SB 18-HEALTH CARE SHARE MINISTRY NOT INSURANCE  2:09:43 PM CHAIR COSTELLO announced the consideration of SB 18. "An Act exempting a health care sharing ministry from regulation as an insurer." She noted this was the first hearing. 2:10:05 PM JORDAN SHILLING, Staff, Senator John Coghill stated that SB 18 has two main purposes: 1) to define health care sharing ministries and 2) to exempt them from insurance statutes because they are charitable organizations. Health care sharing is a payment arrangement for health care among persons of similar beliefs. It is administered by a nonprofit corporation. He noted the three largest sharing ministries are Christian Health Care Ministries, which was established in 1990, MediShare, established in 1993, and Samaritan Ministries, established in 1994. All three are biblically based and have membership requirements, such as living a Christian lifestyle and abstaining from tobacco. MR. SHILLING continued to explain that health care sharing ministries are different from regular insurance. Insurance is the transfer of risk from one entity to another in exchange for a guaranteed payment. The sharing ministries are 501(c)(3)s and no member is required by law to pay anyone's medical bills. They don't assume or transfer risk, pool money or use actuaries, and they don't purchase reinsurance policies. They are a group of people who come together voluntarily and agree to share costs. He stated that most states do not consider sharing ministries a form of insurance, including the Alaska Division of Insurance. There are about 3,400 Alaskans in sharing ministries. He noted 30 states have passed laws similar to SB 18. If the state were to regulate these sharing ministries as insurance companies, they would likely cease to exist. SENATOR MEYER asked Ms. Wing-Heier her opinion of the bill and what it attempts to do from an insurance perspective. 2:13:57 PM LORI WING-HEIER, Director, Division of Insurance, Department of Commerce, Community and Economic Development (DCCED), said the decision to join a health care sharing ministry is a personal commitment by an individual who trusts an organization to assume the responsibility to pay their medical bills. About 3,500 people participate in health care sharing ministries in Alaska. She explained that sharing ministries were specifically carved- out of the Affordable Care Act (ACA) as long as they were in existence in 1999. The bill codifies that this is ongoing in the state and that previous administrations have not taken exception to it. CHAIR COSTELLO asked for an explanation of the DCCED fiscal note. 2:16:30 PM MS. WING-HEIER said the Division of Insurance submitted a zero fiscal note because the bill maintains the status quo. It will not impact the current organization or work load of the division; health care ministries are not taxed currently and won't be in the future. SENATOR MEYER asked how a group qualifies for this exemption. MS. WING-HEIER replied the organization is set up as a 501(c)(3) nonprofit. She deferred further explanation to the sponsor. 2:18:11 PM JOEL NOBLE, Alliance of Health Care Sharing Ministries and Samaritan Ministries, explained that this is one of the accepted exemptions within the Affordable Care Act for not having individual insurance. Some of the qualifying standards include being in existence before December 31, 1999 and providing an annual audit upon request. SENATOR MEYER asked the significance of the 1999 date. MR. NOBLE surmised that it was to keep false actors from starting for the sake of getting out from under the individual mandate of the AFA. The date was set based on the starting dates of the three national ministries. About 50 Mennonite churches also qualify. SENATOR MEYER continued to question the date since the Affordable Care Act passed in 2010. MR. NOBLE said the date came from the U.S. Senate Committee on Finance and he wasn't sure what the thinking was. CHAIR COSTELLO asked how health care sharing ministries work. MR. NOBLE explained that they are member-to-member sharing entities based on the Amish model of community help, but applied to medical needs. He used his membership in Samaritan Ministries as an example. Each month the ministry newsletter includes the name and address of a member along with their medical need. Depending on the need, other members are assigned the same name. He and the other members each send a check to the injured party that is equivalent to the monthly cost of membership. Those checks total the amount of the bill and the injured party uses them to pay their medical costs. He also related that when his kids were born, he received a number of checks from ministry members and he cashed them to pay the hospital and doctors. 2:23:04 PM JENNIFER MEYHOFF, Alaska Association of Health Underwriters (AHU), said this professional organization represents over 100 licensed health insurance brokers, agents, consultants, and benefits specialists. They help individuals and employers purchase, administer and utilize their individual and group health insurance coverage. She said AHU is concerned with consumer protection and integrity of the health care and insurance markets in Alaska. As such, the lack of Division of Insurance oversight of the exemption under SB 18 is very troubling. AHU understands that this is not insurance, but it looks and feels like insurance to the 3,500 consumers in Alaska. She questioned what would happen in the event of a $1 million claim or a prescription drug need in excess of $30 thousand per month. The bill doesn't address this and other important consumer protections, which is why the Alaska Association of Health Underwriters opposes SB 18. 2:26:37 PM SENATOR COSTELLO closed public testimony and held SB 18 in committee for further consideration.