Legislature(1997 - 1998)

04/23/1998 08:20 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
             HOUSE FINANCE COMMITTEE                                           
   April 23, 1998                                                              
                          8:20 A.M.                                            
TAPE HFC 98 - 121, Side 1.                                                     
TAPE HFC 98 - 121, Side 2.                                                     
TAPE HFC 98 - 122, Side 1.                                                     
CALL TO ORDER                                                                  
Co-Chair Therriault called the House Finance Committee                         
meeting to order at 8:20 A.M.                                                  
Co-Chair Hanley   Representative Kelly                                         
Co-Chair Therriault   Representative Grussendorf                               
Representative J. Davies  Representative Martin                                
Representative G. Davis  Representative Moses                                  
Representative Foster  Representative Mulder                                   
Representative Kohring was not present for the meeting.                        
ALSO PRESENT                                                                   
Senator Jerry Mackie; Jay Lively, Deputy Commissioner,                         
Department of Health and Social Services; Bob Labbe,                           
Director, Division of Medical Assistance, Department of                        
Health and Social Services; Karen Pearson, Health Program                      
Manager, Division of Public Assistance, Department of Health                   
and Social Services; Loraine Derr, Alaska State Hospital and                   
Nursing Home Association (ASHNHA), Juneau; Catherine                           
Reardon, Director, Division of Occupational Licensing,                         
Department of Commerce and Economic Development.                               
TESTIFIED VIA TELECONFERENCE - FAIRBANKS                                       
Missy Poeschel, Fairbanks; Margaret Miller, Fairbanks;                         
Laura Bush, Fairbanks; Sarana Schell, Fairbanks.                               
HB 369 An Act relating to Medicaid coverage for certain                        
eligible children and pregnant women; relating to                              
primary care case management and managed care                                  
services as optional services and to premiums and                              
cost-sharing contributions under the Medicaid                                  
program; establishing the Healthy Families Alaska                              
program; and providing for an effective date.                                  
 CS HB 369 (FIN) was reported out of Committee                                 
with a "do pass" recommendation and with (4) four                              
fiscal notes by the Department of Health and                                   
Social Services dated 4/23/98.                                                 
HB 408 An Act establishing the Alaska Seismic Hazards                          
Safety Commission.                                                             
 CS HB 408 (FIN) was reported out of Committee                                 
with a "do pass" recommendation and with a new                                 
fiscal note by the Office of the Governor.                                     
SB 110 An Act relating to licensure of landscape                               
HCS CSSB 110 (FIN) was reported out of Committee                               
with a "do pass" recommendation and with a fiscal                              
note by the Department of Commerce and Economic                                
Development dated 1/21/98.                                                     
SENATE BILL NO. 110                                                            
"An Act relating to licensure of landscape                                     
SENATOR JERRY MACKIE noted that SB 110 related to the                          
licensure of landscape architects.  In order for Alaskan                       
landscape architects to secure federal projects, the State                     
must provide landscape architect licensing capabilities.                       
Alaskan landscape architects are currently excluded from                       
participating in securing the federal jobs and the money                       
going to companies located outside of the State.  The                          
legislation would provide the State with another tool to                       
support the hire of Alaskan workers and companies.                             
He added that the fiscal note indicates that in accordance                     
with AS 08.01.065, all licensees are required to pay the                       
costs of regulating their profession; the program would be                     
paid entirely by program receipts.                                             
Senator Mackie requested that the Committee entertain the                      
proposed amendment to the House Labor and Commerce version                     
of the legislation.  The deletion exemptions provide for an                    
adequate scope of exempted criteria related to                                 
architectural landscaping.  The Chairman of the Labor and                      
Commerce Committee is in concurrence with the proposed                         
Senator Mackie added that the legislation would not affect                     
people doing landscaping in their own yards or someone                         
else's.  It would only affect those situations requiring                       
the landscaping, engineering and/or designing of particular                    
public projects.                                                               
Representative J. Davies noted that language on Page 11,                       
Line 10, would address concerns of Committee members.                          
DEVELOPMENT, spoke in favor of the amendment.  She pointed                     
out that the exemptions added on Page 12, apply to                             
architecture, engineering and land surveying.  Additional                      
exemptions would also be included for designing buildings.                     
Existing exemptions cover anything less than a four-plex.                      
She pointed out that the problem with the language on Page                     
12, Line 11, was that the word "person" could mean                             
"business and/or  corporation".                                                
Co-Chair Therriault MOVED to adopt Amendment #1.  There                        
being NO OBJECTION, it was adopted.                                            
Co-Chair Therriault questioned the up-front fees.  Ms.                         
Reardon replied that language would allow the entire group                     
of architects, engineers and landscapers to pay fees                           
individually, but this would instead allow a sharing of                        
costs between the three professions.  She noted that the                       
Board of Commissions supported this language.                                  
Representative Mulder MOVED to report HCS CSSB 110(FIN) out                    
of Committee with individual recommendations and with the                      
accompanying fiscal note.  There being NO OBJECTION, it was                    
so ordered.                                                                    
HCS CSSB 110 (FIN) was reported out of Committee with a "do                    
pass" recommendation and with a fiscal note by the                             
Department of Commerce and Economic Development dated                          
HOUSE BILL NO. 408                                                             
"An Act establishing the Alaska Seismic Hazards Safety                         
REPRESENTATIVE JOHN DAVIES noted that Alaska needs to                          
establish a Seismic Hazards Safety Commission to address a                     
need it provide a consistent policy framework and a means                      
for ongoing coordination of programs and public safety                         
practices related to seismic hazards.  Currently, the need                     
is not being addressed by any State organization.  The                         
Seismic Hazards Safety Commission would encourage long-term                    
progress toward mitigating the effects of earthquakes.                         
Representative J. Davies continued, Alaska is on the edge                      
of the Pacific Plate, which acts like a relentless conveyor                    
belt, moving about six centimeters a year.  It is                              
inevitable that there will be large earthquakes.  The only                     
question is when will it occur, not if it will.  Although,                     
the State has made great improvements in disaster                              
preparedness, there has been little corresponding                              
improvement in measures to reduce dependence on disaster                       
relief.  Creating a seismic commission patterned after                         
those in California, Oregon, Washington and other states on                    
major fault lines will help address the issue.                                 
Representative J. Davies pointed out that the scientific                       
community is working hard on earthquake predication, but is                    
not yet a reality, except in the most general sense.                           
Alaska needs to mitigate possible effects of earthquakes by                    
encouraging appropriate land use and building design which                     
can reduce loss of life and property, as well as the costs                     
of recovery when earthquakes occur.  He stressed that it                       
costs a lot of money to rebuild after a large earthquake                       
and, of course, there is no way to replace lost lives.  It                     
is clearly worth spending some time and money before an                        
earthquake occurs.  The Commission would help the State be                     
better prepared.                                                               
Representative J. Davies distributed a map showing the top                     
ten quakes in the world between 1904 and 1992.  [Copy on                       
File].  Of the ten largest earthquakes, three of them have                     
occurred in Alaska.  He stressed that this is earthquake                       
country.  Most other states have seismic safety commissions                    
except Alaska.  [Copy on File].                                                
Representative Kelly asked how this information would be                       
gathered.  Representative J. Davies replied that the group                     
would try to assemble and assess information that is                           
relevant to earthquake regions.                                                
Representative Martin questioned what more information is                      
available besides the expertise already existing.                              
Representative J. Davies explained that the question is, do                    
cost-effective measures exist which could reduce the                           
effects of quakes on the population.  At this time, Alaska                     
does not know what research is available and should be                         
considered.  The proposed commission could facilitate that                     
information and transfer it to municipal building codes and                    
land use plans.  He summarized that there needs to be a                        
bridging between the research realms and the building                          
Co-Chair Therriault voiced concern with the proposed size                      
of the commission.  He MOVED an amendment to reduce the                        
size from "11" to "9" members, 4 of which would be from the                    
general public and with 6 members constituting a quorum.                       
The rotation of seats would also need to be shifted, so                        
that 3 seats would be two years, 3 seats would be four                         
years, and the others would fall into the normal three-year                    
pattern shift.  There being NO OBJECTION, the change was                       
Representative G. Davis asked how often the group would                        
meet.  Representative J. Davies replied they would meet 4                      
times a year as specified in the fiscal note.                                  
Representative G. Davis noted that he had a philosophical                      
problem with forming another commission and believed that a                    
group meeting that many times a year was excessive.  Co-                       
Chair Therriault pointed out that there was a sunset and                       
that the commission would need to make progress on                             
establishing these codes and measures.  Representative J.                      
Davies advised that two of the scheduled meetings would be                     
by teleconferencing.                                                           
Representative Kelly agreed that this was an important                         
matter and he supported the concern.                                           
Co-Chair Therriault advised that the fiscal note would need                    
to be recalculated in order to reflect the two less members                    
on the commission.  Representative J. Davies stated that                       
there should only be one fiscal note originating from the                      
Office of the Governor.                                                        
Representative Mulder MOVED to report CS HB 408 (FIN) out                      
of Committee with individual recommendations and with the                      
revised fiscal note.  There being NO OBJECTION, it was so                      
CS HB 408 (FIN) was reported out of Committee with a "do                       
pass" recommendation and with a fiscal note by the Office                      
of the Governor.                                                               
(Tape Change HFC 98- 121, Side 2).                                             
HOUSE BILL NO. 369                                                             
"An Act relating to Medicaid coverage for certain                              
eligible children and pregnant women; relating to                              
primary care case management and managed care services                         
as optional services and to premiums and cost-sharing                          
contributions under the Medicaid program; establishing                         
the Healthy Families Alaska program; and providing for                         
an effective date."                                                            
FAMILIES, FAIRBANKS, read a letter from one of her clients                     
who had participated in the Healthy Families Program and                       
which had helped her make it through serious and difficult                     
times successfully.                                                            
FAMILY SUPPORT WORKER, FAIRBANKS, testified in support of                      
the Healthy Families Program and the success it has                            
manifested in many children's lives.                                           
spoke to the challenges that new families have in outreach.                    
The Healthy Families Program has offered prevention and                        
education for those potentially abusive parents.  Children                     
require special attention to begin the developmental                           
process in an optimal fashion.  The original version of HB
369 would expand Medicaid coverage to poor children with                       
family's income of up to 200% of the federal poverty level.                    
She continued, as more families move from welfare to work,                     
it is appropriate to assist them in becoming self-                             
sufficient by making affordable health care coverage                           
CONSULTANT - HEALTHY FAMILIES, FAIRBANKS, urged members to                     
reinstate the language of the original HB 369.  That would                     
place the Healthy Families Program back into State statute                     
and authorize Medicaid payments for those families out of                      
The families, which the program works with rarely, contact                     
the agency for help.  A health care provider, with the                         
family's consent, usually refers the family to a program                       
assessment worker.  Home visits are reserved for only those                    
families that really need it.  She stressed that the                           
program is voluntary and there is tremendous out-reach                         
associated with it.  She urged Committee members to expand                     
this program because it works.                                                 
SOCIAL SERVICES, provided the Committee with a background                      
of the legislation.  Last fall, Congress passed the Kennedy                    
Hatch bill which enacted the child health insurance                            
program.  The program made federal money available to                          
states to expand health care coverage for uninsured                            
children.  Alaska's allotment from the federal legislation                     
is $5.6 million dollars which requires a state match of $2                     
million dollars.  In Alaska, it is estimated that there are                    
approximately 23 thousand uninsured children of which about                    
11,500 are below the 200% poverty level.  Mr. Lively                           
explained that 200% of poverty level is about $33 thousand                     
dollars for a family of 3 or about $16 dollars per hour                        
The federal law provides considerable flexibility in                           
designing the new program.  Most importantly, the State can                    
decide the eligibility level for the child's health                            
coverage.  Mr. Lively continued, the State can determine                       
the delivery system to be employed to implement the child's                    
health coverage. Federal law allows using Medicaid,                            
expanding private coverage or implementing a combination of                    
the two.                                                                       
He added that within the framework, the Department proposes                    
to increase the eligibility level for Medicaid to the 200%                     
poverty level for all kids and pregnant women.  The current                    
version does not consider the pregnant woman and under the                     
current Medicaid program, the State provides a minimum                         
Mr. Lively continued, the State already has a Medicaid                         
bureaucracy established with a payment system, enrolled                        
providers and the administration to run the program.  Using                    
Medicaid will minimize start up costs and allow the                            
Department to "piggy back" on an established system with a                     
large economical benefit.                                                      
Mr. Lively spoke to the relationship between child health                      
and welfare reform.  Child health coverage will provide                        
health to families without them needing to return to cash                      
assistance.  As soon as families work their way off the                        
cash assistance welfare, the potential is that they will be                    
in jobs, particularly low-income jobs, which have no health                    
care attached to them.                                                         
Last year, when Congress changed the recidivism rate for                       
Medicaid from 50% to 60% federal match, freed up general                       
fund money in the Medicaid program.  One argument was that                     
Alaska use some of the money to expand health care coverage                    
for those that do not have it.  In addition, pregnant women                    
are currently covered up to 133% of poverty level.  The                        
Department proposes to raise it up to 200% of poverty                          
level.  The thought was that if the kids are covered, then                     
the prenatal piece of coverage should also be taken care of                    
in order to guarantee good birth outcomes.                                     
He pointed out that if the Legislature does not act to                         
authorize a child health program, the State will lose its                      
allotment of the $5.6 million dollars.                                         
Representative Martin asked if this situation would create                     
an anti-discrimination for all children living in the                          
State.  Mr. Lively replied that this is not an open                            
entitlement and would be available only to those individual                    
families below the allocated level.                                            
Co-Chair Hanley pointed out that the Healthy Families                          
portion of the bill had been deleted in a previous                             
committee hearing and that the new federal fund program is                     
just for kids, and does not extend to pregnant women.  The                     
bill as it exists at this time, deals only with new federal                    
money passed by Congress to raise the poverty rate of kids                     
up to 200%.  The other portions could be addressed by the                      
Mr. Lively clarified that currently the State covers                           
pregnant women at 133% poverty level, children 0-6 at 133%                     
poverty level, children 6-14 at 100% poverty level and                         
children from 14-18 at 70% poverty level.  At this time, it                    
is a varied level depending on the age.  He stressed that                      
this system is complicated for the families and the                            
Department to keep track off.  Co-Chair Hanley advised that                    
the bill as currently written would cover all kids from 1-                     
18 to 200% at poverty level.                                                   
DEPARTMENT OF HEALTH AND SOCIAL SERVICES, responded to                         
comments by Representative Martin regarding "pregnant                          
women" versus "pregnancy".  He stated that "pregnant women"                    
are part of the federal grouping which the State has been                      
allowed to cover.  This is a category of clients based on                      
being pregnant.                                                                
ASSOCIATION (ASHNHA), JUNEAU, noted that Alaskans share a                      
common goal of safe, healthy children and that ASHNHA                          
incorporates that goal into its mission of improving health                    
care of all individuals.  Last year, the federal government                    
made additional funding available for the purchase of                          
insurance for children's health care coverage.  HB 369                         
would allow the State to take advantage of those funds.                        
Ms. Derr continued, there is a direct correlation between                      
lack of prenatal care and giving birth to a low birth                          
weight infant, and low birth weight accounts for 10% of all                    
health care costs for children.  ASHNHA requests to have                       
pregnant women included in the funding.                                        
She pointed out that Alaska's hospitals continue to report                     
growth in uncompensated care from $122 million dollars in                      
FY93 to $177 million dollars in FY95, as a result of                           
serving uninsured and underinsured Alaskans who cannot pay                     
their medical bills.  It shows that more Alaskans need care                    
and are not able to pay for it.  Raising the poverty level                     
to 200% for children up to the age of 19 will go a long way                    
toward making sure that health care coverage is available                      
to children.                                                                   
Co-Chair Hanley referenced Amendment #1.  [Copy on File].                      
He questioned Section (d) and asked if that section could                      
be addressed by waiver.  Mr. Labbe replied that in the area                    
of managed care, when a client participates, historically,                     
they would need to file for a federal waiver.  At present                      
time, most states are doing this as a matter of course                         
through a normal state plan process.  The Department has                       
been advised that this is required.                                            
Co-Chair Hanley wanted to be assured that the language                         
would keep the same priority listings and would not allow                      
the Department "open-ended" options.  He asked if the way                      
that section was written would allow the Department to add                     
new options or change the priorities of the options list.                      
Mr. Labbe replied that the Department would not be able to                     
add new options or change the priorities.                                      
Co-Chair Hanley MOVED to adopt Amendment #1.                                   
(Tape Change HFC 98- 122, Side 1).                                             
Following discussion regarding concerns of Representative                      
Martin, Representative Mulder recommended changing the                         
language on Page 2, Line 6, of the amendment deleting "for"                    
and inserting "and".  He felt that change would clarify                        
that the services are not optional and must be consistent                      
with State law.  Mr. Labbe responded that it was                               
unfortunate that primary care case management was being                        
considered as optional services; in the past, the                              
Department was required to receive a waiver for a Medicaid                     
client to register.  The only way in which the federal                         
government could move it to the State would be to consider                     
it a new type of State service.  He noted that it is not a                     
service in that sense.  What is being managed are services                     
which the State covers, some of which are mandatory and                        
some of which are optional.  This legislation requests the                     
authority to organize these systems that way.                                  
Representative J. Davies believed that the proposed                            
amendment would make an unintended change for services                         
which already exist.  With such a change, the Department                       
would be required to undertake three things, whereas, with                     
original language, there would only be two requirements.                       
Co-Chair Therriault agreed that without the punctuation, it                    
is clearer that the reference is to an existing set of                         
There being NO OBJECTION, Amendment #1 was adopted.                            
Co-Chair Hanley commented that under the current system,                       
abortions are covered under Medicaid for rape, incest or                       
life of the mother.  He asked to which poverty level would                     
that continue to occur.  Mr. Lively replied at the 133%                        
poverty level, the Medicaid level and the one used in                          
Alaska.  Co-Chair Hanley pointed out that Alaska has not                       
chosen one for abortion.  He clarified that the income                         
level for the General Relief Medical (GRM) and the income                      
level for publicly funded abortions would be the same as                       
the Medicaid level.  He believed that if the poverty level                     
were raised for pregnant women to 200%, it would also be                       
raised for abortions to that level.  Mr. Lively agreed that                    
was correct that the Medicaid eligibility would become the                     
cited level.                                                                   
Representative Martin referenced the letter from a previous                    
DHSS Commissioner, Ted Mala, stipulating that no private                       
information can be given to the Department.  He thought                        
that the Department was prohibited from inquiring about the                    
financial status of a woman.  Mr. Lively replied that there                    
is an income and eligibility test done on each person                          
coming on to the Medicaid program.                                             
Representative Grussendorf pointed out that the bill was                       
directed toward assisting children.  He stated that                            
increasing the level to 200% would make it easier for                          
pregnant women to make a choice to keep the child as there                     
would be extra financial assistance to keep the child                          
healthy.  Co-Chair Hanley stated that he would not offer                       
Amendment #2.  [Copy on File].                                                 
Representative Foster MOVED to adopt Amendment #2 for the                      
purpose of discussion.  Representative J. Davies stated                        
that there would be a cost effectiveness associated with                       
incorporating the amendment.  He pointed out that if the                       
legislation were able to avert two Fetal Alcohol Syndrome                      
(FAS) outcomes, the entire state match would be paid.                          
Representative Kelly disagreed, stating that by adding                         
pregnant women to the legislation could result in negative                     
Representative Grussendorf criticized that many of our                         
State's residents were being punished, first through the                       
cut to the General Relief Medical and now an unwillingness                     
to allow the funding level to be increased for those women                     
who want to have their children but would not qualify under                    
the 200% level.  Co-Chair Hanley inquired what percentage                      
of women between 130% and 200% poverty level, currently                        
have coverage for pregnancy related services.  Mr. Lively                      
commented that the Department's research covers the number                     
of persons who do not have coverage which is 870.                              
Co-Chair Hanley voiced concern, under the federal bill, if                     
you currently have coverage for kids, and you are at 180%                      
poverty level, you could not access this new money.  He                        
noted that if the poverty level was increased to 200% for                      
Medicaid, there would then be some pregnant women who have                     
insurance, who could opt to access this program through                        
Medicaid.  The federal restrictions are specifically                           
related to the kid's portion and not to the pregnant woman                     
Mr. Labbe agreed that if the Department goes to the 200%                       
poverty level, there may be some women who are insured who                     
would drop their coverage, although, he noted that it would                    
be unlikely to transfer Medicaid for only the pregnancy.                       
Retaining their coverage, does not mean that they would not                    
be eligible for Medicaid.  In those situations, Medicaid is                    
the payer of "last resort".  Co-Chair Hanley doubted if                        
most employers offer as good of coverage as Medicaid does.                     
He believed that some employers could drop their coverage                      
for the pregnant employee making under the poverty level.                      
Representative J. Davies questioned why we would not want                      
to pick the kids up before they are born at the 200% level                     
rather than waiting.                                                           
Representative Foster WITHDREW the MOTION to adopt                             
Amendment #1.  There being NO OBJECTION, it was withdrawn.                     
Co-Chair Hanley asked what percentage of the new kids who                      
qualify, already have some level of insurance.  Mr. Lively                     
did not know, pointing out that there is a sizeable number                     
of kids who currently are not covered at all.  Co-Chair                        
Hanley cited that above 70% of all children has some form                      
of insurance coverage.  The legislation would cover                            
approximately 11-15% who do not have any coverage.  He                         
believed that we could create a system in which the                            
government would be providing better service to children                       
than those with that already have coverage.                                    
Representative J. Davies MOVED to add the Healthy Families                     
Program back into the bill.  Co-Chair Hanley OBJECTED.                         
Representative J. Davies stated that the action would                          
create a statutory framework which is already occurring.                       
Co-Chair Hanley countered that would make that program                         
Medicaid eligible which would establish an entitlement                         
A roll call vote was taken on the motion.                                      
IN FAVOR:  Grussendorf, J. Davies                                              
OPPOSED: G. Davis, Foster, Kelly, Martin, Mulder,                              
Therriault, Hanley                                                             
Representatives Kohring and Moses were not present for the                     
The MOTION FAILED (2-7).                                                       
Co-Chair Hanley MOVED to report CS HB 369 (FIN) out of                         
Committee with individual recommendations and with the                         
accompanying fiscal notes.  There being NO OJBECTION, it                       
was so ordered.                                                                
CS HB 369 (FIN) was reported out of Committee with a "do                       
pass" recommendation and with four fiscal notes by the                         
Department of Health and Social Services dated 4/9/98.                         
The meeting adjourned at 10:40 A.M.                                            
H.F.C. 13 4/23/98                                                              

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