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
= bill was previously heard/scheduled
= bill was previously heard/scheduled
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 (CS). 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 (CS). 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 referenced. 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 bill. 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.