July 17, 2003 Hearing Room E

1:30 PM  Tapes 97 - 98


MEMBERS PRESENT:            Rep. Dan Doyle, Chair

Rep. Linda Flores, Vice-Chair

Rep. Laurie Monnes Anderson, Vice Chair

Rep. Vic Backlund

Rep. Betsy L. Close

Rep. Joanne Verger


MEMBER EXCUSED:            Rep. Phil Barnhart


STAFF PRESENT:                  Janet Adkins, Administrator

                                                Cara Filsinger, Administrator

Annetta Mullins, Committee Assistant


MEASURE/ISSUES HEARD:  HB 3648 – Public Hearing and Work Session

HJM 10 – Public Hearing and Work Session



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 97, A


Chair Doyle

Calls meeting to order at 1:31 p.m., reviews the agenda, and opens a public hearing on HB 3648.



Rep. Vic Backlund

Explains that HB 3648 is intended to fix a problem with HB 2130 passed earlier and signed by the Governor.  Asks that his legislative assistant explain the need for HB 3648.


Gary Pelo

Legislative Assistant to Rep. Backlund.  Testifies in support of HB 3648 (EXHIBIT A).


Rep. Backlund

Comments on efforts by Pelo to resolve the issues in HB 3648.



Comments on work group that worked on HB 2130 and HB 3648. 


Mylia Christensen

Public Employees Benefit Board (PEBB).  Provides information on insurance plans offered through PEBB (EXHIBIT B).


Rep. Backlund

Asks if it is PEBB’s experience that rates for retirees and actives are pretty much the same.



Responds that PEBB chooses to pool everyone together and offer the same rate; the rates are mutualized.  The utilization experience is different but the rates are the same.


Leonard Hagen

Regence BlueCross BlueShield of Oregon.  States that the interest of Regence in HB 3648 is to help resolve continuing confusion.  There was a concern that retirees were separated from active employees.  ORS 243.303 s says that when a local government creates a premium or rate for employees it includes retirees and active employees in the same pool for rating and premium purposes.  Comments they have done the opposite in Washington—they have said retirees will be separate, but the local government will make coverage available.  States when the retirees are in a separate pool the experience is much higher and it is difficult to get coverage.  Explains that HB 2084 did a great thing for retirees by getting them into the same underwriting pool as active employees.  HB 2084 also said that the retiree could not be charged more than an active employee, and that a retiree would be charged a category rate or a rate based on status—single, single plus spouse, family.  With the combination of those two pieces in HB 2084 there was confusion about what rate could be charged a retiree.  In the industry it was becoming clear that all they could use was tier/tier or category/category for retirees. 



States that category rating is based on status.  A single person would pay less premium than a person would pay for married plus family.  Local government, for administrative and budgeting purposes, like to use a unit or a composite rate, usually for actives.  Once they have developed their tier rates, they can determine the composite rate to be charged to all employees regardless of status.  States it is also a number that is critical to some collective bargaining agreements.



The thought of not being able to use a composite or unit rate because of HB 2084 was creating all kinds of problems.  They sought a fix in HB 2130 to make it clear that the same rate would be charged to active and retired employees.  They have found that for retirees that were tiered and the local government wanted to continue the composite rate, caused retirees’ premiums to go from $200 or $300 to $500 to $700. 



Believes the public policy lesson he has learned is behind HB 3648.  It is good public policy to include retirees with the actives for creating the group or rating pool, but when we go the next step and tell a local government how they have to charge the premium it bumps into collective bargaining agreements.  If we were to say how the premiums are to be allocated, some will be happy and others will be upset and some local governments will say they cannot do it.  Thinks the policy decision behind HB 3648 is to give the most flexibility to local governments. Believes that HB 3648 with the HB 3648-1 amendments (EXHIBIT C) clarify that the local governments will include active and retirees in the same pool for creating the premium and rating purposes.  But allocating the costs is the responsibility of the local government.   


Sarah Reeder

ODS Health Plans.  Testifies in support of HB 3648 with the HB 3648-1 amendments because they believe the amendments provide the flexibility to local governments and makes more clear the statute by which the carriers are to apply the provisions.


Maria Keltner

League of Oregon Cities and Association of Oregon Counties.  Comments on phone calls and emails she received from local governments after HB 2130 passed.  States everyone says they need HB 3648 with the HB 3648-1 amendments (EXHIBIT C) to straighten out the mandate to raise the rates.  Urges quick passage because the plans start August 1.


Rep. Verger

Asks how this kind of thing can be prevented from happening in this process.



Responds that they were not involved in the work group and the insurance bills were reviewed through a service which did not see the implication for cities and counties.


Chair Doyle

Closes the public hearing and opens a work session on HB 3648.



Rep. Backlund

MOTION:  Moves to ADOPT HB 3648-1 amendments dated 7/15/03.


Rep. Backlund

Thanks everyone for their efforts with this bill.



VOTE:  6-0-1

AYE:            In a roll call vote, all members present vote Aye.

EXCUSED:  1 - Rep. Barnhart


Chair Doyle

The motion CARRIES.



Chair Doyle

MOTION:  Moves HB 3648 be placed on the CONSENT CALENDAR.



VOTE:  6-0-1

EXCUSED:  1 - Rep. Barnhart


Chair Doyle

Hearing no objection, declares the motion CARRIED.



Chair Doyle

Closes the work session on HB 3648 and opens a public hearing on HJM 10.



Rep. Elaine Hopson

District 32.  Testifies in support of HJM 10 (EXHIBIT D).


Rep. Verger

Thanks Rep. Hopson for bringing the legislation.  Comments that tragedies hit everyone on the Oregon Coast and she is very supportive of the memorial.


Rep. Close

Asks how this will go through Congress, where it is now, and what has happened so far.


Rep. Hopson

States it is her understanding it is with the Oregon delegation and is supposed to be included in part of the budgets for 2005.  States that there was an immediate assessment after the charter boat accident and it was determined there was not a need for immediate dredging, but it does not alleviate the need to do continued work on the jetty itself.

TAPE 98, A


Rep. Backlund

Comments on growing up on the coast, and thanks Rep. Hobson for bringing the legislation.


Chair Doyle

Closes the public hearing and opens a work session on HJM 10.





Rep. Flores

MOTION:  Moves HJM 10 be sent to the floor with a BE ADOPTED recommendation.



VOTE:  6-0-1

AYE:            In a roll call vote, all members present vote Aye.

EXCUSED:  1 - Rep. Barnhart


Chair Doyle

The motion CARRIES.

REP. HOPSON will lead discussion on the floor.



Chair Doyle

Closes the work session on HJM 10 and asks members to check with Cara Filsinger for a possible schedule on Friday.


Chair Doyle

Adjourns meeting at 2:02 p.m.





A – HB 3648, prepared statement, Gary Pelo, 2 pp

B – HB 3648, prepared statement, Mylia Christensen, 1 p

C – HB 3648, HB 3648-1 amendments, Rep. Backlund, 1 p

D – HJM 10, prepared statement, Rep. Hopson, 3 pp