Legislature(2013 - 2014)CAPITOL 106
03/21/2013 03:00 PM House HEALTH & SOCIAL SERVICES
| Audio | Topic |
|---|---|
| Start | |
| Presentation: Kenai Peninsula Borough - Medicaid Expansion | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE HEALTH AND SOCIAL SERVICES STANDING COMMITTEE
March 21, 2013
3:04 p.m.
MEMBERS PRESENT
Representative Pete Higgins, Chair
Representative Wes Keller, Vice Chair
Representative Lance Pruitt
Representative Lora Reinbold
Representative Paul Seaton
Representative Geran Tarr
MEMBERS ABSENT
Representative Benjamin Nageak
OTHER LEGISLATORS PRESENT
Representative Andy Josephson
COMMITTEE CALENDAR
PRESENTATION: KENAI PENINSULA BOROUGH - MEDICAID EXPANSION
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
MIKE NAVARRE, Mayor
Kenai Peninsula Borough
Kenai, Alaska
POSITION STATEMENT: Presented a PowerPoint title "Medicaid
Expansion."
ACTION NARRATIVE
3:04:37 PM
CHAIR PETE HIGGINS called the House Health and Social Services
Standing Committee meeting to order at 3:04 p.m.
Representatives Higgins, Keller, Tarr, and Seaton were present
at the call to order. Representatives Pruitt and Reinbold
arrived as the meeting was in progress. Also in attendance was
Representative Josephson.
^Presentation: Kenai Peninsula Borough - Medicaid Expansion
Presentation: Kenai Peninsula Borough - Medicaid Expansion
3:05:36 PM
CHAIR HIGGINS announced that the only order of business would be
a presentation by the Kenai Peninsula Borough on Medicaid
Expansion.
3:06:18 PM
MIKE NAVARRE, Mayor, Kenai Peninsula Borough, shared that his
background also included 12 years as a state legislator. He
presented a PowerPoint titled "Presentation to the Health &
Social Services Committee." He directed attention to slide 2,
"Medicaid Expansion," and shared that states had the option to
participate in the Medicaid Expansion, and established that the
eligibility expanded to 138 percent of the Federal Poverty Level
(FPL). He offered his belief that, in Alaska, this should be
200 percent of the FPL, as the cost of health care in Alaska was
"more than twice as much as other states around the country."
He noted that this expansion would also include all adults under
this FPL, would have a higher federal matching rate for this
expansion group, and would establish modified adjusted gross
income as a means for determining eligibility.
3:09:39 PM
MAYOR NAVARRE moved on to slide 3, "Enhanced Federal Medicaid
Match Rate for New Eligibility Group," which listed the match
rates of federal share and state share over the next 10 years.
He noted that, as this was a "promise from the federal
government, I think there's good reason to be skeptical of it."
He shared an anecdote of his time in the Alaska State
Legislature. He opined that this match rate would make economic
sense for Alaska, if the federal match rate continued as
planned, and he suggested that Alaska move forward with the
Medicaid expansion.
3:10:57 PM
MAYOR NAVARRE pointed to slide 4, "Medicaid Expansion in Alaska:
Enrollment and Spending," which showed the growth of enrollment
and spending for Medicaid in Alaska, from 2014 to 2020, and he
stated that Medicaid expansion "makes good sense."
3:11:15 PM
MAYOR NAVARRE explained that slide 5 was the same information as
slide 4, only in graph form. He reported that slide 6,
"Potential Budget offsets," had estimates for savings with
expansion of Medicaid. He noted that the Department of
Corrections should have significant offsets to spending.
3:11:52 PM
MAYOR NAVARRE moved on to slide 7, "Net Impact on State Budget,"
which reflected the impact if there were the potential offsets.
He reflected that the cost to the state would only be about
$23.3 million, cumulative, through 2020. He pointed to a net
savings for the state through 2018.
3:12:34 PM
MAYOR NAVARRE reflected on slide 8, "Return on Investment,"
which graphed the return on the investment of both state funds
and federal funds in Alaska.
3:12:57 PM
MAYOR NAVARRE noted that slide 9, "Substantial Job Growth,"
slide 10, "Increased Wages," and slide 11, "Regional Impact,"
reflected the accumulated economic impacts through 2020 from the
Medicaid expansion.
3:13:55 PM
REPRESENTATIVE SEATON asked about the participation levels as
described on slide 10.
MAYOR NAVARRE explained that this tracked the low, mid, and high
participation rates of cumulative enrollment into the Medicaid
expansion.
REPRESENTATIVE SEATON asked to clarify that some eligible
participants may still not apply.
MAYOR NAVARRE said that it reflected that eligible participants
would either not apply or not enroll all at the same time.
3:15:12 PM
CHAIR HIGGINS mused that one state, which he could not remember,
was investigating the enrollment of all of its Medicaid
recipients into the Medicaid expansion, declaring that it was "a
novel idea."
MAYOR NAVARRE presented slide 12, "Summary," which reflected
Medicaid coverage for an additional 40,000 Alaskans. This would
increase the federal revenue to Alaska by $1.1 billion, would
potentially create 4,000 new jobs, and would increase salaries
and wages to Alaskans by $1.2 billion. He declared that this
$2.4 billion in increased economic activity throughout Alaska
would cost the state $90 million without offsets, or $23.6
million with the offsets. He stated that the offset numbers
could be higher or lower, and that the impact could be a bit
different as some people were already covered through bad debt,
charity care, discounts, or cost shifting. He opined that
Alaska would benefit from the investments in the state, but not
necessarily feel all of the impacts, as there was the
possibility of a different fund source for these services.
3:16:51 PM
MAYOR NAVARRE offered slide 13, "Who Pays the Hospital Bill?"
He announced that Medicaid and Medicare paid a large share of
hospital care in Alaska, and that the combined State of Alaska,
local government, and commercial insurance programs was also a
large share.
3:17:19 PM
MAYOR NAVARRE furnished slide 14, "Hospitals Must Serve All Who
Need Care," and stated that the cost for uncompensated care in
Alaska during 2011 was $217 million, with an additional $200
million in loss from underpayments.
3:17:49 PM
MAYOR NAVARRE moved on to slide 15, "Cost Shift Hydraulic,"
which depicted the underpayments and uncompensated care. He
pointed out that those unpaid amounts were shifted to the
private payers, through increased premiums. He reported that
insurance plans were now requesting discounts from hospitals, as
procedures had gotten very expensive in Alaska. He emphasized:
"That is a scary thing if we don't get that piece fixed in terms
of the cost of health care."
3:19:19 PM
MAYOR NAVARRE explained slide 16, "Cost Shifting to Private
Payers," and said that the impact of cost shifting for
uncompensated care had resulted in an increase to annual
insurance premiums of $257 per insured person per year in 2009,
with an additional annual increase to insurance premiums of $628
as a result of underpayment.
3:19:50 PM
MAYOR NAVARRE supplied slides 17 & 18, "Central Peninsula
Hospital," and "South Peninsula Hospital," noting that both
hospitals were in his borough, and stated that these slides
portrayed the growth in charity care and bad debt. He declared
that health care continued to increase beyond the increase to
cost of living, which was an unsustainable rate.
3:20:38 PM
CHAIR HIGGINS asked for an explanation of "bad debt."
MAYOR NAVARRE, in response, said that charity care was
recognized for an individual in the application process, in
order to receive debt relief for unpaid hospital bills. He
explained that "bad debt" was simply when individuals were
unable to or did not pay for hospital bills. He commented that
this was a significant amount of money.
3:21:42 PM
MAYOR NAVARRE provided slide 19, "Medicaid Eligible in AK,"
which estimated the potential number of additional enrollees for
Medicaid to be about 40,000 statewide.
3:22:17 PM
MAYOR NAVARRE indicated that slide 20, "Medicaid Eligible in
AK," showed the unanticipated impact of the U.S. Supreme Court
decision for changing the expansion of Medicaid from mandatory
to optional. He declared that, without the expansion, there
would be a gap in coverage for some Alaska residents. He
pointed out that the Patient Protection and Affordable Care Act
was designed to offer care for lower income people, and he
opined that this gap would be resolved with a mandate.
3:22:58 PM
MAYOR NAVARRE offered his belief that the Medicaid Expansion
"makes sense for Alaska, but I also understand the concerns
about future impacts, especially with federal funding and
promises of funding, and whether or not we'll actually see that
level of funding given the situation that our nation finds
itself in." He declared that the Patient Protection and
Affordable Care Act was only a part of the coming changes to the
health care system, although it was not possible to predict
those changes. He announced that the current health care system
was "overly complicated, inefficient, over utilized, and
unsustainable, particularly in Alaska, where the costs are
higher than other states." He deliberated that negotiation for
cheaper care was necessary, or people would go out of state for
care, which would change the economy of scale for local
hospitals. He voiced the need for a long term plan for the
future of health care in Alaska. He referred to an Institute
for Social and Economic Research (ISER) study which indicated
that there was more than $10 billion spent annually on health
care for Alaskans. He stated the necessity to define a plan and
a direction to move forward in order to provide lower cost
health care and expanded service to residents of Alaska.
3:25:25 PM
REPRESENTATIVE TARR, referring to slide 7, asked about the
projected savings for Alaska. She asked if the early years of
savings could be used to pay for the costs in later years.
MAYOR NAVARRE speculated that each state was working for
additional data to make those decisions within the existing
budget. He suggested that a lot more information would need to
be gathered to recognize all the budget impacts.
3:27:22 PM
CHAIR HIGGINS asked about the data. He directed attention to a
handout from the Heritage Foundation, which he distributed to
the committee and Mayor Navarre. He reported that this Heritage
Foundation data reflected that, after 2016, there would be more
money spent than collected. He commented that different data
reflected different projections.
MAYOR NAVARRE expressed his agreement that there was a lot of
data, and he opined that the use of data in context could bring
forward different conclusions. He indicated that it was
incumbent for Department of Health and Social Services to
collect the best data on order to base its public policy.
CHAIR HIGGINS established that it was necessary "to tread
lightly on this whole subject, because it's new to everybody."
He suggested looking at it closely and making good choices.
3:30:21 PM
REPRESENTATIVE SEATON asked for a definition to underpayment.
MAYOR NAVARRE replied that Medicare and Medicaid were defined as
under payers, because these programs did not reimburse to the
full value of usual and customary service. He said that this
underpayment would result in a cost shift, if the cost was what
was being charged. He declared that he was searching for a
health care model to better determine the costs, as the current
system of billings, discounts, and cost shifting made it "very
nearly impossible to determine where things are at, but it's too
expensive."
3:31:42 PM
REPRESENTATIVE REINBOLD asked for more information about the $10
billion in health care expenses.
MAYOR NAVARRE referred to the 2010 ISER study which had reported
$7.5 billion on health care spending in Alaska, and he
extrapolated that the current cost increases brought the
spending over $10 billion, especially if the money spent on
health care outside of Alaska was also included.
3:32:38 PM
REPRESENTATIVE REINBOLD asked if this included insurance
premiums.
MAYOR NAVARRE replied that it did.
REPRESENTATIVE REINBOLD expressed her concern with giving health
care to everyone, because "it's hard to take it back." She
agreed that health care was important, but that she had concerns
that the federal government was making promises while there was
a $16 trillion debt.
MAYOR NAVARRE, in response to Representative Reinbold, said that
he shared her concern. He offered his belief that Medicaid
expansion was the conservative approach, as the health care
system was currently unsustainable. He reported that
negotiations with the public employee unions focused on health
care, as the increases to health care were "off the charts," and
had caused an increase in the unfunded liability. He noted that
the calculations for the increase in health care costs had not
been accurately predicted. He pointed out that the Medicaid
expansion offered a lower cost than the current system.
3:35:15 PM
REPRESENTATIVE REINBOLD asked if it was possible for all the
bargaining units to enroll in the same health care system, in
order to save money.
MAYOR NAVARRE acknowledged that the aforementioned would result
in a huge savings to the public employee union, but stressed
that those savings would shift elsewhere and "somebody else ends
up paying more." He decried that this had been happening for
many years in health care service.
REPRESENTATIVE REINBOLD repeated that it would save money if
everyone bargained together.
3:36:53 PM
ADJOURNMENT
There being no further business before the committee, the House
Health and Social Services Standing Committee meeting was
adjourned at 3:36 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| presentation to HSS Cmt 3-21-13.doc |
HHSS 3/21/2013 3:00:00 PM |
Kenail Peninsula Borough Mediciade Expansion Presentation |
| MN -Medicaid Expansion.ppt |
HHSS 3/21/2013 3:00:00 PM |
Kenail Peninsula Borough Medicaid Expansion Presentation |
| Medicaid Expansion in Alaska Anchorage Chamber 3_4_13 with notes FINAL.PPT |
HHSS 3/21/2013 3:00:00 PM |
Kenai Peninsula Borough Medicaid Expansion Presentation |