Interim Joint Committee on Banking and Insurance


Minutes of the<MeetNo1> 1st Meeting

of the 2014 Interim


<MeetMDY1> September 23, 2014


Call to Order and Roll Call

The<MeetNo2> 1st meeting of the Interim Joint Committee on Banking and Insurance was held on<Day> Tuesday,<MeetMDY2> September 23, 2014, at<MeetTime> 10:00 AM, in<Room> Room 171 of the Capitol Annex. Representative Jeff Greer, Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Representative Jeff Greer, Co-Chair; Senators Jared Carpenter, Julian M. Carroll, Julie Denton, Chris Girdler, Morgan McGarvey, Dennis Parrett, Dorsey Ridley, Albert Robinson, and Dan "Malano" Seum; Representatives Dwight D. Butler, Ron Crimm, Mike Denham, Jim Gooch Jr., Mike Harmon, Dennis Keene, Thomas Kerr, Adam Koenig, David Meade, Michael Meredith, Brad Montell, David Osborne, Ruth Ann Palumbo, Ryan Quarles, Steve Riggs, Bart Rowland, Jonathan Shell, Fitz Steele, Wilson Stone, Tommy Thompson, John Tilley, and Ken Upchurch.


Guests: Sharon Clark, Commissioner, Department of Insurance, Bob McFalls, Executive Director, Kentucky Pharmacists Association, Kelly Fitzgerald, Patient Services Incorporated, Lucy Hicks, Immune Deficiency Foundation, Pamela Fields, Angela Young, and Letitia Hughes, representing the Arthritis Foundation.


LRC Staff: Rhonda Franklin, Sean Donaldson, and Jamie Griffin.


The minutes of the November 26, 2013 meeting were approved.


State of the Insurance Industry in Kentucky

Sharon Clark, Commissioner of the Department of Insurance, stated that there are 174,537 active licensees and 1,615 companies at this time in Kentucky. There were 86 convictions from 1,686 insurance fraud referrals. Jefferson County has the highest rate of fraud in Kentucky. In the last year, $21,540,701,475 was collected in premiums, $138 million collected in state taxes, and $250 million collected in local taxes. The Consumer Protection Division has received 4,243 consumer complaints and recovered $3.5 million dollars. She stated that $1.2 million dollars has been recovered from Medicaid providers. In the Worker’s Compensation marketplace, for the 9th consecutive year, there has been a decrease in claims; Kentucky ranks 9th lowest in the nation. There are two new health care insurance companies selling in the state; the insurance market is very healthy.


Representative Jeff Greer stated that he was impressed by the continued decrease in Worker’s Compensation claims.


Pharmacy Benefit Managers

Bob McFalls, Executive Director, Kentucky Pharmacy Association, stated that Senate Bill 107 that was sponsored by Senator Julie Denton in the 2013 Regular Session has not had an impact on the pharmacy benefit manager transparency issues or the disclosure of the reimbursement calculation method. He said that they are not meeting the requirements of the bill and must be made to do so.


Senator Julie Denton asked if the Department of Insurance could address the status of its enforcement of Senate Bill 107. D. J. Wasson, Staff Assistant, Department of Insurance, stated that the department has a plan in place. It will be researched and dealt with on a case by case basis.


Cap on Co-Pays or Coinsurance for Coverage for Specialty Prescription Drugs Subject to a Tiered Formulary

Kelly Fitzgerald, Patient Services Incorporated, Angela Young and Letitia Hughes Arthritis Foundation, stated that certain medicines used to treat chronic diseases are breakthrough treatments that often prevent disability, save and improve lives, and allow patients to function and remain in the workforce. Unfortunately, some commercial health insurance policies are now moving vital medications into a new specialty tier requiring patients to pay a percentage of their drug cost from 25 percent to 50 percent rather than a fixed co-payment. These practices are placing medically necessary treatments out of reach of average Kentuckians. Patients need protections from both payer policies that create an undue burden for a subset of patients and from rising cost sharing in general. Kentucky needs legislation to addresses both of these critical issues. Capping the highest copayments for medications would distribute pharmacy costs more fairly across enrollees. Limiting the total out-of-pocket cost for drugs would distribute pharmacy costs more fairly between enrollees and insurers.


Representative Jeff Greer stated that he understands that help is needed and feels sure they can talk to members to obtain a sponsor for new legislation.


Senator Julian Carroll stated that it definitely needs to be looked into and that he would be willing to sponsor legislation.


There being no further business, the meeting was adjourned.