Senate Insurance

Feb. 16, 2022

 

Pitsch [00:00:01]  Chair sees a quorum on Senate Committee on Insurance and Commerce. We are going to deal with Senate Bill 85. Senator Irvin. When you are ready, feel free to present your bill. 

 

Irvin [00:00:17] Thank you, Mr. Chair. Members of the committee, this is Senate Bill 85. All this– what this bill does is it clarifies the definition of eligible inactive retiree and modifies that eligibility of those retirees to participate in the state and public school life and health insurance program. 

 

Pitsch [00:00:38] Okay, do we have questions from members? I believe all of us have read through this in the resolution and now the bill. What was that? Once or twice. I want to not– I want to be prompt, but I don’t want to push and act like we’re in a hurry here. So again, I’ll ask, does anybody have any questions pertaining to Senate Bill 85? We have no one to speak for it or to speak against it? Am I correct in the audience? Any members have anything else before I ask Senator Irvin to close for her bill? Senator Irvin, would you like to close for your bill? 

 

Irvin [00:01:26] I’m closed. I’d appreciate a good vote. 

 

Pitsch [00:01:29] OK, and I assume you want to bring with that a committee member motion.

 

Irvin [00:01:33] Motion to– motion do pass. 

 

Pitsch [00:01:34] OK. We have a motion from Senator Irvin on Senate Bill 85. Do I have a second? Senator Hickey is the second. One last question for any comment. Seeing none, we have a motion do pass on Bill Senate 85. All in favor, say aye. Same sign opposed. We got a– pass with the– well, it’s on the tape recording. It’s not on record. It’s a voice vote. Senate Bill 85 has a do pass. We will now– your bill has passed, senator Irvin. Thank you very much. We will now proceed on to Senate Bill 86, Senator Hickey. That would give you the end of the table. You are recognized to present your bill. 

 

Hickey [00:02:25] Thank you, Mr. Chair. Members, I know that we’ve been over this multiple, multiple times, but I’m going to do it one more. OK. This is the funding, the funding mechanism that we’ve been working on. What– and again, as I told you all yesterday, you know what I’d like to, like to refer this to is the bill which forces a conversation of EBD’s financial support annually with the legislative body, EBD, and all other stakeholders. The way that we have done this is to require EBD to maintain certain reserve balances and report those to the Legislature through ALC on an annual basis. The Legislature will then have certain options available to it. In setting this up, we worked with our with Segal, our consultant that we hired, to arrive at what type of reserves would be deemed sufficient. This gets a little confusing right here if you don’t follow it, but the range that we’re going to try to maintain is somewhere between 12 and 16 percent. Of course, we couldn’t use a range. We had to have an exact, some exact numbers. So what we decided is that the 14 percent would be what we would consider an optimal, optimal, optimal amount to try to keep. And then we’d try to make sure that we had no less than 12 percent, which would be acceptable. But, but if it’s less– excuse me, if it’s less than 12 percent, then what we’d have to do is that would require EBD to notify ALC of the need for additional funding. ALC will review, and as you can see on the page– I think it’s the same. I was– I’ve been looking at the, the old bill right here, but on Page 3 line 17 through 26– I hope– am I right– 

 

Pitsch [00:04:10] That’s the 16 percent section. 

 

Hickey [00:04:13] Okay, what, what can happen at that point is they can recommend that we– or we can recommend that the governor call us in for a special session to address, take further action or not act at all. If the Legislature fails to act, then what the EBD director at that time, which will be in statute, is required to initiate a process to collect the needed funds through employee premium increases, reducing benefits or both. We also have a provision in here in the bill that if reserves were to exceed 16 percent, the EBD director may apply the extra to actually lower premium rates for the next year. If the EBD director doesn’t opt to lower those rates, they must come to report to us the reason that they’re not doing it. 

 

Pitsch [00:04:59] I guess the chair would start off to thank you to Senator Hickey. I know Senator Dismang and others have been heavily involved. This was not an easy deal to get to with the financial matters. Can you explain how this bill– I think you alluded to it. So my question is explain how this bill would prevent us from having the situation we found with our EBD coming into the need for this bill? 

 

Hickey [00:05:25] Sure. What has transpired over the years– and again, this bill is going to dovetail with some of the other bills, one that Senator Rice has, couple that he has. But what this is going to do is in– years in the– in the past, there’s really been no one as far as from the Legislature that’s been monitoring this. We actually had an old board that was appointed, which we dissolved them last time because what had, what had been transpiring is whenever you’re in plans like this, which are basically just a self, self, self insured plan is what we are, you have to maintain these reserves to be able to maintain your solvency. So what this is going to do, again, on an annual basis, it’s going to require us to keep those. And whenever they do drop below it, then there has to be action. It has to be reporting every year, so this, this should keep us– I’m not saying that either we won’t have to fund more money or that premiums won’t have to, you know, increase. However, it’ll be be done in incrementally smaller amounts because of the annual look, look at it. 

 

Pitsch [00:06:35] Thank you. Senator Hammer, you have a question. 

 

Hammer [00:06:38] Thank you, Mr. Chair. I was wondering on Page 3 down there between lines 22 and 27, where it talks about if it– it is seems like it accumulates about director show report Legislative Council for not lowering the premium rate. If they choose not to lower the premium rate, and the money is there to do that, what’s our recourse other than wait till the next session maybe to deal with it then? Or is there any? 

 

Hickey [00:07:08] Well, I think we all know as a legislature since we can control the purse strings and control the salaries of the individuals that run this thing in the end that I wouldn’t think that would be real wise. However, it’s a fair, it’s a fair question. I think maybe I should say why we put the ‘may’ in there instead of the ‘shall,’ because we kind of wrestled around with that. But the reason that we put the money in there is because, you know, it may just be that it’s a 16.1 percent. And then if our estimates are showing that, well, we’re going to have some extraordinary items or things of that nature in the following year, it wouldn’t, it wouldn’t make any sense for us to lower the premiums, you know, by that little small amount just to raise them again. So it was a way that, again, to operate within the range so that, you know– but still, you know, try to use some common sense as far as, you know, some smaller thing that would turn around or that we’re estimating is going to turn turn back immediately. 

 

Hammer [00:08:11] So this would be a smoothing effect instead of a cliff effect that, that by building up those reserves we could hold or– 

 

Hickey [00:08:20] That was an excellent way to say it. 

 

Hammer [00:08:22] OK, allright. I got it. Thank you, sir.

 

Pitsch [00:08:23] Do we have any other questions from members? Do we have anyone in the audience who’d like to speak for the bill or against the bill? None have signed up. I guess– no other question seen from the members, would you like to close for your bill, Senator Hickey? 

 

Hickey [00:08:45] I’m closed, and I’ll make a motion at the proper time. 

 

Pitsch [00:08:47] OK, the motion has been made, or– go ahead. 

 

Hickey [00:08:52] So move. 

 

Pitsch [00:08:52] So move do pass. Do I have a second for that motion? Senator Teague with the second. It has been moved and seconded a do pass on Senate bill 86. Is there any final conversation? Seeing none, all in favor, please say aye. Same sign opposed. Motion is passed. Senator Rice, you are up with– I assume you want to do Senate Bill 87 first? 

 

Rice [00:09:22] Yes. 

 

Pitsch [00:09:22] OK. Members, Senate Bill 87. Senator Rice. 

 

Rice [00:09:26] Thank you, Mr Chair and Committee. You heard the bill in resolution yesterday. I will be brief. On the original program on the bariatric surgery, as you know, to, as this bill says, for coverage of diagnosis and treatment of morbid obesity, including bariatric surgery. I changed my mindset over a number of years, and have seen that and the work that the executive committee and consultant has done in the last year has reaffirmed what I’ve seen and some different circumstances that has been. And it’s taken a mindset away from just a weight loss, which does affect health, but the way we’re doing this and the way that the consultants recommend the most outcome for us, cost savings and the best health has been legitimized across many other programs in the fact that if you get the right people with the right diagnosis, it has the most impact. And as I stated yesterday, the history shows that with correct diagnosis, it can be 35 to 45 percent savings long term on the, the insurance. And the greatest help is for diabetics and those with certain heart conditions has been very much. And also that one of the doctor’s testimony that he can cure diabetes about 60 percent of the time with this. So while it does have cost in there, let me read this to you for, for public record that keeps you from having concern that it will get out of bounds. The bill not only reinstates the program offering the coverage of diagnosis and treatment of morbid obesity and include bariatric surgery, it allows the state Board of Finance subject to approval of Legislative Council to discontinue the program or institute an annual expenditure cap on the program if needed to ensure financial soundness of the program. And it allows for promulgation of rules to implement the provisions of the bill. So we tried to think through that, take all the things from other states and successes that they’ve had in this. And the biggest thing we hope not only to lower the cost but have a healthier population. With that, I’d appreciate any questions and try to answer them; if not, a good vote. 

 

Pitsch [00:12:08] Senator Teague, you’re recognized for question. 

 

Teague [00:12:12] Senator Rice, are you making it easier or harder? I never did hear that. 

 

Rice [00:12:17] This, this will be easier for those with the correct diagnosis. As I stated yesterday, when, when we had the pilot project that funded $3 million a year, it opened up at midnight and within 10 minutes it was maxed out. And that was from people that wanted surgery for good reason for themselves, but it may not been the best medical reason or medical outcomes for the people that, that type procedure is helpful with. So this is going to allow the extra input in that, and we’re probably going to spend more money, and it may not have as much savings on the front end. But it is proven– they, they testified again and again, long term, more savings and a healthier population. 

 

Teague [00:13:07] Thank you. 

 

Pitsch [00:13:08] OK. Any other questions, members? Do we have anybody in the audience who would like to speak for or against this bill? Seeing none, Senator Rice, do you have any final comments? 

 

Rice [00:13:23] I am closed. Appreciate a good vote. 

 

Pitsch [00:13:24] Senator Rice has indicated that he’s closed. He is not on the committee. I’ve got a motion for do pass from Senator Teague. Is that what you’re telling me? Do I have a second? I’ve got Senator Ingram with the second. Any comments? Seeing none, all in favor, please say aye. Same sign opposed. Senate Bill 87 has passed and we’ll move on to Senate Bill 88. Senator Rice, you are recognized. 

 

Rice [00:13:50] Thank you again, Mr. Chair. Again, Senate Bill 88 modifies the state contribution to the state and public school life and health insurance program. Removes the cap on the monthly state contribution to the state and public school– school life and health insurance program for state employees, budgeted positions. And the current cap and set it at 550. As you see, that does away with that. This also allows you to look at the Health Index, Health Index CPI. This will go through the governing board that was described yesterday, if you remember, and also through the Board of Finance and ALC, and it will allow savings. Also, it keeps you from having to change the statute every year. Take any questions. 

 

Pitsch [00:14:46] Are there any questions from members? Seeing no questions from members, senator– is there anybody in the audience to speak for or against this bill? Seeing none, Senator Rice, or your closed for your bill? 

 

Rice [00:15:02] I am closed. Appreciate a good vote. 

 

Pitsch [00:15:04] Senate Rice has indicated that he’s closed on Senate Bill 88. I need a motion. I’ve got a motion from Senator Hickey. A second, Senator Elliott. Any final comment? Seeing none, all in favor, please say aye. Same sign opposed. Senate bill 88 passes. You have– both bills have passed, Senator Rice. 

 

Rice [00:15:26] Thank you, Mr. Chair and committee. 

 

Pitsch [00:15:27] Thank you, members of the committee. Thank you for your promptness and attendance. If you’re in education, please hurry to them. They’re waiting on you. And we will watch what comes up next. We are adjourned.