Legislature(2003 - 2004)

01/27/2004 01:48 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 374                                                                                                            
     An Act establishing the SeniorCare program and relating                                                                    
     to that program; and providing for an effective date.                                                                      
Co-Chair  Harris  MOVED  to ADOPT  work  draft  #23-GH2123\V,                                                                   
Mischel, 1/26/04,  as the version  of the legislation  before                                                                   
the Committee.  There being NO OBJECTION, it was adopted.                                                                       
PETER ECKLUND, HOUSE FINANCE COMMITTEE  STAFF, REPRESENTATIVE                                                                   
BILL WILLIAMS,  noted that version  "V" incorporates  the two                                                                   
amendments previously  passed at the last  Committee meeting.                                                                   
Additionally, a change  was made to Page 5,  proposing to set                                                                   
up a Senior Care Fund with the  direct purpose to pay for the                                                                   
Senior  Care services.   The purpose  is to  send a  "strong"                                                                   
signal to  all the seniors  associated with the  program that                                                                   
the State  program would  be fully  funded until the  federal                                                                   
program takes effect sometime in FY06.                                                                                          
Mr. Ecklund  also noted  that Page 5,  Line 21, Section  "C",                                                                   
clarifies that  if there is left  over balance in  that fund,                                                                   
it would  lapse back to the  general fund at  the termination                                                                   
of the program.                                                                                                                 
Mr. Ecklund noted  the technical change to the  fiscal notes.                                                                   
Currently, it is  indicated that the funding  source would be                                                                   
paid from the  Senior Services Fund and that  will be changed                                                                   
to the Senior Care Fund.                                                                                                        
Co-Chair  Harris interjected  that  the committee  substitute                                                                   
would not  change any of the  programs.  Mr.  Ecklund agreed,                                                                   
and that it remained as introduced by the Administration.                                                                       
JOEL GILBERTSON, COMMISSIONER,  DEPARTMENT OF HEALTH & SOCIAL                                                                   
SERVICES, addressed  the new version  of the bill.   He noted                                                                   
that the Administration has the  program "on track to be up &                                                                   
running  by  April  1,  2004".   The  proposed  program  will                                                                   
provide cash  for drug assistance  for low-income  seniors in                                                                   
the State, who  are below the 140% poverty level.   They will                                                                   
have the choice  to receive either the $120  dollars cash per                                                                   
month or a prescription  by subsidy benefit in  the amount of                                                                   
$1600 dollars per  year.  He added that the  combination with                                                                   
the  $600  dollar  Medicare subsidy  and  availability  of  a                                                                   
discount prescription  card for  seniors, means  that seniors                                                                   
below 135% poverty level would  have no out of pocket expense                                                                   
for their first  $2,500 dollar drug coverage.   He reiterated                                                                   
that  seniors would  have  a choice  between  the cash,  drug                                                                   
assistance  and/or  access  to   a  $1,000  dollar  per  year                                                                   
prescription drug subsidy.                                                                                                      
Commissioner  Gilberson  added that  the  program will  begin                                                                   
April  1,  2004.   Applications  should  be processed  during                                                                   
March 2004 and  that the program will continue  until January                                                                   
federal program.   He guaranteed  that there would be  no gap                                                                   
in coverage.   The program is being administered  through the                                                                   
Senior Information Office.                                                                                                      
Co-Chair Harris  clarified that  the program would  be funded                                                                   
through  FY06 and  would  end at  that  point.   Commissioner                                                                   
Gilbertson  stated  that  information   was  drafted  in  the                                                                   
committee  substitute and  it would be  fully funded  through                                                                   
January 1, 2006, the commencement of the federal program.                                                                       
Representative  Joule noted that  the federal government  was                                                                   
currently  revising  their  guidelines.    He  asked  if  the                                                                   
proposed legislation  would also  be changing.   Commissioner                                                                   
Gilbertson  noted   that  the  legislation   sites  different                                                                   
federal poverty  guidelines.   Those guidelines are  adjusted                                                                   
on  a  yearly  basis and  the  income  levels  are  currently                                                                   
updated levels.   The  legislation will  adjust on  an annual                                                                   
base with the federal poverty guidelines.                                                                                       
Representative  Joule voiced concern  that if it  changes, it                                                                   
might   not   accommodate   the  same   people   each   year.                                                                   
Commissioner  Gilbertson acknowledged  that  the program  and                                                                   
the  adjustments  to  the federal  poverty  guideline  should                                                                   
determine eligibility.   If the income levels  increase, more                                                                   
individuals will  be eligible  and that such assumptions  are                                                                   
taken into account.                                                                                                             
ROBERT  BRIGGS,  (TESTIFIED  VIA   TELECONFERNCE),  ATTORNEY,                                                                   
DISABILITY   LAW  CENTER,   SITKA,  testified   on  HB   374,                                                                   
addressing the many Alaskans that  receive disability.  There                                                                   
is another Medicare population  that has similar needs to the                                                                   
seniors.  Those Alaskans receive  only Medicare and their age                                                                   
is  under 65.    Some  of these  people  are not  capable  of                                                                   
providing for their own prescription  drugs.  The only health                                                                   
insurance some of these people receive is Medicare.                                                                             
Mr. Briggs  commented on the  Medicare Buy-In  Program, which                                                                   
does not  help some  people on Medicare,  who have  a certain                                                                   
income bracket.   There is a population of  Alaskans who have                                                                   
high medical  expenses,  who receive Medicare  and are  under                                                                   
the age  of 65.   He suggested  that the  bill be amended  to                                                                   
address that population.   He did recommend that  the bill be                                                                   
passed from Committee and not  slowed by the addition of that                                                                   
language.  He  requested that language be reviewed,  as there                                                                   
are approximately 225 Alaskans  in the described category and                                                                   
estimated  it  would  cost $290  thousand  extra  dollars  to                                                                   
provide a prescription drug benefit to those people.                                                                            
Commissioner  Gilbertson commented  that the  purpose of  the                                                                   
proposed Senior  Care Program as brought forward  by Governor                                                                   
Murkowski is  to serve seniors  in the  State of Alaska.   He                                                                   
acknowledged that there are individuals  with other needs and                                                                   
offered  to   work  with  the   Committee  to   address  that                                                                   
Commissioner  Gilbertson questioned  the numbers provided  by                                                                   
Mr.  Briggs.   He admitted  that there  is a  high degree  of                                                                   
uncertainty regarding the numbers.   The Department estimates                                                                   
that the  cost of adequate  drug coverage in  cash assistance                                                                   
will  be close  to $7.3  million  dollars, largely  resulting                                                                   
from the  $6 million allocated  for the cash  option segment.                                                                   
He reiterated  that  the purpose  of the bill  is to  provide                                                                   
assistance to the seniors of Alaska.                                                                                            
Co-Chair Harris interjected that  the proposed legislation is                                                                   
an answer to  the elimination of the Longevity  Bonus program                                                                   
and  is  intended  to  address  the  most  urgent  needs  for                                                                   
prescription  drug  benefits  for  low-income  seniors.    He                                                                   
commented that the  group referenced by Mr.  Briggs would not                                                                   
have  been  affected  one  way   or  another.    Commissioner                                                                   
Gilbertson  interjected  that  they  would  not  be  eligible                                                                   
unless they met the age and residency criteria.                                                                                 
Representative  Chenault  inquired  if  the  State  might  be                                                                   
creating a "constitutional issue"  by offering services for a                                                                   
select  group   of  persons  in  the  State.     Commissioner                                                                   
Gilbertson   advised  that   the   constitution  does   grant                                                                   
authority  to develop  programs  that differentiate  by  age.                                                                   
The Department is  required by law that the  persons who meet                                                                   
that  criterion  are treated  equally.   There  are  numerous                                                                   
programs in  State government that differentiate  between age                                                                   
and condition.   The proposed  program is constitutional  and                                                                   
is consistent with that type of program.                                                                                        
Vice  Chair   Meyer  asked  if   the  proposed   program  was                                                                   
consistent  with  the percent  of  poverty level  offered  in                                                                   
Denali Kid Care.   Commissioner Gilbertson responded  that it                                                                   
is not.   The income criterion  for that program was  at 200%                                                                   
of the federal  poverty level and was reduced  to 175% during                                                                   
the  last  legislative  session.    The  proposed  bill  ends                                                                   
eligibility at the 150% poverty level.                                                                                          
Co-Chair   Williams  noted   that  AMENDMENT   #3  had   been                                                                   
WITHDRAWN, and  that Representative  Croft might bring  it up                                                                   
on the House Floor.                                                                                                             
Representative Joule  MOVED to ADOPT Amendment #4.   (Copy on                                                                   
File).  Co-Chair Harris OBJECTED.                                                                                               
Representative  Joule  explained  that  the  amendment  would                                                                   
offer  "treatment" for  the  individual.   Additionally,  the                                                                   
amendment  inserts a  new paragraph  on Page  3, Line 31,  to                                                                   
     "to accompany the individual's parent, spouse, sibling,                                                                    
     grandchild, child, or stepchild who is receiving                                                                           
     medical treatment outside the state; or".                                                                                  
Representative  Joule added that  the amendment  would delete                                                                   
"30" days and insert "60" days  on Page 4, Line 1, the amount                                                                   
of time that a person eligible  for the Longevity Bonus could                                                                   
have been out-of-State.                                                                                                         
Commissioner  Gilbertson stated  that the  bill as  currently                                                                   
drafted  and  proposed  by  the   Governor  would  allow  for                                                                   
individuals  to maintain  and assure  their Alaska  residency                                                                   
for the program by only taking  absence for medical treatment                                                                   
or vacations, and/or business  trips for 30 consecutive days.                                                                   
It  would  include medical  treatment  for  immediate  family                                                                   
members and is consistent with  the permanent fund standards.                                                                   
The  Department  believes  that  as  currently  drafted,  the                                                                   
committee  substitute   does  provide  ample  room   for  any                                                                   
individuals to  leave the State.   He added that they  do not                                                                   
specifically object to Representative Joule's amendment.                                                                        
Co-Chair  Harris  understood that  Representative  Joule  was                                                                   
attempting  to   clarify  length   of  duration   of  medical                                                                   
treatment  time for  the  individual under  consideration  by                                                                   
adding  a new  section.   Commissioner  Gilbertson  suggested                                                                   
that the bill  draft before the Committee does  provide ample                                                                   
opportunity for individuals to  leave the State, however, the                                                                   
Administration does  not have specific objections  to the 60-                                                                   
day recommendation.                                                                                                             
Co-Chair Harris asked if anyone  had been excluded from their                                                                   
benefits  because  of  the language.    Representative  Joule                                                                   
responded  that under  the new  language, it  would make  the                                                                   
language consistent  with that of the Permanent  Fund excused                                                                   
absences.  He did not know if anyone had been affected.                                                                         
Co-Chair  Harris maintained  his  objection.   Representative                                                                   
Joule inquired  if a  person was  out-of-state for  more than                                                                   
30-days,  would  they  continue  to be  eligible  to  receive                                                                   
benefits.    Commissioner  Gilbertson   reiterated  that  the                                                                   
language of the bill would limit an individual to only 30-                                                                      
days out-of-state in order to continue their benefits.                                                                          
ANGELA SALERNO, DIVISION OF PUBLIC  ASSISTANCE, DEPARTMENT OF                                                                   
HEALTH & SOCIAL SERVICES, stated  that in the Longevity Bonus                                                                   
program, the allowable absence  had been 60-days.  At the end                                                                   
of that  program, individuals  were allowed  to stay  away as                                                                   
long as needed.  They could not  get their benefits forwarded                                                                   
to them  but they became  eligible again when  they returned.                                                                   
She reiterated that it had been 60-days.                                                                                        
Co-Chair  Harris MOVED  to AMEND  Amendment  #4, leaving  the                                                                   
first two  sections in tact  and deleting  the "30 -  60" day                                                                   
Vice Chair Meyer asked how long could an individual be out-                                                                     
of-state  and still qualify  for the  benefit.   Commissioner                                                                   
Gilbertson responded that an individual could be out-of-                                                                        
state  for longer  than 30-days  but not  continuously.   The                                                                   
version before the Committee does  not remove eligibility for                                                                   
individuals  who stay  within  the consecutive  days  out-of-                                                                   
Representative   Chenault   questioned  what   the   "special                                                                   
circumstances" are noted on Line  2.  Commissioner Gilbertson                                                                   
responded  that  the  Department  has  not  enumerated  those                                                                   
specific  standards.    The  intent   is  to  allow  for  the                                                                   
discretion  of the Department  for cases  of undue  hardship.                                                                   
The authority  is discretionary  and determined case  by case                                                                   
and should pass a common sense test.                                                                                            
Representative  Joule  clarified  the intent  of  the  change                                                                   
proposed  by Co-Chair  Harris  deleting the  last portion  of                                                                   
Amendment #4.                                                                                                                   
There being NO OBJECTION, the  amendment to the amendment was                                                                   
Co-Chair  Harris  WITHDREW  his   OBJECTION  to  the  amended                                                                   
Amendment #4.  There being NO  further OBJECTION, the amended                                                                   
Amendment #4 was adopted.                                                                                                       
Representative Joule  MOVED to ADOPT Amendment #5.   (Copy on                                                                   
File).  Co-Chair Harris OBJECTED.                                                                                               
Representative  Joule stated that  the amendment  would allow                                                                   
the Legislature  to make  the decision regarding  termination                                                                   
of  the   program  rather  than   the  Commissioner   of  the                                                                   
Department  of  Health  &  Social   Services.    Commissioner                                                                   
Gilbertson  advised that  the amendment  would eliminate  the                                                                   
sunset.   He pointed out  that the sunset  was not tied  to a                                                                   
specific date,  instead to the  actual implementation  of the                                                                   
Medicare  prescription  benefit.   As currently  drafted,  it                                                                   
would  be  the  Commissioner that  would  then  certify  that                                                                   
benefit   had  become   available.     Representative   Joule                                                                   
maintained that  the Legislature  rather than the  Department                                                                   
should determine the program.                                                                                                   
Co-Chair  Harris noted  that the  Legislature  does have  and                                                                   
will continue  to have  the authority  to extend the  program                                                                   
into the future  through the funding of it.   The question is                                                                   
regarding the  process and if it  is on the books  and should                                                                   
it  exists  in  statute.    Co-Chair  Harris  maintained  his                                                                   
opposition to the amendment.                                                                                                    
Representative Stoltze agreed with Co-Chair Harris.                                                                             
A roll call vote was taken on the motion.                                                                                       
IN FAVOR:      Joule, Moses                                                                                                     
OPPOSED:       Chenault, Fate, Foster, Hawker, Meyer,                                                                           
               Stoltze, Harris, Williams                                                                                        
Representative Croft was not present for the vote.                                                                              
The MOTION FAILED (2-8).                                                                                                        
Representative Joule  MOVED to ADOPT Amendment #6.   (Copy on                                                                   
File).  Co-Chair Harris OBJECTED.                                                                                               
Representative  Joule  commented  that  the  amendment  would                                                                   
address  the   sections  that  deal  with  proration.     The                                                                   
amendment  would delete  language on Page  2, Lines  18-22(d)                                                                   
and  Page  3,   Lines  22-25(i).    Commissioner   Gilbertson                                                                   
clarified that  the amendment would establish  the program as                                                                   
an   entitlement   program  and   therefore   eliminate   any                                                                   
restriction on  the amount of expenditures by  the Department                                                                   
for the  program as the  amount prorated by the  Legislature.                                                                   
The  second portion  of  the  amendment would  eliminate  the                                                                   
proration  of benefits  for individuals  in  the program  for                                                                   
less  than one  year.   He  stressed  that  the current  plan                                                                   
provides an annual benefit of  $1,600 dollars in drug subsidy                                                                   
and  $120  dollars   per  month  in  cash  assistance.     He                                                                   
maintained  that the Senior  Care proposal  provides  a solid                                                                   
and annual benefit.   He maintained that if a  person is only                                                                   
eligible for one  month, they then should not  be receiving a                                                                   
A roll call vote was taken on the motion.                                                                                       
IN FAVOR:      Joule, Moses                                                                                                     
OPPOSED:       Chenault, Fate, Foster, Hawker, Meyer,                                                                           
               Stoltze, Harris, Williams                                                                                        
Representative Croft was not present for the vote.                                                                              
The MOTION FAILED (2-8).                                                                                                        
Representative Joule  MOVED to ADOPT Amendment #7.   (Copy on                                                                   
File).  Co-Chair Harris OBJECTED.                                                                                               
Representative Joule  explained the intent of  the amendment,                                                                   
which  would insert  after "public  institution"  on Page  4,                                                                   
Line   27,  "state"   governmentally   owned   establishment.                                                                   
Commissioner  Gilbertson  advised  that the  amendment  would                                                                   
change  the  definition  of public  institution  to  restrict                                                                   
interpretation  to  only  those  operated  by  the  State  of                                                                   
Alaska.  He pointed out that on  Page 3, Line 26, directs the                                                                   
Department  not  to  make payments  to  individuals  who  are                                                                   
residing in public institutions and nursing facilities.                                                                         
TAPE HFC 04 - 12, Side B                                                                                                      
Commissioner  Gilbertson stated  that there  are a series  of                                                                   
arrangements  including   prescription  drugs.     Under  the                                                                   
amendment,  it   would  largely   exempt  the  Native   owned                                                                   
facilities.   He  reiterated that  as  currently drafted,  it                                                                   
would  not apply  to  the Alaska  Native  Medical Center  but                                                                   
rather the long-term  care bed capacity in the  Alaska Native                                                                   
Health Care  system.  Commissioner Gilbertson  clarified that                                                                   
on  a policy  level,  the  Administration would  not  support                                                                   
something  that would  differentiate the  ability to  receive                                                                   
the benefits, as there must be equality in the programs.                                                                        
Representative Joule WITHDRAWN Amendment #7.                                                                                    
Representative Joule  MOVED to ADOPT Amendment #8.   (Copy on                                                                   
File).  Co-Chair Harris OBJECTED.                                                                                               
Representative  Joule  explained  that  the  amendment  would                                                                   
change "may"  to "shall" on Page  1, Line 8 and Page  2, Line                                                                   
Representative  Stoltze  asked  if that  amendment  had  been                                                                   
adopted   during   the  previous   meeting.      Commissioner                                                                   
Gilbertson  clarified that the  previous amendment  addressed                                                                   
brand name  drugs paid for by  the Department.   Amendment #8                                                                   
would  alter  two provisions  providing  assistance  and  the                                                                   
payments of  the $120 dollars.   The amendment  is consistent                                                                   
with the  intent of the legislation  and the manner  in which                                                                   
the fiscal  note was drafted.   He noted that  the Department                                                                   
would not object to the amendment.                                                                                              
Co-Chair Harris maintained his objection.                                                                                       
Representative   Joule  discussed   the   reduction  of   the                                                                   
Department of  Health & Social  Services BRU.  He  added that                                                                   
the Commissioner  does have  latitude of  where funds  can be                                                                   
shifted.   Incorporating  "shall" guarantees  the intent  and                                                                   
latitude.    He understood  that  there  would be  a  broader                                                                   
discussion regarding compressing the BRU's.                                                                                     
Representative   Hawker  noted  that   he  did  support   the                                                                   
amendment.  Commissioner Gilbertson  noted that the amendment                                                                   
would direct the  Department to implement the  program and to                                                                   
make the payments.                                                                                                              
Co-Chair  Harris inquired  if  the Department  supported  the                                                                   
amendment.   Commissioner Gilbertson  clarified that  they do                                                                   
not oppose the amendment.                                                                                                       
Co-Chair  Harris  WITHDREW his  OBJECTION.    There being  NO                                                                   
further OBJECTION, Amendment #8 was adopted.                                                                                    
Representative  Joule  asked  about the  $12  million  dollar                                                                   
fiscal note  fund source  and if  it would  be amended.   Co-                                                                   
Chair Harris  noted that the  current notes had  been updated                                                                   
and would come out of the general fund.                                                                                         
Brief At-Ease.                                                                                                                
Co-Chair  Harris  clarified  that  the fiscal  notes  do  not                                                                   
reflect  the Senior  Care  fund.   The  committee  substitute                                                                   
creates a  new fund called the  Senior Care Fund.   That fund                                                                   
has no money in  it at this point but will  be funded through                                                                   
the supplemental.  The $12 million  dollars in the other fund                                                                   
has been placed in the Marine Highway Stabilization Fund.                                                                       
Representative Foster MOVED to  report CS HB 374 (FIN) out of                                                                   
Committee  with  individual  recommendations   and  with  the                                                                   
accompanying fiscal notes.  There  being NO OBJECTION, it was                                                                   
so ordered.                                                                                                                     
CS HB  374 (FIN)  was reported  out of  Committee with  a "do                                                                   
pass" recommendation  and with  five new fiscal  impact notes                                                                   
by the Department of Health & Social Services.                                                                                  

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