Legislature(2003 - 2004)
01/20/2004 01:44 PM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HJR 26 | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
January 20, 2004
1:44 P.M.
TAPE HFC 04 - 5, Side A
CALL TO ORDER
Co-Chair Williams called the House Finance Committee meeting
to order at 1:44 PM.
MEMBERS PRESENT
Representative John Harris, Co-Chair
Representative Bill Williams, Co-Chair
Representative Kevin Meyer, Vice-Chair
Representative Mike Chenault
Representative Eric Croft
Representative Hugh Fate
Representative Richard Foster
Representative Mike Hawker
Representative Bill Stoltze
MEMBERS ABSENT
Representative Carl Moses
Representative Reggie Joule
ALSO PRESENT
Joel Gilbertson, Commissioner, Department of Health and
Social Services; Janet Clarke, Director, Division of
Administrative Services, Department of Health and Social
Services; Marie Darlin, Coordinator, AARP Capital City Task
Force; Sherry Hill, Special Assistant, Office of the
Commissioner, Department of Health and Social Services.
PRESENT VIA TELECONFERENCE
None
SUMMARY
HB 374 An Act establishing the SeniorCare program and
relating to that program; and providing for an
effective date.
HB 374 was heard and HELD in Committee for further
consideration.
HOUSE BILL NO. 374
An Act establishing the SeniorCare program and relating
to that program; and providing for an effective date.
Co-Chair Harris MOVED to ADOPT the proposed Work Draft for
HB 374, 23-GH2123\D dated 1/14/04. There being NO
OBJECTION, it was so ordered.
JOEL GILBERTSON, COMMISSIONER, DEPARTMENT OF HEALTH AND
SOCIAL SERVICES spoke in support of HB 374, Seniorcare. In
December 2003 the Governor announced Seniorcare, a
comprehensive effort by the Department of Health and Social
Services to ensure provision of services to seniors for
prescription drugs.
Mr. Gilbertson explained that Medicare, which was
established in 1965, has never provided comprehensive
coverage for prescription drugs and noted that it it is the
sole source of medical care for many seniors. Last fall,
Congress established a comprehensive drug benefit for
Medicare and passed comprehensive legislation establishing a
true universal drug benefit. However, the legislation delays
implementation until January 2006, and the program costing
$400 billion over ten years will take time to implement. The
need for these services is present now, before January 1,
2006.
Mr. Gilbertson informed the Committee that Seniorcare has
three components including legislation, a senior information
office to access information on the $220 million of programs
that the department delivers to seniors, and an effort to
lower prescription drug costs.
Mr. Gilbertson referred to a chart titled Comparison of
Qualifications and Benefits. He explained a current
assistance program providing a cash subsidy to seniors below
135% of poverty. These seniors receive $120 a month with
the benefit provided by regulation. He discussed income
guidelines. SeniorCare would allow the option of receiving
prescription drug assistance in lieu of a cash benefit.
Under SeniorCare, those individuals below 135% of poverty
could receive a $1600 annual prescription drug subsidy or a
$120 per month continuation of senior assistance. tThis
option would be available once annually.
Mr. Gilbertson described the federally passed legislation
that currently provides an annual Medicare subsidy of $600
for seniors below 135% of poverty. All seniors regardless
of income are eligible for a prescription drug discount card
allowing seniors to access a negotiated discount rate.
Mr. Gilbertson referred to a chart, Bridging the Gap, A
Comparison of Benefits.
Mr. Gilbertson observed that the legislation has an
effective date of April 1, 2004. He concluded seniors want
drug coverage at affordable prices and the department is
committed to starting the program quickly, and integrating
it into existing eligibility, enrollment and payment
systems.
Representative Croft referred to language on page 2, lines
22-23 of the Work Draft, "an eligible individual may make an
irrevocable election to receive prescription drug benefits
annually," and asked if the intent is that the election be
"irrevocable" for the year or apply to a longer period of
time.
Mr. Gilbertson responded that the provision would allow
individuals who apply annually to make the election and it
would be irrevocable for that particular year. He explained
that subsidies are fairly defined. Allowing seniors to
switch programs in mid-year would allow individuals to
collect cash for six months and would fully extend an annual
amount for prescription drug assistance for the remaining
six months. The department assumes the majority of those
currently in the program will continue to receive cash
assistance in lieu of the prescription drug discount.
Representative Croft stated that it makes sense that it be
irrevocable for the year, but questioned if this language
meets the department's intent. He suggested it would be
clearer to state in a separate sentence that a person "may
not revoke for the period of that year." As drafted,
Representative Croft felt the language might be misread to
mean irrevocable for perpetuity.
Mr. Gilbertson replied that the language intends that
eligible seniors will elect once per year to choose either
the drug prescription or cash assistance.
Representative Croft asked if the cash benefit would sunset
in this version of the bill when federal law brings in the
benefit.
Commissioner Gilbertson responded, it is consistent with
this version. The entire package of this legislation would
sunset with the commencement of the prescription Medicare
benefit. By starting in April 2004, this program would
provide continuing assistance if there is a delay in the
implementation of the federal Medicare drug benefit.
Representative Croft referred to language on Page 3, Line
15: "However, the department may pay" and asked why it
states "may" instead of "shall."
Mr. Gilbertson replied, the department does pay and
therefore would be amenable to a change to the word "shall."
Co-Chair Harris asked about the provision for an override
relating to the preferred drug list.
Mr. Gilbertson explained that the current policy for
physicians to document medical necessity on the prescription
itself, which allows prescribing a non-preferred or brand
name drug.
Co-Chair Harris referred to fiscal note #2, noting the $12
million in federal receipts and roughly $2.7 million in
general funds for FY 05. He asked if a supplemental is
being prepared to cover the estimated $554,000 for FY 04.
Mr. Gilbertson responded, the program would run over a
number of fiscal years, and only continuously during FY 05.
If the program begins in April 2004, it will run for three
months in FY 04, a full year FY 05, and half a year in FY
06. The Administration proposes to use funds set aside for
the Senior Assistance Program for the SeniorCare program in
FY 04. The bill itself carries a fiscal note for FY 04,
which Mr. Gilbertson assumed would be in the supplemental
request. A portion of the $400 thousand surplus in the
Senior Assistance Program would also be used.
Co-Chair Harris requested clarification of the $12 million
in federal receipts for FY 2005. Mr. Gilbertson explained
that the funds are from the Office of Management and
Budget's last round of fiscal aid to states. The
appropriation is time-limited and not shown in FY 06 because
continued federal funding cannot be predicted.
Co-Chair Harris questioned if the federal money is
unrestricted. Mr. Gilbertson explained that the federal
funding is an emergency grant to the states and therefore
does not have the usual restrictions. The state has broad
discretion to use those funds for senior assistance
programs.
Representative Croft MOVED to ADOPT Amendment 1: delete
"make an irrevocable election" and insert "semi-annually
elect", on page 2, line 23. Co-Chair Harris objected for the
purpose of discussion.
Representative Croft stated "annually" would be acceptable,
but expressed concern that there would be a wording problem
if the intent is to allow seniors to make a choice every
year. He offered to delete the semi-colon and say "annually
elect," so that it would read "an eligible individual may
annually elect to receive prescription drug benefits
provided in the manner specified by the department in
regulation."
Mr. Gilbertson stated that the proposed wording would be
consistent with the department's intent.
Representative Croft then reworded the proposed Amendment 1,
page 2, lines 22-23 to read:
", an eligible individual may once annually elect to
receive prescription drug benefits"
Co-Chair Harris asked the purpose of the "irrevocable
election" wording.
Mr. Gilbertson clarified the intent of the language is to
allow seniors to choose once a year between the cash or drug
prescription assistance.
Co-Chair Harris asked if the maximum a senior can receive
for prescription drug benefits is $1600 year. Mr.
Gilbertson affirmed.
Co-Chair Harris WITHDREW his objection.
There being NO OBJECTION, , Amendment 1 was ADOPTED.
Representative Croft MOVED to ADOPT Amendment 2. Co-Chair
Harris objected for the purpose of discussion.
Amendment 2 reads:
Page 3, line 15
Delete: "may"
Insert: "shall"
Representative Croft questioned if "shall" should be
substituted for "may" on Page 3, line 15 of the committee
substitute:
"the department may pay for brand-name multisource
drugs if the prescriber writes on the prescription 'The
brand-name drug is medically necessary' and the
prescriber states the reason that the brand-name drug
is medically necessary."
Mr. Gilbertson stated that, in these circumstances, the
department would pay, and agreed that it would be more
appropriate to use "shall" pay. He indicated that the
proposed wording is consistent with department intent and
policy.
There being NO OBJECTION, Amendment 2 was ADOPTED.
Tape Change, HFC04-6, Side A
MARIE DARLIN, COORDINATOR, AARP CAPITAL CITY TASK FORCE,
spoke in favor of prescription drug coverage and the
proposed information office providing access to information
for seniors. Referring to the Senior Assistance Program,
she said that although it did not replace the Longevity
Bonus, it helps over 7,000 of the lowest income older
Alaskans. This proposed bill would significantly help an
estimated 23,000 seniors.
Ms. Darlin concluded the AARP strongly supports the third
part of the SeniorCare program, the Preferred Drug List.
Co-Chair Harris asked how many seniors would be eligible for
this needs-based program who wouldn't have been eligible for
the Longevity Bonus.
SHERRY HILL, SPECIAL ASSISTANT, OFFICE OF THE COMMISSIONER,
DEPARTMENT OF HEALTH AND SOCIAL SERVICES responded that half
of the 7,800 or 46.6% would be eligible for this program.
Co-Chair Harris asked if this program would help the closer-
to-poverty-level seniors whereas the Longevity Bonus
eligibility cutoff did not.
Ms. Darlin responded that it would.
HB 374 was heard and HELD in Committee for further
consideration.
ADJOURNMENT
The meeting was adjourned at 2:30 p.m.
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