Legislature(2007 - 2008)HOUSE FINANCE 519
04/02/2007 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB198 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 198 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE BILL NO. 198
An Act establishing the Alaska senior assistance
payment program; repealing the senior care and
longevity bonus payment programs; and providing for an
effective date.
1:46:38 PM
Co-Chair Chenault MOVED to ADOPT work draft #25-LS074\E,
Mischel, 3/30/07, as the version of the bill before the
Committee. There being NO OBJECTION, it was adopted.
1:47:25 PM
REPRESENTATIVE MIKE HAWKER, SPONSOR, explained that the
original HB 198 established the Alaska Senior Assistance
Program to provide cash assistance payments to low-income
Alaska seniors. The program, which is scheduled to sunset
June 30, 2007, was amended to remove the little used
prescription drug benefit and increase monthly cash payments
to Alaskans, age 65 and older, based on their incomes
related to the federal poverty level guidelines adjusted for
Alaska (FPL-A). Monthly payments are:
· $250 per month to individuals with income less than
75% of the FPL-A
· $175 per month to individuals with income from 75%
to less than 100% of the FPL-A
· $125 per month to individuals with income from 100%
to less than 135% of the FPL-A
Initially, it was proposed that the Alaska Senior Assistance
Program combines features of both the Longevity Bonus and
Senior Care programs into a single needs based structure
that delivers real help to low-income seniors across Alaska.
It will sunset June 30, 2011.
Representative Hawker continued, the work draft renames the
program to the Alaska Senior Benefits Program. It also
increases the income limit for the Alaska Senior Benefits
Program to 175% of the federal poverty level guidelines
adjusted for Alaska (FPA-A). Program participants whose
income was between 100% and 175% of that formula would
receive $125 dollars per month as indicated in Section 8.
Representative Hawker pointed out that the increased income
limit for Denali Kid Care to 175% of the federal poverty
level guidelines indicated in Section 5 includes a technical
change to correct sunset provisions, deleted in Section 13
of the original bill & inserting a new Section 17.
1:51:44 PM
Representative Hawker discussed raising the cash component
level decision. Under the original Senior Care Program,
there was both a drug benefit & cash component. The cash
component had a cap of 135% of the federal poverty level,
but the drug benefit provides for an income level of up to
165% of the FPL-A, intended "to leave no senior behind"; the
work draft proposes raising that level to 175%.
1:52:29 PM
Representative Hawker thought that the proposed bill
includes the best features of the two programs and could
deliver public health recognition of the plight for low
income seniors. The proposed program will not be closed,
but rather open to everyone at age 65 that resides in
Alaska.
HB 198 recognizes that the most powerful assistance to the
Alaskan seniors is cash assistance. HB 198 is not a
Medicaid eligible program; it will be taken only from the
General Fund. He recognized that over time, it could
possibly become a Medicaid eligible program. He pointed out
it would sunset June, 2011.
1:55:46 PM
Representative Hawker continued, the bill identities & fixes
the Denali Kid Care policy ceiling, which provides health
insurance to children and pregnant women. Previously, that
program was established at 175% of the poverty level ceiling
to participate in the program. The concern is that the
effects of inflation purchasing power did not increase. As
a result, the Alaska ceiling for that program eroded to
154%. The Denali Kid Care is a Medicaid & federal matching
dollar program. As long as the Denali Kid Care Program is
kept above 150%, it is Medicaid eligible & that Alaska
qualifies for an enhanced matching rate, meaning 5% extra.
HB 198 identifies the federal poverty level and needs based
programs. The work draft adds clean up language to address
the effective dates, noting the Denali Kid Care program does
not sunset.
1:59:42 PM
Representative Crawford understood that the legislation
would no longer lock in the rate at 175%. Representative
Hawker stated that was correct for both of the programs,
including Denali Kid Care.
Representative Crawford noted language on Page 7, Line 2,
referencing the household income to not exceed 135%.
Representative Hawker countered, that concept had been
addressed on Lines 25-27 of Amendment #1. (Copy on File).
2:01:01 PM
Representative Gara referenced the Denali Kid Care portion
of the bill, noting the possible loss of a federal
illegibility match. He thought the difference for the
federal match was 70%; if Alaska does not comply, it means
approximately a 57% match, pointing out the significant
difference.
Representative Gara highlighted the fiscal difference of the
two programs, listing questions with regard to the inclusion
& exclusion of the Longevity Bonus.
Representative Hawker responded that Alaska will loose if we
do not deal with the FPL-A and Denali Kid Care. It is
anticipated that moving the FPL-A of the Senior Benefits
portion from 135% to 175% results in a fiscal note that is
approximately $20 million dollars. There is difficultly in
determining who could be dually eligible under the original
Longevity Bonus. Assuming that all the new participants
under the Senior Benefits Program were eligible, it could
mean an additional $15 million dollars a year added to the
note. In reality, he thought there might be 1,000 eligible
seniors.
2:06:04 PM
Representative Gara acknowledged that if the State falls
below the 150% poverty line, the State could loose federal
eligibility for the Denali Kid Care program. He noted that
39 other states provide eligibility for their Denali Kid
Care program at 200% poverty level; also, it would allow
other middle income families to buy into the program. He
asked if buying into health insurance had been considered.
Representative Hawker replied it would be a program policy
change. HB 198 attempts to remedy the structural
inefficiencies in current statute. He agreed that expansion
of the program merits consideration but requested it not be
included in HB 198. He commented that during the next few
years, the State is going to be faced with difficult
decisions determining whether to maintain & sustain programs
currently in place. Reimbursement rates are the single
greatest issue.
2:09:11 PM
Representative Gara requested that Representative Hawker
keep an open-mind, pointing out how small the fiscal note
actually is to offer that option. Representative Hawker
took the information under advisement.
2:10:15 PM
Co-Chair Meyer inquired if any members knew of other states
offering something similar to a Permanent Fund Dividend
(PFD). Representative Hawker understood that Alaska is the
only State offering such a program. HB 198 provides for the
Denali Kid Care payment and the Senior Benefit payment, both
needs based programs, using federal eligibility criteria.
The PFD is not used when determining the poverty level
amounts; there is no need for inclusion of a hold-harmless
provision.
Co-Chair Meyer estimated that the dividend could be up to
$2000 in the near future. Representative Hawker agreed,
stating that the PFD is a unique program & that there is a
sense it will be growing; he reiterated inclusion of the
sunset provision, which allows the Legislature to come
forward and revisit all the proposed provisions.
2:13:18 PM
Co-Chair Meyer commented that because of the PFD, Alaska
should not be compared to other states; he asked if other
places provide a Senior Care Program. Representative Hawker
did not know how Alaska compares to other places.
Co-Chair Meyer inquired if 150% had been considered as a
match amount, noting that he personally had encouraged
minimum matching in all budgets. Representative Hawker
thought that could be a legitimate policy call, adding that
on the Senior Care portion, he was comfortable with the 175%
in the existing policy determination, now is "on the table".
The prescription drug benefit eligibility should go away
with the program, noting that it needs to be somewhere
between 165% & 170% of the federal poverty level. He
preferred the 175% level and hoped to justify establishing
that level for both seniors and children.
Representative Hawker acknowledged that House Finance
Committee (HFC) would be the place to determine a lesser
level, yet thought that the 175% level gets Alaska closer to
the objective held in the original program, while
transitioning into a truly needs based program. He
considered it a better policy direction.
Co-Chair Meyer pointed out that 175% was the number selected
four years ago without including an inflation ratio. He
worried about future funding with the proposed raise in
fiscal costs; the fiscal note was initially prepared at
135%, which is now proposed to rise to 175%.
Representative Hawker suspected that the Department's fiscal
note has not yet been completed.
2:17:59 PM
Co-Chair Chenault addressed the difference in numbers
submitted by Representative Gara. He provided income
numbers, including family members and the increases those
bring. He understood that insurance costs are high as well
as the costs in raising a family.
Representative Hawker clarified for the record, what 175% of
poverty level would look like with real numbers. The
numbers for an Alaskan adjusted poverty level today:
A single person qualifies at $30,170 dollars a year; a
couple living together would qualify at $40,446 dollars
a year and families grow from there.
Representative Hawker admitted, it was a stretch for him to
embrace the 175% number. He questioned the role of self
responsibility for those individuals and what the State is
expected to contribute. He reiterated that 175% was
generous.
2:21:16 PM
Representative Gara brought forward the idea of Universal
Health Care, commenting that Alaska "will miss the boat" by
not leveraging federal funds to help provide health
insurance for all kids. He explained the process. Some
insurance companies charge $3 to $5 thousand dollars for a
policy for a child. Denali Kid Care is able to provide
health insurance to kids at a State cost, close to $1
thousand dollars per child. He hoped to see that working
families having a difficult time buying insurance in the
market place have an opportunity to insure their children.
Six other states are now leveraging those federal dollars.
Representative Gara asked to discuss compromises, which
could help families to buy in, helping the middle class. He
stressed that this is not welfare program.
2:24:25 PM
Co-Chair Meyer commented that would be a "new twist" to the
issue. Representative Kelly acknowledged problems existing
for kid care and needy seniors. He disagreed with Governor
Murkowski's deletion of the Longevity Bonus, which at that
time, was on a downward phase out slope. He worried about
the upcoming decade of projected deficits. He claimed that
the sunset clause provides "zero comfort", recommending
placing it on the front end. He supported the 150% number,
inquiring if that could protect the "grandfathered seniors"
without building up an entitlement in the future.
Representative Hawker acknowledged that mechanically, the
language could be modified; however, he did not know the
legal consequence; he was responsive to the proposed
arguments.
Representative Kelly questioned why the number for the
Denali Kid Care issue was not placed at a hold harmless
position by adding only the inflationary factor at the
required level. Representative Hawker understood that was
what had happened and that the numbers had been annually
rolled forward. The consequence is the State's ability to
sustain that offer. He added that Alaska has been "living
the luxury of windfall revenues", while continuing to
increase funding levels.
2:33:30 PM
Representative Kelly recommended that 150% be used as the
trigger point for both programs. He worried about the
Senate increasing any adjustment. Representative Kelly
reiterated concerns regarding sustainability.
2:35:36 PM
Representative Gara referenced the handout chart indicating
what other states use as their eligibility percentage for
the Denali Kid Care Program. (Copy on File). He pointed
out the $100 million dollars proposed to the University for
a new building in the Capital Budget & other projects he did
not support. Those dollars could pay for the proposed
programs. He noted there are only two states, at this time,
that provide less coverage than Alaska.
Representative Crawford attempted to identify how Alaska has
gotten into the current situation. He encouraged
subsidizing small business employers to assist workers with
health insurance costs & concerns. He believed that could
encourage federal leveraging dollars.
Representative Hawker did not agree with previous comments.
He thought such considerations should be policy decisions,
which bear "huge weight" in up coming years of health care
alternatives. He hoped that the Governor's Executive Order
appointing a Health Care Council to evaluate, consider and
report to the Legislature with policies on those issues,
would be successful. Meanwhile, HB 198 addresses the short
term horizon and contains a sunset provision in order to
revisit these issues in the future.
2:41:18 PM
Representative Crawford agreed, however, encouraged that a
long range consideration be debated now rather than as
concerns become insurmountable. He reiterated his support
for a private health care system model.
2:42:47 PM
HERBERT SIMON, (TESTIFIED VIA TELECONFERENCE), OFFNET,
testified in support of the legislation. He suggested that
the State cannot depend on continuing federal funding and
saw the legislation as a compromise. He maintained that the
new program is improved by providing an allowance for
variables. He added that he could not envision reenactment
of an income tax while a senior program exists.
JEANETTE LACY, BARTLETT REGIONAL HOSPITAL, JUNEAU, testified
in support of the legislation, which represents good social
policy. She referred to the poverty guide line, pointing
out that 100% of that guide means only $12,000 a year for
one person. Representative Hawker agreed that was the
accurate number. [Representative Hawker provided the
revised numbers, copy on file]. Ms. Lacy went on to give
additional information regarding the poverty guidelines,
pointing out that the formula was developed in 1963; since
that time, it has not been modified.
Ms. Lacy pointed out that a family of 2 would not be able to
make more than $29 thousand dollars a year @ 175% of the
guideline. Most of the uninsured are working families. Ms.
Lacy maintained that using the 175% benchmark above poverty
is not an adequate amount for parents to purchase health
insurance. She recommended that 200% be the bare minimum
number. Children should be the first ones receiving health
insurance.
2:51:02 PM
Representative Gara asked the amount a private health
insurance policy might cost for a child. Ms. Lacey did not
know, indicating that she pays $3,000 dollars annually
through the City and Borough of Juneau (CBJ).
2:52:10 PM
MARIE DARLIN, COORDINATOR, CAPITAL CITY TASK FORCE, ALASKA
ASSOCIATION OF RETIRED PERSONS (AARP), testified in support
of the legislation. She referred to a letter provided to
the Committee. (Copy on File.)
Ms. Darlin noted that AARP had opposed deletion of the
Longevity Bonus Program. She maintained that its deletion
resulted in a huge loss to seniors throughout the State.
She stated that AARP supports the Senior Care Program and is
in support of the new program. She pointed out that the
asset test in Senior Care was problematic and spoke in
support of HB 198 as it does not include that test. She
voiced support for the higher percentage number of 175%,
noting the three beneficiaries:
· Older women, who did not work long or build up
assets;
· Alaskans that did not have high paying positions;
and
· Rural Alaskans who have not worked or been covered
by any insurance.
Ms. Darlin expressed concern that services be made available
and spoke in support of programs that keep seniors in their
homes. She urged passage of HB 198.
2:58:54 PM
Representative Kelly questioned if AARP would support 175%
now, anticipating a reduction to 150% in five years due to
the Public Employees Retirement System/Teachers Retirement
System (PERS/TRS) concerns. Ms. Darlin declined to answer,
emphasizing that AARP will work for a solution and are aware
of the problems.
3:00:08 PM
Representative Gara referenced the "Keep the Seniors at Home
Proposal", pointing out the success and spoke in support of
the personal care attendance program.
3:01:02 PM
In response to a question by Co-Chair Chenault, Ms. Darlin
observed that the basic cost for three years in the Pioneer
Home is approximately $250,000 dollars. Most people that
go into some kind of a facility are usually there for about
three years.
3:02:01 PM
Representative Crawford opined that he hoped to work
diligently to find more options for the seniors.
3:03:36 PM
Co-Chair Meyer questioned if other states have programs
similar to the Senior Care Program. [The Department was
unable to answer.]
Representative Gara asked for a fiscal analysis of a two-
tiered senior bonus plan, questioning the addition of the
Longevity Bonus.
KARLEEN JACKSON, COMMISSIONER, DEPARTMENT OF HEALTH AND
SOCIAL SERVICES, agreed to provide the requested
information.
Representative Gara asked the fiscal differences of
transiting from the current Denali Kid Care Program to
Universal coverage.
JANET CLARKE, ASSISTANT COMMISSIONER, DIVISION OF FINANCE
AND MANAGEMENT SERVICES, DEPARTMENT OF HEALTH AND SOCIAL
SERVICES, clarified that the total General Fund cost would
be approximately $6 million dollars, adding that there would
be co-pays and premiums & the federal share. She stated
that the change from the current program to the one proposed
by HB 198 would be $1.3 million dollars for half a year,
with $600,000 in General Funds, adding 1,500 individuals
(pregnant women and children.)
Representative Gara pointed out that Representative Hawker's
proposal, from current law going to 175% would, on an annual
basis add approximately $1.2 million dollars. Ms. Clarke
estimated for FY09, $1.3 million dollars.
Representative Gara asked if for that period of time, the
General Fund cost for the Universal coverage would be
approximately $6 million dollars. Ms. Clarke agreed.
3:08:02 PM
Co-Chair Meyer observed that the State of North Dakota is at
140%, asking if they received a federal match. Ms. Clarke
could not speak to North Dakota's program, reiterating that
a drop below 150% of poverty, results in a loss of federal
funds.
Co-Chair Meyer questioned if the Department had a
recommendation. Commissioner Jackson acknowledged it was
the work of the Committee to determine the percentage. She
stressed the desire to continue the Senior Care Program, or
something like it. She added that more money spent upfront
on children results in savings in the future; she would not
speak to the proper split.
3:10:37 PM
Representative Thomas requested more information on programs
offered by other states.
Representative Kelly spoke to the current cost of the Senior
Care program; he noted that it is being used at a lower
level due to prescription drug programs. Ms. Clarke
clarified that amount is approximately $10 million dollars.
Representative Kelly concluded that full use of all programs
would cost around $30 million dollars. Ms. Clarke responded
that the request was $33.7 million dollars. Representative
Kelly worried about doubling the cost of the program.
3:13:17 PM
Representative Gara asked for a chart indicating the poverty
line for those living in Alaska as compared to those living
in the lower 48 states.
ELLIE FITZJARRALD, DIRECTOR, DIVISION OF PUBLIC ASSISTANCE,
DEPARTMENT OF HEALTH AND SOCIAL SERVICES, clarified that
there is a 25% difference in the poverty level between
Alaska and other states. Representative Gara suggested that
the difference would result in a "wash" when taking into
consideration the Longevity Bonus and the PFD programs.
3:14:37 PM
Representative Hawker MOVED to ADOPT Amendment 1. Co-Chair
Meyer OBJECTED.
AMENDMENT 1
Page 4, lines 30 through 31:
Delete all material
Insert: "poverty line applicable to a family of that
size according to the United States Department of
Health and Human Services [FEDERAL OFFICE OF MANAGEMENT
AND BUDGET], and who, but for earnings in excess of the
limit established"
Page 6, lines 1 through 11:
Delete all material
Insert: "whose household income does not exceed 175
percent of the federal poverty guideline as defined by
the United States Department of Health and Human
Services and revised under 42 U.S.C. 9902(2)
(A) $2,208 A MONTH IF THE HOUSEHOLD CONSISTS OF TWO
PERSONS;
(B) $2,782 A MONTH IF THE HOUSEHOLD CONSISTS OF
THREE PERSONS;
(C) $3,355 A MONTH IF THE HOUSEHOLD CONSISTS OF FOUR
PERSONS;
(D) $3,928 A MONTH IF THE HOUSEHOLD CONSISTS OF FIVE
PERSONS;
(E) $4,501 A MONTH IF THE HOUSEHOLD CONSISTS OF SIX
PERSONS;
(F) $5,074 A MONTH IF THE HOUSEHOLD CONSISTS OF
SEVEN PERSONS;
(G) $5,647 A MONTH IF THE HOUSEHOLD CONSISTS OF
EIGHT PERSONS;
(H) $5,647 A MONTH, PLUS AN ADDITIONAL $574 A MONTH
FOR EACH EXTRA PERSON ABOVE EIGHT PERSONS WHO IS
IN THE HOUSEHOLD IF THE HOUSEHOLD CONSISTS OF
NINE PERSONS OR MORE;"
/
Page 7, line 2, following "exceed":
Delete "135"
Insert "175"
Representative Hawker explained that the amendment corrects
existing statutory language reference to the United States
(U.S.) Department of Health and Human Services. The
amendment also raises the level for pregnant women and
corrects the number from 135% to 175%. Additionally, it is
a correction from 135% to 175%, whenever appropriate in the
bill.
Representative Gara questioned if Representative Hawker
would support the addition of Universal Care, noting that
costs would increase from $1.3 to $6 million dollars.
Representative Hawker said he would prefer to limit the
legislation, as it is and addressing only current statute.
Co-Chair Meyer WITHDREW his OBJECTION. There being NO
further OBJECTION, Amendment 1 was adopted.
3:19:40 PM
Representative Gara MOVED to ADOPT Amendment 2, #25-
LS0714\A.2, Mischel, 4/2/07. Representative Hawker
OBJECTED.
Representative Gara stated that Amendment 2 would correct
the statutory concerns with the eligibility of the Longevity
Bonus. That would leave the Senior Care Program for those
people that do not qualify for the Longevity Bonus Program.
Representative Kelly asked if seniors were given the choice,
wouldn't they all select the Longevity Bonus.
Representative Gara thought that some would receive more
under the Senior Care Program. The applicant would make
that decision, not creating a $49 million dollar overlap.
Representative Hawker advised that the Department has
indicated that the restoration of the Longevity Bonus would
be approximately $33.7 million dollars. He addressed
Amendment 2. The Longevity Bonus does not consider any need
of the individual. He thought that it would benefit 13,000
Alaskans without regard to their income level. He
reiterated the State's obligation to determine benefits, for
the most needy. He wanted to seek the "moral high-ground"
when determining terms and conditions, while not giving the
State's wealth to the rich.
3:27:43 PM
Representative Crawford supported the Senior Care Program,
however, he did not want to repeal the Longevity Bonus
program. The amendment reinstates the Longevity Bonus. He
recommended removing references to the Longevity Bonus and
asked if that would be considered a "friendly amendment".
Representative Gara did not realize that there was a repeal
of the Longevity Bonus throughout the bill.
Representative Hawker acknowledged that there is, which is
identified in the sectional analysis in Section 15.
Representative Gara was surprised. The repeal gets rid of
the Longevity Bonus & by getting rid of the repeal, there
would be a Longevity Bonus that would be unenforceable. He
would not consider that a friendly amendment.
Representative Hawker reiterated that the deletion of the
Longevity Bonus is stated clearly in the title of the bill.
3:31:59 PM
Representative Gara noted the reference to the fact that the
Longevity Bonus plan helps wealthy seniors. The Senior Care
Plan only protects the most impoverished seniors,
individuals who earn $22 thousand dollars a year. Assuming
the costs of rent [Pioneer Home @ $2300/month], medical,
transportation, needs more than 175% of the poverty level.
The program gives money to those that are the most
impoverished. He emphasized that the amount of money left
on the table for the oil industry last year could cover the
deficit. People on the Longevity Bonus roll are going to
decrease. He recommended that the State could do better
than helping only the most impoverished, pointing out that
the fiscal notes would not be out of line if seniors were
given the choice of one or the other option, not both.
A roll call vote was taken on the motion.
IN FAVOR: Gara, Crawford
OPPOSED: Hawker, Joule, Kelly, Thomas, Chenault, Meyer
Representatives Foster, Nelson and Stoltze were not present
for the vote.
The MOTION FAILED (2-6).
HB 198 was HELD in Committee for further consideration.
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