Legislature(2003 - 2004)

01/13/2004 03:03 PM HES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HB 374-SENIORCARE                                                                                                             
Number 0473                                                                                                                     
                                                                                                                                
CHAIR WILSON announced  that the only order of  business would be                                                               
HOUSE BILL NO.  374, "An Act establishing  the SeniorCare program                                                               
and  relating to  that program;  and providing  for an  effective                                                               
date."                                                                                                                          
                                                                                                                                
CHAIR WILSON  noted for the  record that  Representatives Kapsner                                                               
and Cissna have joined the meeting.                                                                                             
                                                                                                                                
Number 0573                                                                                                                     
                                                                                                                                
JOEL GILBERTSON,  Commissioner, Department  of Health  and Social                                                               
Services,  presented  HB  374  to   the  committee  and  answered                                                               
questions from  the members.   He told the members  that Governor                                                               
Murkowski's  SeniorCare proposal,  a portion  of which  is in  HB                                                               
374,  is  an effort  to  ensure  that  seniors from  Alaska  have                                                               
greater  access to  health  care services  in  general, but  more                                                               
specifically  access  to prescription  drugs.    There have  been                                                               
difficult challenges for seniors  in affording prescription drugs                                                               
for  a  number  of  years.    Medicare  and  Medicaid  came  into                                                               
existence  in  1965, but  in  the  38  years since  Medicare  was                                                               
established, it failed to provide  for prescription drug benefits                                                               
for  seniors, he  said.   Commissioner Gilbertson  commented that                                                               
when the governor  was a U.S. senator he voted  numerous times to                                                               
establish  a  prescription  drug   benefit  under  Medicare,  but                                                               
Congress  was  never able  to  pass  and  deliver a  benefit  for                                                               
seniors.  That  changed last fall.  Congress  has now established                                                               
a  Medicare  prescription  benefit   for  seniors;  however,  the                                                               
legislation that  was passed is very  complex and it will  take a                                                               
number of  years for it to  be implemented.  Under  the federally                                                               
passed  legislation  the  implementation  does  not  begin  until                                                               
January 1,  2006, he  explained.  While  there is  some temporary                                                               
assistance  for  seniors  until   then,  there  continues  to  be                                                               
pressure,  particularly   on  needy  seniors,  to   afford  their                                                               
prescription drugs.  Commissioner Gilbertson  said it is for that                                                               
reason that Governor Murkowski  announced the proposed SeniorCare                                                               
program in December.                                                                                                            
                                                                                                                                
Number 0607                                                                                                                     
                                                                                                                                
COMMISSIONER GILBERTSON  explained that  under SeniorCare  a cash                                                               
subsidy  will  be delivered  to  individuals  who are  below  135                                                               
percent  of  the  poverty  [level].    Currently,  the  state  is                                                               
operating the Alaska Seniors Assistance  Program, which is a cash                                                               
subsidy program that  began in the fall after  the termination of                                                               
the Alaska  Longevity Bonus Program.   The program  provides $120                                                               
per month  to seniors who have  incomes below 135 percent  of the                                                               
poverty [level].  A single person  would have to have an [annual]                                                               
income below $15,135 and a couple  would have to be below $20,439                                                               
to qualify  for this benefit.   Commissioner Gilbertson  told the                                                               
members  that under  SeniorCare there  would be  an expansion  of                                                               
this  benefit  by adding  prescription  drug  coverage for  those                                                               
seniors who  find that more  in line with their  spending habits.                                                               
Under  the   SeniorCare  program,   seniors  who   are  currently                                                               
receiving benefits  under the  Alaska Seniors  Assistance Program                                                               
will  have  a choice,  he  told  the  members.   If  seniors  are                                                               
comfortable  continuing to  receiving their  cash assistance  and                                                               
believe  it is  most appropriate  for their  financial situation,                                                               
they will have that choice.   However, another choice for seniors                                                               
in that  demographic will  be a  $1,600 annual  prescription drug                                                               
subsidy.  This is a direct subsidy for out-of-pocket costs.                                                                     
                                                                                                                                
Number 0663                                                                                                                     
                                                                                                                                
COMMISSIONER GILBERTSON  told the  members that there  would also                                                               
be  an expansion  of the  program to  include a  larger group  of                                                               
seniors.  These  are seniors who fall between 135  percent of the                                                               
poverty  [level] and  150 percent.   The  annual income  for that                                                               
group  is [$16,815]  for a  single  person, and  [$22,710] for  a                                                               
couple.    He explained  that  this  group  of seniors  does  not                                                               
receive  any  assistance  through the  Alaska  Senior  Assistance                                                               
Program,  but would  receive an  annual $1,000  prescription drug                                                               
subsidy [through the SeniorCare program].                                                                                       
                                                                                                                                
COMMISSIONER  GILBERTSON  explained  that  the  interaction  with                                                               
these [two]  programs is  in line  with the  federal prescription                                                               
drug  assistance   which  will   provide  temporary   relief  for                                                               
qualifying  seniors.    Under   the  Medicare  prescription  drug                                                               
benefit,  seniors  whose  income  is below  135  percent  of  the                                                               
poverty  [level]  will receive  a  $600  annual Medicare  subsidy                                                               
until the full benefit begins in 2006.                                                                                          
                                                                                                                                
Number 0710                                                                                                                     
                                                                                                                                
COMMISSIONER GILBERTSON  said that all seniors  will be receiving                                                               
the  Medicare  drug  discount  card.    This  card  provides  for                                                               
negotiated  rates  with  manufacturers and  suppliers  that  will                                                               
reduce  between 10  and  25  percent from  the  retail price  for                                                               
prescription drugs for seniors.                                                                                                 
                                                                                                                                
Number 0763                                                                                                                     
                                                                                                                                
COMMISSIONER GILBERTSON  asked the members  to look at  the chart                                                               
titled "Bridging the  Gap," and explained that  the Department of                                                               
Health and  Social Services  looked at  a comparison  of benefits                                                               
for  an individual  who had  $2,500 in  annual prescription  drug                                                               
expenses.  He noted that this is  a higher cost than average.  He                                                               
told  the  members  that  without  the  SeniorCare  [program]  an                                                               
individual that  is below  135 percent  of poverty  would receive                                                               
$600 in Medicare prescription drug  assistance, a minimum of a 10                                                               
percent to  25 percent  discount that  the department  equates to                                                               
$250,  which means  that senior  would be  out of  pocket $1,650.                                                               
Under  the  governor's  proposal  that is  before  the  committee                                                               
today,  seniors who  choose the  prescription  drug benefit  will                                                               
still receive  the $650 subsidy  from the federal  government and                                                               
the $250 discount, but will  also receive the $1,600 prescription                                                               
drug subsidy from the State  of Alaska, which means their out-of-                                                               
pocket cost  will be $250,  he said.  If  a senior opted  for the                                                               
cash  assistance  program  instead,  his/her  out-of-pocket  cost                                                               
would  increase to  [$210].   Commissioner Gilbertson  summarized                                                               
that the  department believes that  since the cash  assistance is                                                               
more  flexible, most  seniors  will continue  to  elect the  cash                                                               
assistance payments.                                                                                                            
                                                                                                                                
Number 0825                                                                                                                     
                                                                                                                                
COMMISSIONER  GILBERTSON  explained   that  seniors  between  135                                                               
percent  and 150  percent of  the federal  poverty level  without                                                               
SeniorCare  would receive  only the  prescription discount  card,                                                               
which means  they would be  out of  pocket $2,250.   He commented                                                               
that while it  is assistance, it is not enough  to bridge the gap                                                               
until 2006.   Under the  SeniorCare proposal these  seniors would                                                               
receive a $1,000 drug subsidy.                                                                                                  
                                                                                                                                
COMMISSIONER  GILBERTSON   pointed  out  that  this   is  not  an                                                               
insurance  product;   it  is  a   drug  subsidy.     Commissioner                                                               
Gilbertson  commented that  most  seniors' drug  costs are  lower                                                               
than the $2,500  used in the comparison.  But  if their costs are                                                               
lower, these  individuals would receive  a greater  percentage of                                                               
assistance.  For  instance, a senior who is below  135 percent of                                                               
poverty who  had prescription drug  cost below $2,000  would have                                                               
no out-of-pocket costs.  For  seniors between 135 percent and 150                                                               
percent  of  the poverty  [level]  whose  costs were  lower  than                                                               
$1,000, those individuals would have no out-of-pocket costs.                                                                    
                                                                                                                                
COMMISSIONER GILBERTSON  summarized his  comments by  saying that                                                               
the  SeniorCare proposal  is larger  than just  prescription drug                                                               
assistance.    Steve Ashman,  Director,  Division  of Senior  and                                                               
Disabilities Services,  has established by order  of the governor                                                               
a senior information  office within the Department  of Health and                                                               
Social  Services.    He  said  this office  will  be  a  one-stop                                                               
shopping center  for seniors  who need  to receive  services from                                                               
the State of Alaska.  In  FY 03 the department provided over $200                                                               
million in  assistance to  seniors.   Those programs  are varied,                                                               
for   example,   energy   assistance,   cash   assistance,   food                                                               
assistance,  assisted living,  long-term  care,  and health  care                                                               
expenses.   He explained that  the collection of programs  can be                                                               
difficult  for seniors  to identify  all that  they are  eligible                                                               
for.    Under the  senior  information  office established  under                                                               
SeniorCare, seniors  will have one-stop  shopping through  the 1-                                                               
800  number, web  site,  or  in person,  where  they can  receive                                                               
access to  all the programs that  are available to them,  some of                                                               
which  are  at  the  community level.    Commissioner  Gilbertson                                                               
expressed the  importance of eliminating the  complexity of these                                                               
programs and the necessity to bring needed services to seniors.                                                                 
                                                                                                                                
COMMISSIONER GILBERTSON noted that  the prescription drug program                                                               
does  have  some exclusions,  such  as  over the  counter  drugs,                                                               
vitamins, and  drugs related to impotence,  baldness, and smoking                                                               
cessation.   The intent  of this legislation  is to  provide drug                                                               
subsidy assistance or cash assistance to seniors who are needy.                                                                 
                                                                                                                                
Number 0972                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GATTO   asked  if   alcohol  or   drug  addiction                                                               
treatment is included.                                                                                                          
                                                                                                                                
COMMISSIONER GILBERTSON responded  that the bill does  not make a                                                               
distinction based  on the diagnosis  of the individual.   He said                                                               
if it is a prescription drug, it would be included.                                                                             
                                                                                                                                
Number 1006                                                                                                                     
                                                                                                                                
REPRESENTATIVE  SEATON   asked  what  is  the   average  senior's                                                               
prescription drug cost.                                                                                                         
                                                                                                                                
COMMISSIONER GILBERTSON  responded that  [figure] is  a challenge                                                               
to  identify,  but  according  to  some  two-year-old  data,  the                                                               
average cost  was below  $500 per  year.   He told  the committee                                                               
that  he  will provide  them  with  more  recent estimates.    He                                                               
pointed out  that there are  a large  number of seniors  who have                                                               
extremely high drug  costs.  There are between 15  percent and 20                                                               
percent of  seniors who have  over $4,000 in  annual prescription                                                               
drug  costs.     He  said  these  individuals   will  be  offered                                                               
catastrophic  prescription drug  coverage in  the Medicare  bill.                                                               
He  emphasized  that this  program  is  not  insurance, it  is  a                                                               
subsidy, and  is therefore  not a percentage  of coverage,  but a                                                               
direct benefit payment.                                                                                                         
                                                                                                                                
REPRESENTATIVE  SEATON said  he assumes  since most  seniors have                                                               
less than $500 in prescription drug  costs, most will opt for the                                                               
cash payment, rather than the  prescription drug subsidy, because                                                               
if they opted  for the prescription drug option,  they would lose                                                               
money.     He  asked  Commissioner  Gilbertson   to  confirm  his                                                               
assumption.                                                                                                                     
                                                                                                                                
Number 1086                                                                                                                     
                                                                                                                                
COMMISSIONER GILBERTSON  said that  the department  believes that                                                               
70 percent  of seniors would  remain in the cash  benefit option.                                                               
Only  those  who  fall  in  the  catastrophic  prescription  drug                                                               
expenditures would opt for the drug subsidy plan.                                                                               
                                                                                                                                
Number 1116                                                                                                                     
                                                                                                                                
REPRESENTATIVE CISSNA stated for  the record that she understands                                                               
that recipients of  either the cash payment  or prescription drug                                                               
benefit are  not able  to change  their plan in  the middle  of a                                                               
year; however,  she asked if  there is an open  enrollment period                                                               
when changes can be made.                                                                                                       
                                                                                                                                
COMMISSIONER GILBERTSON  replied that those below  135 percent of                                                               
the poverty  [level] will have  an option to select  either plan,                                                               
but not in mid-year.                                                                                                            
                                                                                                                                
REPRESENTATIVE  CISSNA  asked if  seniors  can  use this  benefit                                                               
while out of state.                                                                                                             
                                                                                                                                
COMMISSIONER GILBERTSON  responded that the bill  covers resident                                                               
of  Alaska,   while  in  Alaska.     There  are   exemptions  for                                                               
individuals who  leave the state.   He asked the members  to look                                                               
at  page  3, line  27,  where  it  lists conditions  under  which                                                               
seniors could be  out of state and still receive  benefits.  They                                                               
are for those who are  absent for medical treatment, or vacation,                                                               
business trips, or other absences of less than 30 days.                                                                         
                                                                                                                                
REPRESENTATIVE  CISSNA asked  if it  would be  possible to  order                                                               
prescription drugs from Canada.                                                                                                 
                                                                                                                                
COMMISSIONER  GILBERTSON   responded  that  it  is   currently  a                                                               
violation of federal law to order drugs through Canada.                                                                         
                                                                                                                                
REPRESENTATIVE CISSNA asked if the state is upholding that law.                                                                 
                                                                                                                                
COMMISSIONER GILBERTSON  replied that the state  does not enforce                                                               
federal laws.                                                                                                                   
                                                                                                                                
REPRESENTATIVE  CISSNA   told  the  members  that   she  recently                                                               
attended  a briefing  where the  new  Medicare prescription  drug                                                               
bill  was discussed.    She  added that  while  the briefing  was                                                               
complex, it was  clear to her that it is  important for the state                                                               
to take into  consideration any impact its actions  might have in                                                               
2006 when  the law is  implemented.  Representative  Cissna asked                                                               
if   Commissioner  Gilbertson   is  bearing   this  in   mind  as                                                               
legislation comes forth.                                                                                                        
                                                                                                                                
Number 1330                                                                                                                     
                                                                                                                                
COMMISSIONER  GILBERTSON commented  that  this  program does  not                                                               
have a nexus with the federal  program.  He pointed out that this                                                               
is  not an  extension of  the  Medicaid program.   It  is a  drug                                                               
subsidy  assistance to  beneficiaries.   While  some states  have                                                               
attempted to  cover prescription drug programs  though "pharmacy-                                                               
plus" waivers  to allow Medicaid  "build-outs" for  some seniors,                                                               
the  federal legislation  grandfathered  out these  pharmacy-plus                                                               
waivers.                                                                                                                        
                                                                                                                                
Number 1391                                                                                                                     
                                                                                                                                
MARIE DARLIN, Coordinator, Capital  City Task Force, AARP Alaska,                                                               
testified in  support of HB  374 and answered questions  from the                                                               
members.  She told the members  that AARP has over 76,000 members                                                               
in Alaska.  Ms. Darlin asked  the committee to look at the letter                                                               
from  Marguerite Stetson,  AARP State  Coordinator for  Advocacy,                                                               
dated January  12, 2004,  which highlights  AARP's support  of HB                                                               
374.    Last  year  was  a difficult  one  for  senior  Alaskans,                                                               
particularly those over the age  of 72, because these individuals                                                               
made  their  financial  plans  for  retirement  based  on  social                                                               
security,  savings and  investments, pensions  for some,  and the                                                               
Alaska  longevity  bonus.   These  seniors  have to  watch  their                                                               
budgets because  they do  not have  the option  of going  back to                                                               
work to make  up for what has  been lost one way  or another, she                                                               
said.                                                                                                                           
                                                                                                                                
MS. DARLIN  pointed out that as  some people age, they  need more                                                               
prescription  drugs.   Unfortunately,  those drugs  that help  to                                                               
deal  with chronic  illnesses  have been  increasing  in cost  at                                                               
rates much  higher than normal  inflation.  She told  the members                                                               
that statistics that  have been provided indicate  that [the cost                                                               
of] prescription drugs  increased 25 percent last year.   This is                                                               
a  real  concern.    Ms.  Darlin  said  that  when  the  governor                                                               
eliminated  the   longevity  bonus  plan,  it   hurt  many  older                                                               
Alaskans.   It has  forced them  to rethink  how they  can manage                                                               
retirement budgets and  still have funds to  pay for prescription                                                               
drugs.  She said that  while the Alaska Senior Assistance Program                                                               
did not replace  the longevity bonus, it does help  over 7,000 of                                                               
the lowest-income older Alaskans  meet their day-to-day costs for                                                               
prescription drugs.                                                                                                             
                                                                                                                                
Number 1512                                                                                                                     
                                                                                                                                
MS.  DARLIN told  the members  that while  the U.S.  Congress has                                                               
passed  and the  President has  signed the  Medicare prescription                                                               
drug  bill,  it will  not  take  effect  until January  1,  2006.                                                               
Although  not  perfect,  this bill  will  significantly  help  an                                                               
estimated  23,000  older  Alaskans  who  are  below  the  federal                                                               
poverty level;  however, the implementation  of this is  over two                                                               
years away.   She  told the committee  that AARP  appreciates the                                                               
proposed SeniorCare program  in that it will  provide some relief                                                               
to seniors until the federal program is in place.                                                                               
                                                                                                                                
MS. DARLIN emphasized that any  program that helps older Alaskans                                                               
deal  with escalating  prescription drug  costs will  be welcome.                                                               
She offered AARP's  assistance in working through  the details in                                                               
making  sure the  system is  user-friendly.   She also  noted the                                                               
good  news that  two additional  staff  will be  hired to  assist                                                               
seniors with  the new  program.   She said  this is  an important                                                               
first step.                                                                                                                     
                                                                                                                                
Number 1648                                                                                                                     
                                                                                                                                
MS. DARLIN  said AARP strongly  supports the preferred  drug list                                                               
(PDL)  for   Medicaid.    Most   countries,  the   U.S.  Veterans                                                               
Administration, the Indian Health Service,  more than half of the                                                               
states, and many  employers already use some form  of a preferred                                                               
[prescription] drug list.  She pointed  out that it does not make                                                               
sense to pay for a more  expensive brand name drug when a generic                                                               
drug is just  as effective.  Ms. Darlin said  that the Department                                                               
of Health  and Social Services  is working  toward evidence-based                                                               
formularies   to   determine   which   prescriptions   are   most                                                               
therapeutically effective.   The  PDL then recommends  those that                                                               
are least  expensive, but it  does not preclude a  physician from                                                               
prescribing other justifiable medications.                                                                                      
                                                                                                                                
MS. DARLIN  told the  committee she believes  it is  important to                                                               
consider  how pharmaceuticals  are manufactured  and marketed  in                                                               
the United States.  When a  drug company seeks approval for a new                                                               
drug  from the  Food and  Drug Administration  (FDA), it  is only                                                               
required to prove  that the new product is more  effective than a                                                               
sugar pill,  not that it  is as good  or more effective  than the                                                               
drugs  that  are  already  on  the  market  to  treat  a  similar                                                               
condition.   Drug  salesmen tell  physicians which  ones are  the                                                               
best, but they  also work for the company  who manufactures them.                                                               
Ms.  Darlin  said  the  Alaska  PDL will  serve  as  the  state's                                                               
consumer report  in saying  how effective  the drug  performs and                                                               
how it compares  with other medications in the same  class.  This                                                               
will be information that was  not previously available.  Valuable                                                               
Medicaid dollars  should not  be spent  on prescription  that are                                                               
too expensive  and no more  therapeutically effective,  she said.                                                               
It  is  AARP's position  that  the  commissioner and  the  health                                                               
professionals who are developing the PDL should be applauded.                                                                   
                                                                                                                                
Number 1754                                                                                                                     
                                                                                                                                
MS. DARLIN  summarized her  comments by saying  that one  of AARP                                                               
[member's]  concerns, as  parents and  grandparents, was  how the                                                               
plan would  be funded.  She  said that no matter  what a person's                                                               
age is, all Alaskans are in this together.                                                                                      
                                                                                                                                
Number 1771                                                                                                                     
                                                                                                                                
REPRESENTATIVE GATTO asked Ms. Darlin if AARP supports HB 374.                                                                  
                                                                                                                                
MS. DARLIN replied  that AARP supports this bill.   She asked the                                                               
members  to  review   the  letter  in  their   bill  packet  from                                                               
Marguerite Stetson,  AARP State  Coordinator for  Advocacy, dated                                                               
January 12,  2004, in which  she delineates AARP's support  of HB                                                               
374.                                                                                                                            
                                                                                                                                
Number 1816                                                                                                                     
                                                                                                                                
SARA  JACKSON, Program  Manager,  Saint  Francis House,  Catholic                                                               
Social Services,  testified in support of  HB 374.  She  told the                                                               
member that  she supports  HB 374  and appreciates  the continued                                                               
cash assistance  to needy  seniors.   Ms. Jackson  explained that                                                               
the seniors  she works with  are extremely  poor.  She  said that                                                               
while  it  is  a  small percentage,  their  situations  are  very                                                               
dramatic.     Because  Saint  Francis  is   responsible  for  the                                                               
distribution of food  to people 60 years [of age]  and older, she                                                               
has  become aware  of  the number  of people  who  are living  on                                                               
dismally small amounts of money,  perhaps $500 or $600 per month,                                                               
she said.                                                                                                                       
                                                                                                                                
MS. JACKSON said that even with  this small amount of money, they                                                               
are  helping  to support  their  unemployed  children or  raising                                                               
their grandchildren.   She said  she believes it is  important to                                                               
honor the pioneers,  but with the limited  resources available it                                                               
is more important to assist those  who are desperately poor.  She                                                               
said  there  should  be  some other  way  [besides  the  recently                                                               
abolished  longevity  bonus]  to  let  the  pioneers  know  their                                                               
efforts are appreciated.                                                                                                        
                                                                                                                                
Number 1947                                                                                                                     
                                                                                                                                
MS. JACKSON  asked how much of  the resources will be  going into                                                               
information and referral.                                                                                                       
                                                                                                                                
Number 1987                                                                                                                     
                                                                                                                                
STEVE  ASHMAN,  Director,  Division of  Senior  and  Disabilities                                                               
Services, Department of Health and  Social Services, testified on                                                               
HB 374  and answered  questions from the  members.   He responded                                                               
that  the  division  currently  has  individuals  who  work  with                                                               
Medicare  and  Medicaid  information  that  is  funded  primarily                                                               
through  federal  government  grants.     Some  of  the  subgrant                                                               
recipients such as  OPAG [Older Person's Action  Group, Inc.] and                                                               
AARP  Alaska  provide similar  information.    He explained  that                                                               
under  the governor's  proposal  for  the SeniorCare  information                                                               
office,  it will  encompass the  same activity,  but will  expand                                                               
those services  so that it  is truly  a one-stop shop  for senior                                                               
citizens.  The office will network  with other groups to see what                                                               
other  types  of  information  and  services  are  available  for                                                               
referral.  Mr. Ashman told the  members that the office will work                                                               
hand-in-hand with  other resources  that are available  and share                                                               
that information not  only with seniors that  are inquiring about                                                               
those services,  but also with  partners in the  senior industry.                                                               
This is a significant expansion, he added.                                                                                      
                                                                                                                                
Number 2039                                                                                                                     
                                                                                                                                
CHAIR  WILSON asked  if  there  will be  a  telephone number  for                                                               
individuals to call for information and referral.                                                                               
                                                                                                                                
MR. ASHMAN  responded that there  will be a  number to call.   He                                                               
explained that  the division  is currently  hiring for  those two                                                               
positions, but  there is a  grantee who is  providing information                                                               
and referral and  is manning the telephone now.   The web site is                                                               
up and  running and under development  now.  Mr. Ashman  told the                                                               
members that the  division will be fully operational  by April 1.                                                               
He noted that information will be continuously updated.                                                                         
                                                                                                                                
Number 2072                                                                                                                     
                                                                                                                                
ED  ZASTROW,  President,  AARP Ketchikan  Chapter,  testified  in                                                               
support of HB  374.  Mr. Zastrow told the  members that he agrees                                                               
with Ms. Darlin's comments,  and applauds Commissioner Gilbertson                                                               
and Mr. Ashman's efforts in putting  forth this program.  He said                                                               
he supports HB 374.                                                                                                             
                                                                                                                                
Number 2110                                                                                                                     
                                                                                                                                
REPRESENTATIVE   SEATON   asked    Commissioner   Gilbertson   if                                                               
exceptions to the PDL are possible under the SeniorCare program.                                                                
                                                                                                                                
COMMISSIONER GILBERTSON referred the members  to page 3, line 15,                                                               
where  it clarifies  that if  the prescribing  physician believes                                                               
that the  brand name  drug is medically  necessary as  opposed to                                                               
the generic  drug, the physician  may document that, and  in that                                                               
case the  brand name drug will  be made available.   Absent these                                                               
circumstances,  the program  will pay  for the  generic drug,  he                                                               
said.                                                                                                                           
                                                                                                                                
REPRESENTATIVE  SEATON asked  Commissioner Gilbertson  to explain                                                               
the bill's  fiscal impact on  the general fund  from FY 04  to FY                                                               
06.                                                                                                                             
                                                                                                                                
COMMISSIONER  GILBERTSON  responded   that  if  this  legislation                                                               
passes  the  legislature  in  short  order,  it  will  allow  the                                                               
department to  begin the program  on April  1, 2004.   This would                                                               
mean that  it will  run approximately one-quarter  of FY  04, the                                                               
full year  of FY 05, and  one-half of FY 06,  because the federal                                                               
benefit begins on January 1, 2006.   He told the members that the                                                               
estimates that have  been put together by the  department for the                                                               
general fund obligation  for the fourth quarter of FY  04 will be                                                               
$316,000.   The FY  05 estimate  is $14.9  million, of  which $12                                                               
million  is federal  funding; therefore,  $2.9 million  will come                                                               
from general  funds.  He  explained that the federal  dollars are                                                               
flexible dollars  available to the  state through  fiscal relief.                                                               
FY 06  funding would be a  general fund program for  the one-half                                                               
year at a cost of $7.78 million.                                                                                                
                                                                                                                                
Number 2219                                                                                                                     
                                                                                                                                
REPRESENTATIVE  KAPSNER referred  to  the chart  provided to  the                                                               
members titled  "Comparison of  Qualifications and  Benefits" and                                                               
asked for  clarification on the  determination of  liquid assets.                                                               
Specifically, she asked  what is included in the  assets list and                                                               
asked if this is done by a self-reporting method.                                                                               
                                                                                                                                
Number 2249                                                                                                                     
                                                                                                                                
COMMISSIONER  GILBERTSON responded  that the  assets test  is the                                                               
same as that for the Alaska  Senior Assistance Program.  For most                                                               
individuals in  this income category,  their liquid  assets would                                                               
be their checking accounts.  The  liquid assets do not include an                                                               
individual's home or automobiles.   Under the application process                                                               
it is  self-reported data.  He  added that the majority  of these                                                               
clients are  already in  other programs  in the  department where                                                               
income  verification   has  already  been  done.     Commissioner                                                               
Gilbertson  pointed out  that this  program is  intended to  be a                                                               
bridge program so  the department will not  be investing sizeable                                                               
amounts  of general  fund dollars  to build  a bureaucracy  for a                                                               
program for a  few years.  For that reason,  the applications are                                                               
simple and the department believes  it has been successful due to                                                               
the  large number  of applications  received, many  of which  are                                                               
duplicative.     The  department  saturated  the   community  and                                                               
obtained  great comments  from  senior  organizations during  the                                                               
development and  implementation of  the Alaska  Senior Assistance                                                               
Program.                                                                                                                        
                                                                                                                                
COMMISSIONER  GILBERTSON  stated for  the  record  that of  those                                                               
individuals  who were  on the  Alaska Senior  Assistance Program,                                                               
which  is  a  needs-based  program,  only  46  percent  were  not                                                               
receiving the longevity bonus [payment].                                                                                        
                                                                                                                                
REPRESENTATIVE  KAPSNER asked  what  consideration  was given  to                                                               
geographic cost  differentials.   She noted that  UAA [University                                                               
of Alaska Anchorage] puts out  an annual list of communities that                                                               
are very expensive to live  in.  Representative Kapsner said that                                                               
her community,  Bethel, is  the most  expensive.   Is it  fair to                                                               
give everyone the same amount, she asked.                                                                                       
                                                                                                                                
Number 2366                                                                                                                     
                                                                                                                                
COMMISSIONER  GILBERTSON responded  that  the state  standardizes                                                               
the benefit  for a variety of  reasons including legal ones.   He                                                               
pointed  out that  the federal  government offers  a geographical                                                               
adjustment and  includes a 25  percent inflation factor  over the                                                               
Lower 48 [states].                                                                                                              
                                                                                                                                
TAPE 04-1, SIDE B                                                                                                             
Number 2361                                                                                                                     
                                                                                                                                
COMMISSIONER  GILBERTSON  pointed  out  that while  there  is  an                                                               
inflation factor for the state,  there is none for regions within                                                               
the state.   He summarized  that the SeniorCare program  does not                                                               
address that issue.                                                                                                             
                                                                                                                                
Number 2352                                                                                                                     
                                                                                                                                
REPRESENTATIVE  WOLF asked  how  the one-stop  shop would  assist                                                               
seniors  who find  it difficult  to complete  applications.   For                                                               
example, in  his district  there were  seniors who  completed the                                                               
application,  included their  deductible for  Medicare, and  were                                                               
disqualified.                                                                                                                   
                                                                                                                                
COMMISSIONER  GILBERTSON responded  that there  will always  been                                                               
seniors who  do not have  access to simple ways  of communicating                                                               
with  the department.    He  added that  the  department will  be                                                               
working   in  partnership   with   organizations  and   grantees.                                                               
SeniorCare will  be serving  over 10,000  seniors in  FY 05.   He                                                               
told the members that a majority  of the clients will not have to                                                               
apply  again because  they  are already  enrolled  in the  Alaska                                                               
Senior Assistance Program.   There will be a  very simple process                                                               
whereby they  will elect either the  prescription drug assistance                                                               
[program]  or   the  cash   assistance  program.     Commissioner                                                               
Gilbertson  added that  there are  about 3,000  seniors who  will                                                               
have to apply and that it is a challenge.                                                                                       
                                                                                                                                
REPRESENTATIVE  WOLF  told  the  members  of  a  constituent  who                                                               
explained  that  he  was  disqualified  from  the  Alaska  Senior                                                               
Assistance Program  even though  [he and  his wife]  had received                                                               
the longevity  bonus.   The problem is  that when  they purchased                                                               
their home,  the longevity bonus  was figured into  their monthly                                                               
income.   When the  constituent went to  [the Division  of Senior                                                               
and Disabilities  Services] to  get help  with the  paperwork, he                                                               
was told  that he wouldn't qualify,  and the best thing  he could                                                               
do is  divorce his wife  of 50 years  and then he  would qualify.                                                               
Representative Wolf  asked Commissioner Gilbertson how  that kind                                                               
of problem could be addressed.   A statement like this from staff                                                               
is insulting to [applicants], he commented.                                                                                     
                                                                                                                                
Number 2226                                                                                                                     
                                                                                                                                
COMMISSIONER  GILBERTSON  responded that  he  does  not know  the                                                               
particulars in  this situation.   He told the committee  that the                                                               
majority of  applications are submitted  by mail,  and assistance                                                               
to  individuals  is  usually  provided   by  individuals  in  the                                                               
community  and not  necessarily  state  employees.   Commissioner                                                               
Gilbertson  emphasized  that  the  program is  available  to  all                                                               
seniors who  meet the income  criteria and that  the applications                                                               
are processed in a fair and unbiased fashion.                                                                                   
                                                                                                                                
Number 2219                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GATTO commented  that most  individuals, even  in                                                               
the  small villages,  have Internet  access.   Is the  department                                                               
working with  AARP and other  volunteer groups for  assistance in                                                               
downloading  a   form,  filling  it  out,   and  transmitting  it                                                               
electronically, or is it always a paper application?                                                                            
                                                                                                                                
COMMISSIONER GILBERTSON  replied that  after the start-up  of the                                                               
Alaska Senior Assistance Program, the  department gained a lot of                                                               
experience  in  outreach  to this  population.    The  department                                                               
saturates the market  and ensures that all who  are eligible have                                                               
an opportunity to  apply.  The trends have shown  that within the                                                               
first  month  of  the  program   there  was  a  large  volume  of                                                               
applications,  and a  very  small group  of  seniors that  joined                                                               
later.    Commissioner  Gilbertson  told  the  members  that  the                                                               
department  has  found a  good  mechanism  and a  combination  of                                                               
outreach  methods  to seniors.    The  department will  use  that                                                               
method  again.   Some of  these outreach  contacts have  been the                                                               
local  resources   on  the  ground,   state  offices   in  larger                                                               
communities,  Senior  Voice, and  grantees.    He commented  that                                                             
there  were  over 5,000  duplicate  applications  in the  initial                                                               
program,  which demonstrates  that the  department saturated  the                                                               
market, and  he added,  the department  plans to  do it  again to                                                               
ensure that  all seniors  have access  to the  program.   Many of                                                               
these seniors are  already on databases from  the longevity bonus                                                               
program and the existing Alaska  Senior Assistance Program, which                                                               
will be used in a direct mailing to all of them.                                                                                
                                                                                                                                
Number 2144                                                                                                                     
                                                                                                                                
CHAIR  WILSON noted  for the  record that  Representative Coghill                                                               
has joined the meeting.                                                                                                         
                                                                                                                                
REPRESENTATIVE  GATTO noted  that the  fiscal note  for FY  05 is                                                               
about  $15 million  and then  the numbers  drop drastically.   He                                                               
asked what the total fiscal note [would be for this program].                                                                   
                                                                                                                                
COMMISSIONER  GILBERTSON  responded  that   the  $15  million  is                                                               
appropriated  to the  Division  of Public  Assistance because  it                                                               
will be  administering the program.   The  administrative expense                                                               
for FY 05  will be $61,500 in the Division  of Public Assistance,                                                               
$7,000  in IT  [information  technology]  Services, and  $184,000                                                               
which  is   largely  an   enrollment  (indisc.).     Commissioner                                                               
Gilbertson summarized that  if would cost a  little over $250,000                                                               
to administer the $15-million program.                                                                                          
                                                                                                                                
Number 2041                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GATTO moved  to report  HB 374  out of  committee                                                               
with  individual  recommendations  and  the  accompanying  fiscal                                                               
notes.  There being no objection,  HB 374 was reported out of the                                                               
House Health, Education and Social Services Standing Committee.                                                                 

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