HOUSE COMMITTEE ON

AUDIT & HUMAN SERVICES BUDGET REFORM

 

 

 

January 30, 2003   Hearing Room 50

3:00 PM Tapes  12 - 13

 

MEMBERS PRESENT:            Rep. Ben Westlund, Chair

Rep. Steve March, Vice Chair

Rep. Susan Morgan, Vice Chair

Rep. Alan Bates

Rep. Jeff Kruse

 

MEMBERS EXCUSED:            Rep. Randy Miller

                                                Rep. Jeff Merkley

 

 

GUEST MEMBERS:               Rep. Billy Dalto

                                                Rep. Gordon Anderson

                                                Rep. Laurie Monnes Anderson

 

 

ISSUES HEARD:            Informational Meeting – Health Insurance - Invited Testimony Only

                                    “Private Market Health Insurance”  Employer Sponsored Insurance 

                                    Rocky King, Insurance Pool Governing Board

                                    “Health Insurance Overview and Role of the Insurance Division”

                                    Joel Ario, Oregon Insurance Division

 

 

 

These minutes are in compliance with Senate and House Rules.  Only text enclosed in quotation marks reports a speaker’s exact words.  For complete contents, please refer to the tapes.

 

TAPE/#

Speaker

Comments

Tape 12 Side, A

003

Chair Westlund

Calls meeting to order 3:10 pm and introduces Rocky King, Oregon Insurance Pool Governing Board and Joel Ario, Administrator for the Insurance Division and opens the informational meeting.

INFORMATIONAL MEETING

040

Rick Berkobien

Goes over the packets presented to the members at the dais.

050

Rocky King

Introduces himself and begins his presentation by giving a brief overview of OMIP and the materials at the dais. (EXHIBIT A), (EXHIBIT B), (EXHIBIT C).

124

Rep. Kruse

Asks what the reason is that people drop enrollment.

135

King

Lists 3 major reason why people leave the pool.

143

Rep. Kruse

Elaborates on his understanding.

158

King

Agrees with comment and continues.

200

Rep. March

Asks how do they get the high risk, and are they appropriately listed.

215

King

Responds to the high risk question.

229

Rep. March

Have people been turned down because of credit ratings.

235

Joel Ario

Insurance Administrator, responds to the question of credit ratings.

339

Chair Westlund

Agrees with the question from Rep. March.

340

Rep. Bates

Makes comments about the conditions that they are looking at.

263

King

Makes additional comments and continues presentation

299

Ario

Added comments about reducing the amount of dependents they had on the high risk pool.

314

King

Continues presentation on slide 44.

364

Chair Westlund

Responds by asking if that is why that number is actually so low.

373

King

Agrees with the statements and comments that they lose people because of economics..

375

Rep. Kruse

If we took a harder look at that we would find that the people that are still in have monthly drug cross higher than the premium.

380

King

Elaborates that that is correct except for people that can’t afford it, and continues with slide 47.

TAPE 13 A

 

 

001

King

Relates some experiences and continues

040

Rep. Kruse

Asks for clarification on page 43.  Asks if automatic escalators in assessments are going to make up for that or are we looking at an increase in assessment.

050

King

Responds by asking them to see the chart on page fifty.  Gives an explanation and continues.

083

Chair Westlund

Asks how many members are in the PIB system.

087

King

Responds with the number of employees in the PIB system.

090

Rep. Kruse

Comments that there seems to be a significant increase, and asks if portability added significantly to this.

096

King

It does, see section 12 page 9 of the (EXHIBIT A) it shows the details of this.  Continues presentation.

125

Chair Westlund

Asks what the state contribution is.

130

King

Agrees and give some figures concludes and states that that was a quick overview of OMIP and opens the floor for questions.

143

Rep. Bates

Asks about the pep assessment for OMIP and how much money it is.

146

King

Responds to pep assessments for OMIP.

148

Rep. Bates

Asks what is the annual assessment is then.

152

Chair Westlund

Gives clarification about the figures.

156

Rep. Bates

Asks how many people are in the program and what the total cost is.

160

King

Answers how many people are in the program and what the total cost is.

181

Rep. March

Would like to look at the claim costs by category that pertain to OMIP verses OHP, verses the private market. Would also like a picture of the letters that are written by agents and who they represent.

194

King

This is not a simple request, but we will see if we can get you the information you are inquiring about.

200

Rep. March

If you could ballpark that would be interesting.

211

King

That was the overview and now I will turn this over to Joel Ario.

218

Ario

Re-introduces himself and begins his presentation.

270

Chair Westlund

Asks where your portability comes from.

275

Ario

Responds to the question on the portability market.  Concurs and continues presentation.

325

Rep. Bates

Asks how you stay away from adverse selections after a insurance company closes.

345

Ario

Responds to insurance companies closing.

360

Rep. Bates

Comments that basically this is a mandate placed on insurers that they have to take these people if they choose to do so.

374

Ario

Gives clarification that this is an obligation placed on insurers.

TAPE 12B

 

 

038

Chair Westlund

Asks if you are fired for whatever reason, you still have the portability option.

045

Ario

Asks his guests if that is correct, and the answer was possibly yes.

051

Rep. Kruse

What would it do to your demographics if we took small group from two to three.

055

Ario

Comments that this is a current problem and addresses that the carriers are particularly concerned about the small groups.

067

Rep. Kruse

One of the issues is, how do we keep these things from turning and how do we stabilize the sections of the market, feel this is a legitimate concern and should be addressed..

072

Ario

Makes comments about the current issues that need to be addressed.

081

Rep. Kruse

Makes comments about segregating in different ways.

085

Ario

Agrees and elaborates.

097

Monnes Anderson

Would like to go back to demographics and what kind of people there are and how people are eligible, gives examples to make more clear.

106

King

Responds that they should look at slide 6, it lays the options you have in regards to portability.

135

Rep. Monnes Anderson

Asks if Medicare works in a similar way.

140

King

States that the previous statement was incorrect and elaborates.

145

Ario

Gives an explanation of what happens when you come out of group coverage.

167

Rep. Monnes

When you turn 62, you can still continue on in the portability pool?

174

Ario

Comments to the length of time you may stay on portability.

185

Chair Westlund

Asks why you would have to be forced to take a lower deductible that translates into a higher premium.

189

Ario

Gives clarification about deductibles.

199

Chair Westlund

Asks additional questions about portability.

201

King

Makes comments to clarify the question for Chair Westlund.

220

Ario

Continues presentation.

284

Rep. Kruse

Asks if we were to focus on the young healthy individuals, relaxing the rate band would certainly be an inducement to get them into the market because they would pay more true costs of what their coverage should be.

287

Ario

Responds to relaxing the rate bands.

317

Rep. Kruse

Asks if he knows how many are eligible that can be in the pool.

320

Ario

Commented that Rocky King may have this information in his handout and makes comments.

333

King

See slide 28, it shows the national figures.  He elaborates with detailed information and lets the members know that he will be bringing more information on Monday.

358

Berkobien

Asks if there is any evidence of this fluctuation being based on the economy of things being better in the mid 90’s and now dropping off.

367

King

Comments about Premiums and the economy.

379

Ario

Continues presentation.

TAPE 13 B

 

 

001

Ario

Continues presentation.

018

Rep. Kruse

Comments about the situation that his own business is in now, and makes comments about how the system works.

029

Ario

Comments about the system

034

Ario

Touches on mandates, see section 7 of the materials.

061

Rep. Monnes Anderson

Asks while looking at page 6 under mandates, do small business have to cover all of those mandates if they offer insurance.

078

Ario

Agrees and elaborates.

086

Rep. Monnes Anderson

Asks about the number one costs of mandates.

093

King

Gives answers about costs of mandates.  See page 17 & 18 in the manual for more explanation on these mandates.

108

Ario

Comments about how much of this is required by the Federal Government.

125

Rep. Kruse

Makes an observation and asks if the self insured were not subject to mandates.

131

King

Responds that there are two federal mandates  (number 9&10 on the chart).

143

Ario

Gives more explanation about Federal mandates.

152

Rep. Kruse

Asks if all self insured are subject to all Federal mandates or just those two.

155

King

Responds about the two Federal mandates.

158

Berkobien

Comments about Federal mandates.

168

Ario

Responds about Federal mandates and how you define the categories.

179

Chair Westlund

Asks if there is any regulatory capacity where you look at different rates for given companies and given parts of the market.

181

Ario

Responds about regulatory capacity.

217

Chair Westlund

Makes comments about the system and the angle of his question.  Asks if there is an internal actuary function you go through as an agency.

222

Ario

Agreed and explained.

245

Chair Westlund

Asks if you only do that for the small group.

247

Ario

Agreed and explained that they do not review rates in the large groups.

260

Chair Westlund

Asks if they are statutorily prohibited from doing that.

265

Ario

Responds with a no, under the insurance code they can ask for whatever information they want from companies.

273

Rep. Bates

Asks if he is familiar with health related accounts.  Asks if they could research that and come back with a report.

290

Chair Westlund

Asks what the basic concept is of health related accounts.

295

Rep. Bates

Explains the basic concept of health related accounts.

304

Ario

Agrees with the basic concept, and elaborates more.

352

Chair Westlund

Comments that with those we could lower the hospital reimbursement rates, and then when the shift came to the private and commercial side they would be even.

360

King

Comments on brining a short slide presentation as an overview.

365

Rep. Bates

Makes comments and asks can you in any way decipher what kind of money is being used just to maintain the administrative load of all these competing and complex and confusing programs and asks if you could put out a floor of some type, for these insurance companies to compete with each other on because that is still the basis of a good program is there one out there.

370

Chair Westlund

Meeting adjourned 4:53pm

 

 

EXHIBIT SUMMARY

 

A – Informational Health Insurance, Health Policy in Oregon, Joel Ario, 22 pp

B – Informational Health Insurance, Health Insurance Mandates, Rocky King, 22 pp

C – Informational Health Insurance, Prevailing Portability Guaranteed Health Plans,

      Rocky King, 5 pp