SB 260 - INSURANCE COVERAGE FOR CONTRACEPTIVES SENATOR ELLIS, sponsor of SB 260, gave the following synopsis of the measure. SB 260 is known as the Contraceptive Coverage Act. It is intended to broaden the coverage for prescription contraceptives in the State of Alaska through private health insurance plans. Nationwide, most plans exclude such coverage: only one-third of health insurers cover oral contraceptives, the most popular method; 15 percent cover diaphragms; 18 percent cover IUDs; and 24 percent cover hormonal implants. Coverage in Alaska is no better. Those specific birth control methods are the most effective, are more costly, and are obtainable only from a health care provider. Though most insurance plans provide no contraceptive coverage, they routinely cover abortions, sterilization, tubal ligation, infertility, and impotence treatments, all more expensive procedures related to fertility. Increased access to contraceptive services will help families to bring children into healthier homes when the time is right. Senator Ellis noted a slide presentation was prepared to show committee members the economic and social benefits of expanding contraceptive coverage. CHAIRMAN WILKEN introduced MICHELE GEARHART, legislative aide to Senator Ellis, who would be assisting Senator Ellis with the slide presentation. Number 434 SENATOR ELLIS discussed the first slide which contained 1987 statistics on pregnancies by outcome, the most recent statistics available from national sources. The statistics are as follows: 43 percent of all pregnancies were intended pregnancies; 20 percent of all pregnancies were mistimed pregnancies; 8 percent of all pregnancies were unwanted pregnancies; and 29 percent of unwanted or mistimed pregnancies result in abortions. The second slide showed that of the 5.4 million pregnancies that occurred in the last decade, 3.1 million were unintended at the time of conception. Of that 3.1 million, 1.5 million resulted in live births while 1.6 million ended in abortion. Only 2.3 million pregnancies were intended at the time of conception and resulted in live births. SENATOR ELLIS emphasized that intendedness is a big issue for all couples. Statistics show that 57 percent of all pregnancies are unintended. The next slide gave the percentage of women who unintendedly become pregnant according to age, marital status and FPL. The Alaska Pregnancy Risk Assessment Monitoring System (PRAMS) data indicates that of pregnancies among Alaska women, 41 percent were unintended; 90 percent of the women were not using, or improperly using, a birth control method. CHAIRMAN WILKEN asked about the PRAMS program. KAREN PEARSON, Division of Public Health, DHSS, explained PRAMS is a voluntary survey conducted by DHSS, about six months after a birth, to compile information on all live births in Alaska. 14 other states have similar surveys. CHAIRMAN WILKEN asked what percent of surveys are returned. MS. PEARSON answered the responses are broken down by strata but she estimated 60 to 80 percent are returned, depending on the strata. SENATOR ELLIS stated that unintended pregnancy is costly on many levels. The costs to the family include abuse, poverty, and divorce - costs that have a direct impact on the state budget. The social costs include lower paying jobs, higher unemployment, and greater likelihood of welfare receipt. He added the hard core economic costs are pregnancy care costs in the form of ectopic pregnancies, induced abortions, spontaneous abortions, and term pregnancies. SENATOR ELLIS explained the next two slides contain information from a book entitled The Best Intentions. The slides listed the consequences for unplanned babies and the consequences for family formation. SENATOR ELLIS reviewed information about health plans. Despite nearly universal drug coverage, many health plans exclude contraceptives: 97 percent offer prescription drug coverage of other types but 49 percent fail to cover contraceptive methods. Only 15 percent cover all five reversible methods of contraception (IUD, diaphragm, implants, injections, and oral contraceptives). Many policies exclude contraceptives even if they are prescribed for a medical condition other than birth control. The next slide showed the medical costs over five years of using contraceptives versus no method, which leads to wanted and unwanted pregnancies. SENATOR ELLIS stated the average out of pocket cost for oral contraceptives is $25 per month. Adding oral contraceptives to a drug card plan increases employee cost by about $16.20 per year, or $1.35 per month. He added that gender inequity does exist in these health care plans. On average, women pay more and get less for their health insurance coverage. In sharp contrast, most health insurance policies offer full coverage for drugs and devices for men, including prostate treatment, penile implants, testicular or urogenital diseases and medication for male impotence. CHAIRMAN WILKEN thanked Ms. Gearhart for the presentation materials she provided for the committee. Number 506 SENATOR ELLIS summarized by saying society is spending millions of dollars on the consequences of unintended pregnancies. Support for family planning is broad and contraceptive coverage is cost effective. If all families had access to contraception, more children would be wanted, poverty and welfare dependence would be reduced, and the number of abortions would be reduced dramatically. He quoted the former surgeon general of the United States as follows, "The starting point of effective child abuse prevention is pregnancy planning." Senator Ellis noted his appreciation to Tom Atkinson of Representative Croft's staff who helped prepare the materials for the presentation. CONNIE PAGE testified on her own behalf from Fairbanks. She questioned why insurance companies are not already covering all contraceptives. Contraceptives have been regularly excluded by insurers even though they are the most widely used drugs by women aged 18 to 44. Oral contraceptives and hormonal implants are the most effective, yet they are expensive and obtainable only from a health care provider. As the mother of two daughters, she is aware of the statistics on teen pregnancy. The fact is many teens are sexually active at an early age, whether parents want them to be or not. She wondered how low income families face the costs of contraceptives and the hard choices they are forced to make. Research data from the Alaska Division of Public Health show that one-half of the births in Alaska are unplanned. Improving private insurance coverage for contraceptive services, or increasing access to contraception, can reduce barriers to effective family planning. Ms. Page commented that it is ironic that insurance plans cover impotence treatment to assure that men can be sexually active while women are not assured that their pregnancies can be prevented. BETH CARLSON testified from Eagle River on her own behalf in support of SB 260. Women pay 68 percent more in health care expenses during their reproductive years than do men, due in large part to the costs women must pay for reproductive health care, such as gynecological care and contraception. The lack of coverage of these health care costs places a heavy burden on young families struggling with many other expenses. Requiring insurance companies to cover prescription and device contraceptives would not only be economically beneficial to insurance companies but will benefit young women and couples. SB 260 will also benefit Alaska businesses. In a one year time period, 85 percent of women in their childbearing years, who are sexually active but do not use contraception, become pregnant, as opposed to only three to six percent of such women who use oral contraceptives. As any employer knows, a pregnancy, whether planned or unplanned, affects worker productivity. Many women experience morning sickness, have required doctor's visits, sometimes require bed rest, and need time off for the birth itself and maternity leave. The husband's productivity can be affected for various reasons as well. Requiring insurance companies to cover the costs of contraception will almost certainly decrease the number of unintended pregnancies, and will benefit not only those women and couples who are not yet prepared to have a child, but also the businesses that employ them. Requiring insurance companies to cover prescription contraception is also a way to ensure that every child is wanted and loved from the moment of conception. She urged committee members to pass SB 260. SENATOR ELLIS asked anyone who has written testimony to fax it to the committee to be included in committee packets. ROBIN SMITH testified on behalf of herself and her husband, business owners with 11 employees, in strong support of SB 260. In the last couple of years, they have seen a number of both male and female employees deal with unintended pregnancies. Every case has been stressful as well as a financial and time burden. As an employer, she can support employees by providing medical insurance for contraception which she believes to be basic health care for women. In our society, it is a woman's responsibility to prevent unintended pregnancies. While most employment related insurance policies in the United States cover prescription drugs in general, a vast majority do not include equitable coverage for prescriptive contraceptive drugs and devices. Similarly, while both policies cover outpatient medical services in general, they often exclude outpatient contraceptive services. This failure is costly, both to insurance companies who may have to pay for maternity care, as well as families whose lack of physical and financial well-being is threatened by an unintended pregnancy and the lack of access to equitable coverage for contraceptives. TAPE 98-24, SIDE B MS. SMITH continued. Young women entering the workforce frequently start out at minimum wage at a time when they need contraceptives most and can least afford them. As previously stated, women pay 68 percent more in out-of-pocket medical expenses during this time period. Unintended pregnancies can also damage a woman's career. Having the added cost of child care rapidly erodes the purpose of working. If a young woman already has one infant in child care, the cost of a second child could force her to quit her job. Maintaining a well trained dependable staff is vital to operating a profitable business. Encouraging planned pregnancies when young adults can afford a family simply makes sense. MARY OSTBACK testified from the perspective of a contraceptive consumer. Her husband's state insurance policy allows two options regarding contraception: a vasectomy or tubal ligation. When neither option is suitable, women are forced to pay for any of the other options available. This places an unfair burden on women who are already paying much more than men do in health care costs. She believes the state should ensure that women have the support and ability to prevent pregnancies so that they do not have to take advantage of other options. She stated her strong support for SB 260. Number 548 GORDON EVANS, representing the Health Insurance Association of America (HIAA), a national trade association of commercial health insurance companies that provide health insurance for approximately 55 million Americans, testified. He clarified HIAA does not represent Blue Cross, AETNA, or some of the other major insurance companies. HIAA opposes SB 260 for a number of reasons, not the least of which is that the provisions mandate a specific coverage of something that is not considered to be basic health care treatment. The consequence of this mandate would be to increase the costs of health insurance, and reduce the efficiencies of managed care. HIAA favors the preservation of a system that allows the prospective purchaser of health insurance free choice of which risk he or she wishes to cover from the various coverages offered by competing insurance carriers. HIAA also believes the choice of how a policyholder spends what funds are available for health insurance should be free of government decree. It continues to oppose the proliferation of benefits through a government mandate. The services for which coverage would be mandated by SB 260 are generally considered to be elective services. Insurance companies are not in the business to provide free health insurance coverage. Anytime the government mandates specific coverage, that becomes one of the rating factors insurance carriers then use in making underwriting decisions. If the coverage sought by SB 260 is mandated, premium costs will be increased even for those people who have no use for, or do not want, the coverage. Furthermore, if this legislation passes and coverage for contraceptive services is mandated, this mandate would apply only to individual policies, smaller employer group policies, and certain other group policies, those who can least afford a premium increase. The mandate of SB 260 would not affect Alaska's largest employers: state employee coverage, CARRS, BP, ARCO, EXXON, or the Municipality of Anchorage because they are all self-insured and are subject to federal ERISA law which preempts state law. He thought approaching Congress to change ERISA would be more appropriate. He added that most of the companies he represents do not routinely cover abortions, vasectomies, sterilizations, and tubal ligations. SENATOR ELLIS asked whether HIAA opposed the state mandate for mammograms. MR. EVANS replied HIAA opposes any mandate, but it did not go on record last year as opposing mammograms, pap smears, prostate coverage, etc. SENATOR ELLIS asked if HIAA did not because it would be politically unpopular to specify those services. MR. EVANS said he did not know why. He was instructed to oppose all mandates. SENATOR ELLIS pointed out that while the state would not be affected because it is self-insured, it has been the state's practice to comply with legislative mandates for other carriers. MR. EVANS thought the state considered such mandates through its collective bargaining process. Number 494 SENATOR ELLIS asked Mr. Evans if he agreed with the HIAA quote on the slide. MR. EVANS replied he cannot disagree with that statistic. SENATOR ELLIS clarified that HIAA estimated that adding oral contraceptives to a drug card plan would increase employee cost by about $1.35 per month. MR. EVANS commented if that cost was mandated, insurance carriers would have to drop coverage elsewhere. CHAIRMAN WILKEN questioned the disparity between benefits for males in our society versus females. He stated he always assumed oral contraceptives were covered under all insurance plans but found out they are not, even when they are prescribed for purely medical reasons other than birth control. He said he co-sponsored this bill because he cannot understand why oral contraceptives are not covered, especially when they are prescribed for medical reasons. MR. EVANS responded the definition of the word "contraceptives" leaves a bit to be desired. That definition describes contraceptives as an appliance, a drug, or a medicinal for preparation intended for the prevention of conception. That definition could include a box of condoms. He suggested tightening up the definition. CHAIRMAN WILKEN indicated he thought a drug would be covered if it was medically prescribed, according to the definition of health care services. MR. EVANS stated Section 2(a) of SB 260 mandates coverage for contraceptives and related health care services. Medically prescribed services would be covered under related health care services. Contraceptives include appliances, which can cover many things. CHAIRMAN WILKEN said he interprets that section to mean either would have to be prescribed or administered by a doctor, which is his intent. He asked Mr. Evans if he could offer suggestions to clarify that language. SENATOR ELLIS indicated Chairman Wilken's interpretation is his intent as well. He noted that intent was expressed to the drafter who wrote the bill. MR. GORDON suggested including a letter of intent to clarify the issue. Number 439 MIKE LESSMEIER, representing State Farm Insurance (an HIAA member), stated State Farm is opposed to SB 260 because it mandates a benefit which mandates a cost, and that cost is then mandated to everyone whether or not they need the benefit. Mandating benefits also interferes with the functioning of a system that has worked well in the free market system based on competition. If availability of a coverage is a true concern, mandating an offer of that coverage is more desirable so that the people who use it are the ones who pay for it. State Farm does not believe that relating the issue of an unwanted pregnancy to the issue of the availability of insurance is fair. The Legislature cannot legislate personal responsibility. State Farm's concern about mandates does not only relate to this issue; it relates across the board. CHAIRMAN WILKEN asked why State Farm would oppose an increased cost of $1.60 per month now to prevent a problem that could cost thousands. MR. LESSMEIER replied to begin with, he does not think the $1.60 figure is accurate. He commented if that is truly the question, then the state should pay that increase, rather than private individuals who have no need for the service. He repeated his opposition to imposing that cost on everyone. He maintained it is unfair to look at individual issues in isolation because there is a laundry list of services many people believe are necessary and should be covered, counseling being one. He stated the question is, where does one draw the line because if all of them are covered, the product will be unaffordable, which will help no one. He repeated that if availability is the problem, mandating an offer of availability is a better approach. Number 386 SENATOR ELLIS indicated he agreed with Chairman Wilken that the incremental cost of providing this coverage is tiny and that SB 260 will not mandate personal responsibility; it will enable people to exercise personal responsibility. Asking people to bear this small increase in policy costs is not an issue because society is bearing the costs of unintended pregnancies now to a great extent. MR. LESSMEIER repeated it is unfair to equate an unwanted pregnancy to a lack of health insurance coverage for contraceptives. He suggested looking at data from other states with similar legislation to see if it has had any impact on unwanted pregnancies. Number 327 LISA BLACKER, representing herself, made the following comments. Regarding Mr. Lessmeier's opposition to requiring all policyholders to pay for the increased cost of contraceptive coverage, she said she is already paying for things that go toward men's health care coverage in her premium cost. She supports SB 260 for two primary reasons. First, it will reduce the disparity in out-of-pocket health care costs between men and women. Second, and more importantly, it will help reduce the number and consequences of unintended pregnancies. The National Academy of Sciences' Institute of Medicine released a 1995 report stating that 50 percent of all pregnancies in the United States were unintended. The number climbs to 60 percent among poor women; 73 percent among never-married women; and 86 percent among unmarried teens. Such pregnancies impose great burdens on families and societies. The Institute of Medicine also notes that the failure to cover birth control leads to higher costs for the insurer. Abortions, delayed prenatal care, low birth weight, and higher infant mortality rates are the costs associated with unintended pregnancies. Those costs are far higher than the costs of birth control and are reflected in the price we pay for insurance premiums now. SB 260 could play a significant role in increasing access to more safe and effective methods of birth control and reduce the tragic consequences of unintended pregnancies. Number 327 ANGELA SALERNO, representing the National Association of Social Workers (NASW), made the following comments. NASW strongly supports SB 260 as it will help working families access the most effective forms of birth control so they can plan happy, healthy, wanted families. Unintended pregnancy is an issue of basic health care for women and families. A 1996 Institute of Medicine Report found the contraceptive needs of a number of groups in society remain unmet so recommended that new and improved forms of contraception be researched and that the full range of contraceptive products be made accessible to consumers. It further states that, "...third party payers, who bear the cost and reap the benefits of the health status of their covered population, include contraception as covered service. Family planning services and the management of sexual health should be integrated as comprehensive reproductive health services." Ms. Salerno maintained SB 260 will not impact those Alaskans who are wealthy and can purchase any kind of contraception they wish. It will impact Alaska's working families, the people who have taken personal responsibility for themselves. It will help them plan for wanted children. NASW believes prevention is the future of providing health care in this country. Cost containment is an issue; prevention is the number one method of containing cost. This type of measure will also prevent some of the social problems experienced by the entire community because everyone pays for unwanted pregnancies. SB 260 is about working families, prevention, social problems, and unwanted pregnancies. Number 288 CAREN ROBINSON, testifying on her own behalf, related her recent experience working with a group of Close-Up students. The Close-Up group studied SB 260, as well as companion legislation in the House. The group had a mock committee hearing as well as a mock legislative session. The mock committee members passed SB 260 unanimously. In the mock legislative session, SB 260 passed with a vote of 35 to 5. Amendments containing intent language were offered. She concluded by saying the third group of Close-Up students supports SB 260. SENATOR ELLIS commented a Senate version of the letter of intent that originated in the House clarifies that the sponsor does not intend to mandate coverage for abortions or other medicinal preparations that affect a fertilized ovum. Also, some concern has been expressed about teens using SB 260 to access contraceptives without their parents' knowledge. He explained that insurance claims require a parent's signature therefore it is very unlikely that a child could get services without a parent's knowledge. CHAIRMAN WILKEN asked Senator Ellis to read the letter of intent into the record. SENATOR ELLIS read his letter of intent to SB 260 as follows: Contraceptive technology is constantly changing, and even medical experts disagree on how certain methods of contraception work. Thus, the sponsor believes it is unwise for the legislature to dispute specific methods, but that it is very important to clarify the intent of SB 260. This legislation is intended to require insurance providers in Alaska to cover contraceptives and contraceptive services. Contraceptives have the primary purpose of, or special utility for, preventing conception. The sponsor intends that conception be understood as the fertilization of an ovum. The sponsor does not intend to require insurance coverage for any appliance, drug or medicinal preparation (or related health care service) the primary purpose of which is to affect a fertilized ovum. Put more plainly, the sponsor does not intend to mandate coverage for abortions. There being no further testimony on SB 260, CHAIRMAN WILKEN adjourned the Senate HESS meeting at 10:32 a.m.