Legislature(2009 - 2010)

04/09/2009 01:09 PM Senate L&C

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
          SB  61-MANDATORY UNIVERSAL HEALTH INSURANCE                                                                       
2:48:56 PM                                                                                                                    
CHAIR PASKVAN announced SB 61 to be up for consideration.                                                                       
SENATOR FRENCH,  sponsor of  SB 61,  said 115,000  Alaskans don't                                                               
have a health  insurance policy. A majority of them  work at jobs                                                               
that  don't provide  it. The  idea behind  this bill  is to  make                                                               
insurance affordable so their health  needs can be addressed in a                                                               
fashion that allows  early action to be taken  instead of waiting                                                               
to go  to the emergency  room and all  that entails. The  bill is                                                               
modeled  loosely after  the Massachusetts  plan that  was crafted                                                               
with the help  of the Heritage Think Tank. It  leaves the current                                                               
insurance landscape in place; it  does not affect anyone that has                                                               
insurance coverage they  wish to keep. It only  makes new private                                                               
insurance affordable for those who can't afford it.                                                                             
2:50:46 PM                                                                                                                    
SENATOR BUNDE  asked if  he had an  age demographic  breakdown of                                                               
people who don't have insurance.                                                                                                
SENATOR  FRENCH  said   it  is  skewed  toward   the  ages  18-30                                                               
demographic.  Anyone who  is  65  years or  older  has access  to                                                               
Medicare and the  very poor have access to Medicaid.   The health                                                               
concerns of these  young people will get treated in  the event of                                                               
an emergency or a catastrophe, but  those costs are passed off to                                                               
everyone else in the state.   He believes that a health insurance                                                               
plan  can be  crafted that  will allow  them to  pitch in  to the                                                               
pool.  Obviously,  the  more  people in  an  insurance  pool  the                                                               
farther and better the risks are spread.                                                                                        
2:52:40 PM                                                                                                                    
ANDY  MODEROW,  staff  to Senator  French,  flipped  through  the                                                               
sections of the bill. The findings are  on pages 1 and 2; on page                                                               
2,  line  24,  language  establishes   what  the  bill  tries  to                                                               
accomplish. Language  on page 3,  line 9, establishes  the Health                                                               
Care Board that  will implement the plan; page 4,  line 5, starts                                                               
the section  on the  board's powers and  duties. It  will oversee                                                               
the health  care fund, which  pays for  this reform and  a health                                                               
care  clearing   house  that  gives  them   some  oversight  into                                                               
recommending how health care plans  can better serve Alaskans and                                                               
in other publicly funded program.                                                                                               
The  Massachusetts uses  an electronic  Expedia-style format  for                                                               
its clearing  house where people  can compare health  plans side-                                                               
by-side.  The site  works  with  public/private partnerships  and                                                               
other  formats to  get information  out that  connects people  to                                                               
health care plans.                                                                                                              
The next  section deals with  essential health care  services and                                                               
this  is the  most controversial  part of  the plan;  it requires                                                               
that individuals in the state have  access to some kind of health                                                               
care. Being  enrolled in a  health care plan already  would count                                                               
as being an IHS beneficiary.                                                                                                    
2:55:05 PM                                                                                                                    
Once  everyone  is  in  the  pool there  is  the  opportunity  to                                                               
continue to make other health care  reforms. One of those is that                                                               
a health  care plan  be offered to  any individual  regardless of                                                               
preexisting  conditions or  other  health issues  they have  that                                                               
might prevent them from getting coverage today.                                                                                 
Page 7 lists  some essential health care services  that should be                                                               
included  in any  health care  plan. The  bill does  not set  out                                                               
financial criteria, and  the goal is to  increase consumer choice                                                               
that includes high  deductible health care plans so  long as they                                                               
protect people  in times  when they need  health care.  The board                                                               
must help ensure this provision.                                                                                                
2:55:53 PM                                                                                                                    
Page  8  deals with  the  employer  provisions. Depending  on  an                                                               
employer's payroll size,  there are different levies  that can be                                                               
assessed to  help pay for this  plan. This bill would  not affect                                                               
employers with a payroll below  $500,000/yr. whether they provide                                                               
health coverage or not. Employers  with a payroll from $500,000 -                                                               
$1,000,000 are  levied 1 percent  of their payroll if  they don't                                                               
provide  health  insurance.  If  the  bar  for  providing  health                                                               
insurance is  relatively low, either  the employer must  offer to                                                               
pay 33  percent of a  health care plan  for premium or  they must                                                               
successfully enroll  25 percent  of their  employees in  the plan                                                               
that they do offer regardless of how much they offer to pay.                                                                    
Employers with  a payroll  of $1,000,000  or more  have to  pay 2                                                               
percent of  payroll. Since that is  a chunk of money,  there is a                                                               
big opt out  clause. If an employer merely  establishes a Section                                                               
125  account,  which  allows  an   employee  to  purchase  health                                                               
coverage with pre-federal  tax dollars, they are  exempt from the                                                               
levy. The cost of establishing  those accounts is several hundred                                                               
dollars for an entire employer for all employees for one year.                                                                  
Page  9 deals  with provisions  that don't  allow denying  anyone                                                               
coverage who  seeks it through  the clearing house  framework; it                                                               
allows  different  financial  criteria,  but  does  not  allow  a                                                               
preexisting  condition limitation  to  extend for  more than  one                                                               
year. If there  is a preexisting condition limitation,  a plan is                                                               
required  to  give credit  for  prior  coverage.  So if  you  are                                                               
leaving a  great state job and  don't want to buy  COBRA, you can                                                               
buy a new plan and have it be continuous.                                                                                       
Page 10 deals with the health  care fund with funds coming from a                                                               
variety of  sources. Page  11 under  disputes and  appeals allows                                                               
the right to  a hearing. It also provides a  variety of different                                                               
things   the   board   must  come   to   the   legislature   with                                                               
recommendations. Regulations can be implemented to establish                                                                    
CHAIR PASKVAN noted that the committee had written testimony                                                                    
from Beverly Smith.                                                                                                             
2:58:41 PM                                                                                                                    
BEVERLY SMITH said she would be available to answer questions at                                                                
the next meeting.                                                                                                               
2:59:14 PM                                                                                                                    
CHAIR PASKVAN said he would hold SB 61 for another hearing.                                                                     

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