MINUTES OF THE SENATE COMMITTEE ON COMMERCE AND LABOR Sixty-eighth Session January 31, 1995 The Senate Committee on Commerce and Labor was called to order by Chairman Randolph J. Townsend, at 8:00 a.m., on Tuesday, January 31, 1995, in Room 227 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. COMMITTEE MEMBERS PRESENT: Senator Randolph J. Townsend, Chairman Senator Ann O'Connell, Vice Chairman Senator Kathy M. Augustine Senator Raymond C. Shaffer Senator John B. (Jack) Regan Senator Joseph M. Neal, Jr. COMMITTEE MEMBERS ABSENT: Senator Sue Lowden (Excused) STAFF MEMBERS PRESENT: Beverly Willis, Committee Secretary Scott Young, Senior Research Analyst OTHERS PRESENT: Marsha Berkbigler, Lobbyist, Nevada State Medical Association Larry Matheis, Executive Director, Nevada State Medical Association Thomas Brady, M.D., Past President, Nevada State Medical Association Charles F. McCuskey, M.D., President, Nevada State Medical Association Chairman Townsend opened the meeting stating testimony would be from the Nevada State Medical Association regarding their proposal known as Health Access Nevada. Senator Townsend noted at today's meeting, the committee would take testimony that would encompass areas that are not within the committee's jurisdiction, such as Medicaid and/or tort reform. Senator Townsend went on to state those items would be heard in committees that would have jurisdiction. Marsha Berkbigler, Lobbyist, Nevada State Medical Association, introduced the speakers and gave the areas they would be covering. At this time, Larry Matheis, Executive Director, Nevada State Medical Association, spoke giving an introduction outlining the process by which Health Access Nevada came to pass. Mr. Matheis explained Health Access Nevada is the umbrella for discussing what physicians think would be policies, programs, and legislation that would improve the situation. Mr. Matheis stated his organization thought a major problem was the failure of the medical liability system. He went on to enumerate many other problems. Thomas Brady, M.D., Past President, Nevada State Medical Association, started his testimony with an introduction to Exhibit C. Dr. Brady went on to state he wanted to speak regarding insurance to Nevada's working uninsured. He then gave background to Exhibit C. Dr. Brady went on to note most health care programs are too large and too complicated, however, all seem to have a common ground. Again, referring to Exhibit C, he went on with his testimony. He stated Health Access Nevada was extremely comprehensive, but because of the very nature of a number of items, legislation might be difficult. Dr. Brady stated a simplified approach could solve many problems of working Nevadans and felt a key issue was access. He continued with his explanation of Exhibit C. Dr. Brady summarized, stating, Health Access Nevada does not solve every problem in health care, but it could solve most of them. It allows access to medical insurance and coverage and to the health care system for almost all of Nevada's working uninsured. The plan does not raise or create new taxes; there is no increased government; there are no employer mandates; there is an increase in individual responsibility and more choice. At this time, Charles F. McCuskey, M.D., President, Nevada State Medical Association, presented Exhibit D. This presentation was supportive of Dr. Brady's plan. Following Dr. McCuskey's presentation, Senator Neal made several observations. Senator Neal then asked for clarification on several items in Exhibit D, to which Dr. McCuskey replied. There followed a discussion between Senator Neal and Mr. Matheis regarding drafting of any legislation which might be presented. Referring to page 4 of Exhibit D, Senator Neal's questions were answered by Dr. Brady. At this time Senator Neal noted he had a particular concern regarding an Employee Retirement Income Security Act (ERISA) waiver. Senator Neal went on to read from Exhibit D: If a Federal waiver is granted the law should have a trigger that would apply , would include ERISA plans in items 1-6 above and also would eliminate preexisting condition exclusions in the state and permit the insurance commissioner to develop a modified community rating experiment to narrow differences in insurance premiums. Senator Neal continued with a question regarding modification and how to narrow differences in insurance premiums. Dr. Brady answered stating this referred to Nevada community rating, because it would allow the entire population of Nevada to be used as a community base to establish insurance rates, rather than small areas of population, i.e., Reno, or Las Vegas, as individual insurance bases. The belief was this method would lower overall rates. Senator Neal and Mr. Matheis had further discussion and explanation regarding an ERISA waiver. Mr. Matheis then answered Senator Neal's questions regarding a medical Individual Retirement Account (IRA). Answering Senator Shaffer's query regarding who would pay for these changes in insurance, Mr. Matheis answered saying there would be more employer paid insurance. Senator Shaffer went on to state he felt there could be problems as it appeared employees might be asked to pay more themselves. Senator Shaffer then inquired of the doctors if they thought there was a possibility of integrating the workers' compensation system into one health plan with 24 hour care. Dr. McCuskey's answer was "no." Mr. Matheis stated he felt this might be a ways off. Offering further comments, Mr. Matheis noted his organization wanted to make more coverage available and improve the access to coverage and not to get too explicit as to what options could be exercised. Senator Augustine questioned Mr. Matheis regarding tort reform. Mr. Matheis replied his organization will be introducing a comprehensive package later in the session. Senator Regan questioned the doctors regarding malpractice screening boards stating it was his understanding two major providers of malpractice insurance were owned by physicians of the United States. Senator Regan asked if there was a possibility of reduced rates on malpractice insurance fee rates by the doctors own companies. Dr. McCuskey stated he hoped there would be a decrease. Dr. McCuskey went on to give further explanation. Senator Neal, Mr. Matheis, Dr. McCuskey and Dr. Brady had further discussion regarding cost control and the entire package in general. Senator Townsend thanked all for their efforts. He did, however, remind the committee as well as the public, the day's testimony was part of an overall package, parts of which will go to other committees. Senator O'Connell spoke to people from the insurance industry in the audience, stating it would be interesting to hear from them either now or in the future before any legislation is proposed. There being no further business, the meeting was adjourned at 9:20 a.m. RESPECTFULLY SUBMITTED: Beverly Willis, Committee Secretary APPROVED BY: Senator Randolph J. Townsend, Chairman DATE: Senate Committee on Commerce and Labor January 31, 1995 Page