The 2nd meeting of the Subcommittee on Insurance of the Special Advisory Commission of Senior Citizens was held on Thursday, November 2, 2000, at 2:30 PM, in the Seminar Room at the Holiday Inn Capital Plaza, Frankfort, Kentucky. Thomas Bullington, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Thomas Bullington, Chair; Hugh Adams, Anna Birch, Bernard Bockweg, Charles Fisher, R.K. Keith, Virgil Mefford, LaVerne Metzgar, John Searcy, Melvin Smith, Pat Tyson, Glen Vanoy, and Vinson Watts.
Guests: Don Shields and Carrie Banahan, Department of Insurance.
LRC Staff: Greg Freedman, Emily Bottoms, Jamie Griffin.
Upon motion made and seconded, the committee approved the minutes from the May 11-12, 2000, meeting.
Carrie Bananahan with the Department of Insurance updated the subcommittee on the implementation of House Bill 390. She explained how the Department of Insurance handles a written complaint against an insurer from the time it is received at the Department through the external review process and the final decision is rendered.
Don Shields with the Department of Insurance spoke about Long Term Care Insurance. He explained the different levels of care and coverage available for policy holders. He also spoke to the subcommittee about Medigap coverage and recent changes. He provided the subcommittee with a report on out-of-pocket health care and prescription drug spending for the elderly by state for 1996. He stated that Kentucky’s figures are close to the national average for all Medicare beneficiaries. Mr. Shields answered questions from the subcommittee regarding the topics he had discussed.
Greg Freedman of the LRC staff reviewed a resolution that the subcommittee had requested during the May meeting urging the General Assembly to adopt a resolution creating a prescription drug payment assistance program for senior citizens of the Commonwealth. He suggested that the members review the resolution and discuss it at the Friday meeting of the subcommittee.
On Friday, November 3, 2000, the subcommittee voted to adopt the resolution and include it in the subcommittee’s recommendation for the next Regular Legislative Session of the General Assembly. The subcommittee voted to submit the following recommendation to the General Assembly:
1) Recommend that the General Assembly and the Department of Insurance be encouraged to continue efforts to increase the affordability of health insurance in Kentucky at affordable premiums.
2) To request that the Kentucky General Assembly adopt a resolution to be sent to the United States Congress encouraging Congress to address the high cost of prescription drugs.
A RESOLUTION urging the Kentucky General Assembly to adopt a resolution at the next Session requesting the United States Congress to enact a prescription drug payment assistance program for senior citizens and urging the 2002 Kentucky General Assembly to create a prescription drug payment assistance program for the senior citizens of the Commonwealth.
WHEREAS, senior citizens in Kentucky spend 41 percent of their out-of-pocket health care costs on prescription drugs which is the highest percentage in the United States; and
WHEREAS, senior citizens in Kentucky spend 67 percent of their total drug costs out-of-pocket which is the highest percentage in the United States; and
WHEREAS, annual spending on prescription drugs per elderly American will grow from $559 in 1992 to $1,205 in 2000, an increase of 116 percent; by 2010, annual prescription drug spending per elderly American is projected to increase to $2,810, a jump of 133 percent over spending in the year 2000, and more than 403 percent higher than 1992; and
WHEREAS, the average number of prescriptions per elderly person will grow from 19.6 in 1992 to 28.5 in 2000, an increase of 45 percent; the average number of prescriptions is projected to grow to 38.5 by 2010, an increase of 35 percent over 2000; from 1992 to 2010, therefore, the average number of prescriptions per senior is estimated to grow by 96 percent; and
WHEREAS, the total number of prescriptions for seniors will grow from 648 million in 1992 to more than 1 billion in 2000, and that number is projected to jump to 1.6 billion by 2010; and
WHEREAS, the average cost per prescription for the elderly will grow from $28.50 in 1992 to $42.30 in 2000, an increase of 48 percent; by 2010, the projected average cost per prescription will be $72.94, an increase of 72 percent over average spending in the year 2000, and 156 percent higher than the 1992 average; and
WHEREAS, total prescription drug spending for seniors will grow from $18.5 billion in 1992 to $42.9 billion in 2000, an increase of 132 percent; by 2010, that spending is projected to reach $113.6 billion, an increase of 165 percent over 2000 and 514 percent higher than 1992; and
WHEREAS, the portion of health care spending for seniors devoted to prescription drugs will grow from 7.4 percent in 1992 to 10 percent in 2000 and a projected 13.3 percent in 2010;
NOW, THEREFORE,
Be it resolved by the Subcommittee on Insurance of the Special Advisory Commission of Senior Citizens of the Commonwealth of Kentucky:
Section 1. That the Kentucky General Assembly is urged to adopt a resolution at the next Regular Session requesting the United States Congress to enact a prescription drug program for senior citizens.
Section 2. That the 2002 Kentucky General Assembly enact legislation creating a prescription drug payment assistance program for the senior citizens of the Commonwealth that will become null and void if the federal government institutes a prescription drug payment assistance program for senior citizens.
The meeting adjourned.