Legislature(2003 - 2004)

04/09/2003 09:05 AM Senate FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                                                                                                                                
     CS FOR SENATE BILL NO. 105(HES)                                                                                            
     "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."                                                                                                        
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-chair   Wilken  informed   that  this   bill  would  amend   "the                                                            
eligibility income levels  for Denali KidCare and Medicaid under the                                                            
special  income limits  for  nursing homes  and home  and  community                                                            
based waiver services."                                                                                                         
                                                                                                                                
JOEL  GILBERTSON,  Commissioner,  Department  of Health  and  Social                                                            
Services, explained that  this bill was introduced by Governor Frank                                                            
Murkowski  and  was  subsequently  amended  by  the  Senate  Health,                                                            
Education  & Social  Services (HES)  Committee. He  stated that  the                                                            
Governor's  bill specified  that the eligibility  income levels  for                                                            
the Denali KidCare  program and pregnant women "would  be frozen" at                                                            
the federal maximum  allowable poverty level of 200  percent, and at                                                            
300  percent of  the special  income  standards for  individuals  in                                                            
long-term  care  under  the Medicaid  program  and  for individuals                                                             
receiving home and community based waiver services.                                                                             
                                                                                                                                
Commissioner Gilbertson  continued that the HES version  of the bill                                                            
amends these levels to  175 percent of poverty levels for the Denali                                                            
KidCare program and pregnant  women program, and he noted that a new                                                            
negative  $7,151,300  fiscal  note, dated  April  8, 2003  from  the                                                            
Department  of  Health  and  Social  Services  accompanies  the  HES                                                            
version of the  bill. He stated that the poverty level  specified in                                                            
the HES  version of  the bill  would eliminate  an additional  1,200                                                            
individuals  from the  Title 21  Denali KidCare  and pregnant  women                                                            
programs  above the  number  specified in  the Governor's  bill.  He                                                            
stated  that  some  of  the  impact  "is  buffered"   by  provisions                                                            
specifying  that pregnant women and  children in the Denali  KidCare                                                            
program who  establish eligibility  by June 30, 2003 would  continue                                                            
to  be   provided  coverage   for  nine   months  and  six   months,                                                            
respectively, under existing eligibility rules.                                                                                 
                                                                                                                                
Commissioner  Gilbertson  stated  that  the  Governor  continues  to                                                            
support the  bill at the 200 percent  of poverty level for  children                                                            
in the  Denali KidCare program  and pregnant  women and 300  percent                                                            
for individuals needing long-term care.                                                                                         
                                                                                                                                
Co-Chair Green  asked whether Alaska's poverty calculation  receives                                                            
additional adjustments at the federal level.                                                                                    
                                                                                                                                
Commissioner   Gilbertson   explained  that   the  State   currently                                                            
specifies the eligibility  level for the Denali KidCare and pregnant                                                            
women program at 200 percent  of the federal poverty level, which he                                                            
noted, is adjusted  and inflation-proofed annually.  Furthermore, he                                                            
declared,  the federal  government  awards  the State  of Alaska  an                                                            
additional inflation factor  of 25 percent. Therefore, he clarified;                                                            
the State's  established  poverty level  for these  programs is  200                                                            
percent  above the  national poverty  level calculated  for  Alaska.                                                            
Additionally,  he pointed out that  individuals in the programs  are                                                            
held  harmless  for  their  permanent  fund   dividends  (PFDs).  He                                                            
qualified that  "the income standards are uniquely  adjusted for the                                                            
Alaska situation"  in terms of the federal calculated  poverty level                                                            
and "the hold harmless clause" for the PFDs.                                                                                    
                                                                                                                                
Commissioner  Gilbertson reiterated  that the Governor continues  to                                                            
support the levels specified  in the original bill as opposed to the                                                            
HES version's amended levels.                                                                                                   
                                                                                                                                
Co-Chair Green  calculated that the State's poverty  level for these                                                            
programs "is  250 percent above" the  normed federal poverty  level.                                                            
                                                                                                                                
Commissioner Gilbertson  stated that when comparing Alaska's poverty                                                            
level  standards to  the national  standard  poverty  level for  the                                                            
"Lower 48," that is correct.                                                                                                    
                                                                                                                                
Co-Chair Green  asked whether additional  adjustments result  from a                                                            
State-conducted asset test regarding the Denali KidCare program.                                                                
                                                                                                                                
Commissioner  Gilbertson clarified  that the State does not  conduct                                                            
an asset test for the Denali KidCare program.                                                                                   
                                                                                                                                
Co-Chair Green  noted therefore "it  is a fairly short window  of an                                                            
income level  at a certain  level that qualifies  a person  for this                                                            
program."                                                                                                                       
                                                                                                                                
Commissioner Gilbertson responded yes.                                                                                          
                                                                                                                                
Co-Chair Green  specified that the program recipients  "could either                                                            
be uninsured or underinsured."                                                                                                  
                                                                                                                                
Commissioner Gilbertson concurred.                                                                                              
                                                                                                                                
Senator  Hoffman declared  that  this bill  reduces  health care  to                                                            
pregnant  women,  children,  and  the disabled  to  save  less  than                                                            
$300,000 in general  funds. He noted that other cost  saving options                                                            
must  be available  "that have  less impact"  on those  in need.  He                                                            
asked for confirmation  that the Administration supports  these cuts                                                            
that would affect  approximately 800 individuals to  save this level                                                            
of funding.                                                                                                                     
                                                                                                                                
Commissioner  Gilbertson responded  that, were  the Governor's  bill                                                            
adopted,  approximately 800  people would  be affected. However,  he                                                            
clarified  that the  HES version,  which  is before  the  Committee,                                                            
would  narrow the  program further.  He clarified  that the  savings                                                            
resulting from the Senate HES version would be $7.2 million.                                                                    
                                                                                                                                
Commissioner Gilbertson  informed the Committee that this bill is an                                                            
effort by  the Administration  to contain  "the rapid escalation  of                                                            
growth of our program,  40 percent growth in the last five years" of                                                            
these three  Medicaid programs.  He advised  that to strengthen  the                                                            
program  and ensure  continuing Medicaid  benefits  "for low  income                                                            
beneficiaries,  …. this is the size  of a Medicaid program  that the                                                            
we can support  in terms of the number of eligible  individuals." He                                                            
stated that  the State  currently has the  highest income  standards                                                            
allowed under federal law,  and that the Governor's bill "would lock                                                            
in" those standards.                                                                                                            
                                                                                                                                
Commissioner   Gilbertson  continued   that  rather  than   being  a                                                            
statement  that this  reduction would  have "no  impact," the  State                                                            
"has undergone  exponential growth in our Medicaid  program," and in                                                            
order to  continue the  program, "some of  the optional categories"                                                             
must be  addressed.  He continued  that the  State must acknowledge                                                             
that  it "has  reached  a capacity  where  further growth  in  those                                                            
programs  will threaten  the  viability of  the program  itself  and                                                            
threaten the ability  of the State itself to fund  the core services                                                            
that  are  covered   for  individuals  currently  enrolled   in  the                                                            
program." He stated  that the poverty levels in the  Governor's bill                                                            
would  not jeopardize  those individuals  currently  in the  program                                                            
provided they not experience  an increase in their income level, but                                                            
would allow  for a downsizing  of the program  over time. He  stated                                                            
that  the  Senate  HES  committee  version   "would  roll  back  the                                                            
standards,"  and consequently  incur a larger  reduction. He  stated                                                            
that  the   bill  recognizes   that  there   are  benefits   to  the                                                            
continuation of these types  of programs such as reducing the amount                                                            
of  low birth  rate  babies  and providing  insurance  coverage  for                                                            
pregnant  women, children  and the  disabled; however  the costs  of                                                            
these programs "coupled  together" is leading to a situation wherein                                                            
the ability  of the State  "to pay for good  services and have  good                                                            
reimbursement   rates  for  those  individuals  who   are  currently                                                            
covered" is being threatened.                                                                                                   
                                                                                                                                
Senator Hoffman expressed  that while this bill might produce short-                                                            
term savings, the long-term costs might increase.                                                                               
                                                                                                                                
Commissioner   Gilbertson  acknowledged   that  there  are   savings                                                            
resulting from  providing State funded  insurance coverage  although                                                            
other health care  options, such as community health  centers, "3-30                                                            
grants and clinics,"  uncompensated care awards, volunteer  services                                                            
by providers,  and other insurance  coverage might be available.  He                                                            
acknowledged  that the State does  "have a problem with individuals                                                             
being  uninsured or  underinsured."  However, he  continued, as  the                                                            
programs  continue  to experience  growth  and "the  State's  income                                                            
standards  rise  to the  point where  we  see individuals  that  are                                                            
moving  into  higher  income  brackets   being  eligible  for  State                                                            
programs,"  the State might not have  the resources "to provide  its                                                            
match  so we  can have  a good  reimbursement  rate  for low  income                                                            
individuals and provide needed services."                                                                                       
                                                                                                                                
Senator  Hoffman acknowledged  this,  but asked  whether the  fiscal                                                            
note's projected  program savings  or other State programs  would be                                                            
negatively  affected by not  providing these  services to the  three                                                            
identified groups.                                                                                                              
                                                                                                                                
Commissioner   Gilbertson   clarified   that   the   HES   committee                                                            
substitute,  rather than the Governor's  version of the bill,  would                                                            
affect  program  eligibility  standards.  He  stated  that  the  HES                                                            
committee  substitute  is  projected  to  produce  $7.1  million  in                                                            
savings,  and he continued,  research does  not indicate  additional                                                            
demand would  be placed on other services  the Department  provides.                                                            
He  stated  that pregnant  women  currently  in  the  program  would                                                            
continue  to receive care.  He acknowledged  that prenatal  care has                                                            
positive results  in terms of health care dollars  spent and that it                                                            
is unknown  what health  care options  future  pregnant women  could                                                            
receive, but  "it is expected that  they would still receive  care."                                                            
                                                                                                                                
Senator Hoffman  voiced that the long-term costs of  the HES version                                                            
of the bill would outweigh the short-term savings.                                                                              
                                                                                                                                
Commissioner Gilbertson  stated that the Administration  agrees that                                                            
savings  do  occur  from  providing  health  care  to  children  and                                                            
pregnant women, and that  is the reason the Governor's bill proposes                                                            
to "lock in" the current standards.                                                                                             
                                                                                                                                
Senator  Hoffman  asked  whether the  Department  supports  the  HES                                                            
amended standards.                                                                                                              
                                                                                                                                
Commissioner    Gilbertson    expressed    that    the    Governor's                                                            
administration does not support the HES committee substitute.                                                                   
                                                                                                                                
Senator  Hoffman voiced  support of  the Governor's  version of  the                                                            
bill.                                                                                                                           
                                                                                                                                
Co-Chair  Wilken asked  for clarification  that 150  percent of  the                                                            
federal  poverty  level  is  the  minimum   level  the  State  could                                                            
authorize,  as referenced  in the "2003  Federal Poverty  Guidelines                                                            
for Alaska" [copy on file] chart provided by the Department.                                                                    
                                                                                                                                
Commissioner  Gilbertson  responded, that  in order  "to access  the                                                            
federal enhanced  match rate,"  the State  must establish a  minimum                                                            
150 percent  of federal poverty level  standard. He shared  that the                                                            
enhanced  match rate increases  the federal  match contribution  for                                                            
the Denali KidCare program from 60 percent to 71 percent.                                                                       
                                                                                                                                
Co-Chair Wilken  asked for confirmation  that the income  figures in                                                            
the chart do not include the permanent fund dividend.                                                                           
                                                                                                                                
Commissioner Gilbertson replied that is correct.                                                                                
                                                                                                                                
Senator  B. Stevens  asked  whether  the  information  in the  chart                                                            
includes the 25 percent Cost of Living Allowance (COLA).                                                                        
                                                                                                                                
Commissioner Gilbertson responded that it does.                                                                                 
                                                                                                                                
Co-Chair Wilken noted that  1,200 individuals "would lose services."                                                            
He asked the  Department to provide  detailed information  as to who                                                            
would be affected.                                                                                                              
                                                                                                                                
Commissioner Gilbertson  responded that this information is included                                                            
on page two of  the HES fiscal note. He noted that  both the HES and                                                            
Governor's  version  of the bill  maintain  the 300  percent of  the                                                            
special income standard  for individuals requiring long-term care or                                                            
home  or  community  based  waiver  services.  He  stated  that  the                                                            
Governor's 200  percent of federal poverty standard  would reflect a                                                            
net decease  of  61 cases  in the Denali  KidCare  program in  2004,                                                            
whereas the HES  version would incur a net decrease  of 1,213 cases.                                                            
                                                                                                                                
Co-Chair Wilken asked the  deadline for individuals to qualify under                                                            
the existing standards.                                                                                                         
                                                                                                                                
Commissioner Gilbertson responded that it is June 30, 2003.                                                                     
                                                                                                                                
Co-Chair  Wilken  asked  the  total number  of  individuals  in  the                                                            
affected programs.                                                                                                              
                                                                                                                                
Commissioner   Gilbertson  responded   that  the  total   number  of                                                            
individuals  in the  program would  be supplied.  He estimated  that                                                            
approximately  26,000 children  are in the  Denali KidCare  program;                                                            
therefore,  he calculated  that approximately  four  percent of  the                                                            
children in the program would be affected.                                                                                      
                                                                                                                                
Co-Chair Wilken asked the  Department to provide the total number of                                                            
individuals in  the programs as well as information  regarding other                                                            
health care options.                                                                                                            
                                                                                                                                
Senator  Hoffman  questioned  the percentage  calculation  of  those                                                            
being affected by changes in the Denali KidCare program.                                                                        
                                                                                                                                
Co-Chair Wilken  asked the Department  to confirm the percentage  of                                                            
program participants who would be affected.                                                                                     
                                                                                                                                
Co-Chair Green  moved to report CS SB 105 (HES) from  Committee with                                                            
individual recommendations and accompanying fiscal note.                                                                        
                                                                                                                                
Senator Hoffman objected.                                                                                                       
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Bunde, Senator B. Stevens, Co-chair Green, and                                                                
 Co-chair Wilken                                                                                                                
                                                                                                                                
OPPOSED: Senator Hoffman, Senator Olson                                                                                         
                                                                                                                                
ABSENT: Senator Taylor                                                                                                          
                                                                                                                                
The motion PASSED (4-2-1)                                                                                                       
                                                                                                                                
CS SB  105(HES)  was REPORTED  from Committee  with  a new  negative                                                            
$7,151,300 fiscal  note, dated April 8, 2003 from  the Department of                                                            
Health and Social Services.                                                                                                     
                                                                                                                                

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