Legislature(2005 - 2006)
05/07/2005 05:45 PM Senate FIN
| Audio | Topic |
|---|---|
| Start | |
| SB54 | |
| HB106 | |
| HB257 | |
| HB279 | |
| HB53 | |
| HB257 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
CS FOR HOUSE BILL NO. 106(FIN)
"An Act establishing the senior care program and relating to
that program; creating a fund for the provision of the senior
care program; repealing ch. 3, SLA 2004; and providing for an
effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
6:02:01 PM
JOEL GILBERTSON, Commissioner, Department of Health and Social
Services, explained that this bill, which is sponsored by Governor
Frank Murkowski, would strengthen the Senior Care Program
implemented the previous year. The purpose of "the Senior Care
Program is to provide assistance for the cost of prescription
medicine to low income seniors in the State". He noted that
prescription drugs are not currently provided for by the federal
Medicare program, and absent the Senior Care Program, seniors would
be required to pay out of pocket or purchase supplemental medical
insurance policy. The initial Alaska Senior Care Program provided
$120 a month equating to $1,440 a year, to seniors living below
135-percent of poverty level. A prescription drug subsidy is
provided to seniors living between 135-percent and 150-percent of
poverty.
Commissioner Gilbertson stated that HB 106 would accomplish two
things. First, it "would extend the cash assistance benefit for
those seniors living below 135-percent of poverty. That income
threshold" is approximately $16,000 a person or $21,600 a couple.
In addition a qualifying single individual could have liquid assets
of up to $6,000; $9,000 for a couple. The cash assistance program
would assist qualifying seniors until they transition on to the new
Medicare Part D Prescription Drug Benefit Program anticipated to
become available in early 2006.
Commissioner Gilbertson communicated that "the bill would also
extend the prescription drug assistance to seniors between 135-
percent and 175-percent of poverty. The household income for a
person living at the 175-percent of poverty level would be $20,900
for an individual and $28,053 for a couple. When the Medicare Part
D benefit becomes available, any senior wishing to participate must
enroll in the program which would "have a premium and a deductible,
separate and distinct and in addition to their existing premiums
and deductibles that they pay for Medicare". The premium would be
$35 a month or $670 a year, and the deductible would be $250 a
month for seniors living between the 135-percent and 175-percent
poverty level; those living below 135-percent of the poverty level
would be federally exempt from both the premium and the deductible.
Once the Medicare Part D program becomes available, the Senior Care
Program would continue to assist seniors living between 135-percent
and 175-percent in paying the costs of their premiums and
deductibles.
Commissioner Gilbertson anticipated that the State's cash
assistance program would continue to serve approximately 7,000
seniors, and that approximately 4,000 seniors living between 135-
percent and 175-percent of poverty would qualify for the State's
proposed prescription drug assistance program.
6:05:41 PM
Commissioner Gilbertson stated that a summary of the anticipated
program expenses is provided on page three of Fiscal Note #8, dated
May 5, 2005, prepared by the Department's Division of Finance and
Management Services. The total costs associated for those living at
135-percent of poverty is anticipated to be approximately
$5,000,000 in FY 06. The amount depicted for FY 06 would provide
for the second half of FY 06 as the initial program was budgeted
through January 2006. The FY 07 full-year expenses are anticipated
to be $10,000,000.
Commissioner Gilbertson explained that the expenses for the
assistance that would be provided to seniors living between 135-
percent and 175-percent are similarly depicted. The FY 06 half-year
expenses would be approximately $1,200,000. The expenses for the
full year of FY would be approximately $2,600,000.
Commissioner Gilbertson noted that the "Combined Program and
Administrative Costs" summary reflected a total cost of $6,800,000
for FY 06 and $13,000,000 for FY 07.
Commissioner Gilbertson explained that when the Legislature
established the Senior Care Program, it forward-funded the Program
through the first half of FY 06. A surplus of approximately eight
million dollars is expected to be in that account on January 1,
2006; therefore there would be no need for additional general fund
dollars in FY 06. It is projected that $1,249,000 of that surplus
would be carried forward into FY 07. This would be married up with
an $11,962,600 general fund request to fund the entire FY 07
program expenses.
Commissioner Gilbertson stated that further details about the
Senior Care program are provided in a Department handout titled
"Comparison of Qualifications and Benefits Beginning January 2006"
[copy on file].
Commissioner Gilbertson reiterated that other than a prescription
drug discount card and the availability of a prescription drug
subsidy to some low-income seniors, "seniors are not receiving any
prescription drug assistance from the federal government. It is
anticipated that a lot of confusion would occur this year and into
the year 2006 in regards to the new federal drug benefit. This
legislation would assist in eliminating some of the confusion and
burden on seniors.
Commissioner Gilbertson noted that a program termination date of
June 30, 2007 is specified in the bill. In addition, any excess
funds remaining in the Program's account at that time would revert
back to the general fund.
6:09:33 PM
Co-Chair Wilken asked whether the federal poverty level for Alaska
is the basis for this legislation.
Commissioner Gilbertson stated that this legislation recognizes the
Alaska poverty level, which is a 25-percent increase over the
federal national poverty level. In other words, a 175-percent of
the national poverty level for the contingent states would be
recognized at a 200-percent level in Alaska.
Co-Chair Wilken asked whether an individual's Permanent Fund
Dividend (PFD) check is factored into their eligibility
calculation.
JOHN SHERWOOD, Department of Health and Social Services, responded
that the PFD is not factored into the calculation. Unless it is
required by federal statute, the PFD is "disregarded".
Senator Olson noted that that policy "would be consistent" for all
hold-harmless provisions relating to public assistance programs.
Senator Olson asked whether the $1,200,000 balance anticipated to
be available on January 1, 2006 could be used to increase the
monthly payment amount.
Commissioner Gilbertson responded that $6,800,000 of the eight
million dollars that would be available on January 1, 2006 would
fund the remainder of FY 06 program expenses. The balance would be
carried forward into FY 07 to assist in paying that fiscal year's
expenses. An additional $12,000,000 in general funds would be
required to fund total FY 07 expenses. "The entire Trust fund
account would be depleted at the completion of this program."
Senator Olson acknowledged.
Co-Chair Wilken moved to adopt committee substitute Version 24-
GH1090\I as the working document.
Co-Chair Green clarified that Version "I" was the document to which
Commissioner Gilbertson's comments applied.
[NOTE: While the Version "I" was not formally adopted, that was the
implied intent of the Committee.]
Co-Chair Green voiced that furtherance of this bill would allow the
Senior Care program to continue to provide assistance to seniors in
need, uninterrupted.
Co-Chair Wilken moved to report the bill from Committee with
individual recommendations and accompanying fiscal notes.
There being no objection, SCS CS HB 106(FIN) was REPORTED from
Committee with four May 5, 2005 fiscal notes from the Department of
Health and Social Services as follow: $163,900 fiscal note #5 from
the Division of Health Care Services; $59,000 fiscal note #6 from
the Division of Senior and Disabilities Services; $6,614,400 fiscal
note #7 from the Division of Public Assistance; and zero fiscal
note #8 from the Division of Finance and Management Services.
AT EASE 6:12:32 PM / 6:15:39 PM
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