Legislature(2011 - 2012)SENATE FINANCE 532
04/08/2011 09:00 AM FINANCE
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SENATE BILL NO. 5 "An Act relating to eligibility requirements for medical assistance for certain children and pregnant women; and providing for an effective date." 9:15:30 AM THOMAS OBERMEYER, STAFF, SENATOR BETTYE DAVIS, read the bill title and referred to SB 5 as the "Denali KidCare bill." He quoted the sponsor statement: Senate Bill 5 increases and restores to original levels established 14 years ago the qualifying income eligibility standard to 200 percent of the Federal Poverty Level (FPL) for the State Children's Health Insurance Program (SCHIP) called Denali KidCare (DKC) in Alaska. Alaska as one of the nation's wealthiest states is only one of four states which fund their SCHIP program below the 200 percent FPL. This bill makes health insurance accessible to an estimated 1277 more uninsured children and 224 pregnant women Alaska. Denali KidCare is an enhanced Medicaid reimbursement program receiving up to 70 percent federal matching funds. Mr. Obermeyer noted that Denali KidCare currently received approximately 65 percent in federal matching funds. He continued to read from the sponsor statement: Denali KidCare serves and estimated 7900 Alaska children and remains one of the least costly medical assistance programs in the state at about $1,700 per child with full coverage, including dental care, which is about 20 percent of the cost of adult senior coverage. Early intervention and preventative care will greatly increase Alaska children's health and yield substantial savings to the state and public and private sector hospital emergency rooms which must admit indigent and uninsured patients for non- emergency treatment. It is estimated per the Kaiser Foundation the 24,000 uninsured children in Alaska with a medical need are five times as likely not to have a regular doctor as insured children and four times more likely to use emergency rooms at a much higher cost. A similar bill was overwhelmingly passed with bipartisan support by the legislature in 2010. Governor Parnell subsequently vetoed the bill over concern that increased eligibility to Denali KidCare would require an increase in state-funded induced termination of pregnancies. Medicaid funds 51 percent of all births in Alaska. In order to continue to receive federal funding for the state Medicaid program of which Denali KidCare is part, and in order to comply with state law, constitutional provisions, and Alaska Supreme Court rulings, the state must provide medical services for pregnant women including medically necessary terminations, as well as prenatal and postpartum care. The Alaska Department of Health and Social Services (DHSS) estimated that no more than 10 percent or 22 more induced terminations would result with minimal expense from the increase in eligibility for Denali KidCare to 200 percent FPL. Induced terminations under Denali KidCare cost about $384,000 annually or less than 0.18 percent of one-fifth of the 1 percent of the $217 million of the DKC budget. While the Governor understandably is concerned about the mushrooming cost of the state Medicaid program, Denali KidCare which is about 18 percent of the $1.2 billion total state Medicaid budget should not be among his first cuts and expense of Alaska's most vulnerable children and pregnant women. Increasing eligibility for DKC to 200 percent FPL under Senate Bill 5 is uncomplicated, manageable, and could take effect immediately with prompt implementation by DHSS. 9:19:29 AM Co-Chair Stedman pointed to the three fiscal notes from the Department of Health and Social Services. The first note in the amount of $221,800 ($77,600 in general funds and $144,200 in federal receipts) from the Division of Public Assistance funded two full-time positions to manage the increased eligibility workload. The second note from the Division of Health Care Services, totaled $567,000 ($183,400 in general funds and $183,600 in federal receipts) and would cover the additional Medicaid costs. The third note in the amount of $2,718,200 ($820,400 in general funds and $1,897,800 in federal receipts) from the Division of Health Care Services funded increased Medicaid costs. 9:21:01 AM PAT LUBY, ADVOCACY DIRECTOR, AMERICAN ASSOCIATION FOR RETIRED PERSONS (AARP) (via teleconference), spoke in support of SB 5. The agency believed that every child in Alaska should have access to insurance coverage. The agency's members over the age of 65 enjoyed the security of Medicare that covered prevention and acute care; the agency felt that the state's children should enjoy the same coverage. He stressed the importance of Medicare coverage for newborns and their mothers. He urged the committee to pass the legislation. 9:22:25 AM ELIZABETH RIPLEY, EXECUTIVE DIRECTOR, MAT-SU HEALTH FOUNDATION (via teleconference), voiced support for SB 5. The foundation owned part of the Mat-Su Regional Medical Center and used revenues from the local hospital to make grants to improve the health of Mat-Su residents. The foundation worked to reduce health care barriers that included lack of insurance. Access to primary, dental, and preventative health services was important for overall health. In 2007 approximately 1,499 of the 22,991 children in Mat-Su were uninsured and 650 of the children fell below 200 percent of the Federal Poverty Level (FPL). The overall rate of uninsured children was 6.5 percent; however, the rate for children at or below 200 percent of the FPL was 20.4 percent and had begun to increase between 1 percent and 2 percent annually due to the decrease in eligibility for Alaska KidCare. Alaska had seen a 31 percent decline in the number of children covered by private health insurance in the past decade. She explained that the cost of care was passed on and raised premiums and out of pocket expenses for other Alaskans and businesses. She stated that uninsured children were not as healthy as insured children and were nine times less likely to have a regular doctor, four times more likely to be taken to the emergency room, and 25 percent more likely to miss school. In order to get a handle on the increased Medicaid costs in the state, it was important to address chronic disease and other drivers at the primary care level; uninsured children did not have access to the necessary preventative care, which increased system costs. She provided an example about a mother who had taken her asthmatic child to the emergency room 12 times one year, but only 3 times the following year, as a result of access to primary care and preventative treatment. She emphasized that increasing Denali KidCare eligibility levels to a minimum of 200 percent of the FPL would increase health care access for children and families in need and would improve public health throughout Alaska. She relayed that currently Alaska was one of four states with the lowest eligibility levels. 9:25:28 AM STEPHANIE BERGLUND, CHIEF EXECUTIVE OFFICER, THREAD (via teleconference), testified in support of SB 5. She stated that the bill would increase access to health care for more women, children, and families. The organization worked with over 7,500 families annually and was aware of the importance of health care resources for healthy development in children. According to research, the support of children during their early years was the most critical and families with access to care were more likely to obtain early intervention to support their child. 9:26:32 AM GUS MARX, GRANTS COORDINATOR, ALASKA ASSOCIATION OF HOMES FOR CHILDREN, spoke in support of SB 5. The association was made up of 19 behavioral and mental health providers throughout the state that served children primarily through Denali KidCare. He explained that the bill would increase Denali KidCare service and would provide children with service who had not previously had access. 9:27:44 AM JOY LYON, EXECUTIVE DIRECTOR, ASSOCIATION FOR THE EDUCATION OF YOUNG CHILDREN, vocalized support for SB 5. She thought that the $600 annual cost to the state represented the best financial deal to help children to become strong citizens in the future. The bill was a priority for the coalition of early childhood associations throughout the state, including the Alaska Association for the Education of Young Children, Best Beginnings, Alaska Head Start Association, Alaska Infant Learning, and THREAD. She stressed the importance of providing at risk families with a connection to a medical home and doctor. At times a doctor was the only individual who saw a family; therefore, their role was necessary to ensure that a child was able to grow and thrive. She relayed that other states including Mississippi, Tennessee, and Alabama had higher support for young children in spite of tougher state financial conditions. She urged the committee to pass the legislation. Senator Olson wondered what help the program offered to community health aides that saw children in rural villages. Ms. Lyon replied that she was not very familiar with the health systems in Alaska's rural communities. 9:30:50 AM NANCY DAVIS, PRESIDENT, ALASKA NURSES ASSOCIATION, testified in support of SB 5 that would expand health care coverage to more children. She had participated in a Yukon- Kuskokwim training for community health aides that taught them how to perform early preventative screenings. She believed that under Denali KidCare, health aides could perform initial screenings and make referrals. She communicated that it was important to invest in healthy children and to make it possible for parents to take good care of their children. Denali KidCare covered pregnant women to support the health of babies and to prevent pre- term deliveries. She had led the enrollment effort when Denali KidCare had first been offered in Alaska; the state had led the nation in enrollment numbers. She believed the need for the program was great in Alaska. 9:32:55 AM Senator Stedman CLOSED public testimony. Senator McGuire spoke in support of SB 5. She stressed the importance of providing all children with access to health care. She wondered what communications had occurred with the governor and his staff in order to ensure that the bill would not be vetoed as it had been in the past. SENATOR BETTYE DAVIS, SPONSOR, replied that the administration had worked on a solution to ensure the governor would not veto the bill. She believed that there were many options available that did not include cutting Denali KidCare. She expressed interest in introducing other legislation that would possibly reduce the number of abortions that would be added to the program. Additional options included adoption services and other. She felt that the bill should be passed as written in order to provide coverage to women and children who were in need of the services. She was open to other suggestions by the administration that would appease the governor. Senator Davis discussed that the bill would increase and restore original Denali KidCare levels established 14 years earlier to the qualifying income eligibility standard to 200 percent of the FPL. The bill had passed the House and Senate the prior year, but had been vetoed by the governor. She had met with the governor who had indicated there was flexibility on some items but not on others; she had agreed. She believed that the governor did not have to veto the bill. She discussed the separation of powers between the legislative and executive branches of government and that the legislature needed to act not based on what the governor may do. She recounted that Governor Parnell had supported the bill the prior session, but he had received information prior to signing it into law that had caused him to change his mind. She believed the program was needed and efficient. Alaska was one of three states with an eligibility standard of 200 percent or less of the FPL. She emphasized that there was no need for the state to be at such a low number when it had the finances to fund the program. 9:37:16 AM Senator McGuire reiterated her support of the legislation. She discussed that the Alaska Supreme Court had decided that abortion services should be covered if Denali KidCare offered services to pregnant women. She explained that the governor was upset about the court's decision, which was beyond the control of the legislature. She encouraged Senator Davis to consider talking with the governor before the end of the current session; she had heard that the governor had been considering a definition of medical necessity related to abortions or other. She understood the philosophical concern, but believed it would be unfortunate if the bill was vetoed again over the item. Senator Davis stressed that there was a medical necessity definition that could be utilized. She believed there were other options. She discussed that the governor's office had the information. She stressed that the governor's statement that he would veto the bill if he received it, was not helpful. SB 5 was HEARD and HELD in committee for further consideration.