Legislature(2003 - 2004)

04/30/2003 03:15 PM House FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
CS FOR SENATE BILL NO. 105(HES) am(efd fld)                                                                                   
     An Act relating to eligibility requirements for medical                                                                    
     assistance for certain children, pregnant women, and                                                                       
    persons in a medical or intermediate care facility.                                                                         
JOEL GILBERTSON, COMMISSIONER,  DEPARTMENT OF HEALTH & SOCIAL                                                                   
SERVICES, spoke  to the  HES version (H)  of the  bill, which                                                                   
would lower and freeze income  levels for eligibility for the                                                                   
Denali Kid Care  Program and would also freeze  income levels                                                                   
for  Medicaid  under the  special  income limit  for  nursing                                                                   
homes and home and community based waiver services.                                                                             
Under  current law,  income standards  for these  eligibility                                                                   
categories  increase every  year  by the  amount of  cost-of-                                                                   
living adjustments to the Supplemental  Security Income (SSI)                                                                   
program or  the federal poverty  guidelines for Alaska.   The                                                                   
bill would  eliminate the  annual cost-of-living  adjustments                                                                   
and  put in  statute  fixed dollar  income  levels for  those                                                                   
programs based on  the SSI standard that became  effective on                                                                   
January 1, 2003 or the federal  poverty guideline for Alaska,                                                                   
which became effective on April 1, 2002.                                                                                        
Commissioner  Gilbertson noted  that the  Senate had  reduced                                                                   
the fixed  income levels for the  Denali Kid Care  Program at                                                                   
175%  of the  federal  poverty guideline  and  the House  HES                                                                   
Committee amended  the bill back  to the Governor's  original                                                                   
proposal.    The   HES  version  before  the   House  Finance                                                                   
Committee  keeps the Denali  Kid Care  income eligibility  at                                                                   
200%.   Setting  the program  income standard  at 200%  would                                                                   
allow the  Department to  maintain current Medicaid  benefits                                                                   
to over 26,000  beneficiaries while fixing levels  to realize                                                                   
significant cost savings in subsequent years.                                                                                   
Commissioner  Gilbertson   added  that  pregnant   women  who                                                                   
establish  eligibility  before  June 30,  2003  would  remain                                                                   
eligible for nine  months notwithstanding the  passage of the                                                                   
bill.   Likewise, children  who establish eligibility  before                                                                   
June 30, 2003 would  be protected for a period  of six months                                                                   
under existing continuous eligibility rules.                                                                                    
Representative  Croft referenced Pages  4 and 5,  which lists                                                                   
the  household  income amounts  and  asked if  those  numbers                                                                   
represented  the   200%  freeze.    Commissioner   Gilbertson                                                                   
reiterated  that the dollar  levels for  the Denali  Kid Care                                                                   
Program and  the Medicaid program  would be locked in  at the                                                                   
200% poverty level and that the  legislation would remove the                                                                   
inflation adjustments.                                                                                                          
Representative  Croft  asked  if  the  200%  federal  poverty                                                                   
guideline had already been incorporated  at the 25% level for                                                                   
Alaska.  Commissioner  Gilbertson responded that  the federal                                                                   
poverty level had  been uniquely calculated for  the State of                                                                   
Alaska.    It is  adjusted  to  reflect  a 25%  increase  and                                                                   
parallels the  cost-of-living adjustment that is  received by                                                                   
federal  employees because  of the  higher cost-of-living  in                                                                   
Alaska.   The Alaska  Permanent Fund is  not included  in the                                                                   
Co-Chair Harris pointed  out that the bill had  originated in                                                                   
the Senate.   He observed that  at one time,  eligibility had                                                                   
been  lowered  to  175%  of  poverty   level.    Commissioner                                                                   
Gilbertson reiterated  that the  Governor had introduced  the                                                                   
legislation  at the 200%  and that  the Senate HES  Committee                                                                   
reduced it from  200% to 175%.  Additionally,  that Committee                                                                   
did not  reflect the special  income standards  for long-term                                                                   
care.  They elected to lower it from 200% to 175%.                                                                              
Co-Chair  Harris  asked  where those  figures  were  located.                                                                   
Commissioner  Gilbertson  responded on  Page  4, Section  13.                                                                   
Co-Chair Harris asked  how he could make the  adjustment back                                                                   
to a 175%  poverty level.  Commissioner  Gilbertson explained                                                                   
that the  numbers listed  are calculated  at the 200%  level.                                                                   
In  order to  indicate that  reduction, each  of the  numbers                                                                   
would  need  to be  adjusted.    He added  that  the  low-end                                                                   
monthly difference  would be approximately  $300-$400 dollars                                                                   
per month.                                                                                                                      
Co-Chair Harris  inquired the amount of general  fund savings                                                                   
using  the 175%  figure.   Commissioner Gilbertson  responded                                                                   
that  the fiscal  note  passed  from the  Senate  would be  a                                                                   
general fund  savings in 2004  in the amount of  $2.1 million                                                                   
dollars with total  funds saved of $7.1 million  dollars.  He                                                                   
added that  the State does  receive enhanced federal  medical                                                                   
funds and that the State would  lose approximately $5 million                                                                   
in federal  dollars by  that reduction.   The State  receives                                                                   
funding for  some optional  categories, the Enhanced  Federal                                                                   
Medical Assistance  percentage.  The program  generates a 71%                                                                   
federal share.                                                                                                                  
Co-Chair Harris questioned the  number of Alaskans that would                                                                   
be  affected  at  the  175%  level  versus  the  200%  level.                                                                   
Commissioner  Gilbertson  responded  that  for FY04,  in  the                                                                   
Denali Kid  Care Program  that 123  pregnant women  and 1,214                                                                   
children would  be affected.   He pointed  out the  impact in                                                                   
FY04  would be  minimized by  some  extent by  the fact  that                                                                   
women  that   are  currently  eligible,  would   loose  their                                                                   
coverage under the adjustment  but that they would be able to                                                                   
retain  their  coverage  throughout   their  pregnancy  under                                                                   
federal law.   Children in the Denali Kid Care  Program would                                                                   
continue their  eligibility.   He reiterated that  the impact                                                                   
in the first year would be reduced  by the fact that pregnant                                                                   
women  in that  first  year would  not  loose their  coverage                                                                   
during  the  pregnancy.    However, in  the  out  years,  200                                                                   
individuals will be affected.                                                                                                   
Co-Chair Harris noted that the  savings in the out-years were                                                                   
significant  given the  proposed benefit  cap.   Commissioner                                                                   
Gilbertson responded it would  save approximately $12 million                                                                   
dollars.  In  the far-out years, the projected  savings would                                                                   
amount to  twice what the  Governor's proposal  recommends at                                                                   
the 175% level.   He commented that at the 200%  scenario, in                                                                   
FY09,  there would  be a total  fund savings  of roughly  $10                                                                   
million dollars, $3.5 of that  would be general fund savings.                                                                   
Under the  175% scenario, there  would be a total  savings in                                                                   
FY09 of $22 million dollars.                                                                                                    
Representative  Joule asked if  the fund source  indicated in                                                                   
the fiscal  note represented  federal savings.   Commissioner                                                                   
Gilbertson  noted that  the amount shows  a federal  savings;                                                                   
the federal  government pays roughly  71% of the cost  of the                                                                   
Denali Kid Care Program and as  a result, most of the savings                                                                   
are  federal  dollars.    He added  that  these  are  formula                                                                   
programs  and that any  reductions in  the Medicaid  Program,                                                                   
federal funds would be lost.                                                                                                    
In response to  an observation made by  Representative Joule,                                                                   
Commissioner  Gilbertson  stated that  the  reference was  to                                                                   
language passed in  the Senate, which was amended  in the HES                                                                   
Committee.   The bill before the  Committee uses the original                                                                   
language  proposed by  the  Governor at  the  200% level  and                                                                   
under  that  scenario,  a  $10  million  dollars  savings  is                                                                   
Representative  Joule asked if  the program continued  as is,                                                                   
would the federal  government participate at  a higher level.                                                                   
Commissioner  Gilbertson responded  that the legislation  was                                                                   
intended to  contribute to a  limited general  funds savings.                                                                   
However,  no   one  currently  in  the  program   will  loose                                                                   
coverage.   In addition,  individuals in  the program  do not                                                                   
have equal  stratification  of incomes.   Those persons  with                                                                   
the  higher  level   of  income  will  be  affected   by  the                                                                   
In response to a query by Representative  Joule, Commissioner                                                                   
Gilbertson reiterated  that the Governor did  not support the                                                                   
Senate HES version of the legislation.                                                                                          
TAPE HFC 03 - 72, Side A                                                                                                      
MARIE  LAVIGNE,  (TESTIFIED  VIA  TELECONFERENCE),  EXECUTIVE                                                                   
DIRECTOR, ALASKA PUBLIC HEALTH  ASSOCIATION, ANCHORAGE, noted                                                                   
that  the  Alaska  Public  Health  Association  applauds  the                                                                   
success of  Denali Kid Care  Program in improving  the health                                                                   
of  pregnant  women and  children  in  Alaska and  urges  the                                                                   
Committee  to continue  eligibility for  this program  at the                                                                   
fullest level possible.                                                                                                         
Public  health research  on the  health  impact of  uninsured                                                                   
children is noteworthy:                                                                                                         
   ·    Uninsured children who need medical and surgical                                                                        
        care are 4 times  more likely to go without  the care                                                                 
        they need than insured children with  the same health                                                                   
        needs.   When  they do  receive  the  care, they  are                                                                   
        sicker and more  likely to be  seen in  the emergency                                                                   
   ·    Uninsured children are 4% times more likely to do                                                                     
        without needed prescriptions and eye glasses, and 5                                                                     
        times more likely to be unable to receive needed                                                                        
        dental care.                                                                                                            
   ·    Uninsured children are 1.5 times more likely to                                                                         
        arrive to kindergarten without their required                                                                           
        immunizations.  They are 8 times more likely to not                                                                     
        have had a well child check up.                                                                                         
   ·    Uninsured pregnant women are less likely to receive                                                                     
        prenatal care, placing them at risk to deliver                                                                          
        early, low-birth weight babies and at the greatest                                                                    
        risk for fetal and/or maternal death.                                                                                   
Ms.  Lavigne stated  that the  Governor's transmittal  letter                                                                   
accompanying   SB  105   states  "While   the  cost   savings                                                                   
associated with this bill are  modest in the short-term, this                                                                   
measure will significantly  reduce future year  costs."  From                                                                   
a public health perspective, any  short-term savings does not                                                                   
compare  to the greater  long  term costs to  the health  and                                                                   
well being of pregnant women and children.                                                                                      
She added that  to succeed in lowering the  enrollment in the                                                                   
Medical assistance programs, the  Legislature should consider                                                                   
the issue  from a  different perspective.    SB 105 seeks  to                                                                   
lower  the  enrollment  in  medical  assistance  programs  by                                                                   
reducing  eligibility  for pregnant  women  and children  who                                                                   
qualify at the upper levels of  the income eligibility, up to                                                                   
200%  of poverty  level.   The  most effective  approach  the                                                                 
Legislature  could  take would  be  to assist  employers  and                                                                   
working  families   to  get   affordable  health   insurance,                                                                   
reducing the  number of pregnant  women and children  needing                                                                 
coverage by Denali Kid Care.                                                                                                    
Ms.  Lavigne   noted  that  while  there  are   many  factors                                                                   
contributing  to 1  in 5  Alaskans  lacking health  insurance                                                                   
coverage,  one   of  the  greatest  barriers   is  access  to                                                                   
affordable  health  insurance.    A study  by  the  Anchorage                                                                   
Access to Health Care Coalition  released this fall indicates                                                                   
of the 16,000 adults in Anchorage  who are uninsured, 71% are                                                                   
working adults,  the majority in  business with less  than 10                                                                   
employees. The  Legislature needs to join with  businesses in                                                                   
addressing  the issue  of affordable  health care  insurance.                                                                   
In the  meantime, she urged  members to keep  the eligibility                                                                   
for  the medical  assistance  programs at  the  full 200%  of                                                                   
federal  poverty level  to maximize  the  health of  pregnant                                                                   
women and children.                                                                                                             
PATRICIA   ZIMMERMAN,   DOUGLAS   ADVISORY   BOARD,   JUNEAU,                                                                   
testified  against the  proposed legislation.   She  provided                                                                   
her employment  history in the pharmaceutical  industry.  She                                                                   
pointed out that  the difference between the  countries where                                                                   
there  is poor health  care and  good health  care has  state                                                                   
involvement.  She spoke in support  for universal health care                                                                   
throughout  the United  States.   Ms.  Zimmerman  recommended                                                                   
taxing the  oil and gas companies  to help provide  for these                                                                   
insurances.    She questioned  why  the  State of  Alaska  is                                                                   
considering   taxing  the   poorest   Alaskans  to   decrease                                                                   
services.  The  companies that extract the  State's resources                                                                   
should  be  the ones  taxed.    Ms. Zimmerman  recommended  a                                                                   
review of who takes the money out of Alaska.                                                                                    
MARIE DARLIN,  ALASKA ASSOCIATION OF RETIRED  PERSONS (AARP),                                                                   
JUNEAU,  voiced  support  for  the Denali  Kid  Care  Program                                                                   
noting  that AARP  is  the  world's largest  organization  of                                                                   
grandparents.   She emphasized  that AARP  supports the  200%                                                                   
poverty  level  for  that program.    Ms.  Darlin  questioned                                                                   
putting  the levels  in statute,  as that  would bind  future                                                                   
Representative  Foster MOVED to  report HCS  CS SB  105 (HES)                                                                   
out  of Committee  with individual  recommendations and  with                                                                   
the accompanying fiscal note.                                                                                                   
Representative Joule OBJECTED.                                                                                                  
Following a brief at-ease, Representative  Joule WITHDREW his                                                                   
OBJECTION.   There  being NO  further OBJECTIONS,  it was  so                                                                   
HCS CS SB 105 (HES)am(efd fld)  was reported out of Committee                                                                   
with a  "do pass" recommendation  and with a new  fiscal note                                                                   
by the Department of Health & Social Services.                                                                                  

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