Legislature(2003 - 2004)
04/01/2003 02:55 PM House FIN
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* first hearing in first committee of referral
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HOUSE BILL NO. 172
"An Act relating to eligibility requirements for
medical assistance for certain children, pregnant
women, and persons in a medical or intermediate care
facility; and providing for an effective date."
Co-Chair Harris MOVED to ADOPT the Committee Substitute,
Work Draft 23-GH128\D, Lauterbach, 3/31/03. Representative
Croft OBJECTED.
JOEL GILBERTSON, COMMISSIONER, DEPARTMENT OF HEALTH & SOCIAL
SERVICES spoke regarding the changes included in the
Committee Substitute.
Commissioner Gilbertson explained that the bill would freeze
the income eligibility levels of for Medicaid and Denali Kid
Care under the special income limits for nursing homes and
Home and Community Based (HBC) Services. He stated that
currently pregnant women and Denali Kid Care recipients
receive eligibility at 200 percent of the federal poverty
level, which is the poverty level standard used in the FY 03
state budget. He noted that this would also lock in cash
dollar amounts for the various corresponding family sizes.
Commissioner Gilbertson referred to the savings indicated in
the fiscal note of $716 thousand for FY 04, with a growth in
savings projected over time. He noted that this savings
would result from a decrease in the number of eligible
individuals joining the program. He added that individuals
currently eligible for any of the programs who did not
experience an increase in income would remain eligible for
the programs.
Commissioner Gilbertson stated that the intent of the
legislation is to acknowledge the extensive growth in
Medicaid program costs, and the resulting diminished ability
of the State to service the program in its current design.
He expressed the Governor's message that that the State had
reached its affordable capacity [for Medicaid]. He noted
that future cost containments and efficiencies would occur.
He stated that the legislation was an effort to contain the
growth of the programs without causing hardship to program
recipients. He maintained that this was a modest cost
containment measure of eligibility. He emphasized that to
continue to have a strong Medicaid program, efforts must be
made to curtail program expansion.
Commissioner Gilbertson commended the programs' success,
noting that a high level of outreach resulted in greater
participation (26 thousand) in the Denali Kid Care program.
In response to an earlier question by Representative Croft,
Commissioner Gilbertson noted that the Work Draft addressed
a drafting error in the original bill (page 4, line 27) in
reference to the cash dollar amounts for eligibility. The
section was corrected to refer to a pregnant woman as a
family of two, in accordance with federal standards, to
ensure prenatal care.
Representative Croft WITHDREW his objection.
There being NO OBJECTION, the Work Draft was ADOPTED.
Representative Croft asked about the effects of not having
proper medical care during pregnancy. He inquired as to
studies done in this area.
Commissioner Gilbertson responded that he did not possess
that information currently. He pointed out that if a woman
was not covered by Medicaid, it did not necessarily mean
that she was not receiving pre-natal care. He noted that
studies have shown a correlation between prenatal care and
healthy births. He added that other health care services
were also provided outside of the Medicaid program. He
pointed out that the public health program provided
assistance and advice for pregnant women separate from the
Medicaid program and this bill.
Representative Croft asked if investment in a prenatal
program had produced fiscal savings.
Mr. BOB LABBE, DEPUTY DIRECTOR, DEPARTMENT OF HEALTH AND
SOCIAL SERVICES noted that a study had not been undertaken
to measure those effects. He recalled a similar national
study.
Commissioner Gilbertson also pointed out that not all costs
associated with Medicaid coverage for this class were for
prenatal care. He noted that standard medical services
were also provided.
Representative Stoltze commented on the cash dollar limits
of eligibility.
Representative Hawker asked if Alaska's limits were already
higher than the standard federal poverty level.
Mr. Labbe responded that Alaska's levels were adjusted from
100 percent to 125 percent compared to the lower 48.
Representative Hawker observed that our level of 200 percent
was actually based on a level 25 percent higher than the
rest of the country, making it 250 percent of the federal
base level. He asked how Alaska's adjustments to poverty
levels compared with other states.
Commissioner Gilbertson stated that Alaska was in the mid
range of comparison. He noted that Alaska was at the
highest standard possible (200 percent), in order to access
the enhanced federal medical assistance percentage for
Denali Kid Care. He noted that Alaska received an enhanced
federal medical assistance percentage with a roughly 70
percent match. He summarized that Alaska was fully
implemented to the highest level possible.
Co-Chair Harris referred to the fiscal note and observed a
general fund match savings of $259,300, compared to a
budgetary decrement of $223,000. He asked why the numbers
were not consistent.
Representative Hawker (Health and Social Services Sub
Committee Chairman) clarified that the number in the sub
committee recommendation was a preliminary estimate, and
that the number in the fiscal note was revised and more
accurate.
Commissioner Gilbertson noted that a portion of the
additional savings was due to the fact that the bill was
drafted one month before a new standard would be adopted on
April 1.
Representative Joule referred to the DHSS budgetary
discussions, and asked if other decreases had eliminated
services that would provide a safety net for those impacted
by the bill.
Commissioner Gilbertson noted that he was not aware of the
elimination of any related programs. He indicated that
budgetary reductions represented cost contained within the
Medicaid program. He pointed out that refinancing $17
million in general funds previously in grant dollars had
resulted in savings to grant programs.
Representative Joule speculated that some of the grant
dollars might have provided services to pregnant women.
Commissioner Gilbertson maintained that the grant reductions
were taken in substance abuse and mental health grants and
would not directly affect this population.
Representative Joule followed up by noting the absence of
departmental budget impact statements during this year's
budget process. He expressed that this made it difficult to
track which services and populations were impacted.
Representative Croft referred to the second page of the
fiscal note that listed savings. He noted an estimated
savings in FY 09 of $2.155 million for pregnant women, and
estimated that this figure would equal roughly $8 thousand
per person. He speculated that pregnant women and children
represented a more cost effective group in the program.
Commissioner Gilbertson noted the exponential growth under
the special income standard and stated that 71 percent of
the growth associated with the Medicaid program nationwide
was attributed to care provided to seniors and disabled
individuals. He noted that currently seniors comprised
roughly 50 percent of Alaska's Medicaid costs, growing
toward the national percentage. He conceded that care
provided to pregnant women and children was less expensive
than long term, facility based care.
Representative Croft asked if the bill could allow the
pregnant women and children category to continue to grow and
to cap the other categories. Commissioner Gilbertson
conceded that this was possible.
Representative Croft speculated that since the federal match
rate for pregnant women was 58.39 percent, the state's
average cost per pregnant woman was $2,500 of the $8,000
total cost.
Commissioner Gilbertson noted that federal match rates
changed every year, and had decreased over the past few
years. He concurred that Representative Croft's figures
would be correct if the federal match rate did not change.
Representative Croft calculated that if the pregnant women
category were omitted from the bill, the program would cost
roughly $800 thousand of general funds in FY 09, with a
savings of $3 million. He maintained that this category
provided the most benefit for the least investment, and
speculated that $800 thousand could be spent on caring for
even one child with birth defects.
CHIP WAGONER, ALASKA CATHOLIC CONFERENCE, testified in
opposition to the bill. He explained that the Catholic
Conference was comprised of the three Roman Catholic bishops
of Alaska and used to speak on public policy.
Mr. Wagoner discussed the tradition of his church. He
pointed out the catholic principal of "preferential option
for the poor and vulnerable". He quoted from a brochure
prepared by the Conference, "A basic moral test of society
is how the most vulnerable members are faring. Both
Catholic teaching and tradition call us to put the needs of
the poor and vulnerable first, and to give our greatest
response to those with the greatest need."
Mr. Wagoner maintained that this theme was one of the most
quoted ideas in his tradition. He pointed out the
responsibilities of elected office, and asked that
legislators carry forward these responsibilities with
consideration for the poor. He asked that this be
considered with regard to the current bill, especially with
regard to Denali Kid Care.
Mr. Wagoner commended the Governor and the Department of
Health and Social Services for their difficult work in
providing services to the poor and vulnerable, especially
since $67 million in general funds was needed to meet the
increased caseload.
Mr. Wagoner recalled that when the State began the Denali
Kid Care program in 1997, 201,713 children were in the state
of Alaska (33 percent of the population). He noted that the
Department hired the Employee Benefits Research Institute to
estimate the number of uninsured children that would be
served by the program. The Institute estimated that nine
percent, or 18,154 children, would be served by the program.
He noted that in 2002, according to the Department of Labor
and Workforce Development comprised 33 percent of the
population. He maintained that, according to the study,
there should be 19,033 children in Denali Kid Care. He
pointed out that currently 49,854 children were in the
program, more than double the projection.
Mr. Wagoner suggested that the legislature could respond in
one of three ways: 1) to recognize the value of the program
and pay for caseload increases, 2) to cap the program in
some manner, or 3) to cut the program back from 200 percent
of the federal poverty level to the Alaskan poverty level
minimum of 150 percent. He expressed his organization's
support of the first option. He pointed out that before the
st
program, Alaska ranked 41 in the nation in terms of health
care for children. He also noted that the program would
strengthen the State's future request for an increased
federal matching assistance percentage. Finally, he noted
that the program was preventative, and highlighted that over
40 percent of the children in the 150 to 200 percent
category are six years of age or less, receiving primarily
preventative care.
Mr. Wagoner exemplified that a family of four in the current
program could have an income of $45,264 to qualify. He
noted that his own family of four paid $9,200 annually for
health insurance. He observed that if this amount were paid
under this limitation, the family in question would spend 20
percent of its income for health insurance.
Mr. Wagoner suggested that other cuts might be possible. He
also emphasized the importance of tracking the effects of
the cap on families over time. He suggested that the
Committee consider three options: 1) to use the 2003
guidelines, vs. the 2002 guidelines, and 2) to ensure that
only those originally in the program, the truly uninsured,
were still on the program, and 3) to add a sunset clause to
force the legislature to review the effects on families. He
urged the Committee to add a sunset clause, cautioning that
without it, the poor would then lose their voice in the
process.
Representative Croft asked whether women might choose
abortion if they were dropped from the program's prenatal
care, as well as having their children become ineligible for
health insurance. He asked if this was a concern of the
Conference.
Mr. Wagoner acknowledged that the Conference held a concern
over the issue of abortion and agreed that this was a
possible outcome of the legislative cuts.
Co-Chair Harris expressed his concern that requests for
governmental assistance seemed to be increasing, despite the
desire of religious organizations to maintain a separation
of church and state. He maintained that reliance on
government assistance resulted in less responsibility by
parishes and individuals.
Mr. Wagoner took exception to the idea that the public
contributed less if the government contributed more. He
pointed out that the Catholic Church was the largest non-
profit and church provider of health and social services in
Alaska. He noted that the preferential option for poor and
vulnerable was a common theme of messages to individuals.
He pointed out that he was a founding member of the
community food bank. He also stated that the Church viewed
the nation's health and social Services programs as being
supported by four factors: individuals, private entities,
churches, and government. He stated that the churches in
Alaska could not provide the nearly $2 billion of health and
social services provided by the state. He pointed out that
the church only comprised ten to fifteen percent of the
State population.
Co-Chair Harris followed up by asking if the churches
predicted less private contribution if there was greater
governmental contribution.
Mr. Wagoner stated that he would research the question
further.
Representative Croft MOVED to ADOPT Amendment #1:
Insert a new section:
Sec. 5. This Act is repealed two years after the
effective date of this Act.
Co-Chair Williams OBJECTED.
Representative Croft maintained that the amendment
represented the simplest solution to concerns about the
bill, adding a two-year repeal that forced reexamination of
the issue.
TAPE HFC 03 - 42, Side B
Representative Croft speculated that if the situation was
allowed to continue, it could lead to unacceptably low
standards of eligibility. He maintained that the repeal
would allow plenty of time for examination of the program.
Representative Stoltze once again commented on the poverty
levels. He noted that the eligible income level for a
family of five was nearly $53 thousand per year.
Co-Chair Harris maintained that if public outcry occurred,
the legislature would respond.
Commissioner Gilbertson stated that the Administration
supported the bill as written. He noted that in two years a
small burden might be perceived. He maintained that in
future years it represented only a modest level of
eligibility reduction. He observed that the program had
reached a capacity where growing eligibility threatened the
quality of the program as a whole. He proposed that in
order to adequately pay providers and facilities, the State
must examine general eligibility.
Representative Croft observed that the majority of previous
conversation had pertained to the bill itself and not the
amendment. He pointed out that the amendment simply stated
a mandate for reexamining the impact of eligibility caps.
He maintained that if the levels were frozen for the long
term, the effects might prove very onerous. He emphasized
that nothing in the legislative process happened
automatically, and proposed that such a sunset provision
forced important reconsideration.
A roll call vote was taken on the motion to adopt Amendment
#1.
IN FAVOR: Croft, Joule, and Moses
OPPOSED: Stoltze, Whitaker, Chenault, Foster, Hawker,
Meyer, Williams, Harris
The MOTION FAILED (3-8).
Representative Foster MOVED to report HB 172 out of
Committee with the accompanying fiscal note
A roll call vote was taken on the motion.
IN FAVOR: Whitaker, Chenault, Foster, Hawker, Meyer, Moses,
Stoltze, Harris, Williams
OPPOSED: Croft, Joule
The MOTION PASSED (9-2).
CSHB 172 was REPORTED out of Committee with a "do pass"
recommendation and a previously published (#1) fiscal impact
note from the Department of Health and Social Services.
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