Legislature(1997 - 1998)

04/23/1998 08:20 AM House FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
HOUSE BILL NO. 369                                                             
                                                                               
"An Act relating to Medicaid coverage for certain                              
eligible children and pregnant women; relating to                              
primary care case management and managed care services                         
as optional services and to premiums and cost-sharing                          
contributions under the Medicaid program; establishing                         
the Healthy Families Alaska program; and providing for                         
an effective date."                                                            
                                                                               
MISSY POESCHEL, (TESTIFIED VIA TELECONFERENCE), HEALTHY                        
FAMILIES, FAIRBANKS, read a letter from one of her clients                     
who had participated in the Healthy Families Program and                       
which had helped her make it through serious and difficult                     
times successfully.                                                            
                                                                               
MARGARET MILLER, (TESTIFIED VIA TELECONFERENCE), HELATHY                       
FAMILY SUPPORT WORKER, FAIRBANKS, testified in support of                      
the Healthy Families Program and the success it has                            
manifested in many children's lives.                                           
                                                                               
LAURA BUSH, (TESTIFIED VIA TELECONFERENCE), FAIRBANKS,                         
spoke to the challenges that new families have in outreach.                    
The Healthy Families Program has offered prevention and                        
education for those potentially abusive parents.  Children                     
require special attention to begin the developmental                           
process in an optimal fashion.  The original version of HB
369 would expand Medicaid coverage to poor children with                       
family's income of up to 200% of the federal poverty level.                    
She continued, as more families move from welfare to work,                     
it is appropriate to assist them in becoming self-                             
sufficient by making affordable health care coverage                           
available.                                                                     
                                                                               
SARANA SCHELL, (TESTIFIED VIA TELECONFERENCE), PROGRAM                         
CONSULTANT - HEALTHY FAMILIES, FAIRBANKS, urged members to                     
reinstate the language of the original HB 369.  That would                     
place the Healthy Families Program back into State statute                     
and authorize Medicaid payments for those families out of                      
work.                                                                          
                                                                               
The families, which the program works with rarely, contact                     
the agency for help.  A health care provider, with the                         
family's consent, usually refers the family to a program                       
assessment worker.  Home visits are reserved for only those                    
families that really need it.  She stressed that the                           
program is voluntary and there is tremendous out-reach                         
associated with it.  She urged Committee members to expand                     
this program because it works.                                                 
                                                                               
JAY LIVELY, DEPUTY COMMISSIONER, DEPARTMENT OF HEALTH AND                      
SOCIAL SERVICES, provided the Committee with a background                      
of the legislation.  Last fall, Congress passed the Kennedy                    
Hatch bill which enacted the child health insurance                            
program.  The program made federal money available to                          
states to expand health care coverage for uninsured                            
children.  Alaska's allotment from the federal legislation                     
is $5.6 million dollars which requires a state match of $2                     
million dollars.  In Alaska, it is estimated that there are                    
approximately 23 thousand uninsured children of which about                    
11,500 are below the 200% poverty level.  Mr. Lively                           
explained that 200% of poverty level is about $33 thousand                     
dollars for a family of 3 or about $16 dollars per hour                        
income.                                                                        
                                                                               
The federal law provides considerable flexibility in                           
designing the new program.  Most importantly, the State can                    
decide the eligibility level for the child's health                            
coverage.  Mr. Lively continued, the State can determine                       
the delivery system to be employed to implement the child's                    
health coverage. Federal law allows using Medicaid,                            
expanding private coverage or implementing a combination of                    
the two.                                                                       
                                                                               
He added that within the framework, the Department proposes                    
to increase the eligibility level for Medicaid to the 200%                     
poverty level for all kids and pregnant women.  The current                    
version does not consider the pregnant woman and under the                     
current Medicaid program, the State provides a minimum                         
coverage.                                                                      
                                                                               
Mr. Lively continued, the State already has a Medicaid                         
bureaucracy established with a payment system, enrolled                        
providers and the administration to run the program.  Using                    
Medicaid will minimize start up costs and allow the                            
Department to "piggy back" on an established system with a                     
large economical benefit.                                                      
                                                                               
Mr. Lively spoke to the relationship between child health                      
and welfare reform.  Child health coverage will provide                        
health to families without them needing to return to cash                      
assistance.  As soon as families work their way off the                        
cash assistance welfare, the potential is that they will be                    
in jobs, particularly low-income jobs, which have no health                    
care attached to them.                                                         
                                                                               
Last year, when Congress changed the recidivism rate for                       
Medicaid from 50% to 60% federal match, freed up general                       
fund money in the Medicaid program.  One argument was that                     
Alaska use some of the money to expand health care coverage                    
for those that do not have it.  In addition, pregnant women                    
are currently covered up to 133% of poverty level.  The                        
Department proposes to raise it up to 200% of poverty                          
level.  The thought was that if the kids are covered, then                     
the prenatal piece of coverage should also be taken care of                    
in order to guarantee good birth outcomes.                                     
                                                                               
He pointed out that if the Legislature does not act to                         
authorize a child health program, the State will lose its                      
allotment of the $5.6 million dollars.                                         
                                                                               
Representative Martin asked if this situation would create                     
an anti-discrimination for all children living in the                          
State.  Mr. Lively replied that this is not an open                            
entitlement and would be available only to those individual                    
families below the allocated level.                                            
                                                                               
Co-Chair Hanley pointed out that the Healthy Families                          
portion of the bill had been deleted in a previous                             
committee hearing and that the new federal fund program is                     
just for kids, and does not extend to pregnant women.  The                     
bill as it exists at this time, deals only with new federal                    
money passed by Congress to raise the poverty rate of kids                     
up to 200%.  The other portions could be addressed by the                      
Legislature.                                                                   
                                                                               
Mr. Lively clarified that currently the State covers                           
pregnant women at 133% poverty level, children 0-6 at 133%                     
poverty level, children 6-14 at 100% poverty level and                         
children from 14-18 at 70% poverty level.  At this time, it                    
is a varied level depending on the age.  He stressed that                      
this system is complicated for the families and the                            
Department to keep track off.  Co-Chair Hanley advised that                    
the bill as currently written would cover all kids from 1-                     
18 to 200% at poverty level.                                                   
                                                                               
BOB LABBE, DIRECTOR, DIVISION OF MEDICAL ASSISTANCE,                           
DEPARTMENT OF HEALTH AND SOCIAL SERVICES, responded to                         
comments by Representative Martin regarding "pregnant                          
women" versus "pregnancy".  He stated that "pregnant women"                    
are part of the federal grouping which the State has been                      
allowed to cover.  This is a category of clients based on                      
being pregnant.                                                                
                                                                               
LORAINE DERR, ALASKA STATE HOSPITAL AND NURSING HOME                           
ASSOCIATION (ASHNHA), JUNEAU, noted that Alaskans share a                      
common goal of safe, healthy children and that ASHNHA                          
incorporates that goal into its mission of improving health                    
care of all individuals.  Last year, the federal government                    
made additional funding available for the purchase of                          
insurance for children's health care coverage.  HB 369                         
would allow the State to take advantage of those funds.                        
                                                                               
Ms. Derr continued, there is a direct correlation between                      
lack of prenatal care and giving birth to a low birth                          
weight infant, and low birth weight accounts for 10% of all                    
health care costs for children.  ASHNHA requests to have                       
pregnant women included in the funding.                                        
                                                                               
She pointed out that Alaska's hospitals continue to report                     
growth in uncompensated care from $122 million dollars in                      
FY93 to $177 million dollars in FY95, as a result of                           
serving uninsured and underinsured Alaskans who cannot pay                     
their medical bills.  It shows that more Alaskans need care                    
and are not able to pay for it.  Raising the poverty level                     
to 200% for children up to the age of 19 will go a long way                    
toward making sure that health care coverage is available                      
to children.                                                                   
                                                                               
Co-Chair Hanley referenced Amendment #1.  [Copy on File].                      
He questioned Section (d) and asked if that section could                      
be addressed by waiver.  Mr. Labbe replied that in the area                    
of managed care, when a client participates, historically,                     
they would need to file for a federal waiver.  At present                      
time, most states are doing this as a matter of course                         
through a normal state plan process.  The Department has                       
been advised that this is required.                                            
                                                                               
Co-Chair Hanley wanted to be assured that the language                         
would keep the same priority listings and would not allow                      
the Department "open-ended" options.  He asked if the way                      
that section was written would allow the Department to add                     
new options or change the priorities of the options list.                      
Mr. Labbe replied that the Department would not be able to                     
add new options or change the priorities.                                      
                                                                               
Co-Chair Hanley MOVED to adopt Amendment #1.                                   
                                                                               
(Tape Change HFC 98- 122, Side 1).                                             
                                                                               
Following discussion regarding concerns of Representative                      
Martin, Representative Mulder recommended changing the                         
language on Page 2, Line 6, of the amendment deleting "for"                    
and inserting "and".  He felt that change would clarify                        
that the services are not optional and must be consistent                      
with State law.  Mr. Labbe responded that it was                               
unfortunate that primary care case management was being                        
considered as optional services; in the past, the                              
Department was required to receive a waiver for a Medicaid                     
client to register.  The only way in which the federal                         
government could move it to the State would be to consider                     
it a new type of State service.  He noted that it is not a                     
service in that sense.  What is being managed are services                     
which the State covers, some of which are mandatory and                        
some of which are optional.  This legislation requests the                     
authority to organize these systems that way.                                  
                                                                               
Representative J. Davies believed that the proposed                            
amendment would make an unintended change for services                         
which already exist.  With such a change, the Department                       
would be required to undertake three things, whereas, with                     
original language, there would only be two requirements.                       
Co-Chair Therriault agreed that without the punctuation, it                    
is clearer that the reference is to an existing set of                         
services.                                                                      
                                                                               
There being NO OBJECTION, Amendment #1 was adopted.                            
                                                                               
Co-Chair Hanley commented that under the current system,                       
abortions are covered under Medicaid for rape, incest or                       
life of the mother.  He asked to which poverty level would                     
that continue to occur.  Mr. Lively replied at the 133%                        
poverty level, the Medicaid level and the one used in                          
Alaska.  Co-Chair Hanley pointed out that Alaska has not                       
chosen one for abortion.  He clarified that the income                         
level for the General Relief Medical (GRM) and the income                      
level for publicly funded abortions would be the same as                       
the Medicaid level.  He believed that if the poverty level                     
were raised for pregnant women to 200%, it would also be                       
raised for abortions to that level.  Mr. Lively agreed that                    
was correct that the Medicaid eligibility would become the                     
cited level.                                                                   
                                                                               
Representative Martin referenced the letter from a previous                    
DHSS Commissioner, Ted Mala, stipulating that no private                       
information can be given to the Department.  He thought                        
that the Department was prohibited from inquiring about the                    
financial status of a woman.  Mr. Lively replied that there                    
is an income and eligibility test done on each person                          
coming on to the Medicaid program.                                             
                                                                               
Representative Grussendorf pointed out that the bill was                       
directed toward assisting children.  He stated that                            
increasing the level to 200% would make it easier for                          
pregnant women to make a choice to keep the child as there                     
would be extra financial assistance to keep the child                          
healthy.  Co-Chair Hanley stated that he would not offer                       
Amendment #2.  [Copy on File].                                                 
                                                                               
Representative Foster MOVED to adopt Amendment #2 for the                      
purpose of discussion.  Representative J. Davies stated                        
that there would be a cost effectiveness associated with                       
incorporating the amendment.  He pointed out that if the                       
legislation were able to avert two Fetal Alcohol Syndrome                      
(FAS) outcomes, the entire state match would be paid.                          
Representative Kelly disagreed, stating that by adding                         
pregnant women to the legislation could result in negative                     
ramifications.                                                                 
                                                                               
Representative Grussendorf criticized that many of our                         
State's residents were being punished, first through the                       
cut to the General Relief Medical and now an unwillingness                     
to allow the funding level to be increased for those women                     
who want to have their children but would not qualify under                    
the 200% level.  Co-Chair Hanley inquired what percentage                      
of women between 130% and 200% poverty level, currently                        
have coverage for pregnancy related services.  Mr. Lively                      
commented that the Department's research covers the number                     
of persons who do not have coverage which is 870.                              
                                                                               
Co-Chair Hanley voiced concern, under the federal bill, if                     
you currently have coverage for kids, and you are at 180%                      
poverty level, you could not access this new money.  He                        
noted that if the poverty level was increased to 200% for                      
Medicaid, there would then be some pregnant women who have                     
insurance, who could opt to access this program through                        
Medicaid.  The federal restrictions are specifically                           
related to the kid's portion and not to the pregnant woman                     
portion.                                                                       
                                                                               
Mr. Labbe agreed that if the Department goes to the 200%                       
poverty level, there may be some women who are insured who                     
would drop their coverage, although, he noted that it would                    
be unlikely to transfer Medicaid for only the pregnancy.                       
Retaining their coverage, does not mean that they would not                    
be eligible for Medicaid.  In those situations, Medicaid is                    
the payer of "last resort".  Co-Chair Hanley doubted if                        
most employers offer as good of coverage as Medicaid does.                     
He believed that some employers could drop their coverage                      
for the pregnant employee making under the poverty level.                      
                                                                               
Representative J. Davies questioned why we would not want                      
to pick the kids up before they are born at the 200% level                     
rather than waiting.                                                           
                                                                               
Representative Foster WITHDREW the MOTION to adopt                             
Amendment #1.  There being NO OBJECTION, it was withdrawn.                     
                                                                               
Co-Chair Hanley asked what percentage of the new kids who                      
qualify, already have some level of insurance.  Mr. Lively                     
did not know, pointing out that there is a sizeable number                     
of kids who currently are not covered at all.  Co-Chair                        
Hanley cited that above 70% of all children has some form                      
of insurance coverage.  The legislation would cover                            
approximately 11-15% who do not have any coverage.  He                         
believed that we could create a system in which the                            
government would be providing better service to children                       
than those with that already have coverage.                                    
                                                                               
Representative J. Davies MOVED to add the Healthy Families                     
Program back into the bill.  Co-Chair Hanley OBJECTED.                         
Representative J. Davies stated that the action would                          
create a statutory framework which is already occurring.                       
Co-Chair Hanley countered that would make that program                         
Medicaid eligible which would establish an entitlement                         
program.                                                                       
                                                                               
A roll call vote was taken on the motion.                                      
                                                                               
IN FAVOR:  Grussendorf, J. Davies                                              
OPPOSED: G. Davis, Foster, Kelly, Martin, Mulder,                              
Therriault, Hanley                                                             
                                                                               
Representatives Kohring and Moses were not present for the                     
vote.                                                                          
                                                                               
The MOTION FAILED (2-7).                                                       
                                                                               
Co-Chair Hanley MOVED to report CS HB 369 (FIN) out of                         
Committee with individual recommendations and with the                         
accompanying fiscal notes.  There being NO OJBECTION, it                       
was so ordered.                                                                
                                                                               
CS HB 369 (FIN) was reported out of Committee with a "do                       
pass" recommendation and with four fiscal notes by the                         
Department of Health and Social Services dated 4/9/98.                         

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