Legislature(2009 - 2010)BUTROVICH 205

03/13/2009 01:30 PM Senate HEALTH & SOCIAL SERVICES

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
Moved CSSB 61(HSS) Out of Committee
          SB  61-MANDATORY UNIVERSAL HEALTH INSURANCE                                                                       
CHAIR DAVIS  announced the consideration  of SB 61. The  bill was                                                               
heard  previously and  there is  a proposed  committee substitute                                                               
1:32:07 PM                                                                                                                    
ANDY  MODEROW, staff  to primary  bill  sponsor, Senator  French,                                                               
said he and Ms. LeLake would  recap what the subcommittee did and                                                               
then present the proposed CS.                                                                                                   
AMORY  LELAKE, staff  to bill  sponsor,  Senator Ellis,  reported                                                               
that  during  the  March  10 subcommittee  meeting  a  memo  from                                                               
Senator French was distributed discussing  three topics that were                                                               
raised  during the  first bill  hearing. First  was how  the bill                                                               
affects   50-64   year  old   Alaskans.   Second   was  how   the                                                               
clearinghouse can be structured to  reach all Alaskans. Third was                                                               
how  employers and  health benefit  plans  provided by  employers                                                               
could be affected by the bill.                                                                                                  
The  sponsor  suggested  one  change   on  the  last  topic.  The                                                               
subcommittee  supported   the  change  conceptually  and   it  is                                                               
incorporated   in  the   proposed  CS.   The  subcommittee   also                                                               
considered the suggested change  in language to mandate insurance                                                               
coverage  for  non-medical  healthcare  services  provided  by  a                                                               
religious  non-medical  provider.  The  members  present  decided                                                               
against the proposed  change citing that the bill  has an opt-out                                                               
provision  for  Alaskans  that  don't  want  to  participate  for                                                               
religious reasons.                                                                                                              
MR. MODEROW referenced page 4  of the memo that states, "Language                                                               
should be  changed in Senate  Bill 61 to  say that a  health care                                                               
insurance plan sold  in the group market  fulfills the individual                                                               
responsibility  clause of  the legislation."  Mr.  DeWitt of  the                                                               
National  Federation of  Independent Business  in Alaska  brought                                                               
this to  the sponsor's attention  to ensure that  employers won't                                                               
have   to  change   existing  employee   plans  to   fulfill  the                                                               
responsibility clause of the legislation.                                                                                       
The proposed CS, version E,  replaces subsection (a)(4), starting                                                               
on  page 5,  line 30.  It exempted  employees who  were receiving                                                               
benefits regulated under the  Employee Retirement Income Security                                                               
Act (ERISA)  that met or  exceeded essential  healthcare services                                                               
defined on  page 7  and 8  of the bill.  The new  language covers                                                               
those plans and additional ones.                                                                                                
1:35:41 PM                                                                                                                    
MR. MODEROW explained  the change in three parts.  The first part                                                               
requires  that a  person  be covered  by a  plan  to fulfill  the                                                               
individual responsibility  clause. Merely offering a  plan is not                                                               
adequate. The second part requires  that the coverage be a health                                                               
benefit plan  as defined  in AS 21.54.500(15).  This is  a health                                                               
benefit plan  that basically captures  all employer  based plans.                                                               
They could be  regulated by ERISA or by the  state insurance laws                                                               
within the  group market. The  third part requires that  the plan                                                               
be offered through  employment in the group market  as defined in                                                               
AS 21.54.500(14).                                                                                                               
The  new  subsection  (a)(4)  also strikes  the  element  in  the                                                               
original version  that required  that a  plan meet  the essential                                                               
healthcare services  on pages 7  and 8  of the bill.  This change                                                               
ensures  that any  existing employee  health plan  that currently                                                               
provides quality  coverage to  employees fulfills  the individual                                                               
responsibility clause.                                                                                                          
CHAIR DAVIS asked for a  motion to adopt the committee substitute                                                               
SENATOR  PASKVAN  moved to  adopt  the  proposed  CS for  SB  61,                                                               
labeled  26-LS0312\E, as  the working  document.  There being  no                                                               
objection, version E was before the committee.                                                                                  
1:38:36 PM                                                                                                                    
AL TAMAGNI SR., Owner,  Cancer Services International, Anchorage,                                                               
said  his company  administrates  retirement  plans and  oversees                                                               
group  health insurance  plans for  some employers.  He does  not                                                               
want to see SB 61 move  forward. Nothing in the bill provides for                                                               
enhanced COBRA  coverage under the  federal stimulus.  Under that                                                               
provision  the  federal  government  reimburses  an  employer  65                                                               
percent of  the premium and  the employee pays 35  percent. Also,                                                               
all of the large employers  are again exempt from contributing to                                                               
the state  plan. This is  a problem  for small employers  who are                                                               
carrying  the burden.  We're seeing  a "socialistic"  movement in                                                               
this area, he said.                                                                                                             
MR. TAMAGNI  pointed out that  SB 61 talks about  "group markets"                                                               
but there is no reference  to the individual market. Furthermore,                                                               
when he looks at  the makeup of the task force,  he only sees two                                                               
people that are  paying the bills while the other  11 members are                                                               
the beneficiaries of  those funds. There is not  a balanced input                                                               
or fair  representation of  small businesses  with less  than 100                                                               
employees.  In  these  uncertain  economic  conditions  he  would                                                               
suggest it's time to sit back and see what happens.                                                                             
MR. TAMAGNI  said he believes  a smorgasbord of options  could be                                                               
adopted  so  that  the  employer or  the  employee  could  choose                                                               
different   elements  of   coverage  including   maternity  care,                                                               
chiropractic  care,  or vision  care.  Those  things need  to  be                                                               
addressed  and  SB  61  doesn't   do  that.  The  small  business                                                               
community  is  again   being  asked  to  pay   with  very  little                                                               
opportunity to participate.                                                                                                     
1:44:16 PM                                                                                                                    
CHAIR DAVIS asked if he had a copy of the CS.                                                                                   
MR. TAMAGNI replied he didn't think so.                                                                                         
CHAIR DAVIS  said there were few  changes but she did  want to be                                                               
sure he  sees the  new bill.  She also asked  what task  force he                                                               
MR. TAMAGNI directed attention to  page 3, line 9, Sec. 21.54.210                                                               
Alaska Health  Care Board and  again suggested there needs  to be                                                               
substantial changes to the membership of the proposed board.                                                                    
SENATOR  DYSON  asked if  he  anticipates  that health  insurance                                                               
providers will increase rates because of this legislation.                                                                      
MR.TAMAGNI replied he expects that would happen.                                                                                
1:47:00 PM                                                                                                                    
SENATOR ELLIS  asked if he as  a small business person  prefers a                                                               
national health  care reform or  a more Alaska  specific approach                                                               
as proposed in SB 61.                                                                                                           
MR. TAMAGNI  said he'd prefer  neither. The current  system works                                                               
well for about  60-75 percent of the people and  he doesn't agree                                                               
with changing the system for  the remaining 25-40 percent. "We're                                                               
moving towards an  imperialistic aspect as far as  treatment of a                                                               
lot of elements in our society," he said.                                                                                       
CHAIR DAVIS closed testimony and said  she would like to move the                                                               
1:49:23 PM                                                                                                                    
MR.  MODEROW said  he'd  like to  point out  that  page 10,  Sec.                                                               
21.54.280  has  provisions  to  get  federal  funding  and  other                                                               
sources of money  into the healthcare fund to  help implement the                                                               
program.  He  isn't  familiar  with the  enhanced  COBRA  in  the                                                               
stimulus,  but  they  would  like to  capture  dollars  from  all                                                               
available  sources. In  this bill  they tried  very hard  to make                                                               
protections  that  are  available   in  the  small  group  market                                                               
available to individuals.  He clarified that the CS  seeks to not                                                               
change any of the mandated benefits in the small group.                                                                         
CHAIR DAVIS  said she  thinks the  committee has  considered this                                                               
sufficiently. This  is a good  step and  hopefully in the  end it                                                               
will be  agreeable to  most people. The  system is  broken; there                                                               
are too many people out there without coverage.                                                                                 
SENATOR  DYSON said  he is  impressed with  the work  that's been                                                               
done on the bill,  but it starts with a premise  he can't come to                                                               
grips with  yet. "In our  desire to make healthcare  available to                                                               
everybody, we have  decided that the way we've got  to do that is                                                               
to make  health insurance available  to everybody." I  can't come                                                               
to that conclusion, he said.                                                                                                    
SENATOR  DYSON commented  that  he realizes  that  the bill  will                                                               
move, but he is going to object.                                                                                                
1:53:17 PM                                                                                                                    
SENATOR ELLIS said  he is a co-sponsor and an  enthusiast vote to                                                               
move the bill  forward. The committee, subcommittee  and staff in                                                               
particular  have  done  good  work.   Senator  French  should  be                                                               
commended  for his  efforts over  the last  three years.  Senator                                                               
Ellis noted that  he and former Senator Jim  Duncan sponsored the                                                               
original  universal  healthcare task  force  20  years ago.  They                                                               
recommended  a single  payer system  and  the business  community                                                               
called it  socialized medicine, which  it is not. Since  then the                                                               
situation  has  gotten worse.  Public  opinion  polling does  not                                                               
agree with the figures provided by Mr. Tamagni.                                                                                 
Senator  French   has  taken   a  market-based   consumer  driven                                                               
approach. It's not a single  payer system and it's not socialized                                                               
medicine. It  is socialized insurance through  the private market                                                               
with  government  subsidy.  We  have  to  be  respectful  of  the                                                               
concerns of small businesses, but  large businesses can no longer                                                               
compete in  the world market  because this country  hasn't solved                                                               
the healthcare issue, he said.  Every other industrialized nation                                                               
has  addressed healthcare  and found  resolution. This  is a  new                                                               
approach  and  a  step  forward.   Private  health  insurers  are                                                               
included and can make money.                                                                                                    
CHAIR DAVIS commented that the  COBRA enhancement in the stimulus                                                               
package could be incorporated in another committee.                                                                             
1:57:12 PM                                                                                                                    
SENATOR PASKVAN  moved to  report committee  substitute to  SB 61                                                               
from committee  with individual recommendations  and accompanying                                                               
fiscal notes.                                                                                                                   
1:57:37 PM                                                                                                                    
SENATOR DYSON objected.                                                                                                         
A roll  call vote  was taken.   Senators Ellis,  Thomas, Paskvan,                                                               
and  Davis voted  in favor  of the  motion.  Senator  Dyson voted                                                               
against  it. Therefore,  CSSB  61(HSS) was  reported  out of  the                                                               
Senate Health  and Social Services  Standing Committee by  a vote                                                               
of 4:1.                                                                                                                         

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