Legislature(2007 - 2008)Anch LIO Conf Rm

06/26/2007 11:00 AM House FINANCE


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11:05:16 AM Start
11:12:50 AM SB4
12:35:21 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Teleconference --
= SB 4 SENIOR CARE/MED.AID FOR KIDS& PREG. WOMEN
Moved HCS CSSB 4(FIN) Out of Committee
                  HOUSE FINANCE COMMITTEE                                                                                       
                       June 26, 2007                                                                                            
                         11:05 a.m.                                                                                             
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Meyer called the House Finance Committee meeting to                                                                    
order at 11:05:16 AM.                                                                                                         
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Mike Chenault, Co-Chair                                                                                          
Representative Kevin Meyer, Co-Chair                                                                                            
Representative Bill Stoltze, Vice-Chair                                                                                         
Representative Harry Crawford                                                                                                   
Representative Les Gara                                                                                                         
Representative Mike Hawker                                                                                                      
Representative Reggie Joule                                                                                                     
Representative Mike Kelly                                                                                                       
Representative Mary Nelson                                                                                                      
Representative Bill Thomas Jr.                                                                                                  
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Richard Foster                                                                                                   
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Suzanne  Cunningham,  Staff, Co-Chair  Meyer;  Janet  Clarke,                                                                   
Assistant  Commissioner, Division  of Finance and  Management                                                                   
Services,  Department of  Health and  Social Services;  Allie                                                                   
Fitzjarrald, Acting Director,  Division of Public Assistance,                                                                   
Department  of  Health  and  Social  Services;  John  Bitney,                                                                   
Director, Legislative Office, Office of the Governor.                                                                           
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
None                                                                                                                            
SUMMARY                                                                                                                       
                                                                                                                                
CSSB4(FIN) am                                                                                                                   
          "An  Act  extending  the  cash  assistance  benefit                                                                   
          program for  seniors under the senior  care program                                                                   
          and   increasing  the   benefit  amount;   amending                                                                   
          medical  income eligibility provisions  for persons                                                                   
          under 19  years of age and for pregnant  women; and                                                                   
          providing for an effective date."                                                                                     
                                                                                                                                
          HCS CSSB  4 was REPORTED  out of Committee  with an                                                                   
          "amend" recommendation  and with a new  fiscal note                                                                   
          by the Department of Health and Social Services.                                                                      
                                                                                                                                
CS FOR SENATE BILL NO. 4(FIN) am                                                                                              
                                                                                                                                
     "An Act  extending the  cash assistance benefit  program                                                                   
     for   seniors  under   the  senior   care  program   and                                                                   
     increasing the  benefit amount; amending  medical income                                                                   
     eligibility  provisions for  persons under  19 years  of                                                                   
     age  and  for  pregnant  women;  and  providing  for  an                                                                   
     effective date."                                                                                                           
                                                                                                                                
Co-Chair  Meyer announced  that  the legislation  required  a                                                                   
title change  since it referenced  persons under 19  years of                                                                   
age [and these provisions were removed].                                                                                        
                                                                                                                                
Vice-Chair   Stoltze  MOVED  to   ADOPT  proposed   Committee                                                                   
Substitute, 25-LS0056\N. There  being NO OBJECTION, it was so                                                                   
ordered.                                                                                                                        
                                                                                                                                
SUZANNE  CUNNINGHAM,  STAFF,   CO-CHAIR  MEYER  reviewed  the                                                                   
changes  contained in  the  Committee Substitute.  She  noted                                                                   
that provisions  pertaining to  Denali KidCare were  removed,                                                                   
as legislation  pertaining to  Denali KidCare was  passed and                                                                   
enacted by the Governor.                                                                                                        
                                                                                                                                
Ms. Cunningham  noted that a  new section was  added. Section                                                                   
1,  Legislative  Intent  clarifies that  the  Senior  Benefit                                                                   
Payment Program would be funded  under the FY 08 Adult Public                                                                   
Assistance   (APA)   appropriation   as  a   General   Relief                                                                   
                                                th                                                                              
allocation until  the second session  of the 25   Legislature                                                                   
convenes and passes an appropriation  bill that creates a new                                                                   
allocation  titled: "Senior  Benefit Payments".   The  second                                                                   
part of this  section clarifies that the  pro-rata provisions                                                                   
contained in the  legislation do not apply  to appropriations                                                                   
made August 1 through June 30,  2008. She noted that in FY 08                                                                   
the   program  is   held   harmless  against   reduction   or                                                                   
elimination   of    benefits   if   the    appropriation   is                                                                   
insufficient.                                                                                                                   
                                                                                                                                
There  was  no   change  to  Section  2;  Section   3,  which                                                                   
establishes the  Alaska Senior  Benefits Payment  Program; or                                                                   
Section 4.                                                                                                                      
                                                                                                                                
Ms. Cunningham  explained that  the last  change was  made in                                                                   
Section 5:  Applicability Section.  This section  pertains to                                                                   
the establishment  and enactment of emergency  regulations by                                                                   
the  Department of  Health and  Social Services  on June  18,                                                                   
2007.  The section  clarifies  that dual  payments cannot  be                                                                   
made.                                                                                                                           
                                                                                                                                
     Provides   that   an  individual   who   receives   cash                                                                   
     assistance  or a  prescription  drug  benefit under  the                                                                   
     emergency regulations  adopted by DHSS cannot  receive a                                                                   
     benefit  under  the  senior   benefits  cash  assistance                                                                   
     program, enacted under Section 3, simultaneously.                                                                          
                                                                                                                                
Representative Thomas questioned  if a separate appropriation                                                                   
bill would be forthcoming.                                                                                                      
                                                                                                                                
Co-Chair  Chenault  noted  that  the  plan would  be  to  add                                                                   
funding to a supplemental bill  [at the beginning of the next                                                                   
regular  session].  Representative Nelson  expressed  concern                                                                   
with  the timing  of a  "fast track"  supplemental bill.  Co-                                                                   
Chair Meyer noted that the Administration  would be consulted                                                                   
to make sure that the funding  is in place before the program                                                                   
could expire.                                                                                                                   
                                                                                                                                
Representative Gara  explained that funding could  run out as                                                                   
early as  February or January.  He suggested that  the "safe"                                                                   
thing to do would be to fund the program now.                                                                                   
                                                                                                                                
11:12:50 AM                                                                                                                   
[The Juneau LIO connection was lost.]                                                                                           
                                                                                                                                
11:15:15 AM                                                                                                                   
[Connection with Juneau was restored].                                                                                          
                                                                                                                                
JANET  CLARKE, ASSISTANT  COMMISSIONER,  DIVISION OF  FINANCE                                                                   
AND  MANAGEMENT SERVICES,  DEPARTMENT  OF  HEALTH AND  SOCIAL                                                                   
SERVICES explained  that the current version of  HB 148 would                                                                   
have cost  [the state] $11  million. She concluded  that both                                                                   
programs [Adult Public Assistance  and Alaska Senior Benefits                                                                   
Payment Program]  could be  run through  April [at  the level                                                                   
contained in the Committee Substitute].                                                                                         
                                                                                                                                
Representative Gara questioned  when funding would run out if                                                                   
the level contained in HB 198 were enacted.                                                                                     
                                                                                                                                
Ms. Clark  explained that  they could  operate both  programs                                                                   
until February 2008,  if HB 198 funding levels  were adopted.                                                                   
Representative Gara asked how  comfortable the Department was                                                                   
in their  estimates and observed  that funding could  run out                                                                   
sooner  if  estimates  are  off. Ms.  Clark  noted  that  the                                                                   
current  program  serves  6,700  individuals  and  they  have                                                                   
projected a growth of 3,000 more.  Additional caseload growth                                                                   
has been factored in to each assumption.                                                                                        
                                                                                                                                
Representative  Gara  noted  that  historically  supplemental                                                                   
legislation  has  not  passed  until February  or  later.  He                                                                   
observed that the Department might  have to divert funding if                                                                   
a supplemental  appropriation  is not  passed and  questioned                                                                   
what programs would suffer.                                                                                                     
                                                                                                                                
Ms.  Clark advised  that the  temporary  transfer would  come                                                                   
from the  Adult Public  Assistance program,  which is  a cash                                                                   
assistance program  that supports  very poor individuals  who                                                                   
are over  65 years of age  or disabled. The  Department chose                                                                   
not to tap into other general  funds within the appropriation                                                                   
since they are matched with federal  funds for maintenance of                                                                   
effort.  These  transfers  would  be  more  complicated.  She                                                                   
indicated that the Department  could borrow from "less easily                                                                   
done"  sources  to  continue  to  make  the  payment  if  the                                                                   
supplemental  legislation  was  making  its way  through  the                                                                   
process and they  were convinced that it only  needed another                                                                   
month or so [to be enacted]. She  expressed concern with that                                                                   
option, but emphasized  that they would not  want payments to                                                                   
be jeopardized. The Department  is not legally able to expend                                                                   
funds for the program without an appropriation.                                                                                 
                                                                                                                                
Representative  Gara  asked  the   Administration's  position                                                                   
regarding  an appropriation  during  the  special session  to                                                                   
prevent further worries.                                                                                                        
                                                                                                                                
11:20:33 AM                                                                                                                   
                                                                                                                                
Ms.  Clark  noted that  the  Department  would work  out  the                                                                   
funding to the  best of their ability, but  that the decision                                                                   
lies with the Legislature.                                                                                                      
                                                                                                                                
Representative  Gara  noted  that  clients  of  Adult  Public                                                                   
Assistance could  be in jeopardy for the competing  funds and                                                                   
asked the criteria for those that  qualify for APA. Ms. Clark                                                                   
noted that in  order to qualify for APA, individuals  must be                                                                   
at no more  than 92.5 percent  of the poverty level  and must                                                                   
be disabled or over 65 years of age.                                                                                            
                                                                                                                                
Co-Chair  Meyer   noted  the   various  options   before  the                                                                   
Committee. He questioned how other states operate.                                                                              
                                                                                                                                
11:22:56 AM                                                                                                                   
                                                                                                                                
ALLIE  FITZJARRALD,  ACTING  DIRECTOR,   DIVISION  OF  PUBLIC                                                                   
ASSISTANCE,   DEPARTMENT  OF   HEALTH  AND  SOCIAL   SERVICES                                                                   
explained  that most states  do not  offer cash  supplemental                                                                   
programs to needy seniors. There  are no programs such as the                                                                   
Longevity Bonus Program.                                                                                                        
                                                                                                                                
Co-Chair Meyer  noted that programs  offered by  other states                                                                   
are also  offered in Alaska,  such as property  tax exemption                                                                   
and senior housing.                                                                                                             
                                                                                                                                
Representative Gara suggested  that other states with similar                                                                   
APA programs may  have a higher monthly rate  and more people                                                                   
that qualify  for assistance. Ms. Fitzgarrald  explained that                                                                   
each state structures their program  differently. Some states                                                                   
pay significantly less and some  pay a comparable amount. She                                                                   
did not  think that other states  paid at a higher  rate. She                                                                   
noted  that most  seniors access  prescription drugs  through                                                                   
the  new Medicare  Part B  program  through Social  Security.                                                                   
Their contributions to the premiums vary.                                                                                       
                                                                                                                                
11:25:29 AM                                                                                                                   
                                                                                                                                
JOHN  BITNEY, DIRECTOR,  LEGISLATIVE  OFFICE,  OFFICE OF  THE                                                                   
GOVERNOR observed that the Governor  submitted legislation to                                                                   
extend the  prior benefit  level of  the Senior Care  Program                                                                   
(at the current $125 a month level).  There were some changes                                                                   
in relation to the drug benefits  in the Governor's proposal.                                                                   
The Governor  would  like to see  the issue  brought to  some                                                                   
closure. He noted  the need to pass legislation,  which would                                                                   
resolve  the issue, without  an appropriation.  The  CS would                                                                   
place   a  benefit  level   that  could   be  managed   until                                                                   
appropriation  legislation could  be passed  during the  next                                                                   
regular  session.  It  may  be  necessary  to  adopt  funding                                                                   
authorization  prior  to  the  next regular  session  if  the                                                                   
benefit level is  increased. The Governor does  not object to                                                                   
an  increase in  the  payment level,  but  is concerned  with                                                                   
management of the program.                                                                                                      
                                                                                                                                
Co-Chair  Meyer   summarized  that  the  Governor   would  be                                                                   
comfortable with  a program in  the $11 - $16  million range.                                                                   
Mr. Bitney affirmed.                                                                                                            
                                                                                                                                
11:29:37 AM                                                                                                                   
                                                                                                                                
In response  to a  question by  Representative Crawford,  Mr.                                                                   
Bitney reiterated  that the Governor  is only  concerned that                                                                   
they  have the  ability  to manage  the  benefit  and is  not                                                                   
concerned with an increased benefit level.                                                                                      
                                                                                                                                
Representative     Crawford    noted    that     supplemental                                                                   
appropriations are not commonly  passed timely and questioned                                                                   
how the appropriations would be managed.                                                                                        
                                                                                                                                
Mr. Bitney noted  that the funding would come  from different                                                                   
allocations,  but  that  careful   consideration  must  occur                                                                   
regarding required matches.                                                                                                     
                                                                                                                                
Representative  Thomas asked if  a stand alone  appropriation                                                                   
bill  would be  preferable  to  inclusion in  a  supplemental                                                                   
appropriation bill. He concluded that it would be quicker.                                                                      
                                                                                                                                
11:32:16 AM                                                                                                                   
                                                                                                                                
Mr. Bitney reiterated  the desire to resolve the  issue in an                                                                   
efficient  manner and  felt that the  proposal would  achieve                                                                   
those goals.                                                                                                                    
                                                                                                                                
Representative  Gara noted  the risk  that funding would  run                                                                   
out before  an appropriation were  adopted and  questioned if                                                                   
the  Administration would  approve  funding authorization  in                                                                   
the current special session.                                                                                                    
                                                                                                                                
Mr. Bitney concluded that an appropriation  bill would need a                                                                   
minimum of three legislative days [to be passed].                                                                               
                                                                                                                                
Representative Joule  questioned if it  is the intent  of the                                                                   
Finance Committee Chairmen to  be expeditious and to find the                                                                   
necessary funds.  Co-Chair Meyer deferred comments  until the                                                                   
funding level could  be determined, but noted  that there are                                                                   
mechanisms  to  make  the  program   work  until  funding  is                                                                   
available in March or April.                                                                                                    
                                                                                                                                
11:36:14 AM                                                                                                                   
                                                                                                                                
Representative  Gara  noted  that  there  are  two  inflation                                                                   
issues.  The qualifying  level is adjusted  for inflation  in                                                                   
the legislation.  However, there is no inflation  proofing to                                                                   
the   benefit   payment   amount.  He   questioned   if   the                                                                   
Administration  would  support  the ability  to  provide,  at                                                                   
their discretionary, an increase adjusted for inflation.                                                                        
                                                                                                                                
Mr. Bitney replied that they would  not object and emphasized                                                                   
the  need  for reviews,  which  the  four year  sunset  would                                                                   
allow, in light of the long-term  fiscal health of the state.                                                                   
Representative Gara observed that  the Administration has the                                                                   
authority  to raise  the  APA rate  for  inflation. He  spoke                                                                   
against  a hard  cap [for  the Senior  Benefit Program].  Mr.                                                                   
Bitney noted  the need to  have further discussions  with the                                                                   
Department regarding the issue.                                                                                                 
                                                                                                                                
11:39:37 AM                                                                                                                   
                                                                                                                                
Co-Chair  Chenault expressed  concern  with  inclusion of  an                                                                   
inflation provision on the benefit  and emphasized that it is                                                                   
the legislature's job to determine appropriations.                                                                              
                                                                                                                                
Representative  Gara  observed  that  the  legislature  would                                                                   
retain  the appropriation  power  even  if the  governor  was                                                                   
given the  discretion to increase  the benefit  for inflation                                                                   
proofing. He noted that, as it  stands, the benefit cannot be                                                                   
increased.                                                                                                                      
                                                                                                                                
11:42:18 AM                                                                                                                   
                                                                                                                                
Co-Chair Chenault  provided members  with a handout  (copy on                                                                   
file).  The  handout  identified the  various  programs  that                                                                   
benefit seniors:  Adult Public Assistance, Senior  Care, Food                                                                   
Stamps, Property Tax Exemptions,  Energy Assistance, Assisted                                                                   
Living  Medicaid  Wavers, Assisted  Living  Medicaid  Waiver,                                                                   
Personal  Care Attendants,  Federal Income  Tax Break,  Sales                                                                   
Tax Exemption  and Sales  tax exemptions  in some areas  that                                                                   
have  sales tax.   He  acknowledged that  the funding  levels                                                                   
aren't high  in many  of the  programs and  that it  would be                                                                   
difficult for some  to live on the annual  benefits provided.                                                                   
He  emphasized  that the  entirety  of  programs need  to  be                                                                   
considered in  order to determine  if the state  is providing                                                                   
intended  services and  to identify  who is  affected by  the                                                                   
exemptions.                                                                                                                     
                                                                                                                                
11:44:51 AM                                                                                                                   
                                                                                                                                
Representative Kelly MOVED to  ADOPT conceptual amendment #1:                                                                   
extend   current  program   to  June   30,  2011;   eliminate                                                                   
prescription drug benefit; change  the name to Senior Benefit                                                                   
Program; and allow  Alaska Legal Services to  make conforming                                                                   
changes. Vice-Chair Stoltze OBJECTED.                                                                                           
                                                                                                                                
Representative  Kelly acknowledged that  some want  to change                                                                   
the terms  of the  program, but  emphasized that the  primary                                                                   
intent of  the Special Session  is to prevent  termination of                                                                   
the Senior  Care Program. He  maintained that Alaska  has one                                                                   
of  the most  comprehensive senior  benefit  programs in  the                                                                   
nation. He expressed concern that  an increase benefit cannot                                                                   
be sustained in  the future due to projected  deficits, which                                                                   
could occur in the next year or  the year after. He expressed                                                                   
concern with attempts  to revive the Longevity  Bonus Program                                                                   
and observed  that it has not  been funded for the  past five                                                                   
years.  He  noted  that  7,000 of  those  that  received  the                                                                   
Longevity Bonus are currently  covered under the Adult Public                                                                   
Assistance and Senior Care programs.  He mentioned that there                                                                   
is dual eligibility  in the current programs  (APA and Senior                                                                   
Care).  He  stressed  the  need  to  stop  a  growth  into  a                                                                   
"grander"  program. He  did not  feel that  the state  should                                                                   
attempt to attract  seniors from other states.  He maintained                                                                   
that not every  senior is sick or broke and  that, except for                                                                   
the  "poorest  of  the  poor,   you  are  on  your  own".  He                                                                   
maintained that  individuals and their families  are supposed                                                                   
to provide for  the benefits of the later years.  He stressed                                                                   
that the  "bar should  not be  lowered so  low that  we don't                                                                   
have the cash to do a real first  class job of taking care of                                                                   
those people who absolutely cannot take of themselves."                                                                         
                                                                                                                                
11:52:30 AM                                                                                                                   
                                                                                                                                
Co-Chair Meyer  summarized that the current program  would be                                                                   
kept in  place by Conceptual  Amendment 1, which  mirrors the                                                                   
Governor's originally proposal.                                                                                                 
                                                                                                                                
Vice-Chair Stoltze  questioned if  the intent is  to continue                                                                   
the   program   for   the  neediest   seniors   and   provide                                                                   
sustainability. Representative  Kelly agreed, but  added that                                                                   
it is also a  matter of determining an appropriate  level for                                                                   
public assistance  to "kick in, given all of  the things that                                                                   
we are applying right now to the  equation." He did not think                                                                   
[the state] had anything to be  embarrassed about in terms of                                                                   
its  senior programs  and  suggested that  the  state may  be                                                                   
"going overboard here".                                                                                                         
                                                                                                                                
Representative    Gara    acknowledged     the    issue    of                                                                   
sustainability,  but stressed  that  the time  to adjust  for                                                                   
sustainability is  when funding has decreased.  He emphasized                                                                   
that  the  first place  he  would  cut  would not  be  senior                                                                   
assistance.  He  pointed out  that  there  was a  $5  million                                                                   
capital budget, which  he felt should be looked  at first for                                                                   
reductions.  He  asserted  that private  enterprises  in  the                                                                   
capital   budget   should   be   eliminated   before   senior                                                                   
assistance. Representative  Kelly interjected that  he is not                                                                   
proposing  a  "cut". Representative  Gara  acknowledged,  but                                                                   
stressed  that  consideration  of  a  decent  senior  benefit                                                                   
program should  be based on "what  we are going to  do in the                                                                   
future"   and  maintained   that  there   should  be   better                                                                   
prioritization.  He noted that  he did not  want to  get into                                                                   
the "longevity  bonus fight", but  pointed out that  a person                                                                   
would  have to  have been  in the state  for 14  years to  be                                                                   
eligible for  a longevity  bonus if it  were funded.  He felt                                                                   
the debate would not be over the  longevity bonus, but on the                                                                   
senior care benefit.  He maintained that in  order to qualify                                                                   
for benefits  under Conceptual  Amendment  1, a person  would                                                                   
have to  be pretty  close to pauper  statute; a person  would                                                                   
qualify if they earned $16,000  a year. He noted that rent in                                                                   
Anchorage  for a modest  one or  two bedroom  place would  be                                                                   
$1,200 a month, before food, clothing,  or fuel was added. He                                                                   
stressed that  none of  the proposals  would fund those  that                                                                   
are wealthy, but  that Conceptual Amendment 1  would cut many                                                                   
off that do not have enough money  for food, rent, cloths and                                                                   
other basic necessities.                                                                                                        
                                                                                                                                
11:57:33 AM                                                                                                                   
                                                                                                                                
A roll call vote was taken on  the motion to adopt Conceptual                                                                   
Amendment 1.                                                                                                                    
                                                                                                                                
IN FAVOR: Kelly, Stoltze, Chenault, Meyer                                                                                       
OPPOSED: Thomas, Nelson, Gara, Crawford, Hawker, Joule                                                                          
                                                                                                                                
Representative Foster was absent from the vote.                                                                                 
                                                                                                                                
The MOTION FAILED (4-6).                                                                                                        
                                                                                                                                
11:59:01 AM                                                                                                                   
                                                                                                                                
Co-Chair  Meyer MOVED  to ADOPT  Amendment 1.  Representative                                                                   
Hawker OBJECTED. Ms. Cunningham  noted that Amendment 1 would                                                                   
make technical changes suggested  by the Department of Health                                                                   
and Social  Services and  Department of  Law. She noted  that                                                                   
"relief" would  be added on page  1, line 9 to  be consistent                                                                   
with the  allocation, which  is "general relief  assistance."                                                                   
The  title  would   be  changed  from  the   "Senior  Benefit                                                                   
Assistance" to  "Senior Benefit  Payment Program".  The final                                                                   
part  of the  amendment would  add a  new transition  section                                                                   
that restates the legislative  intent section as requested by                                                                   
the  Department   of  Health  and  Social  Services.   A  new                                                                   
transition  section restates the  legislative intent  section                                                                   
that  clarifies in  un-codified  law that  the payments  from                                                                   
August 1,  2007 - June  30, 2008 would  not be held  harmless                                                                   
against a pro ration.                                                                                                           
                                                                                                                                
Representative Hawker WITHDREW his OBJECTION.                                                                                   
                                                                                                                                
Representative  Gara OBJECTED for  purpose of discussion  and                                                                   
asked if the  amendment clarifies that benefits  would not be                                                                   
reduced through  pro-ration if  an appropriation  is expected                                                                   
during the  next legislative  session. Ms. Cunningham  agreed                                                                   
and noted that the fiscal year  FY08 would be covered as long                                                                   
as there is  an appropriation during the  Twenty-Fifth Alaska                                                                   
State Legislature.                                                                                                              
                                                                                                                                
Representative  Gara WITHDREW his  OBJECTION. There  being NO                                                                   
OBJECTION, Amendment 1 was adopted.                                                                                             
                                                                                                                                
12:01:12 PM                                                                                                                   
                                                                                                                                
Representative  Hawker MOVED to  ADOPT Amendment  2. Co-Chair                                                                   
Meyer  OBJECTED.   Representative   Hawker  noted   that  the                                                                   
amendment would raise the benefit  level to the same level as                                                                   
considered under HB  198: $250 per month at  the upper level.                                                                   
The  lower  bracket   would  be  raised  to   households  not                                                                   
exceeding 175  percent of the poverty level.  He acknowledged                                                                   
sustainability  issues,  but  maintained  that  these  levels                                                                   
could  be achieved  and  emphasized that  "where  there is  a                                                                   
will; there is a way."                                                                                                          
                                                                                                                                
12:04:03 PM                                                                                                                   
                                                                                                                                
Representative Crawford spoke in support of the amendment.                                                                      
                                                                                                                                
Representative  Kelly spoke against  the amendment.  He noted                                                                   
that, under  the original  proposal [HB  198], the  Longevity                                                                   
Bonus Program  would have  been eliminated  forever.  He felt                                                                   
that the purchase price was too  high, even with the deletion                                                                   
of the Longevity Bonus Program.                                                                                                 
                                                                                                                                
Co-Chair Meyer  summarized that  the Administration  would be                                                                   
comfortable with  the funding  levels of the current  program                                                                   
or  those contained  in SB  4  and questioned  if they  would                                                                   
still be comfortable with a $20  million program as contained                                                                   
in HB 198.                                                                                                                      
                                                                                                                                
12:07:20 PM                                                                                                                   
                                                                                                                                
KARLEEN  JACKSON,  COMMISSIONER,  DEPARTMENT  OF  HEALTH  AND                                                                   
SOCIAL SERVICES  responded that  she would  not use  the word                                                                   
"comfortable" for  a program that  went beyond $120  a month,                                                                   
since funds would  run out at an earlier date  if the funding                                                                   
were increased.  She indicated  that a special  session would                                                                   
be  an option  if funding  ran  out before  the next  regular                                                                   
session.                                                                                                                        
                                                                                                                                
Ms.  Clark  provided  a proposed  fiscal  note,  which  would                                                                   
pertain  to HCS  CSHB  198 (FIN).  The  note estimates  $18.5                                                                   
million  would be  spent for  FY  08 under  Amendment 2.  She                                                                   
observed  that 3,000  more seniors  would  qualify under  the                                                                   
benefit  level  contained  in  Amendment  2  than  under  the                                                                   
Governor's  proposal. The  Department  projects that  funding                                                                   
for APA and the  new Senior Benefit program would  run out in                                                                   
February   2008.   Caseload  assumptions   project   that   a                                                                   
significant  number of  individuals in  the mid level,  below                                                                   
100 percent of poverty, would  take advantage of the benefit.                                                                   
Under the amendment,  they would receive $175 a  month or $50                                                                   
more than  under SB  4. The Department  estimates that  fewer                                                                   
individuals would take advantage  [of the Senior Benefit]. At                                                                   
the lower  level of 175 -  100 percent, 5,700  individuals at                                                                   
$125 a month for a total of 10,700  individuals are estimated                                                                   
to  take advantage  of the  program. The  Department has  not                                                                   
managed  a peer benefit  level  before and  is trying to  use                                                                   
available data  for the best  estimates. She summarized  that                                                                   
the first  year would cost  $18,500,000 and that  funds would                                                                   
run out in February 2008.                                                                                                       
                                                                                                                                
12:11:00 PM                                                                                                                   
                                                                                                                                
Representative Hawker acknowledge  comments by Representative                                                                   
Kelly and  pointed out  that the  amendment only pertains  to                                                                   
payout  provisions  and  is  only  half  of  the  compromised                                                                   
reached by HB 198.                                                                                                              
                                                                                                                                
12:11:55 PM                                                                                                                   
                                                                                                                                
Representative  Kelly noted  that the  state's population  is                                                                   
aging  and questioned  what the  program would  look like  in                                                                   
2020. Commissioner Jackson concurred  that there is a growing                                                                   
senior    population    and    acknowledged    concerns    of                                                                   
sustainability.                                                                                                                 
                                                                                                                                
Representative  Kelly questioned if  there is intent  to grow                                                                   
the senior population in the state.  Commissioner Jackson was                                                                   
not aware of such intent.                                                                                                       
                                                                                                                                
Representative Joule  spoke in support of the  amendment with                                                                   
the understanding  that choices would need to be  made in the                                                                   
coming  years. He  stressed the  difference in  value of  the                                                                   
dollar to the out reaches of the state.                                                                                         
                                                                                                                                
12:15:10 PM                                                                                                                   
                                                                                                                                
Representative  Gara asked  what was  spent on the  Longevity                                                                   
Bonus when it ended  in 2003. Ms. Clark stated  that it would                                                                   
cost $33.7  million to restart  the program. The  program was                                                                   
in the $40 million dollar range  when it ended. The Longevity                                                                   
Bonus Program  was over $50  million in 1993.  Representative                                                                   
Gara stressed that  the state had sufficient  funds while the                                                                   
price of  oil was $18 a  barrel (not $60) and  concluded that                                                                   
it was  unfair to say  this is a  new $20 million  burden. He                                                                   
suggested that  it is a cost  savings for a program  that the                                                                   
state  supported   at  a  higher  level  with   less  revenue                                                                   
available.                                                                                                                      
                                                                                                                                
12:17:06 PM                                                                                                                   
                                                                                                                                
Representative  Thomas noted that  other programs  benefiting                                                                   
seniors have been added. Ms. Jackson  suggested that "in many                                                                   
ways we are comparing apples to  oranges." Different services                                                                   
have been  added and the  costs of services  have gone  up in                                                                   
general.  Representative Thomas  expressed  concern that  the                                                                   
amendment would require an additional  special session for an                                                                   
appropriation.  He observed  the number  of special  sessions                                                                   
over  the  past   years.  He  spoke  in  opposition   to  the                                                                   
amendment.                                                                                                                      
                                                                                                                                
12:19:47 PM                                                                                                                   
                                                                                                                                
Representative  Crawford  recalled  that  the  Personal  Care                                                                   
Attendance Program  was initiated  to save the  state funding                                                                   
by reducing the cost of nursing homes.                                                                                          
                                                                                                                                
Representative Kelly  expressed concern that  the legislature                                                                   
would  find  it  difficult to  sunset  the  [Senior  Benefit]                                                                   
program.                                                                                                                        
                                                                                                                                
Commission Jackson  noted that  the Department of  Health and                                                                   
Social  Services' budget  has been approximately  a  third of                                                                   
the state's  overall [general  fund] budget,  but that  it is                                                                   
slightly less at the current time.                                                                                              
                                                                                                                                
Representative Kelly noted that  the Department of Health and                                                                   
Social  Service's  budget  has  grown  at a  very  rapid  and                                                                   
unsustainable rate.  He maintained  that the state  is "doing                                                                   
more for  folks than  we were." In  reference to  the raising                                                                   
cost of  the Personal  Care Program,  he maintained  that "we                                                                   
were paying family  members to do what family  members out to                                                                   
do."    He  acknowledged  the   work  of  the  personal  care                                                                   
attendants, but  felt that  the bar was  too low and  "it got                                                                   
away from  us." He  spoke in support  of the high  multiplier                                                                   
and  against the  amendment,  since he  is  "hesitant to  put                                                                   
something  in place  and  then  take it  away."  He spoke  in                                                                   
support of continuing the current program without increase.                                                                     
                                                                                                                                
12:23:37 PM                                                                                                                   
                                                                                                                                
Representative  Gara pointed  out that  at the highest  level                                                                   
Senior Care would  not be given to people that  have a lot of                                                                   
money. Individuals would not be  eligible under the amendment                                                                   
"if they  made anything close to  $2,000 a month and  I don't                                                                   
think there is anyone here that  can live on $2,000 a month."                                                                   
He did  not "buy the  argument that  we should punish  people                                                                   
who make  less than $2,000 a  month because other  people are                                                                   
so sick that they need personal  care attendants to take care                                                                   
of them at home."                                                                                                               
                                                                                                                                
12:25:32 PM                                                                                                                   
                                                                                                                                
Representative  Hawker  acknowledged  the  challenges  of  an                                                                   
unsustainable human  services budget. The Lewin  study, which                                                                   
analyzed the demographics of the  populations being served by                                                                   
the  Department, showed  that  by 2025  the preponderance  of                                                                   
services would  go to adults instead  of children due  to the                                                                   
growth  in the  low income  senior population  of the  state.                                                                   
Currently,  $380  million  in  general  funds  are  spent  on                                                                   
Medicaid;  this number  would  be $2.2  billion  by 2025  for                                                                   
Medicaid alone, which  is more than the entire  current human                                                                   
services budget.  He acknowledged  the catastrophe  the state                                                                   
faces  in  meeting this  level  of  need. He  maintained  the                                                                   
state's  priority  is  to  target   the  needs  of  the  most                                                                   
vulnerable  citizens.  He  could not  support  the  non-needs                                                                   
based  Longevity  Bonus  program.   The  rate  structure  [in                                                                   
Amendment  2] would target  the preponderance  of poverty  in                                                                   
the  state. He  acknowledged the  level of  poverty in  rural                                                                   
areas,  which  he  felt  was   equal  to  some  of  the  most                                                                   
horrendous  third-world  poverty  conditions.  The  amendment                                                                   
would offer $250 [a month] to  someone whose household income                                                                   
does not exceed 75 percent of  the federal poverty guideline.                                                                   
"The ideal was to get to those  most impoverished individuals                                                                   
with the most money", in particular,  in regards rural Alaska                                                                   
"because that $250 is going to  go probably as far as $120 in                                                                   
an urban  area". He explained  that by taking the  program to                                                                   
175  percent  of poverty  with  a  $125 dollar  payment,  the                                                                   
intent is  "to get to  the margins, to  make sure  there's no                                                                   
one on the existing  programs that is left  out". He observed                                                                   
that original version of HB 198  included an extension of the                                                                   
Denali KidCare  program at 175  percent. He felt that  it was                                                                   
reasonable parity to provide benefits  to seniors at the same                                                                   
level as those  contained in Denali KidCare  legislation (175                                                                   
percent of  poverty). He acknowledged  the merit  of concerns                                                                   
regarding  sustainability,  but   spoke  in  support  of  the                                                                   
amendment.                                                                                                                      
                                                                                                                                
12:31:14 PM                                                                                                                   
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Nelson, Gara, Crawford, Hawker, Joule                                                                                 
OPPOSED: Kelly, Stoltze, Thomas, Chenault, Meyer                                                                                
                                                                                                                                
Representative Foster was absent from the vote.                                                                                 
                                                                                                                                
The MOTION FAILED (5-5).                                                                                                        
                                                                                                                                
12:32:39 PM                                                                                                                   
                                                                                                                                
Representative  Gara MOVED  to  ADOPT Amendment  3.  Co-Chair                                                                   
Meyer  OBJECTED.  Representative   Gara  explained  that  the                                                                   
amendment would  allow the commissioner of the  Department of                                                                   
Health  and  Social  Services  to  make  adjustments  to  the                                                                   
monthly  benefit  for  inflation   if  funds  are  available.                                                                   
Actions  by the  governor  would  be subject  to  legislative                                                                   
appropriation.  The legislation does  not allow the  governor                                                                   
or the  legislature to  adjust the  benefit upwards  if funds                                                                   
are available without passage  of authorizing legislation and                                                                   
an accompanying  appropriation. The monthly benefit  would be                                                                   
frozen without the passage of new legislation.                                                                                  
                                                                                                                                
Co-Chair Chenault questioned where  additional funds would be                                                                   
found. Representative  Gara stressed  that the program  would                                                                   
work like  any other  appropriation. He  spoke in support  of                                                                   
allowing  the  legislature  the  authority  to  increase  the                                                                   
benefit,  without mandating  an increase  or leaving  all the                                                                   
power with the governor.                                                                                                        
                                                                                                                                
Representative Gara WITHDREW Amendment 3.                                                                                       
                                                                                                                                
12:35:21 PM                                                                                                                   
                                                                                                                                
Ms. Clark clarified  that there are no cash  payment programs                                                                   
that have automatic inflation proofing, including APA.                                                                          
                                                                                                                                
Co-Chair Meyer reviewed the fiscal note.                                                                                        
                                                                                                                                
Representative Hawker  MOVED to report  HCS CSSB 4  (FIN) out                                                                   
of Committee with  the accompanying fiscal note.  There being                                                                   
NO OBJECTION, it was so ordered.                                                                                                
                                                                                                                                
HCS CSSB  4 was  REPORTED out  of Committee  with an  "amend"                                                                   
recommendation and  with a new fiscal note  by the Department                                                                   
of Health and Social Services.                                                                                                  
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 12:37 PM                                                                                           

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