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Minutes for SB32 - Committee on Financial Institutions and Insurance

Short Title

Exempting certain non-insurance healthcare benefits from the commissioner's jurisdiction.

Minutes Content for Wed, Jan 30, 2019

Opponent Brad Smoot bullet-pointed the first segment of his testimony. He indicated that he believes the bill allows managers to escape many things imposed on others such as provider mandates, benefit mandates, prompt pay and solvency requirements. He continued to discuss concerns about the bill that it did not address the right of external independent review. He raised questions regarding who the consumer is going to call with a complaint or what about the one person in the family who does not get accepted by the health plan. He alleged that the thirteen page questionaire/application was intended to find reasons to exclude higher risk applicants with existing conditions or complications.

(Attachment 1)

During committee questions and comments the following points were made:

  • Affordable Care Act Marketplac (ACA) enrollment has been declining primarily due to the elimination of the individual mandate and the increasing premium costs.
  • The primary cause of high increases in premium rates might be attributed to the rising costs of healthcare and the aging population with requirements that healthcare plan providers must spend ninety-two cents of every premium dollar on paying claims.
  • It was estimated that there are currently about 80,000 ACA enrollments in Kansas with about 65,000 of them covered by Blue Cross Blue Shield of Kansas. However, it remains to be seen how many of those enrolled can afford to pay the first several months of premium.

Neutral Testimony:

Neutral Lee Modesitt indicated that while the Kansas Insurance Department does not intend to weigh-in on policy decisions, he hoped to provide some helpful history regarding Self-Funded Association Health Plans (AHPs) and some questions that are important to keep in mind regarding the proposal being considered today.  (Attachment 2)

He also discussed a written comparison of Fully Insured, Self-Funded and New Self-Funded Association Health Plans (AHPs).

(Attachment 3)

Written Only Neutral Testimony:

Neutral Will Larson offered written testimony indicating that his association had not had an opportunity to consider the eight insurance related bills currently before the committee. (Attachment 4)

Chairman Olson seeing no more questions or comments from the committee called upon Terry Holdren to review a rebuttal document submitted to committee members just today.

Terry Holdren summarized the letter in rebuttal to several issues that had been raised during the committee process. He stated the intention for the plan outlined by the plan to have a robust offering targeted to the needs of market in need of healthcare benefits today. He explained that there would be no life limits and that the application was a tool to better understand the underwriting costs of the plan. He pointed out that the target audience is rural individuals that do not have a healthcare plan option today and the point of this proposal is to provide another option to those who prefer a rural life style. He sited successful innovative plans in Tennessee, Iowa and Nebraska as examples of markets that have provided viable and responsible alternatives to their markets. In response to questions he reiterated that the likely market for this proposal of 1.5% of the population of the state (estimated at 42,000). He also explained that the KFB has two classes of members including associate members who subscribe to other services and voting members who are engaged in or support direct agricultural production. He also responded to a question to explain that the broad consumer protection statutes would call for the Kansas Attorney General's consumer protection division to deal with consumer issues.

(Attachment 5)

Seeing no more testimony or committee questions Chairman Olson closed the hearing on the bill.