterized HB 275 as an important piece of legislation. This bill would restore a component for a life-saving procedure along with a mechanism to recover the costs of the test. He emphasized that this bill is a win-win for the state and for retirees. He concluded by saying, "It's also the right thing to do." He thanked Representative Lynn and Gara, and Mr. Sica. 3:59:53 PM CHAIR OLSON left public testimony open. [HB 275 was held over.]