02/25/2009 09:00 AM Senate FINANCE

SENATE BILL NO. 87                                                                                                            
                                                                                                                                
     "An  Act  expanding  medical   assistance  coverage  for                                                                   
     eligible children  and pregnant women; relating  to cost                                                                   
     sharing  for certain recipients  of medical  assistance;                                                                   
     and providing for an effective date."                                                                                      
                                                                                                                                
SENATOR BILL  WIELECHOWSKI, SPONSOR, explained  that the goal                                                                   
of SB 87 is to increase the eligibility  requirements for DKC                                                                   
to  200  percent.  He stated  that  80  percent  of  children                                                                   
without health  insurance are from working  families. Private                                                                   
insurance for children can cost  thousands of dollars, with a                                                                   
large deductable  and co-pay. This bill would  allow families                                                                   
with incomes  up to 300  percent of the  FPL to buy  into DKC                                                                   
using a sliding  fee scale for premiums and a  20 percent co-                                                                   
pay. Those with the greatest means  would reimburse the state                                                                   
roughly 90  percent of  its costs.  An opportunity  exists to                                                                   
take advantage  of millions  of federal  dollars and  provide                                                                   
the  opportunity  to  allow all  children  access  to  health                                                                   
insurance.                                                                                                                      
                                                                                                                                
10:19:53 AM                                                                                                                   
                                                                                                                                
Mr. Wielechowski  opined that the  bill would save  the state                                                                   
money.  He   stated  that  Providence  and   Alaska  Regional                                                                   
Hospitals  in  Anchorage  report  providing  $89  million  in                                                                   
uncompensated care  in 2006. All premiums are  increased when                                                                   
hospital care  is uncompensated. In  2005, the total  cost of                                                                   
health  care in  Alaska for  the  uninsured (excluding  costs                                                                   
paid  out-of-pocket  by  the   uninsured)  was  $125  million                                                                   
(Families USA). He estimated that  every Alaskan family would                                                                   
pay $2248  in 2010  for increased  premiums. The  opportunity                                                                   
exists  to spend  millions of  federal  dollars resulting  in                                                                   
significant  cost  savings  for all  Alaskans  including  the                                                                   
state's  14,000  employees.  Providing  health  insurance  to                                                                   
multiple families  will ultimately save millions  of dollars.                                                                   
He noted that there  was not an increment in  the HESS budget                                                                   
for DKC, which  leads him to believe that  the administration                                                                   
is  not  anticipating  increase  costs  due  to  raising  the                                                                   
eligibility limits.                                                                                                             
                                                                                                                                
10:22:38 AM                                                                                                                   
                                                                                                                                
Co-Chair  Stedman  stated  that   the  fiscal  note  included                                                                   
language  regarding  staff  increases.  Senator  Wielechowski                                                                   
answered that he had been working  with the administration to                                                                   
seek efficiencies in the administration of the bill.                                                                            
                                                                                                                                
Co-Chair Hoffman  stated that even  though the money  for the                                                                   
expanded program  is not in the operating budget,  the fiscal                                                                   
note  is a  method  of accommodating  the  increases, if  the                                                                   
legislation passes.                                                                                                             
                                                                                                                                
10:24:13 AM                                                                                                                   
                                                                                                                                
MICHELLE SYDEMAN, STAFF, SENATOR  WEILECHOWSKI, mentioned the                                                                   
original fiscal note. She noted  that there had been numerous                                                                   
meetings with the  department to review the  overall costs in                                                                   
terms of the general  fund as well as the number  of required                                                                   
positions.  She stated that  there is  a revised fiscal  note                                                                   
based  on new  understanding about  available federal  funds.                                                                   
She assured that  the amount was substantially  less than the                                                                   
one  listed before  the  committee.  The assumption  is  that                                                                   
there would  be some changes in  the bill with regard  to the                                                                   
co-pay amount. The new fiscal  note shows significantly fewer                                                                   
staff.                                                                                                                          
                                                                                                                                
Co-Chair Stedman asked for the  number of staff listed on the                                                                   
new  fiscal note.  Ms.  Sydeman  understood that  there  were                                                                   
eleven  staff listed  on the  most current  fiscal note.  She                                                                   
stated that she had not seen the note.                                                                                          
                                                                                                                                
Senator Huggins asked how many staff are employed.                                                                              
                                                                                                                                
Senator Thomas  asked how many  full time positions  would be                                                                   
required for the changes in the bill.                                                                                           
                                                                                                                                
Senator Wielechowski  answered that the number  of additional                                                                   
children  in  SB  13  is roughly  1500,  and  the  number  of                                                                   
additional children in SB 87 is roughly 1500.                                                                                   
                                                                                                                                
Co-Chair Stedman stated  that he would like to  wait until he                                                                   
had updated information on SB 13.                                                                                               
                                                                                                                                
10:27:13 AM                                                                                                                   
                                                                                                                                
Senator  Elton questioned  the  point that  there  was not  a                                                                   
requested  increment  for  DKC,  even  with  the  eligibility                                                                   
increase from  175 percent of the  FPL to 200 percent  of the                                                                   
FPL.  He  suggested  that  there might  not  be  a  requested                                                                   
increment because there is anticipation  by the department of                                                                   
a co-pay/premium structure in  place by the next fiscal year.                                                                   
Senator  Wielechowski  answered that  the  Health and  Social                                                                   
Services(HSS)  committee  had  not  addressed  the  increment                                                                   
increase.  The  co-pay  and  premium   system  would  require                                                                   
additional staff.                                                                                                               
                                                                                                                                
Senator  Elton suggested  that new staff  would be  necessary                                                                   
with a co-pay  system. He asked for the  additional increment                                                                   
of positions needed if the program  increased from 200 to 300                                                                   
percent of the FPL.                                                                                                             
                                                                                                                                
Senator Wielechowski stated that  SB 87 does include a co-pay                                                                   
system from 200 to 300 percent of the FPL.                                                                                      
                                                                                                                                
Senator Elton asked that if additional  staff are required to                                                                   
implement a  co-pay system for  a program serving 150  to 200                                                                   
percent of  the FPL, could the  same level of staff  handle a                                                                   
co-pay  system  between  200  and 300  percent  of  the  FPL?                                                                   
Senator Wielechowski  answered that  he would rather  see the                                                                   
co-pay begin  at 200  percent of  the FPL  and extend  to 300                                                                   
percent of  the FPL. He felt  concern about dropping  the co-                                                                   
pay system down to 150 percent of the FPL.                                                                                      
                                                                                                                                
Senator Elton explained  that he was not suggesting  that the                                                                   
co-pay drop  to serve 150  percent of  the FPL. He  wanted to                                                                   
know  what  the  number  of  additional   staff  required  to                                                                   
implement the increase to 200-300 percent of the FPL.                                                                           
                                                                                                                                
10:31:02 AM                                                                                                                   
                                                                                                                                
Senator Olson  asked how the same  number of staff  needed to                                                                   
serve 200 percent of the FPL could  also serve 300 percent of                                                                   
the  FPL. Senator  Wielechowski  answered  that the  increase                                                                   
from  175 percent  to  200 percent  adds  an additional  1579                                                                   
people. To extend from 200 percent  of the FPL to 300 percent                                                                   
of  the  FPL  with  the  co-pay  system  adds  an  additional                                                                   
estimated 1500 children and pregnant women to the program.                                                                      
                                                                                                                                
10:31:52 AM                                                                                                                   
                                                                                                                                
DAHNA  GRAHAM   ANCHORAGE  FAITH  AND  ACTION   CONGREGATIONS                                                                   
TOGETHER (AFACT)  (testified via  teleconference).  She spoke                                                                   
in favor of income  limits for DKC at 200 percent  of poverty                                                                   
level. Above  200 percent of the  FPL, she maintained  that a                                                                   
co-pay or premium system would be appropriate.                                                                                  
                                                                                                                                
PAT  SENNER,   ALASKA  NURSES   ASSOCIATION  (testified   via                                                                   
teleconference)  She   requested  the  exploration   of  cost                                                                   
sharing  methods. She  did not  agree with  cost sharing  for                                                                   
people below  200 percent of the  FPL. She spoke in  favor of                                                                   
exploring  all  options  to allow  an  increase  of  children                                                                   
covered above 200 percent of the FPL.                                                                                           
                                                                                                                                
10:35:38 AM                                                                                                                   
                                                                                                                                
ROD BETIT, PRESIDENT,  ALASKA HOSPITAL ASSOCIATION,  spoke in                                                                   
support  of   SB  87.  He   agreed  with  sharing   financial                                                                   
responsibility as  income increases. He agreed  with language                                                                   
in SB 87 discouraging a shift  of people currently covered by                                                                   
private  plans to a  public plan.  The approach  in SB  87 is                                                                   
similar to that of other countries'  successful health plans.                                                                   
                                                                                                                                
JORDEN  NIGRO, PRESIDENT,  ALASKA  ASSOCIATION  OF HOMES  FOR                                                                   
CHILDREN,  stated that  the Alaska Association  of Homes  for                                                                   
Children would like to see a co-pay  established for families                                                                   
over 200 percent of the FPL only.                                                                                               
                                                                                                                                
MARIE DARLIN, PRESIDENT, AARP  CAPITAL CITY TASK FORCE, spoke                                                                   
in support  of SB 87.  She agreed that  raising the  floor to                                                                   
200 percent was the most important factor.                                                                                      
                                                                                                                                
10:41:06 AM                                                                                                                   
                                                                                                                                
Co-Chair Stedman  asked for the administration's  view of the                                                                   
program   expansion.    Mr.   Sherwood   stated    that   the                                                                   
administration  supports  expanding   the  program  and  cost                                                                   
sharing. He  stated that he could  not provide a  position on                                                                   
the bill.                                                                                                                       
                                                                                                                                
Senator Elton asked if additional  staff would be required to                                                                   
implement cost sharing for 200 to 300 percent of the FPL.                                                                       
                                                                                                                                
Mr. Sherwood  answered that the administration's  position is                                                                   
not to  implement cost sharing  for groups currently  served.                                                                   
Pregnant   women   are   exempt  from   cost   sharing.   The                                                                   
administration  does not have  plans to administer  new staff                                                                   
to collect premiums or administer the co-pay provisions.                                                                        
                                                                                                                                
Senator  Elton   asked  if   the  department  was   exempting                                                                   
expansion. He  asked if the  department was considering  cost                                                                   
sharing from 175 to 200 percent of the FPL if SB 13 passes.                                                                     
                                                                                                                                
Mr.  Sherwood stated  that the  administration's response  to                                                                   
cost sharing has not been determined  in regard to SB 13. The                                                                   
department  will not implement  cost sharing  with SB  13. He                                                                   
assumed  that   the  department  would  respect   legislative                                                                   
intent.                                                                                                                         
                                                                                                                                
10:44:59 AM                                                                                                                   
                                                                                                                                
SB87 was HEARD and HELD in Committee for further                                                                                
consideration.                                                                                                                  
                                                                                                                                
10:46:08 AM