Senate Labor & Commerce Committee

Good afternoon. I'd like to call this meeting of the Senate Labor and Commerce Committee to order. The time is 1:35 PM. We are in BELTS Room 105 of the Thomas Stewart Building in the nation's most beautiful capital city of Juneau, Alaska. Today is Wednesday, April 29th, 2026.

Members present are Senator Dunbar, Senator Gray Jackson, Senator Yunt, and and myself, Senator Bjorkman. Let the record reflect that we have a quorum to conduct business. Welcome everyone to Senate Labor and Commerce. Please turn off or silence your cell phones and join me in welcoming our recording secretary,.

Kerry Tupo and our LAO moderator Jude Augustine. Our agenda for today is Senate Bill 262, social media minors, and Senate Bill 266, insurance reimbursement rates. First up, we will take up Senate Bill 262. This is our first hearing on the bill. To present the bill, we have my staff, Ms. Lara Asche.

Welcome back to Senate Labor and Commerce. Please join us and begin your presentation of the bill.

Thank you, Mr. Chairman. For the record, my name is Laura Asche. I'm staff to the esteemed senator from District D, Senator Jesse Berkman, and chair of the committee. Mr. Chair, members of the committee, I think that it's fair to say I would put money that everyone in this room either has or at one time has had a social media account.

We all as adults use social media. Um, those of us who've been using social media for a little while have seen the progression. Initially, social media started out as a way that you could connect with your friends and family and keep up with what they were doing, have conversations. Um, it has over the years morphed into what one could reasonably expect to be a monetized platform similar to the model for TV or radio or print media where a lot of the focus of the social media operators rightly is to recoup the cost that they put into social media and maybe make a little bit of a profit. So we definitely have seen a change in how social media works over the years.

One of the things that we've seen as adult users of social media is we have seen how people learned how to curate their lives online. You only showed the best parts. You showed your vacation. Vacation pictures, you shared your funny quips, you didn't necessarily talk about the harder aspects of your life. Um, it generated a term, FOMO, fear of missing out, which was what was happening when people were seeing only the most perfect parts of their friends' and acquaintances' lives online.

Um, there have been documented cases of adults developing depression because they're comparing their own imperfect lives to what they're seeing online. Those of us who have been using social media for a while recognize the progression from where you used to go online and go to the individual pages of your individual friends to when the news feeds and the endless scrolling started to be introduced, when social media platforms were prioritizing what you were seeing in ways that would keep you engaged instead of you being able to select what you were seeing, and prioritizing it in a way that would keep you scrolling. I think I would imagine almost everybody in this room has had at least one experience of looking up from their phone to realize that they've been on social media a lot longer than they thought they'd been or had intended to be. Even for adults, sometimes being on social media can start to impact the rest of your life as it sucks you into that endless scroll.

And one of the things we've seen with social media is when the platform started to recognize that The posts that got the most engagement, that kept us and our eyeballs online so that we would see their advertisements, were the posts that made people angry. And they started prioritizing those posts so that that's what we as adults were seeing, not a random feed, but being presented with information and opinions that was designed to make us angry so that we would continue to engage. And I think we've seen how that's impacted our culture as a whole. It seems like over the years social media has definitely become less social and become more media. Now we're seeing more and more posts not from our friends or family, but from individuals or organizations that put relatively innocuous but definitely engaging information, whether it's fact or fiction, it's pictures or information or writing that is designed to make us engage with that content and stay on that platform.

And this isn't an indictment of social media. This is how, again, how television or radio or print media worked. It's designed to draw you in so that you're engaged with that media and then they can use your engagement to market products to you. But I say all of that to say that this is how we as adults deal with social media. We who have fully formed frontal lobes in our brains, we who hopefully through life experience have developed discernment and the ability to look at things and think about whether they're real or not, and the ability to regulate our own emotions.

We have hopefully as adults greater impulse control. And so when we start to talk about what it means for teenagers who don't have any of those advantages of the, the development and the wisdom that we have as adults, when even we struggle with social media, to be on social media, it starts to raise some real red flags about whether we should put some limitations in place that would curb teens' access to social media. And I say teens because right now, um, a lot of the social media platforms do have policies that don't allow children under 13, although there has been evidence that there's still a lot of children under 13 that are online despite those policies. Um, So we definitely want to consider those kids as well, but the focus of the legislation before you today is on teenagers. Um, some of the concerns that I think we can have about teenagers being online is that we are inviting them or allowing them to be in a space that is, is presumably designed for adults, where there are adults and where teenagers and children can be in a position of interacting with adults, adults who don't necessarily have the best the interest of those kids or teenagers in mind.

We can also have situations where kids have another channel with which to interact with each other, sometimes in ways that have been very detrimental. We've seen cases of bullying that's taking place on social media among young people. And so I think, you know, as a society, we've put limits on teenagers and on kids where it made sense for their safety and for the public safety. For example, um, drivers, You have to be 16 to have a driver's license. A lot of jurisdictions will limit the hours that kids can drive or who can be in the car with them if they're a teen driver.

We have labor laws for children and teenagers. If you're a young teenager, you're only allowed to work in certain industries. You're only allowed to have certain jobs. You're not allowed to have jobs that would put you where you're working with heavy equipment. You have a limit on the number of hours that you can work as a teenager, and whether that's, uh, during the summer or going to school during the school year, that varies.

Um, we have put laws in place that limit kids' access to alcohol and cigarettes to help, um, limit their use of these because we know that they are harmful to kids and to adults. But we want to help kids who, like I said, don't necessarily have the same discernment as adults. To not use these things. And as has been a big topic of conversation this session, there is an age of consent in our statutes because we want to limit the ability of adults to have intimate contact with teens, um, with younger folks who don't have the ability to make informed, wise decisions as we do as adults. And so for all of these reasons, at the request of Some constituents of the senator on the Kenai Peninsula who have firsthand interactions with teens and have seen firsthand the negative impacts that social media can have on kids and teens have asked that the senator introduce Senate Bill 262.

And in this way, Alaska is joining other states who've introduced and in many cases passed legislation, joining Australia. Turkey in the last few days just passed limitations on teenagers using social media. The European Union has had limitations for a few years now. On teenagers using social media. And so Senate Bill 262 has been introduced at the request of those constituents.

You will hear both today and on Friday from invited testimony who have a lot more direct experience with these impacts, and I anticipate some of the questions you may want to ask, they will probably be better able to ask them, although I stand ready to take any questions that you have. So in summary, Mr. Chairman and members of the committee, Senate Bill 262 would require that social media platforms prohibit teens under the age of 16 from having a social media account, and they would, um, say that teens who are 16 and 17 could have an account, but they could not have an account that gives them that endless scroll. The social media platform cannot push content to them the way it does to us as adults. Also, Senate Bill 262 would allow the Attorney General of the State of Alaska to take action against social media platforms under Alaska's Consumer Protection Act if they violate these prohibitions knowingly or recklessly, and also would allow minors who were able to get accounts on these platforms and who were harmed by having those accounts, if the platform was acting knowingly or recklessly and allowing that teen to be online, would allow them to bring suit. Mr. Chairman, with that, um, I am happy to go through a sectional analysis.

I believe there's also a committee substitute, and then we do have Ms. Roble from the Alaska Children's Trust online.

To give brief remarks. Very good. Thank you very much, Ms. Asche. I think now if we could adopt the committee substitute that just made some cleanup technical stuff, and then we'll go through a sectional of that. Correct.

May I have a motion, please? Thank you, Mr. Chairman. Mr. Chairman, I move committee substitute for Senate Bill 262, version 34 Lima Sierra 1286, /I as in India as the working document. Thank you, Mr. Chairman. Very well.

Is there any objection? Seeing no objection, version 34-LS1286 version I as in Iditarod is before us as the working document. Ms. Asche, if you could please take us through the sectional, that would be most excellent. Absolutely. And when I do, Mr. Chairman, I will point out the difference with between this and the prior version.

Excellent. So beginning with, um, Section 1, the bill adds to the list of actions that are considered unfair trade practices that warrant consumer protection a prohibition relating to social media accounts for minors. This is in AS 4550-471. Section 2 is the bulk of the bill. Section 2 creates new sections in AS 4550 regarding the restriction and prohibition of social media used by Alaska minors.

In this section, Section 650 would prohibit Alaskans under the age of 16 from holding a social media account— more accurately, would prohibit a social media platform from allowing them to have an account— and would prohibit platforms from pushing recommended social media content to users who are under age 18. This would effectively mean they don't get the endless scroll. Section 660 would allow for the award of punitive damages in cases brought by the Attorney General if a social media platform has engaged in a pattern of knowingly or recklessly violating the prohibitions against minors having an account, um, or receiving pushed content. 670 Would allow Alaskans under 18, uh, or who were under 18 when they had an account, to bring suit against a social media platform if they're harmed by the platform's knowing or reckless violations of the prohibitions. And this is where we made the change from the prior version.

There had been a limitation of $10,000 on the damages that could be awarded, and we removed that limitation.

680 Would apply the prohibitions for teen users to social— basically, it says which social media platforms this law applies to, and that is the platforms in which at least 10% of users are under 18 and spend more than 2 hours a day on the site. And also that the site has one or more addictive features. 690 Provides definitions for the terms used in the bill. And then Section 3 provides a January 1, 2027 effective date. Thank you very much.

Are there any questions from committee members? Senator Yunt. Thank you. Through the chairman to staff, I have a quick comment. And then I have a question or maybe a brief suggestion.

But first of all, I just want to say I want to thank the sponsor. I liken this very much to say like a seatbelt law for a minor. You know, going back to what you mentioned earlier with non-developed frontal lobes and all the other things, like we do things in society to protect our children for a reason. And it could pertain to many different areas of life. And I definitely think this is the beginning framework of some very good legislation.

So thank you. Thank you very much.

Page 2, line 26, Section 670, line 24, under 18. And so I get why that's there. I think this all makes sense, but maybe something to consider would be establishing a larger amount for those under 16, right? And so this, this, this could pertain to an 11-year-old, or it could pertain to a 17-year-old. And I do think there's a difference, as called out in the legislation already.

Um, 16- and 17-year-olds will have access, and there'll be, there'll be some, you know, uh, guidelines in there for that. But 16 and under, or under 16 I should say, are not allowed. So, you know, if they're on there, they're damaged by the count, blah, blah, blah, so on and so forth. Perhaps maybe the, the recovered damages portion would be larger for 15-year-olds and under. Just something to entertain in the future.

So thank you. Thank you for that, Senator Yunt. Any additional questions from committee members? Mr. Chairman, would you like for me to respond to that? Oh, yes.

Thank you. Through the chair, Senator Yunt. I think what you're asking is to raise the cap on damages, and that is the difference between the previous version and version I, is version I eliminates the cap. There is no longer any cap for any age. So I think that addresses your concern.

Any additional questions? We'll go now to invited testimony. On Teams, we have Ms. Theresa Roble. She is the director of policy and advocacy from the Alaska Children's Trust. Ms. Roble, welcome to Senate Labor and Commerce today.

Please put yourself on the record and begin your testimony.

All right. For the record, I am Theresa Roble, director for policy and advocacy at the Alaska Children's Trust. Thank you so much for this opportunity to testify before you all today. The Children's Trust supports Senate Bill 262, Social Media and Minors. As the statewide lead organization focused on the prevention of child abuse and neglect, we recognize that the internet has become one of the most significant threats to the safety of Alaska's children.

Every day, children across Alaska and the nation are being harmed by social media platforms that were designed to keep them scrolling addicted, not to keep them safe. The data tells a troubling story. According to the Alaska Youth Risk Behavior Survey, 2 out of 5 Alaska high school students report feeling persistently sad or hopeless, a nearly 60% increase since 2009. That increase is reflective of a generation of young people in crisis. In 2023, 72% of high schoolers reported using social media several times a day, and 22% reported experiencing online bullying.

Those numbers are not a coincidence. Social media platforms are engineered with addictive features that are designed to maximize the time users spend on them. SB 262 names those features explicitly, and we think that this precision matters. The bill applies to platforms where at least 10% of underage daily users are spending 2 or more hours a day and have features like infinite scroll that loads content continuously as you move down the page, pages with no visible end, autoplay videos that begin playing without a child ever choosing to watch, push notifications designed to pull users back in, live streaming, and interactive metrics like shares, likes, and reaction counts that are specifically engineered to trigger the brain's reward system. The features I listed are deliberate strategies to create compulsive use, of which a developing adolescent brain is especially vulnerable to.

The American Psychological Association and leading researchers have connected heavy social media use to increased rates of depression, anxiety, body image disturbance, and sleep disruption in young people. From a child abuse prevention standpoint, we also know that mental health is a strong protective factor. Children who are struggling emotionally are more vulnerable to manipulation, exploitation, and harm, online or off. When platforms deliberately undermine children's mental health for engagement purposes, they cause stress and erode the resilience that keeps kids safe. Beyond mental health, Alaska's children are being targeted for sextortion, coerced, blackmailed, and emotionally abused through platforms they use often.

This is a harm that is deeply traumatic, often goes unreported, and can have devastating consequences. Families in Alaska have experienced this firsthand, and the platforms on which it's happened have largely failed to act. Online safety is a core part of child abuse prevention work. The Alaska Children's Trust has developed resources to help families navigate these risks, including K9 Sunny, which is a comic book that follows a child and her dad through important online safety topics like screen time, privacy and security. That parent guide is available in both English and Yup'ik currently because we know that online safety is a concern across the state.

We also offer family conversation cards, educator resources, and platform-specific privacy guides. And we also have a new online safety app on the horizon. What that work has told us is that Alaska families want to protect their kids online, and to do that they need both tools and policy to back them up. Parent and child education and social media accountability are not either/or. They work together.

SB 262 is the, is part of the policy side of addressing this. The legal landscape reflects a growing demand for accountability as well. More than 1,000 individual plaintiffs, hundreds of school districts in 48 states, but not Alaska yet, have filed lawsuits against social media companies. In March 2026, a jury found Meta and Google negligent and ordered them to pay $6 million in damages. Courts and state legislatures across the country are sending clear messages.

It is time for Alaska to send one too. SB 262 prohibits children under 16 from creating or owning accounts on platforms that underage users spend more than 2 hours per day and use a predictive feature. The bill would ban Alaska children under 16.

Having an account on TikTok, Instagram, Snapchat, YouTube, Facebook, X, and similar platforms. For children already on those platforms who are under 16, it would be required that their accounts are terminated with a permanent deletion of the minor's personal data. For 16- and 17-year-olds, the bill would prohibit social media platforms from using their data and personalized recommendation systems. Those recommendation systems are the algorithmic engines that decide what content to feed young people next. And often is the point where children are exposed to unwanted, extreme, or harmful material.

Platforms will still be able to show content a teen has chosen to follow in chronological order, like how it used to be. What is being prevented is using a child's data to target and manipulate what they see. It's also worth noting what this bill does not do. It does not restrict children from using email. It does not restrict direct messaging between a sender and chosen recipients, like texting.

SB 262 narrowly targets specific features causing the most harm while preserving, while preserving the communication tools our families depend on. The Alaska Children's Trust believes every child in the state deserves to grow up safely on or offline. SB 262 is a very strong foundation to protect the youngest and most vulnerable against harmful social media engagement tactics, begin to address Alaska's youth mental health crisis, and encourage accountability in online platforms. We urge your support for Senate Bill 262. Thank you so much for your time today.

I'm happy to try to answer any of your questions. Thank you very much, Ms. Roble. Are there any questions from committee members?

Seeing none, Ms. Roble, so there have been, um, other states that have passed these types of bills. Um, have, have other states been successful in kind of holding up are bills that take on this type of subject matter to court challenges?

And so I will share that I am not— I don't have those pulled up, but I can share after of what particular states have enacted these type of laws. But I also share that the states that have have only been having them in force for 1 or 2 years, and so they're still looking to see how that's working for families. And then if there are active lawsuits. They are still ongoing. They have been holding up.

It is something that is on an international level, is something that most societies are looking to do. Very good. But I will share more information. I have a good resource for that. Okay, thank you.

That would be much appreciated. We would appreciate that here. Okay, are there any other final questions for Ms. Roble? Seeing none, I'll just make a couple of comments. This situation really stemmed from a number of constituents separately for different reasons that came to our office and situations that created quite a bit of strife in our schools that bubbled over from social media into very significant negative interactions that happened in school due to minors using social media, and then the drama that played out there became very much happenstance in real life.

So we'll hear more about that from invited testimony on Friday and look forward to continuing this conversation then. Do you have anything in wrap-up, Ms. Asche? No, thank you, Mr. Chair. Very well.

We'll take a brief at ease while we set up for the next bill. We'll set Senate Bill 262 aside for further consideration of future future meeting. Brief it ease.

We're back on the record. It's 2:03 PM here in Senate Labor and Commerce. Our last item today is Senate Bill 266, sponsored by the Honorable Senator Matt Clayman. This is our first hearing on the bill. To present the bill, we have the bill sponsor, Senator Matt Clayman, and his staff, Serena Hackemiller.

Welcome back to Senate Labor and Commerce. Please place yourselves on the record and begin your presentation. Thank you, Mr. Chair and members of the Senate Labor and Commerce Committee. For the record, this is Matt Clayman, Senator for Senate District H in West Anchorage.

Senate Bill 266 is designed to bring much-needed predictability to Alaska's unique healthcare market. Right now, when a provider is out of network, the patient's share of the cost can be unreasonably high, especially if the out-of-network pay to the provider is only 185% of the Medicare rates. Patients then face massive balance bills that push some families into bankruptcy. This bill also encourages medical providers to go in-network. Senate Bill 266 sets a standard payment rate for out-of-network care at 75% of the median in-network rate for that insurer.

By capping these payments at a fair, data-driven level, It gives insurers a better picture of their liabilities and reduces financial risks to patients. At the same time, it encourages providers to join networks so they can access negotiated rates, which ultimately give patients more choices and better coordinated care. Senate Bill 266 is a positive step in stabilizing the market and making healthcare more affordable for Alaskans. There is only one section of the bill which essentially matches the sectional analysis. My staff is certainly ready and willing to provide a sectional analysis if the committee wishes.

Thank you very much, Senator Clayman. I think we understand the bill and we can forego the lengthy sectional. We have invited testimony. First up is Dr. Gene Quinn.

Are you able to hear me? Yes, we are. Dr. Quinn, welcome to the Senate Labor and Commerce Committee. Please state your name and affiliation for the record, Dr. Quinn, and begin your presentation. Excellent.

Thank you. I'm Dr. Dean Quinn. I'm from Anchorage, Alaska. I'm a private practice cardiologist and CEO of Envoy Integrated Health, but I am speaking on my own behalf today. I really appreciate the opportunity to address this committee.

Thank you very much for having me. You know, it's an interesting issue, and I think it's really tempting to think of it as a purely financial discussion where— when we're talking about reimbursement, but I really prefer to frame that out-of-network reimbursement in terms of the implications that it has for public health. Um, I prefer to think of things as how do we best improve the health of Alaskans and then let that decision direct how we incentivize those health outcomes financially. Because that's really the financial, um, piece to this is incentivizing the outcomes that we want. From that health policy lens, I think there's two important issues here.

The first, as Senator Klayman said, is the balance billing. This is where patients are responsible for charges that are not covered by their insurance on care from out-of-network providers. This is a financial strain on patients. And I say patients, I mean people. We as doctors, we refer to everybody as patients.

It's a financial strain on patients, but it goes further than that. It really fosters this economic mistrust between patients and healthcare providers, as well as against insurance companies. And when people are less trust— trusting of the medical system, that makes them less likely to seek care and that care that they need. And unfortunately, contrary to popular belief, the Federal No Surprises Act didn't solve the balance billing problem completely. It only applies to emergency services and it doesn't apply to elective and preventative care.

And it So, it can help the Alaskans that are already sick, but it doesn't enable them to engage care that would keep them healthier in the first place and possibly save costs in the long run. And I think that's the second issue here is access. We have a huge crisis in our communities for access, especially around our senior community and our Medicare community. Many of my patients don't have a regular source of primary care, which means that I do much of their preventative care in the specialist's office. This lack of access to preventative care, it really runs up a preventative health debt, and that the more of that debt that we accrue in our communities, the harder it's going to be to catch up and make sure that our outcomes are just as good as anywhere else in the lower 48.

I think that stability in provider reimbursement for non-emergency care is key to those investments that we need to make our communities healthier. Physicians are just in short supply around the country, and Alaska doesn't have enough. We need more. I think it's important that we get beyond this kind of adversarial insurance company versus doctor mindset and, and really work together for a more affordable healthcare system in Alaska. I would encourage you all to set the expectation that our insurers will reimburse providers at sustainable rates.

But also set the expectation that in return our providers will measurably improve the health of all Alaskans. And that is regardless of who insures them. Doesn't matter if they have commercial insurance, Medicare, Medicaid. Having a floor for out-of-network reimbursement is an excellent step forward as we continue to build a better healthcare system for Alaska. Thank you all for your time.

I'd be honored to take any questions. Good. Senator Gray Jackson has a question. Thank you, Mr. Chairman. I don't have a question.

I just want to say hello, Dr. Quinn. I hope you're doing well. And thank you for your testimony. Thank you, Mr. Chairman. Thank you.

Any questions? Thank you. Dr. Quinn, I have a question. So bounce billing occurred under the 80th percentile rule when it existed previously. It still is in practice today.

How would this bill setting a floor at 75% implicate balance billing practices in the future?

Yeah, so, and I would defer to Senator Klayman on the details of how they would like that process itself to happen. The way that I see this is that we need physicians to be in-network. I personally, and all of my colleagues and all of the large practices that I know, are in-network with all providers. And I think that's really important because it's showing you that we want to work together with insurers to take care of the population that is insured.

I think that Setting some sort of floor that is not too beneficial to providers and not too beneficial to insurance companies will incentivize both sides to come into network because really the, the goal here is to have all physicians be in network so that balance billing doesn't happen and is precluded by that being in network.

Very good. Do you think it's possible that the state could pass a law or institute a regulation that would prevent out-of-network providers from balance billing?

Honestly, and I apologize, I'm just a humble physician. I'm not sure if they could. I think that the difficulty there, from my perspective, in terms of, like, banning balance billing or not balance billing, banning balance billing is that there unfortunately is a cost to providing care. And, you know, say what you will about our healthcare system, we have decided that healthcare in the United States is a business. And there is a certain amount of reimbursement that you need to be able to run that business in a sustainable way.

And so, if we set rates, it can get difficult to know which rates are we setting that are sustainable and by whose measure. Um, when we just leave the market to do what market wants to do, um, unfortunately the healthcare is just not a perfect market, uh, system. So I'm not sure that you can, um, legislate that in particular, but I do think that legislation that, um, encourages, uh, that balance billing to be superfluous, like why would anybody, um, But why would anybody want to balance bill? Of course we want to be in network. Of course we want to work together and make sure that we're not passing that cost on to our patients.

I think that that's the way that we— that it should be set up to incentivize that collaboration. Understood. Thank you very much. Senator Bjork or Mr. Chair, on that particular topic, just As an example, I had a constituent contact our office a couple of years ago who had been on a— gone to an out-of-network provider for a routine physical, and the insurance coverage was 185% of the Medicare rate, which worked out on some procedures to be $7 or $8 per code.

And the total charge from the— for the physician doing the procedure with their The standard billing charge was around $1,500 for the physical, and if that had been in network, I think it would have been about an $800 physical, and the patient would have picked up 20% under the typical 80/20 billing split. But because it was an out-of-network provider, the 185% of Medicare meant that the reimbursement to the provider was in the $200 to $250 range, so the patient was left carrying a $1,250 balance bill because they were at an out-of-network provider and it had been an in-network provider, then the pay would have been less to the provider, but the balance, the share of the patient would have been 20% of whatever that amount was. And it was an example. And if you look at this legislation in that same setting, in there, in that instance, the patient would pay more seeing an out-of-network provider than the person that sees a network provider. And there would be an— it would create an incentive both for the provider and the patient to be in network.

I guess the patient doesn't get to choose a network, but it would encourage the provider to be in network because their reimbursement— they wouldn't get any dramatic improvement on their reimbursement. Understood. Very good. Up next we have— we'll go from Dr. Quinn to Mr. Jeff Davis. Jeff Davis is joining us from the Weston Consulting Group on the Teams Web.

Welcome back. To Senate Labor and Commerce. Mr. Davis, if you could please put yourself on the record and begin your presentation. Thank you, Chairman Bjorkman. My name is Jeffrey Davis, and I'm the principal and owner of Weston Group Consulting, and I'm here on behalf of the Alaska State Medical Association today, as well as myself.

I appreciate the chance again to speak to this committee on this very important subject. This is a different approach than, uh, what is— I've spoken with you about in the past, but it seeks to accomplish the same things, which is to put in place a reasonable floor that protects consumers from enormous— from balance billing. What we have today since the repeal of the 80th percentile is that carriers were able to set their definition of what's an allowable charge. And as Senator Clayman has said earlier, it's set at 185% of Medicare, which is significantly lower than what it was under the 80th percentile. So what that means is if a patient had seen an out-of-network provider prior to repeal, they would have had a balance bill of a certain amount.

But after repeal, with the new definition of allowable being at 185%, their balance bill would be much greater. So what this bill seeks to do is to set a market-based, if you will, a floor by tying the.

Minimum allowable, which is the amount that the carrier would use to calculate benefits, to what the carrier has actually been able to accomplish at the bargaining table with other providers. So it's, it's market-based. It's a real number. This is a negotiated number that, that the carriers and the providers have recognized as being the, probably the best deal that they can get. So for an out-of-network provider then to have their reimbursement pegged to a percentage of that means that the patient is protected rather than just an arbitrary, very, very low number.

As Senator Klayman said, it does preserve an incentive to join the network, but it doesn't require for a patient— or excuse me, a provider to join a network in order to be able to provide services to their patients at something more reasonably related to market rates. You would say, well, why— perhaps you would ask, well, why would a provider not join a network? There might be a number of reasons, but there are actually instances where providers have wanted to join a network and have not been able to. So, this provides then some freedom of choice for the provider to say, I want to be in, or I don't, based on my business practices. But more importantly, provides for accessibility to be continued to that out-of-network provider for the patient.

So the Alaska State Medical Association has looked at this and said this is a reasonable way to provide a floor that doesn't exist since repeal. There are a couple of wording changes that we would suggest and that we'd be willing to work with Senator Clayman and with Ms. Hackenmiller to perhaps bring some more clarity to the wording that is in the bill. But I think this is a good compromise and step forward to, again, restore some balance to the market that has not existed since the repeal of the 80th percentile. So thank you very much. I'm happy to entertain any questions that you, Chairman Yorkman, might have, or the other senators of the committee.

Thank you. Thank you very much, Mr. Davis. Are there any questions? Senator Gray Jackson. Thank you, Mr. Chairman, and thank you for your testimony.

But you said that you would be interested in changing some of the wording. The bill is only one paragraph. What would you change? I'm just curious. Thank you.

Thank you, Mr. Chairman. Thank you. Senator Gray Jackson, through the chair, Senator Bjorkman. The word reimburse or reimbursement, Senator, is a term that could be subject to some confusion. Is that what— when you say reimburse, is that what the insurance company paid on behalf of the patient?

Is it what they paid to the provider? What I would suggest, and certainly it is up to Senator Klayman and staff as to what they would put here, is that we would just clarify to say rather than to reimburse, to calculate payment based on or to the contractual allowable. So it's a bit of insurance, perhaps, but it does then bring some specificity, I think, to this very brief and elegant— by its brevity— bill that's before you today. Thank you. Thank you, Mr. Chairman.

Very well. Any further questions?

Seeing and hearing none, Mr. Davis, thank you very much for joining us today. Thank you. My pleasure, always. Also with us today for questions is the Division of Insurance Director Heather Carpenter. Does anyone have any questions for Ms. Carpenter?

I have a couple questions, if you don't mind.

Thank you, Director Carpenter, for joining us today. Um, this is a topic we've spent a decent amount of time on in our committee over the last couple of years. I was wondering, could you please explain how this bill is different or similar to the previous 80th percentile regulation that was in place until a couple of years ago?

For the record, Heather Carpenter, Director of the Division of Insurance. Chair Bjorkman, this bill takes a different approach than the 80th percentile. The 80th percentile required out-of-network claims to be reimbursed at the 80th percentile of reimbursement. So say you you had 10 providers who billed all over the map and they were out-of-network providers. The 80th percentile of that is where someone would have to be reimbursed.

Or if their billed charges were less than that 80th percentile, they would be reimbursed at billed charges. We can certainly provide a little more information, but that's the basic refresher is that it was how the market reimbursed those. So you could have, say, one specialist or two specialists in the state that really set that reimbursement amount for all specialties in the state, which we, we did see happen. When you look at this bill, it is saying that the amount has to be 75% of the median. So the median actually means the 50th percentile.

And so what Senator Clayman is trying to achieve is that you're starting at the median, 50%, and saying, okay, if you're going to stay out of network, you're going to get reimbursed 75% of that median reimbursement amount.

Okay.

And would you say that is a very significant encouragement for providers to be in network? Chair Bjorkman, I think the intent here is to try to keep people in network. So this is definitely trying to steer that because you're not going to get reimbursed more than that median of the network reimbursement. And I will just remind the committee members, consumers are most protected when they receive care in network. I know you asked questions about balance billing.

When a consumer goes to an in-network provider, they know their deductible. And if they've met— after you meet your deductible, you have that coinsurance. So it might be 80% of the bill is covered by insurance. You have 20%. And then usually insurance policies all have that out-of-pocket max.

When you see a provider who is out of network, After that coinsurance is paid, the provider can actually balance bill you for whatever is remaining. So you may have to pay more than just your normal 20% coinsurance. When you receive that care in-network, a provider is prohibited by our insurance statutes from balance billing.

Very well. Is it possible to prohibit balance billing for out-of-network providers? Chair Bjorkman, I am not an attorney, so I think that would be a question for legislative legal and for attorneys to noodle over if that is allowed or not. I will say in other state insurance codes, this is not a factor because in other states insurance plans are allowed to prohibit out-of-network benefits. That is not something we've ever done in Alaska in the fully insured market because we have specialists who stay out of network.

We may need to go out of state for care. So for the Division of Insurance, we've always felt like it's important to require our insurance carriers in our market to allow out-of-network benefits. Very well.

Okay. Could you talk us through a little bit of the fiscal note? And I see that it's indeterminate. But do you have any projections as to how it will implicate and change finances of the state?

Chair Bjorkman, for the fiscal note, our fiscal notes of course do not contemplate what's going to happen to insurance premiums because those are not covered by the Division of Insurance. So we had a conversation with Senator Clayman earlier in the year and shared, you know, right now it's a little unclear how often they want us to audit these reimbursement methodologies. Right now, providers may be negotiating with insurance carriers throughout the year. So if they're required to change their methodology every time they renegotiate with providers, we could have that median change every month. So we had a conversation with Senator Clayman about thinking about how often does he want that to happen.

And if the intent of the sponsor is the division is validating this, you know, once a year or looking at it, we would need staff to do that. If it's that, hey, we just wanna wait until we get complaints, we do take complaints from providers and we do suspect complaints from providers.

About not being reimbursed fairly would increase. So we may need staff for that. Um, so because we weren't sure where the sponsor and the committee would go, we tried to leave it as open as possible. Right now, we truly don't know. Would we need a staff member?

Um, would we need extra contractor resources? I don't think it would be significant, but I'm just not sure until we kind of land on that clarity of which way you all want us to implement it. Okay. Very well.

Okay. Any further questions for Director Carpenter? Seeing, hearing none, thank you for joining us today.

Senator Clayman?

Thank you, Mr. Chair. Happy to take any questions. Just in terms of a couple of closing remarks, I think one of the efforts that we've done in this legislation is, as I have understood, the 80th percentile rule. That was one in which the Division of Insurance or a state agency had some obligation to figure out what that was.

So there was state action involved in figuring out the 80th percentile. The bill is structured so that that division of insurance is not involved in figuring out the median because the language of the bill makes it so that— so, Primera being one carrier, the median is Primera's median for people that are sending in bills to Primera. So, for example, Aetna, who manages the package for State of Alaska employees, their median might be different than the Primera median. And the people that are insured with Premera and Aetna would be subject to the median of that insurer. And so dissatisfaction with whether they were or not getting the median rate would be— Division of Insurance might be involved with whether they're actually managing their relations, but the goal is not to create a whole new level of state regulation and supervision of what the median rate is, but make the median rate a in relationship between the patient and their particular insurance company.

And that would be— and part of the goal there is to make less state regulation but make it more about the relationship between the patient and their insurance provider.

Interesting. Okay. Thank you. Thank you very much. Anything further for Senator Clayman or staff?

Thank you very much. We appreciate you being here today. We'll set Senate Bill 266 aside for further consideration at a future meeting. The Senate Labor and Commerce Committee will meet again on Friday this week, May 1st, when we will hear Senate Bill 262, Social Media for Minors, and Senate Bill 150, Net Metering Program and Fund. As there is no further business to come before the committee today, we are adjourned at 2:29 PM.