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