Legislature(1995 - 1996)
03/28/1996 02:05 PM HES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= 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 care. 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 impoverishment. 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 legislation. 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 applicable. 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 testimony. 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 testify. 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 community. REPRESENTATIVE VEZEY said he didn't understand what the amendment did. 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' Homes. 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.