Legislature(2009 - 2010)BUTROVICH 205

02/01/2010 01:30 PM Senate HEALTH & SOCIAL SERVICES

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01:32:04 PM Start
01:32:43 PM SB238
02:26:40 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved SB 238 Out of Committee
         SB 238-MEDICAID FOR MEDICAL & INTERMEDIATE CARE                                                                    
1:32:43 PM                                                                                                                    
CHAIR DAVIS  announced consideration  of SB 238. This  bill mirrors                                                             
a bill in  the House and was introduced  on the Senate  side at the                                                             
request of members of that body.                                                                                                
1:33:38 PM                                                                                                                    
TOM  OBERMEYER,  aide  to  Senator  Davis,  presented  the  sponsor                                                             
statement  for SB  238.  SB 238  amends the  eligibility  threshold                                                             
for medical  assistance for  persons in  a medical or  intermediate                                                             
care  facility. In  2003  the legislature  changed  Alaska  Statute                                                             
Sec.  47.07.020(b)(6),  the  Medicaid   long-term  services  income                                                             
eligibility  limit  for persons  in  medical or  intermediate  care                                                             
facilities  from 300  percent supplemental  income  security to  an                                                             
equivalent  fixed dollar  amount of  $1656 per  month. This  change                                                             
created  an  income ceiling  for  waiver  eligibility,  effectively                                                             
freezing  the eligibility  limit for  the last  seven years  rather                                                             
than  allowing the  limit to  adjust  annually in  tandem with  the                                                             
federal Supplemental  Security Income  (SSI) limit. The  result was                                                             
that  small   Social  Security   cost-of-living  adjustments   have                                                             
disqualified many needy disabled people from the program.                                                                       
He  said that  near  the end  of  2008,  many individuals  who  are                                                             
aged,  blind,  or   disabled  and  requiring  institutional   care,                                                             
received  notices that  they would  no longer be  eligible for  the                                                             
Home  and Community-Based  Services  waivers after  the 2009  cost-                                                             
of-living  adjustment   went  into   effect.  Because   the  waiver                                                             
eligibility  limits no  longer increase  with the  cost of  living,                                                             
it  placed a  number of  people  over the  $1656  per month  limit,                                                             
which  is 300  percent  of  the 2003  SSI  benefit rate.  The  2009                                                             
income  equivalent at  300 percent  SSI  was $2022  per month.  (He                                                             
referred  members to the  attached fiscal  note.) Alternatives  for                                                             
preserving   eligibility,   particularly    for   those   requiring                                                             
lifetime  or  long-term  care,  include   creation  of  a  Medicaid                                                             
Qualifying  Income Trust,  also  known as  a Miller  Trust.  Trusts                                                             
have  procedural  drawbacks  including  numerous   responsibilities                                                             
and  restrictions,  limited  access  to  income, the  need  for  an                                                             
attorney, and the need for a trustee to manage trust assets.                                                                    
The  Supplemental  Security  Income  program is  a  federal  needs-                                                             
based  disability  program  for  low income  adults  over  age  65,                                                             
blind, or  disabled. For an adult,  the SSI disability  requirement                                                             
is based on  the ability to work.  An adult is considered  disabled                                                             
if the person  cannot do the work  that he or she performed  before                                                             
the disability  occurred and  cannot do  alternate work because  of                                                             
a  severe  physical  or  mental   condition.  For  a  child  to  be                                                             
eligible,  he  or she  must  suffer from  serious  physical  and/or                                                             
mental  problems.  For  both adults  and  children  the  disability                                                             
must  last, or  be expected  to  last, at  least  a year.  Medicaid                                                             
services   are  critical   to  the  wellbeing   of  Alaska's   most                                                             
vulnerable citizens.  Supporting SB  238 will ensure that  eligible                                                             
Alaskans  can continue  to receive  nursing home  care and  in-home                                                             
services.  It  will   also  save  the  legislature   from  amending                                                             
statutes   every  year  or   two  as   the  federal   poverty-level                                                             
guidelines  and  supplemental  security levels  increase  with  the                                                             
cost of living.                                                                                                                 
1:36:58 PM                                                                                                                    
MR.  OBERMEYER   noted  that  SB   238  has  a  zero   fiscal  note                                                             
accompanied   by  a  good  deal   of  written  analysis   from  the                                                             
Department of Health and Social Services.                                                                                       
1:37:15 PM                                                                                                                    
CHAIR    DAVIS   called    John   Sherwood    to   represent    the                                                             
1:37:26 PM                                                                                                                    
JON  SHERWOOD,  Medical  Assistant  Administrator,   Department  of                                                             
Health  and Social  Services  (DHSS)  said, as  stated  previously,                                                             
this bill  would  increase the  income standard  used to  determine                                                             
Medicaid  eligibility  for  people  who  are in  nursing  homes  or                                                             
receiving  Home   and  Community  Based  Waiver  (HCBW)   services.                                                             
Basically,  these are  people who  need an  institutional level  of                                                             
care.  It would allow  the income  standard  to increase  according                                                             
to   cost-of-living    increases   granted   under    the   federal                                                             
Supplemental  Security Income program.  Those are the same  kind of                                                             
cost-of-living  increases  people  get  in  their  Social  Security                                                             
Currently,  people  who  are  over  income  for  this  category  of                                                             
Medicaid,  because  of the  large  expense of  providing  services,                                                             
use  a device  called a  Qualifying Income  Trust  (QIT) or  Miller                                                             
Trust to reduce  their countable  income for Medicaid to  below the                                                             
income standard  ($1656 per month)  and qualify for Medicaid.  As a                                                             
result  of this  standard  being  fixed in  law,  he  has not  seen                                                             
people losing  Medicaid eligibility,  however  they are subject  to                                                             
significant  inconvenience  and expense  in setting  up the  trust,                                                             
and  management  can  impose  hardships  on  themselves  and  their                                                             
families.  The Department of  Health and  Social Services  does not                                                             
anticipate  that raising  the need  standard will  add more  people                                                             
to  the  Medicaid  program;  therefore  they are  assuming  a  zero                                                             
fiscal note.                                                                                                                    
MR. SHERWOOD  pointed out that  people who meet this  institutional                                                             
level of  care and  are in a  nursing home or  on a waiver  program                                                             
are  subject to  a calculation  called a  cost-of-care  calculation                                                             
that  takes place  after  HSS determines  their  eligibility.  This                                                             
calculation  takes into  effect all  of their  income and  provides                                                             
some  deductions  including a  Personal  Needs Allowance  (PNA),  a                                                             
deduction  to  cover the  cost  of  a spouse  or  other  dependents                                                             
living  in the community,  medical  expenses that  are not  covered                                                             
by  the  Medicaid   program,  and  some  others.   Once  they  have                                                             
completed  that calculation,  HSS determines  what amount of  money                                                             
individuals  must  pay  for  their  cost of  care;  that  is,  what                                                             
portion they  must pay their providers  for the cost of  care. That                                                             
in turn reduces  the amount the state  pays to providers  for their                                                             
care. He  said he raises  that issue  because this proposed  change                                                             
in  the statute  would not  affect  the Personal  Needs  Allowance;                                                             
the PNA  is set in regulation,  and they  assume they will  keep it                                                             
at its current levels for the time being.                                                                                       
He  stressed that  if  they were  to  increase the  Personal  Needs                                                             
Allowance,  it  would  decrease  the amount  of  money  people  are                                                             
paying for  their cost of  care and would  have a fiscal  impact on                                                             
the program.                                                                                                                    
MR. SHERWOOD  said this  change would  prevent  a number of  people                                                             
from having  to get  a trust, and  it would  allow the standard  to                                                             
move with  adjustments to  the cost of living  on the SSI  program.                                                             
He reiterated  that the cost of  care and Personal Needs  Allowance                                                             
are separate,  and they  are not proposing  to change the  Personal                                                             
Needs Allowances as part of this bill.                                                                                          
1:41:19 PM                                                                                                                    
SENATOR DYSON  asked Mr.  Sherwood from what  sources a person  who                                                             
is institutionalized might receive income.                                                                                      
MR. SHERWOOD  replied that  the most common  source of income  is a                                                             
Social  Security  payment or  another  retirement  payment such  as                                                             
state, federal,  or private retirement.  Some people would  qualify                                                             
for Social  Security Disability Insurance  benefits. If  people are                                                             
receiving  cash assistance from  the state,  they don't fall  under                                                             
this category;  they fall  under another  category of Medicaid,  so                                                             
they  are not  subject  to  these standards  or  the  cost of  care                                                             
1:42:41 PM                                                                                                                    
SENATOR  DYSON questioned  why the legislature  wouldn't want  them                                                             
to exhaust this other source of income to pay their bills first.                                                                
MR.  SHERWOOD  explained  that  they  are  required  to  use  their                                                             
income to pay  toward the cost of  their care after certain  income                                                             
deductions  are applied.  Some  of  those deductions  are  explicit                                                             
under  federal law.  The  Personal Needs  Allowance  is subject  to                                                             
some degree  of flexibility  by the  state; but  the state has  set                                                             
levels  that   should  afford  people   enough  funds   to  support                                                             
themselves  in their living  situation. It  is slightly higher  for                                                             
nursing  homes than  for assisted  living homes  and persons  being                                                             
cared  for in  their  own homes.  In  nursing homes,  the  Medicaid                                                             
payment  includes   a  payment  for   room  and  board.   In  other                                                             
settings,  by federal  law,  the state  is prohibited  from  paying                                                             
for room  and board;  in some  of these situations  people have  to                                                             
pay  rent  or  a  separate  fee  for  room  and  board  that  isn't                                                             
reimbursed  by Medicaid.  The  idea is  to give  people a  Personal                                                             
Needs Allowance  that is sufficient  to meet their living  expenses                                                             
in  the community.  Those  allowances  will  not increase  if  this                                                             
bill passes.                                                                                                                    
1:44:59 PM                                                                                                                    
SENATOR DYSON  said he  was unclear about  whether SB 238  proposes                                                             
to raise  the limit  so people  can have more  personal income  and                                                             
not be disqualified from these categories of public income.                                                                     
MR. SHERWOOD  said that  is correct,  but explained  that the  bill                                                             
increases  the  standard  the  state   uses  to  determine  whether                                                             
people are  eligible for  Medicaid; it does  not change the  amount                                                             
of money  they  can keep  before they  have to  start paying  their                                                             
providers for the cost of their care.                                                                                           
1:46:23 PM                                                                                                                    
MR.  SHERWOOD expanded  that  in  federal terms,  the  cost-of-care                                                             
calculation  is  referred  to  as  "post-eligibility."   After  the                                                             
determination  of eligibility, Medicaid  calculates how  much money                                                             
a  person  has  to  pay  for  his  care.  Those  are  two  separate                                                             
calculations;  they are not done at  the same time, and  they don't                                                             
use the same rules.                                                                                                             
1:47:01 PM                                                                                                                    
SENATOR THOMAS joined the meeting.                                                                                              
SENATOR  PASKVAN  asked Mr.  Sherwood  approximately  what the  net                                                             
amount of  monies is in  these Miller Trusts  and if he  is correct                                                             
that  these funds  are used  to pay  living  expenses separate  and                                                             
apart from the program.                                                                                                         
MR.  SHERWOOD  replied  that there  are  limits  on the  amount  of                                                             
money  that  can  be made  available  to  individuals  through  the                                                             
Miller Trusts  directly. That money  is typically used to  pay room                                                             
and board  and other  living expenses;  each trust  is tailored  to                                                             
the  needs   of  the  individual.   The  cost-of-care   calculation                                                             
ignores  the existence  of a  Miller Trust.  The trust  is used  to                                                             
determine eligibility  and after the  state determines the  cost of                                                             
care,  they have  access  to all  of  the funds  that  go into  the                                                             
Miller Trust.                                                                                                                   
1:49:11 PM                                                                                                                    
SENATOR  PASKVAN  asked  what  happens  to  any  money  within  the                                                             
Miller Trust upon death.                                                                                                        
MR.  SHERWOOD  said  people  in  this  income  group  tend  not  to                                                             
accumulate  money in this  trust; if they  do, the balance  is used                                                             
to reimburse  the Medicaid program  for expenses incurred  on their                                                             
SENATOR PASKVAN responded "So this isn't a savings account."                                                                    
MR.  SHERWOOD  concurred.  He  said   the  Miller  Trust  has  been                                                             
referred to  as a "flush trust" by  one attorney he knows,  because                                                             
money comes in and goes out each month.                                                                                         
1:50:39 PM                                                                                                                    
SENATOR PASKVAN  ventured that if SB  238 passes, a person  with an                                                             
income of less than $2022 will not have to open a Miller Trust.                                                                 
MR. SHERWOOD responded "That is correct".                                                                                       
SENATOR  PASKVAN asked  what the  typical  cost of  setting up  and                                                             
administering a Miller Trust would be.                                                                                          
MR. SHERWOOD  answered that when  he was working more  closely with                                                             
trust policy,  the cost  ran between approximately  $800 and  $2000                                                             
to set up the trust.                                                                                                            
1:52:19 PM                                                                                                                    
SENATOR  PASKVAN said  he understands  that by  raising the  limit,                                                             
recipients  won't have  to spend that  money. They  can earn  up to                                                             
$2022 per month to pay for other costs of living.                                                                               
MR. SHERWOOD  affirmed that if  recipients' income falls  below the                                                             
$2022 per  month they would  not have to  open a trust.  This would                                                             
save them  the expense  of setting  it up; it  would save them  the                                                             
burden  of trust accounting;  and  it would save  them from  having                                                             
to find a reputable person to act as their trustee.                                                                             
SENATOR THOMAS joined the meeting.                                                                                              
1:53:26 PM                                                                                                                    
SENATOR  THOMAS said  his only  experience with  Miller Trusts  has                                                             
been that  they are  a simple  arrangement and  generally apply  to                                                             
people  who have  have Social  Security  income  and have  divested                                                             
themselves  of  most  of  their  possessions.  He  asked  if  other                                                             
groups  of people  qualify  for these  trusts  and  have assets  in                                                             
excess of what is generally allowed under state assistance laws.                                                                
MR.  SHERWOOD  answered  that  a  Miller Trust  is  used  only  for                                                             
income.  The asset  test  that affects  this category  of  Medicaid                                                             
allows a maximum  of $2000. There  is a generous spousal  deduction                                                             
and some assets  are exempt such as  a home and car, so  to use the                                                             
trust  people  still  have  to  divest  themselves  of  accountable                                                             
assets  beyond the  asset  standard. Generally,  people  who use  a                                                             
Miller  Trust have  some kind  of retirement  or disability  income                                                             
in excess  of  the standard.  It is  most commonly  used by  people                                                             
who are in  nursing homes or qualify  for Home and Community  Based                                                             
1:55:59 PM                                                                                                                    
SENATOR  THOMAS  wondered  if  any  additional  funds  are  usually                                                             
directed  to  the care  facility,  since  those  funds have  to  be                                                             
accounted  for and used  to pay  for individuals'  care at the  end                                                             
of the year.                                                                                                                    
MR.  SHERWOOD replied  that  people,  especially those  in  nursing                                                             
homes,  have to  pay most  of their  income  toward their  cost-of-                                                             
care,  so   they  tend  not  to   accumulate  money.  If   they  do                                                             
accumulate  money that takes  them over the  $2000, then  they need                                                             
to spend  that money in  a way that will  not also create  problems                                                             
for their  eligibility; they cannot  convert that money  to another                                                             
accountable  asset. If  they have no  other needs  to be met,  DHSS                                                             
would  typically  recommend  that  people  pay  their  provider  an                                                             
additional sum toward their cost of care.                                                                                       
1:57:42 PM                                                                                                                    
VANCE  L. SANDERS,  Attorney at  Law, Juneau,  Alaska, started  out                                                             
with Alaska  Legal Services  in 1984  and has  been practicing  law                                                             
here  for many  years. He  is also  the President  of Alaska  Legal                                                             
Services  Corporation  but   was  speaking  on  this  issue  as  an                                                             
individual and expressed strong support for SB 238.                                                                             
This is  a complicated area  of the law,  he said. There  are three                                                             
things  people have  to do to  qualify for  Medicaid. First,  their                                                             
accountable   resources  have   to  be  below   a  certain   limit,                                                             
depending  on whether  they are married  or single.  That limit  is                                                             
$2000 per  single individual;  for married  persons it is  $109,640                                                             
per community  spouse  this year.  Certain things  are not  counted                                                             
such as  a car  or a  home valued  at less  than $500,000.  Second,                                                             
their  level  of   care  has  to  be  either  skilled   nursing  or                                                             
intermediate,  which means  that they cannot  care for  themselves.                                                             
The third criterion  is that their  income must be below  a certain                                                             
amount that  was frozen in time by  the state of Alaska  in 2003 at                                                             
$1656 per month, the SSI limit at that time.                                                                                    
MR. SANDERS  explained that  SSI is a  federal payment program  for                                                             
people  who  are  determined  by  the   federal  government  to  be                                                             
disabled, have  not paid money into  the insurance system,  are low                                                             
income and  have few resources but  meet the disability  test. That                                                             
is  Title 16  of the  federal  Social Security  Act  and is  called                                                             
"the SSI limit."  Title 2 is the  insurance status. It  applies the                                                             
same disability  test, but resources  are not relevant; it  is just                                                             
like a federal insurance program for people who are disabled.                                                                   
The state of  Alaska made a policy  decision in 2003 to  freeze the                                                             
income  limit  for  people  to  qualify  for  Medicaid.  These  are                                                             
primarily  people on  Home  and Community  Based  Waivers, so  they                                                             
are at home  getting Medicaid,  those in long-term care  facilities                                                             
such as  Wildflower Court  in Juneau, and  now in pioneers'  homes.                                                             
Since  that time,  as those  people's  income  has gone  up due  to                                                             
cost-of-living  adjustments or other  factors, they have  no longer                                                             
qualified  and have  had  to use  a  Miller Trust  to  artificially                                                             
reduce their income.                                                                                                            
That sounds  easy, but  these are  people who  are already at  home                                                             
and  unable  to   care  for  themselves,  in  a  nursing   home  or                                                             
pioneers'  home,  or are  in  triage; now  they  have  to face  the                                                             
difficulty of  creating a trust. These  trusts are not easy  to set                                                             
up  and average  from  $500  to $1000,  which  for people  who  are                                                             
making $1700  to $2000 per month  is a lot. In Anchorage,  that fee                                                             
can  be up  to $2000  for  a single  trust  fee. They  are  24-page                                                             
documents  that have  to  incorporate not  only  federal and  state                                                             
law,  but  anticipate   that  these  people's  health   status  may                                                             
change.  When  he does  a  trust, he  anticipates  three  different                                                             
scenarios:  walking  around  Medicaid,   home  and  community-based                                                             
Medicaid,  or  nursing  home  Medicaid.  So  they  have  a  24-page                                                             
trust,  a family  in crisis,  and  in Juneau,  unless  a person  is                                                             
fortunate enough  to have the Office  of Public Advocacy  appointed                                                             
as his conservator  or guardian, there  are no trustees.  That is a                                                             
chronic  problem throughout  Alaska. Once  a trust  is created,  it                                                             
has  to  be registered  with  the  superior  court;  it has  to  be                                                             
assigned  an  Employer  Identification  Number  (EIN)  by  the  IRS                                                             
because  it is  a separate  legal entity;  it  requires a  separate                                                             
bank  account,  and there  is  an annual  review  by  the state  of                                                             
Alaska. He  reiterated that  these are  complicated things  and the                                                             
people who  have to deal with them  are generally not  qualified by                                                             
education  or inclination to  administer them.  It is an  amazingly                                                             
difficult thing for these families to pull off.                                                                                 
2:04:04 PM                                                                                                                    
MR.  SANDERS  said he  sees  this  as  a pro-family  bill.  SB  238                                                             
raises  that artificial  income limit  and ties  it to the  federal                                                             
SSI limit;  as that goes  up, the income  limit goes up.  That will                                                             
obviate the  need for many  families to come  up with the  money to                                                             
pay  for these  trusts and  go through  this  trust experience.  He                                                             
agrees with  Mr. Sherwood  that it  should be  a zero fiscal  note.                                                             
It  will  not  change   the  cost-of-care  calculation   for  post-                                                             
2:05:30 PM                                                                                                                    
MARIE  DARLIN, President,  AARP Capital  City  Task Force,  Juneau,                                                             
Alaska,  said AARP  supports  SB  238 and  urges the  committee  to                                                             
pass  this legislation.  She  expressed  her appreciation  for  Mr.                                                             
Sanders's  clear explanation  of Miller  Trusts.  She related  that                                                             
several  people at  Fireweed Place  were affected  by the  increase                                                             
in Social Security  last year and  had to begin looking  at trusts.                                                             
They were  very upset because  they did not  have the money  to pay                                                             
for it  and some gave up.  Those who were  able to create  one with                                                             
the support  of family found the  process very difficult.  AARP has                                                             
been  concerned about  this  since  the limit  was  fixed in  2003.                                                             
Most beneficiaries  of  this bill  not well  off financially;  they                                                             
are at  risk both  economically and  from a  health standpoint.  If                                                             
they don't  get the  care they  need and  are not  able to stay  at                                                             
home, it  will increase the  cost to the  state more when  they end                                                             
up in long-term care facilities.                                                                                                
She  concluded by  emphasizing  that this  bill  supports the  home                                                             
and community  based services  the state is  trying to promote  and                                                             
that are so badly needed.                                                                                                       
2:09:20 PM                                                                                                                    
HOLLY HANDLER,  Attorney at Law,  Juneau, Alaska, said she  sets up                                                             
Miller  Trusts for  clients  and assists  them  with problems  that                                                             
occur  during  the lifetime  of  these  trusts. In  December  2008,                                                             
because  no adjustment  to  the Medicaid  standard  to  SSI was  in                                                             
place, dozens  of Alaskans across  the state received  notification                                                             
that their  benefits were being cancelled  because of a  small cost                                                             
of  living increase  in Social  Security.  Some of  the people  she                                                             
represented  exceeded  the income  limit  by  only a  few  dollars.                                                             
Because of  this problem, they had  to set up Miller Trusts.  These                                                             
are irrevocable  trusts,  which means  they last  for the  lifetime                                                             
of the creator unless they are dissolved in court.                                                                              
MS. HANDLER  said that,  while some  people are  fortunate to  have                                                             
caring  family members  who will  serve  as trustee  to manage  the                                                             
trust account,  others  have no family  or friends  they can  trust                                                             
with  the whole  of  their finances.  She  emphasized  that when  a                                                             
trustee  becomes  responsible  for  a  Miller  Trust,  they  become                                                             
responsible  for  administering  the person's  entire  income,  and                                                             
for   SSI  eligibility.   If   the   trustee  manages   the   trust                                                             
irresponsibly   or   incorrectly,   it  can   jeopardize   Medicaid                                                             
In December  2008 when  the most recent  Social Security  COLA went                                                             
into  effect, she  represented  two  people who  had  no family  to                                                             
serve as  trustee. One of  these individuals  found a niece  out of                                                             
state  to manage  the trust;  but between  December  2008 and  now,                                                             
that  niece decided  her  financial needs  were  more important  to                                                             
her and took  all of the money.  This 70-year-old individual  could                                                             
not take  care of  himself and,  due to  this horrendous  financial                                                             
exploitation,  could no longer  pay rent  or utilities.  Rectifying                                                             
the situation  was not  a simple  matter of  changing the  trustee;                                                             
it was  a matter  of finding  an  attorney to  petition the  court,                                                             
explaining  in  court   affidavits  why  the  trustee   had  to  be                                                             
changed,  obtaining  a  court order,  registering  that  change  in                                                             
trustee  with  the  courts,  submitting  the  documents  to  public                                                             
assistance  for approval,  submitting legal  documents to the  bank                                                             
to change  all of  the trustee  information, and  dealing with  the                                                             
credit agencies to repair this person's credit.                                                                                 
In another  instance in Ketchikan,  a gentleman with end-stages  of                                                             
Parkinson's  disease had to  use a person he  did not know  well as                                                             
a  trustee.  That  trustee  proceeded  to  mismanage  the  Medicaid                                                             
account so  that his Medicaid was  jeopardized within  months after                                                             
setting up the trust.                                                                                                           
MS. HANDLER  stated  that she is  testifying in  strong support  of                                                             
this bill  because, not only  will it make  it easier for  existing                                                             
Medicaid  recipients to maintain  their eligibility,  it will  go a                                                             
long  way toward  preventing  the  kind of  financial  exploitation                                                             
and abuse  of the disabled  and elderly that  is already  a problem                                                             
in the  state and is made  worse by the  need to have these  Miller                                                             
Trusts  in place.  She  added  that she  has  had the  pleasure  of                                                             
working  with a  number  of fine  employees  at the  Department  of                                                             
Public  Assistance,  Jim  Steele  included.   Their  workloads  are                                                             
increased whenever these Social Security COLAs go into effect.                                                                  
2:16:05 PM                                                                                                                    
SENATOR  PASKVAN  asked  what  the   typical  cost  to  maintain  a                                                             
trustee is  if it isn't  the Office of  Public Assistance  (OPA) or                                                             
a family member.                                                                                                                
MS. HANDLER  answered that  in the cases  she handled, the  trustee                                                             
charged  approximately  $50 per  month; for  those  who exceed  the                                                             
income  limit by  only a  few dollars,  that takes  them below  the                                                             
$1656  per  month allowed  to  pay  for food,  shelter,  and  basic                                                             
living expenses.                                                                                                                
2:17:01 PM                                                                                                                    
DENISE DANIELLO,  Executive Director,  Alaska Commission  on Aging,                                                             
Juneau,  Alaska, said  the commission  is very  much in support  of                                                             
this bill.  They first  became aware of  this issue last  December,                                                             
when her  office received  a number of calls  from seniors  who had                                                             
gotten letters  advising that,  because of  the 5.8 percent  Social                                                             
Security  cost-of-living  increase,  they  were  disqualified  from                                                             
their  Medicaid Waiver  programs. Her  office told  them about  the                                                             
Miller  Trusts and  made referrals  to local  attorneys and  Alaska                                                             
Legal Services;  luckily Holly Handler  in Juneau was  available to                                                             
help many of these individuals.                                                                                                 
MS. DANIELLO  pointed  out that  one of  the commission's  concerns                                                             
with  the  Miller  Trusts,  in  addition   to  the  things  already                                                             
mentioned,  has to  do with  allowable expenses;  according to  the                                                             
Personal Cost Allowance, a person can have the amount of  $1656 per                                                             
month. Even  though they've received  a cost-of-living  increase to                                                             
help them  pay for  increases in  food and housing,  none of  these                                                             
additional  funds over  the  $1656 may  be used  to  pay for  those                                                             
expenses.  For an  elderly person  living in  Fairbanks or  another                                                             
cold area of the state, the price of fuel is very high.                                                                         
She said  that since  the income  limit was set  at $1656 in  2003,                                                             
these  people  have  been increasingly   less able  to  meet  their                                                             
basic  living   expenses.   She  commented   that  she  hopes   the                                                             
Department of  Health and Social  Services and this committee  will                                                             
consider  raising the  amount  of the  personal  care allowance  at                                                             
some  point,  to   give  people  additional  funds   to  cover  the                                                             
increased costs of food and housing.                                                                                            
MS. DANIELLO  closed by saying  this is a  good investment.  If the                                                             
state is  able to keep  people healthy, allow  them to keep  decent                                                             
housing  and warmth, there  is a  better chance  they will be  able                                                             
to stay  in their homes,  and for  every year a  person is  able to                                                             
remain  independent,  the state  saves  from $80,000  to  $181,000.                                                             
The  cost for  an older  Alaskans waiver  is  only roughly  $23,000                                                             
per year.                                                                                                                       
2:21:52 PM                                                                                                                    
CHAIR  DAVIS called  Mr. Sherwood  back to  address Ms.  Daniello's                                                             
comment that the money cannot be used for food or fuel.                                                                         
MR.  SHERWOOD  said  the limiting  factor  is  the  personal  needs                                                             
allowance  in  the  cost-of-care  allowance.  It can  be  used  for                                                             
anything but  is capped at $1656.  If they have funds in  excess of                                                             
that amount  they have  to qualify  for another  deduction such  as                                                             
disabled  dependent, spouse,  or uncovered  medical. Basically,  to                                                             
pay for  their own  food shelter  and other  living expenses,  they                                                             
are  allowed  only  $1656  per month.  That  can  be  changed  only                                                             
through state regulation.                                                                                                       
2:23:48 PM                                                                                                                    
CHAIR DAVIS  closed public  testimony. She  said she believes  that                                                             
her  questions   have  been   answered  and   said  she  would   be                                                             
comfortable moving SB 238 out of committee.                                                                                     
2:25:05 PM                                                                                                                    
SENATOR PASKVAN  moved to report  SB 238, labeled 26-LS1362\A,  out                                                             
of committee  with individual recommendations  and attached  fiscal                                                             
note(s). There being no objection, SB 238 moved from committee.                                                                 
2:26:40 PM                                                                                                                    
There  being no  further  business to  come before  the  committee,                                                             
Chair Davis adjourned the meeting at 2:26 PM.                                                                                   

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