ALASKA STATE LEGISLATURE  SENATE LABOR AND COMMERCE STANDING COMMITTEE  JANUARY 30, 2026  1:33 P.M.  MEMBERS PRESENT  Senator Jesse Bjorkman, Chair Senator Elvi Gray-Jackson Senator Forrest Dunbar Senator Robert Yundt Senator Kelly Merrick, Vice Chair (via teleconference) MEMBERS ABSENT  All members present COMMITTEE CALENDAR  COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 78(FIN) AM(EFD FLD) "An Act relating to the public employees' retirement system and the teachers' retirement system; and providing certain employees an opportunity to choose between the defined benefit and defined contribution plans of the public employees' retirement system and the teachers' retirement system." - MOVED SCS CSHB 78(L&C) OUT OF COMMITTEE SENATE BILL NO. 121 "An Act relating to settlement of health insurance claims; relating to allowable charges for health care services or supplies; and providing for an effective date." - HEARD & HELD SENATE BILL NO. 163 "An Act relating to inactive state accounts and funds; repealing the home ownership assistance fund; repealing the operating loss reserve account; repealing the public access fund; repealing the Southeast energy fund; repealing the Alaska Gasline Inducement Act reimbursement fund; repealing the child care facility revolving loan fund foreclosure expense account; repealing the tourism revolving fund foreclosure expense account; repealing the residential energy conservation fund foreclosure expense account; repealing the historical district revolving loan fund foreclosure expense account; repealing the Alaska temporary assistance program emergency account; repealing the 2001 Special Olympics World Winter Games reserve fund; and providing for an effective date." - HEARD & HELD PREVIOUS COMMITTEE ACTION  BILL: HB 78 SHORT TITLE: RETIREMENT SYSTEMS; DEFINED BENEFIT OPT. SPONSOR(s): FINANCE 01/31/25 (H) READ THE FIRST TIME - REFERRALS 01/31/25 (H) FIN 02/10/25 (H) FIN AT 1:30 PM ADAMS 519 02/10/25 (H) Heard & Held 02/10/25 (H) MINUTE(FIN) 02/11/25 (H) FIN AT 1:30 PM ADAMS 519 02/11/25 (H) Heard & Held 02/11/25 (H) MINUTE(FIN) 02/18/25 (H) FIN AT 1:30 PM ADAMS 519 02/18/25 (H) Heard & Held 02/18/25 (H) MINUTE(FIN) 02/27/25 (H) FIN AT 1:30 PM ADAMS 519 02/27/25 (H) Heard & Held 02/27/25 (H) MINUTE(FIN) 04/02/25 (H) FIN AT 1:30 PM ADAMS 519 04/02/25 (H) Heard & Held 04/02/25 (H) MINUTE(FIN) 04/03/25 (H) FIN AT 1:30 PM ADAMS 519 04/03/25 (H) Heard & Held 04/03/25 (H) MINUTE(FIN) 04/04/25 (H) FIN AT 1:30 PM ADAMS 519 04/04/25 (H) Heard & Held 04/04/25 (H) MINUTE(FIN) 04/29/25 (H) FIN AT 1:30 PM ADAMS 519 04/29/25 (H) Heard & Held 04/29/25 (H) MINUTE(FIN) 04/30/25 (H) FIN AT 1:30 PM ADAMS 519 04/30/25 (H) Heard & Held 04/30/25 (H) MINUTE(FIN) 05/07/25 (H) FIN AT 1:30 PM ADAMS 519 05/07/25 (H) Moved CSHB 78(FIN) Out of Committee 05/07/25 (H) MINUTE(FIN) 05/09/25 (H) FIN RPT CS(FIN) NEW TITLE 6DP 3DNP 2AM 05/09/25 (H) DP: HANNAN, GALVIN, JIMMIE, FOSTER, JOSEPHSON, SCHRAGE 05/09/25 (H) DNP: JOHNSON, ALLARD, TOMASZEWSKI 05/09/25 (H) AM: BYNUM, STAPP 05/10/25 (H) DIVIDE THE AMENDMENT FAILED Y15 N23 E2 05/12/25 (H) SUSTAINED RULING OF CHAIR Y21 N19 05/12/25 (H) TRANSMITTED TO (S) 05/12/25 (H) VERSION: CSHB 78(FIN) AM(EFD FLD) 05/13/25 (S) READ THE FIRST TIME - REFERRALS 05/13/25 (S) L&C, FIN 01/23/26 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg) 01/23/26 (S) Heard & Held 01/23/26 (S) MINUTE(L&C) 01/26/26 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg) 01/26/26 (S) Heard & Held 01/26/26 (S) MINUTE(L&C) 01/28/26 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg) 01/28/26 (S) Heard & Held 01/28/26 (S) MINUTE(L&C) 01/30/26 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg) BILL: SB 121 SHORT TITLE: HEALTH INSURANCE ALLOWABLE CHARGES SPONSOR(s): GIESSEL BY REQUEST 03/05/25 (S) READ THE FIRST TIME - REFERRALS 03/05/25 (S) HSS, L&C 03/11/25 (S) HSS AT 3:30 PM BUTROVICH 205 03/11/25 (S) Heard & Held 03/11/25 (S) MINUTE(HSS) 03/20/25 (S) HSS AT 3:30 PM BUTROVICH 205 03/20/25 (S) Heard & Held 03/20/25 (S) MINUTE(HSS) 03/27/25 (S) HSS AT 3:30 PM BUTROVICH 205 03/27/25 (S) Moved CSSB 121(HSS) Out of Committee 03/27/25 (S) MINUTE(HSS) 03/31/25 (S) HSS RPT CS 4NR 1DP SAME TITLE 03/31/25 (S) NR: DUNBAR, HUGHES, CLAMAN, TOBIN 03/31/25 (S) DP: GIESSEL 05/14/25 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg) 05/14/25 (S) Heard & Held 05/14/25 (S) MINUTE(L&C) 01/30/26 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg) BILL: SB 163 SHORT TITLE: REPEAL CERTAIN INACTIVE FUNDS/ACCOUNTS SPONSOR(s): KAUFMAN 04/09/25 (S) READ THE FIRST TIME - REFERRALS 04/09/25 (S) L&C, FIN 01/30/26 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg) WITNESS REGISTER  SENATOR CATHY GIESSEL, District E Alaska State Legislature Juneau, Alaska POSITION STATEMENT: Sponsor of SB 121. JANE CONWAY, Staff Senator Cathy Giessel Alaska State Legislature Juneau, Alaska POSITION STATEMENT: Presented the summary of changes from version I to version G for SB 121. JEFF DAVIS, Owner Weston Group Consulting Wenatchee, Washington POSITION STATEMENT: Testified by invitation on SB 121. CAROLYN RHENE MERKOURIS, MD Denali OB-GYN Anchorage, Alaska POSITION STATEMENT: Testified by invitation on SB 121. TERESA LYONS, President Advanced Practice Registered Nurse Alliance (APRN) Anchorage, Alaska POSITION STATEMENT: Testified by invitation on SB 121. KARL BAURICK, MD, FACOG Interior Women's Health Fairbanks, Alaska POSITION STATEMENT: Testified by invitation on SB 121. DEBBIE RYAN, Chief Executive Officer Alaska Chiropractic Society Anchorage, Alaska POSITION STATEMENT: Testified by invitation on SB 121. SENATOR JAMES KAUFMAN, District F Alaska State Legislature Juneau, Alaska POSITION STATEMENT: Sponsor of SB 163. ACTION NARRATIVE  1:33:17 PM CHAIR BJORKMAN called the Senate Labor and Commerce Standing Committee meeting to order at 1:33 p.m. Present at the call to order were Senators Dunbar, Gray-Jackson, Yundt and Chair Bjorkman. Senator Merrick joined via teleconference. HB 78-RETIREMENT SYSTEMS; DEFINED BENEFIT OPT.  1:34:31 PM CHAIR BJORKMAN announced the consideration of CS FOR HOUSE BILL NO. 78(FIN) am(efd fld) "An Act relating to the public employees' retirement system and the teachers' retirement system; and providing certain employees an opportunity to choose between the defined benefit and defined contribution plans of the public employees' retirement system and the teachers' retirement system." The committee adopted SCS CSHB 78 on January 26, 2026, and is before the committee. 1:35:22 PM SENATOR YUNDT stated that he appreciated that HB 78 allowed a choice between the DB and DC plans during the first five years of an employee's employment. This flexibility is important because many people move to Alaska without intending to stay long-term but often decide to remain. He said since the state aims to attract highly qualified professionals, such as engineers and attorneys, retaining that option would have been beneficial. 1:36:22 PM CHAIR BJORKMAN solicited the will of the committee. 1:36:24 PM SENATOR GRAY-JACKSON moved to report SCS CSHB 78, work order 34- LS0493\G, from committee with individual recommendations and attached fiscal note(s). 1:36:40 PM CHAIR BJORKMAN found no objection and SCS CSHB 78(L&C) was reported from the Senate Labor and Commerce Standing Committee. 1:36:55 PM At ease. SB 121-HEALTH INSURANCE ALLOWABLE CHARGES  [CSSB 121(HSS) was before committee.] 1:38:58 PM CHAIR BJORKMAN reconvened the meeting and announced the consideration of CS FOR SENATE BILL NO. 121 "An Act relating to settlement of health insurance claims; relating to allowable charges for health care services or supplies; and providing for an effective date." 1:39:23 PM SENATOR CATHY GIESSEL, District E, Alaska State Legislature, Juneau, Alaska, sponsor of SB 121 stated that this bill addresses health care access and affordability by setting minimum reimbursement rates for out-of-network clinicians. It builds on prior efforts to ensure insurers pay a defined amount for services provided by clinicians who are not contracted with them, establishing a clearer baseline for payment and negotiation. She gave an example of how SB 121 would work with two different clinics. She said the bill aims to set a standard reimbursement rate for out-of-network clinicians, providing a baseline for negotiations with insurers. It includes a benchmark based on the 75th percentile and works alongside network adequacy requirements to ensure insurers offer a sufficient range of in-network providers. Following interim discussions, these elements were combined into the current committee substitute before you. 1:44:53 PM CHAIR BJORKMAN solicited a motion. 1:44:54 PM SENATOR GRAY-JACKSON moved to adopt the committee substitute (CS) for SB 121, work order 34-LS0282\G, as the working document. 1:45:04 PM CHAIR BJORKMAN objected for purposes of discussion. 1:45:10 PM JANE CONWAY, Staff, Senator Cathy Giessel, Alaska State Legislature, Juneau, Alaska, provided the summary of changes from version I to version G for SB 121 and paraphrased the following: [Original punctuation provided.] New Section 1 - Version G amends AS 21.07 by adding a new section AS 21.07.035: Minimum provider network  standards to the bill. Section 2 (formerly Section #1 in version I) Standards for settlement of health insurance claims  This section amends AS 21.36.497 by removing the verbiage from subsection(a) pertaining to the 75th percentile as a standard for reimbursement for out-of- network providers. However, subsection (a) still contains the language for the 450 percent of the CMS fee schedule for Medicare as the minimum allowable charge. Subsections (b) (c) and (d) remain the same from I to G. New Section 3 - is a repeal of AS 21.07.020(3) language that is no longer needed because of the addition of language in Section 1 covering network standards. Section 4 - is the same transition language (formerly Section 3 in version I) Section 5 - is the effective date of the bill (formerly Section 4 in version I) 1:47:48 PM SENATOR YUNDT stated that health insurance is complex and requires careful handling, with ongoing efforts needed to improve it. He asked for how this proposal will benefit consumers, help control costs, and maintain market stability. 1:48:17 PM SENATOR GIESSEL replied that access to care in Alaska is declining as reimbursements have dropped, leading to clinic closures and clinicians leaving the state. SB 121 sets a minimum reimbursement rate for out-of-network providers, giving in- network clinicians' leverage to negotiate fairer payments and remain financially viable. The bill also includes network adequacy requirements to ensure patients have multiple provider options, improving access while supporting a stable health care system. 1:51:38 PM CHAIR BJORKMAN [removed his objection]; found no further objection and CSSB 121 was adopted as the working document. 1:51:51 PM CHAIR BJORKMAN announced invited testimony on SB 121. 1:52:04 PM JEFF DAVIS, Owner, Weston Group Consulting, Wenatchee, Washington, testified by invitation on SB 121 and paraphrased the following: [Original punctuation provided.] I am quite familiar with these issues with 40 years of healthcare and health insurance experience in AK. President of PCBSAK for 18 years. During my tenure with Premera had many discussions with the DOI about th how to improve the 80 percentile regulation but we never suggested repeal without replacement as there were benefits from the regulation. I could talk with you for an hour about this but have done my best to keep my remarks short, but please ask questions if any of this doesn't make sense or if I left out something important to you. SB 121 is a consumer protection bill that replaces the protections that were in place for 20 years under the th repealed 80 percentile regulation plus proactively prevents access issues when narrow network products are eventually introduced. Specifically, SB 121 does two things: 1. Ensures Alaskans get the health insurance benefits they paid for. 2. Helps protect access to physicians and other providers in Alaska. How does this bill ensure people get the benefits they paid for? 1. Insurers don't automatically pay based on a provider's charges. 2. If there is no contract, someone decides if the charge is reasonable. a. Under the repealed regulation, a state defined rule was in place for determining reasonable. b. After repeal, the insurers decided what was reasonable. Largest chose a standard which is about half of what was in place under the regulation. 3. In most cases, this means the insurer now pays much less than what it paid under the regulation and the patient pays more! The value of the policy they bought is decreased. The consumer is not getting what they paid for! 4. SB 121 reestablishes a State determined rule for deciding what a reasonable charge is. That protects the consumer! 1:54:37 PM MR. DAVIS continued with his testimony of SB 121: [Original punctuation provided.] How does this bill protect access to providers? Three ways 1.First, if a patient chooses a non-contracted provider, the insurance payment would be based on what is reasonable in Alaska, not some lower cost location a. This supports the patient's ability to choose the doctor they think is best for them. 2. Second, this bill supports fair payment to providers by establishing what is reasonable based on charges in Alaska not an arbitrary fee schedule or data from other states. Why does that matter? a. Fair payment is needed to keep physicians and other providers in Alaska! i. Many Alaska providers are in financial trouble and in danger of closing their practices. Here are a few or the reasons: (Dr. Merkouris example) 1. Insurance contract rates have been flat or gone down over the last few years 2. Medicare rates are down 33 percent. 3. Medicaid rates in Alaska are now equal to Medicare 4. Medicare and Medicaid patients now make up a larger proportion of the population 5. In the face of declining or flat revenue sources, the cost of support staff is up 47 percent in last 10 years 6. Result - take home pay for physicians amongst lowest in the nation and their practices are struggling, and 7. Practices are unable to recruit to replace providers who retire or leave b. This bill promotes also fair payment by bringing more balance to contract negotiations i. Before repeal, insurers would already not agree to contract increases they knew they had the upper hand 1:56:47 PM MR. DAVIS continued with his testimony of SB 121: [Original punctuation provided.] ii. After repeal, with increased power, insurers immediately began demanding steep decreases as much as 28 percent! iii. In other words, repeal without replacement weakened providers negotiating power and they were already the underdogs 3. Third, this bill proactively sets minimum network standards before narrow networks come to Alaska a. A narrow network product is one that provides little or no payment for non-network providers b. Narrow networks are not in Alaska today but are widely used in the Lower 48 and some include as few as 16 percent of the providers in the area. c. This means patient choice and access are significantly limited. d. Insurers use narrow networks to drive down contract rates by pitting provider groups against each other in a bidding war which would make the current crisis worse. e. The NAIC has stated network minimums are amongst the most important thing a State can do to preserve well-functioning healthcare and health insurance markets. 38 states have adopted some form. f. The minimum standards proposed in SB 121 reflect the unique geography and distribution of people and providers in Alaska and the already fragile state of the provider community. g. All of Alaska is a federally designated healthcare professional shortage area. Without minimum standards, narrow networks would make the situation worse. h. Action is needed now as at least one major insurer has stated their desire to bring narrow network products to AK. In Summary, SB 121 is needed to protect consumer's pocketbooks and access to needed healthcare. 1:59:48 PM SENATOR DUNBAR stated that this is now a combined bill and asked if Mr. Davis could explain how the rules on narrow network enforcement would work. 2:00:14 PM MR. DAVIS replied that enforcement would be handled by the Division of Insurance. Carriers must demonstrate compliance with network standards when filing their plans. If the carriers cannot meet the requirements, SB 121 allows for a phased implementation period and permits the director to grant temporary exceptions when justified. 2:01:01 PM SENATOR DUNBAR asked if insurers must obtain approval from the Division of Insurance before bringing a product to market. 2:01:31 PM MR. DAVIS replied that it is correct and said insurers must file their products and obtain approval before offering regulated insurance plans in Alaska. SENATOR DUNBAR asked what similar efforts have worked in other states and is this enforcement approach consistent with the other states. MR. DAVIS replied that the enforcement mechanisms are largely consistent with the model legislation from the National Association of Insurance Commissioners. He said most of the 30 states and territories with these standards follow that model closely, though definitions of minimum requirements vary by state based on factors like population density. 2:02:55 PM CHAIR BJORKMAN asked if providers are guaranteed a set reimbursement rate out of network, then what incentive do the providers have to join insurance networks and sign contracts. 2:03:38 PM MR. DAVIS replied that there are several incentives for providers to remain in-network. Insurers typically reimburse a higher percentage of costs for in-network providers, making it easier to collect payments from insurers rather than patients. He said being in-network also helps retain patients, as out-of- network care is more expensive and burdensome for them. Additionally, in-network providers benefit from better support from insurers and visibility in provider directories. Overall, most providers still prefer to stay in-network and negotiate reasonable rates rather than operate outside the network. 2:07:37 PM CHAIR BJORKMAN said over the life span of the 80th percentile rule there was a time when there was an overwhelming number of out-of-network providers. He asked what action caused providers to change from out-of-network to in-network. MR. DAVIS stated his belief that between 2004 and 2014, Alaska saw a significant increase in providers, largely due to the 80th percentile rule, which stabilized reimbursements and made the market more financially predictable. He said this led to a roughly 40 percent rise in physician offices and encouraged providers to join networks, especially as competition grew and studies highlighted higher compensation levels in the state. 2:11:12 PM CHAIR BJORKMAN asked is there anything that would prevent an out-of-network provider from charging more than the proposed 450 percent benchmark of Medicare. MR. DAVIS replied no, out-of-network providers can charge any amount, but insurer payments are capped by the set standard, leaving patients potentially balance billed for the difference. This practice is unpopular. In contrast in-network providers must accept contracted rates as full payment with no balance billing. 2:13:58 PM CAROLYN RHENE MERKOURIS, MD, Denali OB-GYN, Anchorage, Alaska, testified by invitation on SB 121 and read the following: [Original punctuation provided.] Thank you for the opportunity to speak today. I'm here as a physician who practiced in Alaska for many years and who loved caring for patients here. I want to share how the loss of Alaska's 80th percentile rule affected me not in theory, but in real life. When that rule stopped being enforced, the impact was immediate. In the fall of 2024, my reimbursement dropped significantly, even though I saw the same number of patients and providing the same level of care. Alaska is an expensive place to run a medical practice. After paying rent, malpractice insurance, supplies, and my employees people who support families and communities I found myself losing money simply by staying open. About every three months, I was having to put my own money into the practice just to keep it going. At the same time, the demand for care didn't slow down. In OB-GYN, patients don't get put on pause. Pregnancies, emergencies, and complications keep coming, and they require time, attention, and constant availability. The financial strain, combined with the emotional and physical demands of patient care, became overwhelming. Not because I didn't want to keep working but because the system no longer made it possible to do so sustainably. Eventually, I made the difficult decision to retire earlier than I ever planned. That decision wasn't just hard for me it meant fewer options for patients who were already struggling to find care. Today, I still practice medicine, but I do it out of state as a locum physician. Alaska lost a doctor not because the need disappeared, but because the math stopped working. When we talk about reimbursement policies, we're really talking about access to care, about whether physicians can stay, and about whether communities can depend on having doctors when they need them. I hope my story helps put a human face on this issue because these decisions affect real people, on both sides of the exam room. 2:17:08 PM TERESA LYONS, President, Advanced Practice Registered Nurse Alliance (APRN), Anchorage, Alaska, testified by invitation on SB 121. She provided the following testimony: [Original punctuation provided.] My name is Teresa Lyons and I am an Advanced Practice Registered Nurse (APRN). I am here today as the President of the APRN Alliance an umbrella organization made up of the four specialty areas of advanced practice nursing. Our Alliance represents over 2600 Advanced Practice Registered Nurses (APRN's) in the State of Alaska. Of this number, a majority (approximately 2400) are Certified Nurse Practitioner (CNP's) who are practicing in primary care settings oftentimes in rural and frontier locations and ensuring access to wellness care, chronic disease prevention and management and urgent care. APRN's are members of the health care delivery system and practice autonomously in areas such as family practice, behavioral health, women's health care, obstetrics, pediatrics, internal medicine, geriatrics, cardiology, and oncology. CNPs are qualified to diagnose and treat patients with undifferentiated symptoms as well as those with established diagnoses. In addition, there are over 150 Certified Registered Nurse Anesthesiologists who deliver anesthesia care in all rural hospitals in the state and in many instances are the only health care providers doing so ensuring access to care in these critical access hospitals. Over 100 certified nurse midwives provide access to prenatal, obstetrical, postpartum and women's health care in urban and rural areas of our state. Our Clinical Nurse Specialists (CNS) are approximately 50 in strength and serve in our hospitals and rehabilitation units throughout the State. Recission of the 80 percent rule has had a significant impact on small practice owners like me. I started a private mental health practice in 2012 in Fairbanks, expanded to Kenai in 2021 and to Anchorage in 2024. I employ 14 employees 6 of which are APRNs all nationally board certified in psych/mental health. Between the three practice sites in Alaska, we see an average of 200 patients a week and over 10,000 client visits a year. We serve people as young as 3 years of age and currently our eldest is 98 years old. We are Medicaid, Medicare providers. Accepting most major health insurances including commercial carriers. 2:19:22 PM MS. LYONS continued with her testimony of SB 121: Like many of my colleagues, the practice has been both in and out of network finding both situations financially unstable. When in network, the reimbursements are dictated as opposed to negotiated and are frequently changed throughout the year with minimal notification. Our reimbursement experience has been as low as 160 percent-185 percent of Medicare, in network. This level of reimbursement does not allow for the sustainability of a business. Being out of network offers no better options with no floor established for reimbursement. Many of my colleagues in private practice have experienced the same. This results in practices closing and decreasing access to care for patients. This bill provides for a comprehensive menu of providers to ensure greater access including APRNs. A statistically credible methodology for setting allowable charges when out of network. Assure uniformity and equity in the application of reimbursement rates applied for health care services when billed under the same Current Procedural Terminology code by health care providers who are practicing under the scope of their license and authorization by their respective professional state board. We thank you again for hearing this bill and the APRN Alliance stands in full support to pass this bill out of your committee. 2:22:27 PM CHAIR BJORKMAN asked her to clarify if reimbursements were about 165 percent of Medicare before the repeal of the 80th percentile rule. MS. LYONS replied yes, while in-network. She chose contracts to help her clients. She found there was little room to negotiate, and reimbursements were reduced over time. The bigger challenge is not a lack of patients, but difficulty attracting and retaining clinicians in Alaska. 2:24:03 PM KARL BAURICK, MD, FACOG Interior Women's Health, Fairbanks, Alaska, testified by invitation on SB 121. He referred to a slide with a bar graph showing reimbursement, which he provided for the committee. He said the clinic relies heavily on obstetric services to operate. Since the repeal of the 80- percentile rule, reimbursements have dropped significantly by about 20 percent for hospital-based care and 15 percent for clinic procedures, while costs and staff wages have risen. He said additional cuts to mid-level provider reimbursements and payments below cost for some supplies have further strained finances. SB 121 would not fully restore prior conditions but would help improve negotiations and sustainability, as current reimbursement levels are not viable for maintaining care. 2:28:57 PM DEBBIE RYAN, Chief Executive Officer, Alaska Chiropractic Society, Anchorage, Alaska, testified by invitation on SB 121 and read the following: [Original punctuation provided.] I am a co-owner of a chiropractic clinic with a 70+- year legacy of serving Alaskans. For transparency, I also serve as the CEO of the Alaska Chiropractic Society, representing chiropractic physicians statewide and working to protect patient access to conservative care. In that role, I hear far too often from providers who are retiring early, leaving Alaska, or unable to repay student loans (which can be as much at $250,000) or support their families because they simply cannot make a living practicing health care in this state anymore. Nor are we attracting new younger providers to Alaska. Today, I am here to speak about how insurance affects health care, not only for providers, but for patients. When you look at the full picture, both sides of the health-care equation are under serious strain. Let me share a few real-world facts directly from my office. MS. RYAN continued with her testimony of SB 121: [Original punctuation provided.] First, deductibles are extremely high. The highest deductible I have seen is $6,350, with coverage at 80 percent only after that deductible is met. For conservative care like chiropractic services, this often means patients pay 100 percent out of pocket, despite paying significant monthly premiums. For patients with a straight co-pay, some of these co-pays are $85 and the insurer pays nothing. Second, Alaska has a dominant health insurer that functions as a monopoly. Over ten years ago, that insurer implemented major fee schedule reductions-some services were reduced by as much as 60 percent-while premiums have remained strong. Providers today are being paid less than they were 20 years ago. When I reviewed my 2025 billings, that insurer paid only 36 percent of all claims submitted by my office. Patients paid 35 percent of the charges, in addition to their premiums. As an in-network provider, my office was required to write off 29 percent of all charges submitted, nearly one-third of the care we provided, because of contractual obligations. Let me be clear: our services are not expensive and not excessive. You may ask why we remain in network. The answer is simple: many insurance plans in Alaska provide no coverage at all if a patient sees an out-of-network provider. Providers are effectively forced to stay in network just to serve their patients. Let me give you one concrete example of what "insured" care looks like today. For a common chiropractic service CPT code 98940, our office charges $78. The insurance company allows $45.10. We are required to write off$32.90. The patient pays a $35 copay, and the insurance company pays $10.10. The patient paid most of the cost, plus their monthly premiums. From my perspective, that is not meaningful insurance coverage. Years ago, the State recognized these issues and implemented percentage-based safeguards for out- of-network reimbursement. That system allowed providers to assess whether staying in network was sustainable or whether they needed to go out of network to survive. When that safeguard was removed, control shifted entirely back to the insurer. Reimbursement is now dictated solely by internal 2:33:34 PM MS. RYAN continued with her testimony of SB 121: [Original punctuation provided.] fee schedules and payment policies. The result has been predictable: providers retiring early, closing practices, or leaving Alaska. Health care is a business, like any other. Providers face rising costs for labor, rent, supplies, taxes, and compliance. Small practices must compete with hospitals and large systems for the same workforce. We often train staff only to lose them to larger organizations that can offer better wages and benefits. Because the cost of doing business has grown and reimbursements have diminished, I currently operate with half the support staff I once had. This is why SB 121 matters. If SB 121 passes, it will: - Protect patient choice by making Alaska a more viable place for health-care providers to practice and remain. - Allow providers to make informed decisions about whether being in network with strict fee limitations or operating out of network with predictable reimbursement which is sustainable; and - Use Medicare as a benchmark, adjusted by a reasonable percentage, which is a fair and transparent reference since Medicare evaluates costs annually. Members of the Committee, SB 121 addresses a real and urgent problem in Alaska's healthcare system. I urge you to ensure the final policy is data-driven, reasonable, and sustainable, so we can protect patients, retain providers, and preserve access to care. 2:38:08 PM CHAIR BJORKMAN asked how chiropractic physicians operated prior to the widespread use of insurance. 2:39:07 PM MS. RYAN replied that chiropractic services are widely covered by most insurers but are limited under Medicare and Medicaid due to federal restrictions. Medicaid coverage is especially narrow, leaving many patients without access and forcing referrals to more expensive care like emergency rooms. Expanding coverage could improve access, reduce costs, and support effective, conservative treatment options in Alaska. 2:42:48 PM SENATOR GIESSEL said health insurance premiums have risen while clinician reimbursements have sharply declined, creating a crisis in Alaska's health care system. SB 121 aims to establish a minimum reimbursement rate to give providers leverage in negotiations, help retain clinicians, and support primary care access. While 450 percent of Medicare is proposed, she is open to adjusting the rate, emphasizing the need to stabilize the system and reduce reliance on temporary providers. 2:46:02 PM SENATOR YUNDT asked for Senator Giessel to come back with numbers from the last four or five years that show health insurance costs in Alaska. 2:46:54 PM SENATOR GIESSEL replied that she would. 2:47:03 PM CHAIR BJORKMAN stated that rising health care costs are evident in both insured and self-insured markets, indicating broader systemic issues beyond insurers alone. Contributing factors include past reimbursement policies, the growing influence of pharmacy benefit managers, and low Medicare and Medicaid rates that shift costs into premiums. He said with potential federal cuts ahead, the outlook for costs, and access is increasingly concerning. [CHAIR BJORKMAN held SB 121 in committee.] 2:49:30 PM At ease. SB 163-REPEAL CERTAIN INACTIVE FUNDS/ACCOUNTS  2:51:46 PM CHAIR BJORKMAN reconvened the meeting and announced the consideration of SENATE BILL NO. 163 "An Act relating to inactive state accounts and funds; repealing the home ownership assistance fund; repealing the operating loss reserve account; repealing the public access fund; repealing the Southeast energy fund; repealing the Alaska Gasline Inducement Act reimbursement fund; repealing the child care facility revolving loan fund foreclosure expense account; repealing the tourism revolving fund foreclosure expense account; repealing the residential energy conservation fund foreclosure expense account; repealing the historical district revolving loan fund foreclosure expense account; repealing the Alaska temporary assistance program emergency account; repealing the 2001 Special Olympics World Winter Games reserve fund; and providing for an effective date." 2:52:25 PM SENATOR JAMES KAUFMAN, District F, Alaska State Legislature, Juneau, Alaska, sponsor of SB 163 explained that the bill builds on a process created in a previous legislature to review state accounts every two years and eliminate unused or outdated funds. He said the goal is to reduce clutter, improve transparency and efficiency, and ensure only necessary accounts remain, with candidates identified, evaluated, and removed if no longer serving a purpose. 2:55:43 PM SENATOR GRAY-JACKSON noted that according to the fiscal note, it appears that all the funds are empty. SENATOR KAUFMAN said while some unused funds have been cleared, outdated accounts often remain on the books, creating unnecessary clutter. SENATOR GRAY-JACKSON asked whether there is money in any of the funds. SENATOR KAUFMAN replied that the identified funds have no remaining money. He said going forward, any unused funded accounts would also be cleared and closed. 2:56:42 PM SENATOR GRAY-JACKSON exclaimed that if there is money in the funds that are being closed that is bonus money. SENATOR KAUFMAN replied yes. He said the two-year review process was created to reassess outdated requirements and accounts, eliminate what is no longer needed, and improve efficiency. The process also ensures that any unnecessary funds are cleared, enhancing transparency and public trust in government finances. 2:58:42 PM CHAIR BJORKMAN asked if there were more funds identified that the sponsor wants to add to the current list. SENATOR KAUFMAN replied yes. He said a list of unused funds is created, and legislation is then needed to eliminate them. Since these accounts accumulate over time across statutes, the goal is to work with legal and finance teams to identify more unnecessary funds and remove them more comprehensively. 2:59:49 PM CHAIR BJORKMAN held SB 163 in committee. 3:00:12 PM There being no further business to come before the committee, Chair Bjorkman adjourned the Senate Labor and Commerce Standing Committee meeting at 3:00 p.m.