03/21/2012 01:30 PM Senate HEALTH & SOCIAL SERVICES

             SB   5-MEDICAL ASSISTANCE ELIGIBILITY                                                                          
                                                                                                                                
2:38:17 PM                                                                                                                    
CHAIR DAVIS  announced that  the next  bill before  the committee                                                               
was SB 5.  She noted that at  the previous meeting the  CS for SB
, version I, was adopted.                                                                                                      
                                                                                                                                
SENATOR  MEYER asked  if anyone  from the  Department of  Law was                                                               
present.                                                                                                                        
                                                                                                                                
JEAN  MISCHEL, Attorney,  Legislative Legal  Counsel, Legislative                                                               
Legal   and  Research   Services,  Legislative   Affairs  Agency,                                                               
answered questions pertaining to SB 5.                                                                                          
                                                                                                                                
SENATOR MEYER  pointed out that the  new version [I] of  the bill                                                               
addresses   previous   concerns   about  abortion   funding.   By                                                               
[maintaining]  Medicaid  coverage for  children  over  12 at  175                                                               
percent of the  federal poverty level (FPL), the  risk of funding                                                               
more  abortions is  reduced. He  asked if  two classes  of people                                                               
were being created  by the bill; those over 12  who are funded at                                                               
175 percent of the  FPL and those 12 and under  who are funded at                                                               
200  percent  of  the  FPL.  He  questioned  if  SB  5  could  be                                                               
challenged  in  court  for  that reason.  He  requested  a  legal                                                               
explanation of  what the  court would  likely do  if the  bill is                                                               
challenged.                                                                                                                     
                                                                                                                                
MS. MISCHEL  replied that she  did consider the  equal protection                                                               
issue  that  might  be  raised  when  drawing  a  line  regarding                                                               
eligibility based on  age. She said she could not  predict if the                                                               
bill will be  challenged for that reason; however,  she opined if                                                               
the  bill is  challenged on  equal protection  grounds, it  would                                                               
likely survive constitutional scrutiny  because Medicaid has many                                                               
age categories  for both mandatory  and optional  services. Under                                                               
an equal  protection analysis, the  courts would  examine whether                                                               
or not  children over 13  are similarly situated to  the expanded                                                               
income  eligibility category  that version  I of  SB 5  provides.                                                               
That would  be a hurtle  for a challenger because  teenagers have                                                               
different types  of health problems  and the legislature  has the                                                               
ability  to make  cost decisions  and provide  services that  the                                                               
legislature  considers, from  a policy  standpoint, valuable  and                                                               
cost effective.                                                                                                                 
                                                                                                                                
MS. MISCHEL  explained that Congress provides  that for mandatory                                                               
coverage, all  states that participate  in Medicaid  must provide                                                               
mandatory medical  services for kids  age six and younger  at 133                                                               
percent of  FPL. That demonstrates  that there already is  an age                                                               
cutoff. Some  states only provide  for that age group;  Nevada is                                                               
an example. She continued  to say if a family is  at or below 100                                                               
percent of  the FPL,  that age  limit goes away.  SB 5  goes well                                                               
above the mandatory minimums.                                                                                                   
                                                                                                                                
MS. MISCHEL  stated that if  the court found that  teenagers were                                                               
similarly situated  to kids under  13, then the court  would look                                                               
at whether or  not there is a fundamental interest  at stake. She                                                               
said  she  could  not  answer   that  complicated  question.  She                                                               
stressed that it is up to  the legislature to articulate either a                                                               
compelling interest  or a legitimate interest,  depending on what                                                               
the court  determines is at  stake. Because there is  a potential                                                               
for dealing  with reproductive services for  teenagers, the court                                                               
could apply the  compelling interest standard if  they found that                                                               
teenagers  were similarly  situated. She  noted that  would be  a                                                               
higher  burden for  the  state  to meet,  but  not an  impossible                                                               
burden.  There are  many potential  state interests,  such as  to                                                               
provide medical services  to a more vulnerable  population, or to                                                               
cover  immunizations  for  school-age children.  The  legislature                                                               
would have  to justify  treating similarly  situated individuals.                                                               
If  a court  found that  it was  just an  economic interest,  the                                                               
state would need to articulate  a legitimate interest for drawing                                                               
the age distinction  and provide some rational  basis for cutting                                                               
off the age limits.                                                                                                             
                                                                                                                                
MS.  MISCHEL related  that  she  could not  find  any cases  that                                                               
looked  at age  limits that  would have  precedential value.  She                                                               
gave  an  example  of  a  Washington state  case  for  home  care                                                               
services in which  an "age of 13", along with  "a child living at                                                               
home", was found  to be arbitrary. The court would  be looking to                                                               
see if the  age cutoff was arbitrary. SB 5  is neutral about what                                                               
type of  care is  provided. She  concluded that it  is up  to the                                                               
legislature to  draw the distinctions. Age  categories are common                                                               
distinctions  made for  Medicaid purposes.  She gave  examples of                                                               
age categories.  She said SB  5 just  deals with an  added income                                                               
limit.                                                                                                                          
                                                                                                                                
MS.  MISCHEL stated  that the  risk to  the state  is fairly  low                                                               
because  if  an equal  protection  challenge  did prevail,  after                                                               
first a finding  that the younger kids are  similarly situated to                                                               
the  older  ones,  and  that  the  state  either  didn't  have  a                                                               
compelling  interest or  legitimate interest  that is  reasonably                                                               
related to  the change  in the  law, the result  would not  be to                                                               
eliminate Medicaid care  for children in general, it  would be to                                                               
go back to the 175 percent category.                                                                                            
                                                                                                                                
MS. MISCHEL  pointed out that the  other thing version I  of SB 5                                                               
does is include the added  income category for children under the                                                               
age of  13 in  the cost-sharing  provision, just  as it  does for                                                               
children under 19 years old who  are from homes with incomes over                                                               
175 percent of the FPL.                                                                                                         
                                                                                                                                
2:50:36 PM                                                                                                                    
SENATOR MEYER  summarized that if the  courts would find SB  5 to                                                               
be  unconstitutional,  the  statute  would  revert  back  to  175                                                               
percent of the FPL for everyone.                                                                                                
                                                                                                                                
MS. MISCHEL said yes. The court would invalidate the change.                                                                    
                                                                                                                                
SENATOR  MEYER noted  that  the reason  the  age distinction  was                                                               
being made in  the bill was due to the  possibility of abortions.                                                               
He  asked if  the  court  would find  that  reason arbitrary  and                                                               
capricious.                                                                                                                     
                                                                                                                                
MS.  MISCHEL said  she did  not  know, but  thought it  extremely                                                               
unlikely. The  Alaska Supreme  Court has  already found  that the                                                               
state  has  a  legitimate  interest in  protecting  children  and                                                               
providing medically  necessary services. In the  parental consent                                                               
case, it was  found that parents and the state  have a legitimate                                                               
interest in preventing abortions for  children to the extent that                                                               
is allowed under the privacy interests  in the state. She did not                                                               
think "arbitrary"  would be considered.  The question  is whether                                                               
or not  the court would say  the only reason the  legislature has                                                               
limited  the   increased  eligibility  category  is   to  exclude                                                               
abortion  coverage. She  opined  that someone  might  be able  to                                                               
argue  the case  on  privacy  grounds. The  court  would apply  a                                                               
compelling interest standard  and that interest would  have to be                                                               
narrowly tailored to  the change. Even under the  higher level of                                                               
scrutiny,  the court  could find  compelling  state interest,  as                                                               
they did in the parental notice litigation.                                                                                     
                                                                                                                                
SENATOR  MEYER gave  an example  of a  qualifying child,  age 12,                                                               
losing eligibility at age 13.                                                                                                   
                                                                                                                                
MS. MISCHEL agreed with Senator Meyer's example.                                                                                
                                                                                                                                
SENATOR DYSON thanked  Ms. Mischel for her work.  He guessed that                                                               
the bill would be challenged, and  that it would be difficult for                                                               
the amendment to survive the court challenge.                                                                                   
                                                                                                                                
2:54:23 PM                                                                                                                    
MS. MISCHEL suggested articulating  additional policy reasons for                                                               
the  age cutoff,  in  addition to  preventing  teen abortions  or                                                               
pregnancies.  She gave  examples such  as how  many children  are                                                               
affected, the  cost benefit analysis,  and types of  medical care                                                               
younger children need versus older children.                                                                                    
                                                                                                                                
SENATOR DYSON understood it was up  to the state to demonstrate a                                                               
compelling state  interest for the  position it is taking  on the                                                               
amended version of SB 5 in order to meet any challenges.                                                                        
                                                                                                                                
CHAIR DAVIS  said the bill  would not  go to Senate  Finance, but                                                               
rather  to Senate  Rules. She  requested that  the bill  be moved                                                               
from committee.                                                                                                                 
                                                                                                                                
SENATOR MEYER asked about the new fiscal notes.                                                                                 
                                                                                                                                
CHAIR  DAVIS said  fiscal notes  will be  attached when  the bill                                                               
goes to the Rules Committee.                                                                                                    
                                                                                                                                
At-ease from 2:57 p.m. to 2:58 p.m.                                                                                             
                                                                                                                                
2:58:23 PM                                                                                                                    
SENATOR EGAN  moved to report  the CS for  SB 5, version  I, from                                                               
committee  with individual  recommendations  and the  forthcoming                                                               
fiscal notes.                                                                                                                   
                                                                                                                                
SENATOR DYSON objected.                                                                                                         
                                                                                                                                
A  roll call  vote was  taken.  Senators Meyer,  Egan, and  Davis                                                               
voted in favor of the motion  and Senator Dyson voted against it.                                                               
Therefore, CSSB  5(HSS) moved from  the Senate Health  and Social                                                               
Services Committee by a 3:1 vote.