Legislature(1995 - 1996)

03/28/1996 02:05 PM HES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
 HB 384 - PIONEERS' HOME - INABILITY TO PAY                                  
 Number 2297                                                                   
 REPRESENTATIVE ROKEBERG, Sponsor, said House Bill 384 provides a              
 statutory protection for the residents of the state's Pioneers'               
 Homes.  It has always been the policy of the state of Alaska not to           
 evict a resident if they did not have the resources or the money to           
 pay.  Currently, 86 of the approximately 600 residents of the                 
 Pioneers' Homes in the state do not pay the full rent.  He                    
 expressed concern that when the Governor, with the concurrence of             
 the Senior Commission in the state, advised and agreed to raise               
 significantly the rents in the Pioneers' Homes this year, the                 
 residents of the homes became very fearful of what was going to               
 happen to them.  He became aware of this because his mother is a              
 resident of the Anchorage Pioneer Home in the first level of basic            
 assisted living.  He noted for the record that his mother is fully            
 capable and has sufficient net worth to withstand any increase in             
 the rates, so that's not why he's interested in this bill.                    
 TAPE 96-34, SIDE B                                                            
 Number 001                                                                    
 REPRESENTATIVE ROKEBERG commented that he has made many friends in            
 the Pioneers' Homes and his interest stems from the fear and                  
 concern he has seen in the eyes of those residents of the homes.              
 These people have extraordinary concerns because they know they               
 don't have the ability to meet the new rate schedules.  They are              
 fearful to this day because they don't understand how politics work           
 and the way the world works.  All they know is that the rates are             
 going up, they don't have the money to pay for it and are fearful             
 of being thrown out in the street.                                            
 REPRESENTATIVE ROKEBERG said it was kind of ironic that he first              
 became aware of the legal circumstance and the lack of any                    
 statutory protection for the residents when Representative Davis,             
 Representative Robinson and he were on a subcommittee last year and           
 there was testimony by Director Connie Sipe as to the fact that               
 there was no statutory authority.  It's just something that all               
 residents of the state of Alaska truly believe because it has been            
 the policy since 1913 that no one would be thrown out due to their            
 inability to pay.                                                             
 REPRESENTATIVE ROKEBERG said HB 435 memorializes the state policy             
 in statute.  He said normally most legislators are concerned about            
 the fiscal notes attached to their bills, but he felt he could take           
 the fiscal note and the footnote to the fiscal note and make it his           
 sponsor statement for this legislation.  The administration is                
 fully supportive of this bill.  It has a zero fiscal note as it               
 will not have any fiscal impact on the state because of the                   
 existing state policy.                                                        
 REPRESENTATIVE ROKEBERG directed the attention of the committee to            
 the Ombudsman Office report, specifically area 4 which states, "The           
 legislature should insist by either enacting statute or adopting a            
 resolution that the state agencies unwritten policies be set out              
 either in statute, regulation or departmental policy and procedures           
 manuals so that the affected members of the public are informed of            
 the policies and procedures that apply to them when dealing with              
 state agencies."  He said it has been the unwritten state policy              
 never to throw anyone out of a Pioneers' Home, and it needs to be             
 given statutory authority.  He referred to the memorandum in the              
 committee packets dated March 13, 1996, addressed to him from James           
 Kohn, Deputy Director of the Division of Senior Services and said             
 his mother's rate for the basic assisting living was $860 per                 
 month.  He noted that had been increased twice in the last two                
 fiscal years; this year there was no increase because they were               
 anticipating another raise.  In any event, it's been raised 10                
 percent in the two fiscal years it was raised.  Starting July 1,              
 1996, her rent will go up 50 percent to $1289, and there will be a            
 one-seventh increment each succeeding fiscal year.  In FY 98, it              
 will raise to $1718 which is about a 33 percent increase from the             
 current rate; $2147 in FY 99 which is a 25 percent raise, and so on           
 up to $3,862 in just seven years.  He said there is no question               
 this is a bargain.  He thought the committee should guard against             
 discussing the entire philosophy of the Pioneers' Homes, but on the           
 other hand the nature of these homes should be addressed which is             
 to provide a place of care.                                                   
 Number 174                                                                    
 REPRESENTATIVE ROKEBERG noted this bill had a hearing before the              
 State Affairs Committee where committee members expressed concern             
 about the future fiscal realities of the state and the ability of             
 the Pioneers' Homes to exist.  Therefore, they insisted that a                
 change be made in the language to indicate that as of the effective           
 date of this bill, only those people who were presently residents             
 of the Pioneers' Homes would be protected as far as being evicted.            
 Thus, any future resident could potentially be evicted if they did            
 not have the money to pay.  Representative Rokeberg said he agreed            
 to the amendment only to move the bill along in the process, but as           
 the bill stands now with the State Affairs committee substitute, he           
 would withdraw the bill unless it was amended in the HESS                     
 committee.  He noted that he had prepared an amendment.                       
 CO-CHAIR BUNDE referred to the memorandum regarding the rate                  
 increase and said obviously the Administration's goal was to raise            
 the rate in 2003 to the level of the estimated monthly cost, but              
 that's the monthly cost in 1996.  Using the basic assisted living             
 as an example, he pointed out that presently the cost to provide              
 the service is $3,000 more per month than the rent.  He questioned            
 when the cost to provide the service reaches $3,862 a month in the            
 year 2003 how will that relate to the actual cost?                            
 REPRESENTATIVE ROKEBERG said that Mr. Kohn was available to respond           
 but he wanted to comment that those are the costs of the state                
 running an operation.  He said to him, that doesn't necessarily               
 mean what the private sector costs are and he believes there are              
 ways that monies can be saved even with the existing program.  In             
 other words, he believes that efficiencies could be implemented to            
 offset any inflationary costs (indisc.-paper shuffling).                      
 Number 303                                                                    
 REPRESENTATIVE BRICE said he appreciated the amendment and agreed             
 wholeheartedly that segregating the new residents from existing               
 residents was wrong.  He also suggested that perhaps the logic                
 behind the State Affairs Committee was that the future fiscal                 
 impact was faulty by not having this language in the bill.                    
 Number 344                                                                    
 JOE ALTER testified that he had a deep interest in Pioneers' Homes.           
 He is currently serving as chairperson for a volunteer board made             
 up of representatives from each of the geographic areas where                 
 Pioneers' Homes are located.  He noted that once a year the entire            
 board visits each Pioneers' Home for the purpose of holding a                 
 public hearing in which the residents, family members and community           
 persons may participate.  He said that last fall the board visited            
 each of the homes, which is what led him to testify in opposition             
 to CSHB 384, but in support of the original HB 384.  He advised               
 that in the hearings throughout the state, there was fear expressed           
 that the rates would be raised in the Pioneers' Homes to help close           
 the fiscal gap and residents were concerned about what would happen           
 if they were unable to pay the rate.  The board debated these                 
 issues, but the board in its knowledge of the need to close the               
 fiscal gap and its need to make the payments more fair for each of            
 the residents, particularly those who could pay more than what they           
 have been paying, adopted a recommendation.  The recommendation was           
 made to the Governor in letter form dated October 9, 1995, that               
 recovery of the full cost of care be made over about a seven year             
 time period, with the idea the board was doing their part in trying           
 to cooperate in meeting the fiscal gap and yet dealing with people            
 in a humane way.  He said the residents expressed concern, even               
 more than before, about what would happen to them when they were              
 unable to pay their rent.  He noted the third paragraph of the                
 October 9 letter, states these are crossroads times in which we               
 need to define public policy in relation to the Pioneers' Homes.              
 He said particularly it needs to be defined for the comfort and the           
 ability to live a healthy life for those people who are now living            
 in the Pioneers' Homes as well as future residents.                           
 MR. ALTER stated with those thoughts in the background, he had no             
 other recourse than to say he supports the original bill.  He felt            
 that if the State Affairs committee substitute was adopted, a mixed           
 public policy message would be sent in that one group of residents            
 would be treated differently than the other residents.  He asked              
 what would happen to people if they were thrown out and who pays              
 the bill?  In his opinion, it would be the same person that's                 
 paying when they can't afford to pay, whether they're in a                    
 Pioneers' Home or outside of the Pioneers' Home.                              
 MR. ALTER said that since most of the people in Pioneers' Homes are           
 suffering from Alzheimer's or related dementia, and currently there           
 isn't any other place for them to go other than the Pioneers' Home,           
 unless they were sent to a mental hospital where the cost is                  
 significantly more.                                                           
 Number 543                                                                    
 CO-CHAIR TOOHEY noted there is no mental hospital that accepts                
 Alzheimer's patients.  The Alaska Psychiatric Institute does not              
 take Alzheimer's and Harborview is being closed.  She referred to             
 a letter dated December 15, 1994, from Connie Sipe, Director of               
 Senior Services, which states, "The new rates will be effective               
 beginning February 1, 1995.  If you have income or assets, you must           
 pay the rate charged.  If you do have sufficient income or assets,            
 please talk to the social worker or a business office staff member            
 for assistance.  No one who is unable to pay the full rate will be            
 asked to leave the Home or be discriminated against in any way."              
 She asked Mr. Alter if anyone has ever led him to believe there is            
 any other plan that would cause people not to believe the letter?             
 MR. ALTER responded that question comes up repeatedly from the                
 residents in the Pioneers' Homes.                                             
 CO-CHAIR TOOHEY asked him if the residents were not made aware of             
 the letter.                                                                   
 MR. ALTER said yes, but generally when people address the issue               
 with the residents of the homes, it is usually prefaced with "It              
 has been the policy to do this, but we don't know what the policy             
 is going to be in the future."  He added that based on the past 80            
 years, the policy has been not to throw people out.                           
 CO-CHAIR BUNDE made reference to the Board's proposal to the                  
 Governor that residents pay gradually up to the cost, and the                 
 memorandum from Deputy Director Kohn that indicates the cost in               
 2003 will be the same as the cost is now and said he didn't think             
 people were getting the full information.                                     
 MR. ALTER said Co-Chair Bunde's point was well taken.  The Board              
 was under the impression that the estimated cost for the year 2003            
 is estimated to be the full cost of care at that time for the type            
 of service that the homes are rendering.  He added that the homes             
 are gradually zeroing in on not being everything to everybody, but            
 focusing on where the greatest need can be met for the greatest               
 number of people.                                                             
 CO-CHAIR BUNDE said if mixed messages were being sent to the                  
 public, it needed to be stopped.                                              
 Number 682                                                                    
 REPRESENTATIVE ROBINSON thought some of the fears stem from the               
 residents hearing about government downsizing, budget cutting,                
 privatizing and not quite understanding how politics work.  For               
 many of them receiving a letter from the government indicating                
 there will not be a problem if they are unable to pay their rent is           
 not enough security for them.                                                 
 Number 735                                                                    
 ALISON ELGEE, Deputy Commissioner, Department of Administration,              
 testified that Co-Chair Bunde was correct in talking about the                
 potential for people to be misled about what the full cost of care            
 will be in the year 2003, but it is the department's intent to be             
 at full cost of care by dividing by the remaining number of years,            
 each year as the rate adjustments are done.  She said, "The concern           
 we had in trying to project what that cost of care would be is                
 that, when we look at the historical patterns of the Pioneers'                
 Homes, in fact we are appropriating less money today for the                  
 Pioneers' Home operations than we were three or four years ago                
 because the nature of the business has changed."  She emphasized              
 that the department would do everything they could to hold the cost           
 down in providing these services.  She commented that rather than             
 using some projected inflationary cost to demonstrate what that               
 rate would be, the department was basing it on today's full cost of           
 CO-CHAIR BUNDE said he takes comfort that the department is working           
 toward an undetermined but real number at some time and people                
 would be kept informed.  He questioned the zero fiscal note and               
 asked if there was a fiscal note somewhere that reflected the cost            
 of the Pioneers' Homes?                                                       
 MS. ELGEE responded the Pioneers' Home budget is a part of the                
 Department of Administration budget and the proposal for FY 97                
 reflected an increase in the designated receipts that come from               
 residents based on this plan to raise rates effective July 1.                 
 Number 817                                                                    
 CO-CHAIR TOOHEY asked how diligent the department was in following            
 up on residents' assets and incomes?                                          
 MS. ELGEE replied the department was currently in the process of              
 drafting new regulations for the (indisc.-paper shuffling) rate               
 increases and the existing regulations will be substantially                  
 modified to more closely correspond to the spousal impoverishment             
 statutes for Medicaid, so people are not put in a position of one             
 family member living in a Pioneers' Home and another family member            
 still living in a private residence.  The department does not want            
 to jeopardize that kind of environment.                                       
 CO-CHAIR TOOHEY asked if the department tracked the other assets.             
 She said it is very clear that an individual cannot live in a                 
 Pioneers' Home and then go to their empty home on the weekend.  She           
 was personally aware of cases in Anchorage where that was                     
 happening.  She objected to that because there were people trying             
 to get into the Pioneers' Home who don't have the money and qualify           
 for the original intent of the Pioneers' Home, which was to help              
 indigent Alaskans.  Her concern was if the department was not                 
 following up on this, then the services are not being provided to             
 the people who really need the service of the Pioneers' Home.  In             
 her opinion, this bill was not really needed because there is                 
 assurance that people are not going to be kicked out of the                   
 Pioneers' Home because of their inability to pay.                             
 MS. ELGEE stated that just one of the outcomes of the announcement            
 that rates were going to be raised, is that those individuals who             
 don't really need the services of the Pioneers' Home are in fact              
 relocating out of the Pioneers' Home.                                         
 CO-CHAIR BUNDE asked Co-Chair Toohey if there was an amendment to             
 the bill that would require enforcement of regulations.                       
 CO-CHAIR TOOHEY thought the best thing to do was to review the                
 entire program.  She reiterated she just did not see the need for             
 this legislation.                                                             
 MS. ELGEE said as the department has gone into this regulation                
 development process, their attorneys have advised them that the               
 existing statute is being stretched to put into regulation the                
 statement that admission will not be disallowed based on ability to           
 pay or kick people out.  The attorneys would be more comfortable if           
 this policy statement was set in statute, and it would be helpful             
 to the department in that respect.  It has always been the policy,            
 and it is the department's intent to continue the policy, but they            
 would be on firmer ground if it was in statute.                               
 CO-CHAIR BUNDE commented he is a member of the Legislative Budget             
 and Audit Committee and if Co-Chair Toohey felt the regulations               
 were not being judiciously applied, he would be happy to                      
 investigate and precipitate an audit.                                         
 Number 1021                                                                   
 REPRESENTATIVE ROKEBERG asked Ms. Elgee to respond to the statement           
 under number 3, reasons for termination of contract of the                    
 Pioneers' Home Assisted Living Contract which reads, "for violation           
 of the terms of the residential services contract, including                  
 failure to pay costs incurred under the contract."                            
 MS. ELGEE asked Mr. Kohn, Deputy Director of the Division of Senior           
 Services to respond.                                                          
 Number 1070                                                                   
 JAMES KOHN, Deputy Director, Division of Senior Services,                     
 Department of Administration, said the department is moving toward            
 implementing the assisted living legislation that was passed last             
 year and all the Pioneers' Homes will be assisted living                      
 facilities, which require under that legislation, that contracts be           
 drawn up between the resident and the Pioneers' Homes.  The                   
 contract in the committee packets is a draft of the contract and              
 changes have since been made.  For example, a parenthetical                   
 statement has been added following the statement referred to by               
 Representative Rokeberg which indicates it is based on the                    
 resident's ability to pay and advises residents of their rights               
 under the Administrative Code to apply for the stipend.  He pointed           
 out that couldn't pay and won't pay are two different things; there           
 have been people who could pay, but wouldn't pay and then there               
 have been residents who can't pay.  The department requires a full            
 disclosure of assets and income for residents who can't pay and               
 then the department determines what they are able to pay.  The                
 amount the individual is unable to pay is maintained in a ledger as           
 a debt to the state and if there is an estate at the time of the              
 resident's death, the department applies to the estate for the                
 indebtedness.  Often times there is nothing in the estate.                    
 CO-CHAIR TOOHEY commented that often times there is a spouse living           
 in the original residence which she believes should certainly                 
 continue.  She questioned if the state has the ability to apply to            
 the estate at the time of the spouse's death.                                 
 MR. KOHN said the department's regulations at the present time are            
 unclear about that; however, they have attempted to put a lien on             
 the estate at the time of the resident's death so the estate                  
 couldn't be transferred without payment of the lien.  The                     
 department has done that at times; however, it is few and fairly              
 far between because usually when the resident gets to that point              
 there are not many assets left.  He reiterated that regulations are           
 being rewritten and will focus on the aspect of spousal                       
 Number 1260                                                                   
 CO-CHAIR TOOHEY asked where and when the department would have the            
 ability to collect Medicare?                                                  
 MR. KOHN said that Medicare is for hospital care.                             
 CO-CHAIR TOOHEY interjected Medicaid, SSI or any help for people              
 who are unable to pay.                                                        
 MR. KOHN said he would not say never; however, he thought that with           
 certain changes at the federal and state level there is a                     
 possibility that in the next few years something like that could              
 happen.  He hastened to point out that if the federal government              
 caps the amount of money given to the state, it isn't really going            
 to help the state because it's not new money.  It appeared to him             
 that it would be better to get the new money from the residents who           
 can pay and decrease the dependence of the Pioneers' Homes on                 
 general fund monies by, they predict, 50 percent over the next                
 seven years rather than go after federal funds that most likely               
 won't be there.                                                               
 CO-CHAIR BUNDE asked if the spend down requirement included the               
 residents' permanent fund dividend?                                           
 MR. KOHN replied it included all income to the resident.  He noted            
 the spend down requirement was not the same as it was for Medicaid.           
 The department requires residents to spend their assets to pay for            
 their rent, for their care and for their expenses.  However, in the           
 case of a spouse living in the original residence, the state does             
 not require the house to be sold; a lien is placed on it later on.            
 He added the department will probably place a lien sooner rather              
 than waiting until the resident dies.  He pointed out the                     
 regulations are fairly old and have been changed in bits and                  
 pieces.  He emphasized the whole Pioneer's Home system was built on           
 the premise that the resident is indigent; that's how it got                  
 started and it was that way until 1990 when the legislature changed           
 from giving preference to indigents to allowing people to come in             
 as their name came up on the list.  He informed the committee the             
 statute written for Pioneers' Homes is based on indigency, but for            
 about the last six years the program has been operating not based             
 on indigency.  He felt that was another reason to support this                
 CO-CHAIR BUNDE asked if Mr. Kohn felt there was a need for an                 
 entire legislative cleanup of the statutes?                                   
 MR. KOHN replied absolutely.  He explained that the statute still             
 reflects a 15-year residency before getting on the waiting list for           
 the Pioneers' Homes, the levels of care in the statute are not                
 reflective of what is being done, the focus of the program has                
 changed and there are a number of things that are not longer                  
 CO-CHAIR BUNDE asked if the department had any way of tracking the            
 average length of residency in Alaska.                                        
 MR. KOHN replied that 95 percent of people presently on the active            
 waiting list have been in the state in excess of 15 years.  Five              
 percent of people on the waiting list have been in the state for              
 less than 15 years and the average of that is about 7 1/2 years.              
 CO-CHAIR TOOHEY asked what the department's time frame was for                
 revising the statutes?                                                        
 MR. KOHN commented it is a very big job and the department is                 
 trying to start from the inside out.                                          
 CO-CHAIR TOOHEY said she didn't even want to consider legislation             
 that would jeopardize that process in any way.  She commented that            
 she personally would like to see this bill stay in the HESS                   
 Committee until it is really needed.                                          
 Number 1546                                                                   
 REPRESENTATIVE DAVIS said it appears that the time is approaching             
 where we are differing public policy as it relates to the Pioneers'           
 Homes and he felt that Mr. Alter's argument for not accepting the             
 committee substitute was that it is different public policy.  The             
 wording in the committee substitute was fine with him in that it              
 didn't restrict the department from establishing an eviction policy           
 if that's what was needed in the near or far future and it assures            
 current residents that they won't be evicted.                                 
 Number 1660                                                                   
 REPRESENTATIVE BRICE didn't think there was anything that would               
 stop the legislature from revisiting the statutes associated with             
 the Pioneers' Homes if the need existed.  He felt it was the                  
 prerogative of the HESS Committee and this legislature to move on             
 this bill.  He added it addresses the needs now as well as the                
 needs of the future.  He moved the amendment presented by                     
 Representative Rokeberg.                                                      
 REPRESENTATIVE ROKEBERG asked if there was further public                     
 CO-CHAIR BUNDE said there was no one else signed up to testify.               
 GENE DAU, Representative for the American Association of Retired              
 Persons and Veterans of Foreign Wars, indicated he would like to              
 REPRESENTATIVE BRICE withdrew his motion.                                     
 Number 1730                                                                   
 MR. DAU referred to Co-Chair Toohey's comment that residents of the           
 Pioneers' Homes do not need to be concerned about the rate increase           
 because the state will pay it and remarked that many of the                   
 residents do not understand politics nor do they know who the                 
 legislators are.  However, he felt it would be a sense of security            
 for residents if the current policy was placed in statute.                    
 Number 1837                                                                   
 REPRESENTATIVE BRICE moved to adopt Amendment 1.                              
 REPRESENTATIVE DAVIS objected.                                                
 REPRESENTATIVE BRICE referred to the memorandum from Terri                    
 Lauterbach dated February 26, 1996, and said he believed the                  
 argument was made that CSHB 384(STA) establishes some shaky                   
 constitutional questions relating to the Pioneers' Homes.  He                 
 believed the Pioneers' Homes and its administration had been in the           
 courts enough and it was better to error on the side of safety with           
 respect to this issue.  He remarked there was no need to                      
 differentiate between the current residents of the Pioneers' Homes            
 and those individuals who will be there arbitrarily the day after             
 this bill is signed into law.  He doesn't believe the fiscal impact           
 is going to be associated with whether or not someone can be                  
 evicted, but rather people will pay what they can pay which is the            
 whole nature of the Pioneers' Home.  He said it's a community, not            
 a nursing home.  In his opinion the amendment goes a long way                 
 toward bringing the Pioneers' Home back to the ideal of a                     
 REPRESENTATIVE VEZEY said he didn't understand what the amendment             
 CO-CHAIR BUNDE said the committee substitute states the provisions            
 of this bill only apply to the people currently in the Pioneers'              
 Homes and future residents could be evicted.  The amendment removes           
 that and provides that all residents be treated the same.                     
 Number 2025                                                                   
 REPRESENTATIVE DAVIS said he felt there was ample opportunity to              
 discuss with the department the impacts of this as it relates to              
 future policy.  He understood the intent and said he could pursue             
 this later, so he withdrew his objection.                                     
 REPRESENTATIVE VEZEY maintained the objection.  He asked if the               
 intent was to go back to the language in the original bill?                   
 REPRESENTATIVE ROKEBERG explained there was a slight change in the            
 wording with regard to income and assets.  He added that it does              
 take it back to the original bill in concept.                                 
 CO-CHAIR TOOHEY sought clarification that the committee substitute            
 allowed an exemption only for current residents of the Pioneers'              
 CO-CHAIR BUNDE further explained that the amendment removes that.             
 He asked if there was further objection to the amendment.                     
 CO-CHAIR TOOHEY replied yes.                                                  
 REPRESENTATIVE ROKEBERG said it's clear that we can discriminate in           
 certain instances, but usually between different classes of people.           
 All the residents of the Pioneers' Homes are of the same class,               
 therefore, their constitutional grounds and equal protection clause           
 would be a lead pipe (indisc.), citing Vest and Zobel.                        
 TAPE 96-35, SIDE A                                                            
 Number 017                                                                    
 REPRESENTATIVE ROBINSON spoke in strong support of the amendment.             
 She did not support the change made to the bill in the State                  
 Affairs Committee and commented there was nothing to lose by                  
 setting this policy in statute.  She discussed the security it                
 would provide to the residents of the Pioneers' Homes to know  they           
 would not be subject to eviction if there were rate increases and             
 were not longer able to pay the full rate.  She urged committee               
 members to support the amendment.                                             
 CO-CHAIR BUNDE asked for a roll call vote.  Voting to adopt                   
 Amendment 1 were Representatives Brice, Robinson, Vezey, Davis,               
 Rokeberg, Toohey and Bunde.                                                   
 Number 145                                                                    
 REPRESENTATIVE BRICE moved to pass CSHB 384(HES) out of committee             
 with individual recommendations and accompanying zero fiscal note.            
 Hearing no objection, it was so ordered.                                      

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