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Minutes for SB32 - Committee on Insurance

Short Title

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

Minutes Content for Wed, Mar 6, 2019

Chairperson Vickrey opened the hearing on SB 32.

Assistant Revisor Eileen Ma briefed the members on the bill. She said the bill would create a healthcare benefits coverage product that would not be subject to the jurisdiction of the Commissioner of Insurance and amended K.S.A. 40-222, 40-222a and 40-222b. She added the bill had been worked and amended by the Senate Committee on Financial Institutions and Insurance to clarify the healthcare benefits coverage would not be considered insurance, added a provision that allowed the risk to be reinsured, and required providers of such coverage to file a signed certified actuarial statement of plan reserves annually with the Commissioner of Insurance (Attachment 1)

Questions were asked and answered regarding: whether the exemption was the same for the other nine qualifying entities and if the entity's membership requirements were contained in the bill.

Terry Holdren, Kansas Farm Bureau (KFB), testified in support of the bill. He provided background information on Farm Bureau. He said farm families could not afford health insurance and the bill sought authority for Kansas Farm Bureau to develop healthcare benefit coverage, specifically and solely for Farm Bureau members. This plan would be another option available to members for medical coverage. He said because the plan was defined as "not insurance" it allowed for the creation of individual non-ACA compliant healthcare benefit coverage, fully underwritten and individually rated, resulting in lower premiums. He said the bill allowed KFB to partner with other entities as third party administrators. Last, he said the bill required annual reporting to the Insurance Department. Mr. Holdren provided a chart with their proposed complaint and appeals process and said it followed the process mandated by the Affordable Care Act (Attachment 2) (Attachment 2.1)

Marieta Hauser testified in support of the bill. She said she and her husband, Tom, operated a 3,000-acre farm in southwest Kansas between Ulysses and Johnson. She also worked as director for the Grant County Chamber of Commerce and Tourism but her job did not provide health insurance benefits. When the Affordable Care Act was implemented they enrolled but the four consecutive companies they had all eventually pulled out of Kansas. As a result, they had to go to the marketplace. They found  those plans cost some $40,000 per year with premiums and deductibles. They were now enrolled in a Medi-Share program. They would like to see legislation that allowed KFB to offer members affordable healthcare benefit options (Attachment 3).

Tim Franklin testified in support of the bill. He said he and his wife returned to northwest Kansas in 2011 to raise children and grow wheat and corn on a fourth-generation farm. They had a group policy but in 2017 the ACA altered the definition of sole-proprietorship which resulted in their carrier cancelling their group coverage. He said they went to the marketplace to see if they qualified for a subsidy but were unsuccessful. The individual policy they purchased had high costs and deductibles which increased annually. In addition, they experienced challenges with adequate in-network/out-of-network coverage for a son with health concerns (Attachment 4).

John Buttenhoff testified in support of the bill. He said after marriage and college he returned to work on his family's fourth-generation farm and ranch in Lincoln. He said they were able to obtain group insurance as an employee of his parents. After passage of the ACA, they were able to remain on the plan, however, his father was now on Medicare and his mother would qualify for Medicare in August 2020. This would force them to find coverage elsewhere. He said when that happened, his wife might have to acquire childcare for their 4 young children and find employment that offered insurance. He added that a year ago he had the opportunity to chair the State Young Farmers and Ranchers and see Farm Bureau's process from idea to a plan that brought many farmers from across the state to the Capitol to stand up for what they believe was a better and more affordable health care option (Attachment 5)

Justin Vosburgh testified in support of the bill. He said he was a 55-year-old farmer from central Kansas where they raised five, now grown, children. Two sons were still active as sixth-generation farmers. He currently had insurance with Blue Cross and Blue Shield but his rates had increased 2,600% in 34 years. He described the difficulties of his grown children in finding affordable health care. Crop prices and yields had risen but fertilizer and other farm costs were also up. Health insurance costs, however, were, by far, the highest (Attachment 6).

Sarah Schmidt testified in support of the bill. She and her husband were from Junction City and they returned to her family's farm in 2009. They were raising the sixth generation of proud Kansas farmers with farm ground in four counties. They came back to the family farm to raise their children because of the lifestyle, work ethic and values. Like many Kansas farm families, since enactment of the ACA they had struggled to find a reasonable and affordable healthcare solution. She said they have had multiple policies with several providers in the last 6 years. She described their struggles in finding a health care plan. She closed saying finding health care had been one of their greatest financial, physical and emotional struggles since coming back to their family's fifth-generation farm (Attachment 7)

Michelle Hubert provided written testimony in support of the bill. She said she started with Farm Bureau Financial Services in 1990 as a sales associate and currently worked as regional vice president. Farmers and ranchers had unique risk management needs and their agents and agricultural marketing underwriters worked together to make sure they had the right liability coverage in place and insurance on their crops and livestock. Health care was one of the risks they were not adequately able to help with with today. In addition, FB agents worked as independent contractors and that created a challenge because, for agents, there was no outlet to obtain adequate and affordable health care. She said Farm Bureau built a reputation on having quality products and service. There was a need in Kansas to help families obtain adequate and affordable healthcare coverage, but they needed a provider ((Attachment 8)

Melissa Dryzmalla provided written testimony in support of the bill. She said her and her husband, Steven, farmed full time with her parents on a Harvey County family dairy farm. She also worked part time off the farm but received no heath care benefits in her position. They bought insurance through their dairy cooperation but the premiums were astronomical for a family of five and they could not afford health insurance without sacrificing other basic needs. They decided this year to apply for government health care but did not realize their children had been denied until they took their daughter to Urgent Care for stitches. As of today, their children were still not covered because KanCare continued to ask for paperwork. She said the bill was necessary, not only for their family of five but for so many others in the farming community (Attachment 9)

Luke Kreider provided written testimony in support of the bill. He said he farmed about 1,200 acres of soybeans and hay with his father. He said as a young single man prior to enactment of the ACA, he had good, affordable healthcare insurance. Now he was married with three daughters and his insurance had been cancelled every year and replaced by a more expensive plan that covered less and less. His wife had a job off the farm to essentially work for health insurance and his father helped with the $2,100 monthly premiums. He said their family worked hard, they just wanted affordable health insurance the way it used to be. He believed the ACA crippled businesses and family farms. He believed Farm Bureau had a competitive option that had helped thousand of people in other states like Tennessee and Iowa and their health care benefits were a simple but effective to help people find affordable healthcare (Attachment 10)

Gary Wohlforth provided written testimony in support of the bill. He said in the 1970s he planned to be a fourth-generation dairy farmer in Leavenworth County. The future of the small family farm seemed uncertain so he left for a more stable job. In 2011 he retired and went back to "what's in my blood" to farm what was left of the family farm. Once he reached retirement, he had to obtain healthcare insurance. To maintain coverage for him and his disabled wife he paid $1,310 per month through a COBRA plan from a former employer. For the past five years, he had been working away from the farm again and probably will have to work another five years until he reached age 65 and qualified for Medicare. He said farmers needed another option and the bill would allow KFB to create a new health care plan so he can keep farming (Attachment 11)

Jeff Grossenbacher provided written testimony in support of the bill. He said he was the sixth generation to farm in northern Nemaha County near the community of Bern. His family farm was established in 1859 but he may be the last generation to farm. He and his wife had five children but the major obstacle for his children returning to farm was affordable healthcare insurance. He said his wife worked in Topeka so they could have insurance for the family. Prior to that, they paid $1,350 per month for a $10,000 deductible policy with no dental or vision coverage. She now stayed in Topeka all week to work so they would have coverage. He said the bill provided the opportunity for young individuals to return to their rural Kansas family farms and ranches without worry they would have to work off the farm to acquire affordable health care benefit packages (Attachment 12)

Brian Wetta provided written testimony in support of the bill. He said he was a fifth-generation farmer actively trying to buy into the family operations. Making payments on a home, land and farm equipment exhausted most of his personal income from the farming operation. Because coverage and pricing under the ACA was no longer affordable, he was compelled to drop health insurance this year. Since the ACA, his premiums had risen annually to a 407% increase in 7 years. He said farmers, being self-employed with no group insurance plan available, needed another option for more affordable healthcare coverage. The bill allowed KFB to offer a competitive and affordable option with robust coverage for farmers (Attachment 13)

Amanda and Anders Buus Thomsen provided written testimony in support of the bill. They said they were self-employed custom harvesters based in Kiowa. They became victims of the ACA, and their prior insurance plan completely fell apart. Their once affordable $500 a month premium became the equivalent of a $2,100 house mortgage payment. In February 2017, they had a son. Their hospital bill was over $35,000 for a C-section and a three-day hospital stay. They paid $12,000 annually for premiums but their medical costs still didn't meet their deductible of $13,500. They considered Amanda finding employment outside the farm solely for the health insurance employee benefits. Their income, in true agricultural fashion, varies and there were several months when the insurance premiums were 40-50% of their income. They asked the bill be passed to support rural farmers, ranchers and agricultural businesses that made up the backbone of the Kansas economy (Attachment 14).

Mindy Young provided written testimony in support of the bill. She said she was a wife, mother, entrepreneur, farmer and proud KFB member. Her husband, Matt, was a fifth-generation Atchison County farmer. They worked hard to create their farm family including working 7 jobs between the two of them. Healthcare premium costs were the one barrier holding them back from actually making their dream come true of becoming full-time farmers working together on the family farm (Attachment 15)

Jamie Panek provided written testimony in support of the bill. She said she currently worked outside the farm because her employer offered insurance. Prior to this (October 2018), quality affordable health insurance was not a possibility for her family. In 2017, marketplace premiums constituted 33% of her family's net income. In 2018, even with wage increases, this rose to 35% of their income. She said in 2019, for the first time since the ACA was implemented, there was not a single marketplace insurance provider that offered out-of-network coverage in Kansas. This was important because in 2015 her daughter was born with a hole in her heart. There was only one pediatric cardiologist in the entire state and it took 5 1/2 months and 3 rescheduled visits before they found an answer to their child's health problem. In the 2019 marketplace this sole pediatric cardiologist would be considered an out-of-network provider and charges would have to be paid out of pocket. She said policies with stipulations like these were detrimental to farmers and ranchers who worked their entire lives to build assets only to be forced to liquidate them to pay medical bills. Passage of the bill would offer another option to farm and ranch families like hers (Attachment 16)

Andrea Knoll provided written testimony in support of the bill. She said her husband, Shane, and his brother, Zach, farmed full time on the family farm. Andrea worked full time selling crop insurance as an independent agent. As such, she received no health benefits. Her family currently carried health insurance through the farm and recently the premiums had become "astronomical." For a family of five and Zach's family of three they paid premiums of $25,000 annually with no dental or vision coverage. Andrea and her husband had a child with health problems and cannot afford to go without health care coverage. Even if they do not qualify for the FB insurance, it would allow somebody else to find the coverage they needed and deserved (Attachment 17)

Daniel Korber provided written testimony in support of the bill. He said he was a self-employed farmer in Nemaha County. Prior to 2017, he was able to purchase a business healthcare plan which provided decent health coverage for both himself and any potential employee for $200-$250 for month with a $1,000 deductible, and access to in-network providers in both Kansas and Nebraska as his farm is located on the Kansas-Nebraska border. In 2017, he was required to change to an individual plan with $400 monthly premiums and a $6,500 deductible. It allowed him to visit his doctor in Nebraska. In 2018, that plan was discontinued and he had to change to a Kansas physician since no healthcare plans offered access to out-of-network or out-of state-providers. Premiums for this plan were $400-420 per month with a $6,500 deductible and no access to out-of-network providers. He said he believed the bill created the necessary authority for additional health coverage options (Attachment 18)

Jenny Burgess provided written testimony in support of the bill. She said her and her husband were first-generation farmers in Reno County. Between weather, markets and the increased cost of living, affordable health insurance became another stress. They decided to let their coverage lapse after paying $16,000-$24,000 in annual premiums for a healthy family with two children. Last year, she and her husband had a troubling decision to make: one of them had to give up their dream of farming and go work in town. She said they strongly believed the bill gave farmers, like them, another option for health care (Attachment 19)

Josh Roe, Kansas Corn Growers Association, provided written testimony in support of the bill. He said the KCGA represented more than 1,000 members in Kansas and actively worked with other organizations to maximize the voice of Kansas corn producers. Their members have been faced with declining net farm incomes not seen since the farm crisis in the 1980s, coupled with health insurance costs that quadrupled over the past five years. He believed their members, and any Kansan not qualifying for ACA or an employer subsidized plan, would benefit from the ability to purchase group insurance offered by the Kansas Farm Bureau (Attachment 20)

Dwight Meyer, Kansas Soybean Association, provided written testimony in support of the bill. He said rapidly escalating healthcare costs for Kansas soybean producers in recent years contributed mightily to declining net farm incomes in the state. One producer told him his healthcare premiums had tripled since 2010. He believed the bill would allow the KFB, if exempted from the jurisdiction of the Kansas Insurance Commissioner, to partner with a provider to offer health care benefits and significant health insurance savings for farm families (Attachment 21)

Christy Hopkins, western Kansas Rural Economic Development Alliance (wKREDA) provided written testimony in support of the bill. They said each year wKREDA developed a legislative paper that reflected their concerns and solutions for matters impacting rural development. The 2019 statement included acknowledgment that financial stress on rural hospitals impacted the quality of care in rural Kansas. They believed the bill would improve health care in rural Kansas as it expanded options for health insurance (Attachment 22)

Chairperson Vickrey asked if there were any other persons wanting to testify in support of the bill. There were none.

The chairperson asked if the members had any questions for the proponents.

Questions asked by the committee and answered by Terry Holdren included: Comparisons to the Tennessee Farm Bureau Plan, the requirements to be a member of the Farm Bureau, marketing to the public versus just to members, whether FB offered health insurance coverage in the past, the Nebraska plan offered by Medica, what the FB product would look like (preventative care, out-of-area coverage, vision and dental, prescriptions, pre-existing conditions, waiting periods, lifetime coverage), how FB arrived at the 30% reduction in cost, whether the FB would have a high-risk pool, what happened if an insured person developed a health condition, development of a medical services network and cost containment, third-party claims processing, insurance versus non-insurance companies and the difference in profit margins, the underwriting process, amending the bill to limit membership only to those in agriculture, and premium rates compared to marketplace rates.

Also asked was if this was not defined as an insurance contract and had not yet been developed, how could the committee make a decision with no data about what a plan might contain. Answered was the bill sought authorization, similar to the association health plans bills which also did not yet have a plan. 

After discussion, the chairperson asked if there were any opponents to the bill.

Dennis Maggart, McInnes Group, testified in opposition to SB 32. He said he heard concerns about cost and coverage throughout the 35 years he had been in business. Availability and affordability of medical coverage was a critical concern for all Kansans. He said the bill would harm the market and divide the individual and small group market by allowing a carrier to medically underwrite individuals based on health questions. This shifted the cost through high premiums to less healthy individuals creating classes of "winners" and "losers." The bill also stripped citizens of proven consumer protections provided by the Insurance Department. It gave one company a statutory monopoly on coverage and prevented other associations from entering the market. He believed the FB plan would financially destroy other existing associations by drawing away healthier members resulting in higher and higher rates for older and/or sicker individuals. He added the Tennessee plan had been in place for many years and the state had higher exchange rates than Kansas (Attachment 23)

Dana Bacon, Leukemia and Lymphoma Society, testified in opposition to the bill. He said the bill was driven by the right concerns, but they were worried the plan was not the right answer to the cost of health insurance. He said consumers deserved health coverage that was not just affordable on the front end, but also provided a stable high-quality product that was affordable when illness struck. Good coverage also required tight profit margins to ensure customers' premiums were spent on their care. He was concerned that the cost of care would go up for less healthy customers turned away by the SB 32 plan. The cherry-picking could take the form of reduced benefits, denial of applications and would price sicker people out of their plans. He added that many FB members had pre-existing conditions (Attachment 24)

Jordan Feuerborn, Cancer Action Network, testified in opposition to the bill. She related her family's personal story about their farm and her grandfather's cancer diagnosis, treatment and their good medical coverage. She was concerned if people in the plan developed cancer they could face caps or higher deductibles. She added that we cannot go back to the day when cancer patients couldn't get health insurance because they exceeded a limit or were subject to a denial or waiting period just because they survived cancer (Attachment 25)

Dr. Dena Hubbard, Kansas Chapter, American Academy of Pediatrics testified in opposition to the bill. She was here representing kids, she said. She was not opposed to the bill or Farm Bureau and sympathized about the cost, but believed the bill was not the answer. They were making less comprehensive coverage available with fewer protections. The plan would also not be ACA-compliant and listed the services that might not be covered. She said the "devil was in the details" and without knowing exactly what the plan would be, it was hard to authorize the bill. While FB said they would go above and beyond when a claim was appealed there was no guarantee. She added many pregnancies were unplanned and questioned whether a pregnancy coverage waiting period was good considering the importance of early prenatal care. In addition, having the FB plan precluded pregnant women from finding other medical coverage. She added 100% of the parents who had infants in NICU or with pediatric issues did not plan to be there (Attachment 26)

Ashlea Konecny, American Heart Association, testified in opposition to the bill. She said she had a vested interest in all the things the bill was not. She said all Kansans wanted less expensive insurance but not at the expense of our health, livelihood and at the expense of other Kansans. She related her mother's history with cancer. She also said the issue was important because her son was born with a heart defect and in 2015 had his third open-heart surgery with additional surgeries anticipated. Under the proposed bill, he would not be guaranteed coverage because of his pre-existing condition. She added as a family with pre-existing conditions, they needed their regulated, comprehensive plans to remain just that: regulated and comprehensive (Attachment 27)

Noah Tabor, Medica, testified in opposition to the bill. He said he understood there was a problem but where he differed was the solution. He said the solution was the ability of associations to form fully-insured association health plans (AHP) subject to state law and regulatory oversight. He related Medica worked with a Nebraska member-based agricultural organization to create such an offering for farmers, ranchers and others connected with the agricultural community. Medica offered to assist Kansas in developing such a plan using the flexibility of the statutory and regulatory framework for association health plans proposed in HB 2054. He added an AHP was a guaranteed issue, meaning it could not deny applicants for pre-existing conditions. Last, he said they were opposed to legislation that exempted certain types of health insurance from state and federal oversight, as proposed in the bill (Attachment 28)

Jessica Colo, Medica Nebraska sales operations, added to Noah Tabor's testimony in opposition to the bill. She described the Nebraska health plan model and said the stories she heard today were the same she had heard from Nebraskans about the difficulties in finding affordable health care, and their firm was doing something about it. She worked with farmers, ranchers, agribusinesses and agents to promote their health insurance coverage. She said the categories and ratings depended on whether the plan was production-based (farmers, ranchers and their families) or the agribusiness side. She said the plans were offered within an association health plan so they were compliant with ACA and there were no hidden fees or rules. Everything was written in the policy documents and the insured were not individually rated. Most important, they accepted individuals with pre-existing conditions and there was guaranteed acceptance.They currently had about 700 active members and believed it had been a successful venture. She added the coverage was exclusively a Farm Bureau member and agent benefit. The requirement for the coverage was to qualify as a Farm Bureau member and be in good standing.

Peggy Johnson, Susan G. Komen, testified in opposition to the bill. She said she was a 7-year breast cancer survivor. As a volunteer with Susan G. Komen she assisted women after they were diagnosed with breast cancer. She said a cancer diagnosis affected lives - work, family and one's sense of well being. There were decisions to be made and questions to ask. If you add the startling fact insurance wouldn't pay for treatment, it further disrupted one's life. She said the bill did not guarantee peace of mind. She related her story about being diagnosed in January 2012 with triple negative breast cancer. She was fortunate to have good insurance because her total treatment cost over $200,000. After insurance paid she was out of pocket $2,525. She added that no one expected to develop cancer or other pre-existing conditions. SB 32 policies further complicated the insurance world and targeting farmers with such policies did a terrible disservice to the farming community, especially those younger workers unfamiliar with insurance policies and medical expenses (Attachment 29)

Courtney Eiterich, National MS Society, testified in opposition to the bill. She recognized health care coverage was broken and that Kansans needed insurance but felt there was one organization that wished to supersede the rules. She told her story about getting diagnosed with MS 12 years ago while 32 years old and pregnant with twins. She said there were over a million persons living with MS. There was no known cause or cure. She empathized with the testimony given today and understood health care was complicated. She said insurance coverage had become more fair in the last 12 years with no lifetime or annual caps and coverage for pre-existing conditions. Now there was adequate network access and payment of prescription costs. The bill today did not guarantee any of those things. She said she spoke with a FB member recently whose husband had been diagnosed with MS shortly after purchasing insurance through the ACA marketplace. Ms. Eiterich said if the bill passed, he would have been one of the people with a plan that could be cancelled and they would not have been eligible to apply for insurance until the November enrollment with no coverage for the estimated $100,00-150,000 annual cost of medication to treat MS. She felt they have heard lots of promises but the bill did not provide protections in the long run (Attachment 30)

Brad Smoot, Counsel for Blue Cross and Blue Shield of Kansas (BCBSKS), testified in opposition to the bill. He congratulated the conferees on their presentations. He said he agreed with Mr. Holdren (Farm Bureau) that price was a big issue. He said BCBSKS was the "canary in the coal mine" to tell what the results could be when healthcare issues came to the legislature. He said current law required issuers to offer policies to people with pre-existing conditions. Absent that legal requirement, SB 32 exempt organizations could "cherry pick" healthy applicants and reject others. The result was that other companies or associations subject to "guaranteed issue" laws would have to accept the less healthy with the higher costs and premiums that went along with coverage of Kansans with pre-existing conditions. BCBSKS, Medica and other health insurance companies would have to accept those at higher risk. He provided charts to show how their firm spent health insurance premiums--92.4% for medical care and 7.6% on business expenses--and a breakdown of the medical expense categories. Another chart showed the services that the legislature had deemed necessary in healthcare coverage. The last chart showed sources of health insurance coverage. He last pointed the committee's attention to written opposition testimony from Ascension Via Christi because they operated in Tennessee and have seen the high premiums and destabilized insurance market due to the the Tennessee Farm Bureau health plans (Attachment 31)

Sara Prem, American Lung Association, provided written testimony in opposition to the bill. She said they recognized affordable healthcare was not a reality for many Kansas residents and supported smart solutions; however, the Farm Bureau plan did not provide the coverage that Kansans, including farmers, needed. The plans were not regulated and FB did not have to follow the rules that other health insurers did, including covering the 10 essential health benefits and covering people with pre-existing conditions. This could cause patients with chronic conditions to not be able to acquire coverage. They also believed FB plans would fragment the market for health insurance driving up premiums. She suggested that expanding Medicaid and implementing a reinsurance program were more sustainable ways to expand health coverage (Attachment 32)

Roy Jensen, MD, University of Kansas Cancer Center, provided written testimony in opposition to the bill. The KU Cancer Center must demonstrate that it had significantly improved the health of Kansas residents and reduced the cancer burden in the region. One way was to ensure that Kansans with pre-existing conditions were not discriminated against and that access to quality health insurance was not harmed by unregulated, substandard plans that segmented the individual market and drove up costs. Further, it was dangerous for the patient and individual market to promote coverage products without proper oversight or protection (Attachment 33)

Donn Teske, Kansas Farmers Union, provided written testimony in opposition to the bill. He said their members believed access to health care was essential to a strong quality of life in the state. The problem was that the bill removed important consumer protections, set a dangerous precedent and put upward pressure on the rest of the insurance market. He added farmers were exposed to chemicals, were older and they did dangerous work. There was no reason to believe they would see much benefit from SB 32 plans (Attachment 34)

Michelle Guadalupe, Arthritis Foundation, provided written testimony in opposition to the bill. She said this type of plan exposed consumers to medical and financial harm, especially those with pre-existing conditions (like arthritis). Additionally, the bill exempted the insurance-like plans from oversight by the Insurance Department (Attachment 35)

William Sneed, Counsel for America's Health Insurance Plans, provided written testimony in opposition to the bill. He said the bill had the potential to harm Kansas' individual health insurance market resulting in higher costs for consumers who relied on the individual market for health coverage. Permitting the sale of a product that closely resembled insurance but without valuable consumer protections posed a danger to those who purchased the product without knowing the crucial difference. Moreover, the federal Department of Labor acknowledged in its proposed rule for association health plans that such plans, along with other multiple employer welfare arrangements, had a significant history of fraud and insolvency (Attachment 36)

Bruce Witt, Ascension Via Christi Health, provided written testimony in opposition to the bill. He said from their firm's experience in Tennessee, there was a high probability the bill would segment the individual market leaving the demographics of the ACA-compliant health insurance pool older and at higher risk from a health morbidity standpoint. This resulted in higher premiums and out-of-pocket costs for those individuals in the ACA-compliant market. It would also leave enrollees in this type of health plan subject to bare-bones coverage. He added based on Tennessee's experience their individual market had seen higher annual premium increases than Kansas due to the existence of plans provided by the Tennessee Farm Bureau (Attachment 37)

Cristi Nance, Oral Health Kansas, provided written testimony in opposition to the bill. She said creation of association health plans and health insurance products outside of the insurance commissioner's regulatory powers provided poor access to health care for farmers across Kansas. The plans undermined crucial Affordable Care Act protections by denying coverage for pre-existing conditions and leaving out benefits such as maternity care and prescription drugs. She added if Farm Bureau was allowed to develop these types of health plans, it would open an opportunity for more state associations to develop and offer similar plans to their members (Attachment 38)

Bob Shield, Kansas Association of Professional Insurance Agents provided testimony neutral to the bill. He cautioned that adding an entity to the list of entities within the Insurance Code that would not be subject to jurisdiction of the insurance commissioner would be a stepping stone to deregulating the entire Kansas health market, and pushed the state closer to federal intervention and control of the insurance industry. He added as an agents' association they were uniquely qualified to express concern over the potential dangers for licensed agents selling unlicensed products including: the lack of regulatory oversight about what agents told applicants, the potential pressure to "cherry-pick" existing AHP or employer group clients, privacy concerns with respect to HIPPA information, and exposure to an agent's business if E&O coverage excluded sale of unlicensed products (Attachment 39)

Chairperson Vickrey asked if the committee had any questions for the opponents or neutral conferees. Questions asked and answered included: applicant rejection rate for the Iowa and Tennessee Farm Bureau plans, comparison of the FB proposed plan to other plans offered by other small groups (cooperatives, dental and bankers associations), why in the bill did carriers of fully-insured plans pay a 2 percent premium tax versus carriers of self-insurance's 1 percent, could a person approved for the plan later be kicked out, and what happened to those persons as far as obtaining coverage.

Hearing no further questions, Chairperson Vickrey closed the hearing.

The meeting adjourned at 5:55 p.m.