Legislature(2019 - 2020)CAPITOL 106

04/18/2019 03:00 PM HEALTH & SOCIAL SERVICES

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                    ALASKA STATE LEGISLATURE                                                                                  
      HOUSE HEALTH AND SOCIAL SERVICES STANDING COMMITTEE                                                                     
                         April 18, 2019                                                                                         
                           3:10 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Representative Ivy Spohnholz, Co-Chair                                                                                          
Representative Tiffany Zulkosky, Co-Chair                                                                                       
Representative Harriet Drummond                                                                                                 
Representative Geran Tarr                                                                                                       
Representative Lance Pruitt                                                                                                     
MEMBERS ABSENT                                                                                                                
Representative Matt Claman                                                                                                      
Representative Sharon Jackson                                                                                                   
OTHER LEGISLATORS PRESENT                                                                                                     
Representative Andi Story                                                                                                       
COMMITTEE CALENDAR                                                                                                            
HOUSE BILL NO. 96                                                                                                               
"An Act relating to Alaska Pioneers' Home and Alaska Veterans'                                                                  
Home rates and services."                                                                                                       
     - HEARD AND HELD                                                                                                           
CS FOR SENATE BILL NO. 37(FIN)                                                                                                  
"An Act relating to the statewide immunization program; and                                                                     
providing for an effective date."                                                                                               
     - HEARD AND HELD                                                                                                           
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: HB 96                                                                                                                   
SHORT TITLE: PIONEERS' HOME AND VETERANS' HOME RATES                                                                            
SPONSOR(s): REPRESENTATIVE(s) FIELDS                                                                                            
03/15/19       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/15/19       (H)       STA, HSS                                                                                               
03/26/19       (H)       STA AT 3:00 PM GRUENBERG 120                                                                           
03/26/19       (H)       Heard & Held                                                                                           
03/26/19       (H)       MINUTE(STA)                                                                                            
03/28/19       (H)       STA AT 3:00 PM GRUENBERG 120                                                                           
03/28/19       (H)       Heard & Held                                                                                           
03/28/19       (H)       MINUTE(STA)                                                                                            
04/02/19       (H)       STA AT 4:00 PM GRUENBERG 120                                                                           
04/02/19       (H)       Moved CSHB 96(STA) Out of Committee                                                                    
04/02/19       (H)       MINUTE(STA)                                                                                            
04/03/19       (H)       STA RPT CS(STA) 2DP 4NR                                                                                
04/03/19       (H)       DP: SHAW, FIELDS                                                                                       
04/03/19       (H)       NR: LEDOUX, WOOL, STORY, KREISS-TOMKINS                                                                
04/09/19       (H)       HSS AT 3:00 PM CAPITOL 106                                                                             
04/09/19       (H)       -- MEETING CANCELED --                                                                                 
04/11/19       (H)       HSS AT 3:00 PM CAPITOL 106                                                                             
04/11/19       (H)       -- MEETING CANCELED --                                                                                 
04/18/19       (H)       HSS AT 3:00 PM CAPITOL 106                                                                             
BILL: SB 37                                                                                                                   
SHORT TITLE: RENEWAL OF VACCINE ASSESSMENT PROGRAM                                                                              
SPONSOR(s): SENATOR(s) GIESSEL                                                                                                  
01/25/19       (S)       READ THE FIRST TIME - REFERRALS                                                                        
01/25/19       (S)       HSS, FIN                                                                                               
02/06/19       (S)       HSS AT 1:30 PM BUTROVICH 205                                                                           
02/06/19       (S)       Moved SB 37 Out of Committee                                                                           
02/06/19       (S)       MINUTE(HSS)                                                                                            
02/08/19       (S)       HSS RPT 5DP                                                                                            
02/08/19       (S)       DP: WILSON, BEGICH, COGHILL, STEVENS,                                                                  
02/13/19       (S)       FIN AT 9:00 AM SENATE FINANCE 532                                                                      
02/13/19       (S)       Heard & Held                                                                                           
02/13/19       (S)       MINUTE(FIN)                                                                                            
03/12/19       (S)       FIN AT 9:00 AM SENATE FINANCE 532                                                                      
03/12/19       (S)       Moved CSSB 37(FIN) Out of Committee                                                                    
03/12/19       (S)       MINUTE(FIN)                                                                                            
03/13/19       (S)       FIN RPT CS  5DP 3NR NEW TITLE                                                                          
03/13/19       (S)       DP:   VON   IMHOF,   MICCICHE,   SHOWER,                                                               
                         WILSON, BISHOP                                                                                         
03/13/19       (S)       NR: STEDMAN, WIELECHOWSKI, OLSON                                                                       
03/27/19       (S)       TRANSMITTED TO (H)                                                                                     
03/27/19       (S)       VERSION: CSSB 37(FIN)                                                                                  
03/29/19       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/29/19       (H)       HSS, FIN                                                                                               
04/09/19       (H)       HSS AT 3:00 PM CAPITOL 106                                                                             
04/09/19       (H)       -- MEETING CANCELED --                                                                                 
04/11/19       (H)       HSS AT 3:00 PM CAPITOL 106                                                                             
04/11/19       (H)       -- MEETING CANCELED --                                                                                 
04/18/19       (H)       HSS AT 3:00 PM CAPITOL 106                                                                             
WITNESS REGISTER                                                                                                              
REPRESENTATIVE ZACK FIELDS                                                                                                      
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  As prime sponsor, presented HB 96.                                                                       
TRISTAN WALSH, Staff                                                                                                            
Representative Zack Fields                                                                                                      
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  On behalf of Representative Fields, prime                                                                
sponsor of HB 96, answered questions regarding the bill.                                                                        
CLINTON LASLEY, Director                                                                                                        
Central Office                                                                                                                  
Division of Alaska Pioneer Homes                                                                                                
Department of Health and Social Services (DHSS)                                                                                 
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions regarding HB 96.                                                                      
BRAD RIDER                                                                                                                      
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in support of HB 96.                                                                           
FRED KOKEN                                                                                                                      
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in support of HB 96.                                                                           
LUANN MCVEY                                                                                                                     
Douglas, Alaska                                                                                                                 
POSITION STATEMENT:  Testified in support of HB 96.                                                                           
MARK BADGER                                                                                                                     
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 96.                                                                           
LAURA BONNER                                                                                                                    
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 96.                                                                           
SUSAN MILLER                                                                                                                    
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 96.                                                                           
SHARON LONG                                                                                                                     
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 96.                                                                           
ROCKY PLOTNICK                                                                                                                  
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 96.                                                                           
JANET MACCLARENCE                                                                                                               
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 96.                                                                           
JUSTIN PARISH                                                                                                                   
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in support of HB 96.                                                                           
DEBBIE TILSWORTH                                                                                                                
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 96.                                                                           
URBAN RAHOI                                                                                                                     
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 96.                                                                           
BARBARA PARKER                                                                                                                  
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 96.                                                                           
SUSAN CARTER                                                                                                                    
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Testified during the hearing of HB 96.                                                                   
CAROL KLOPF                                                                                                                     
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Testified during the hearing of HB 96.                                                                   
WILLIAM HARRINGTON                                                                                                              
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified during hearing of HB 96.                                                                       
SENATOR CATHY GIESSEL                                                                                                           
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Introduced CSSB 37(FIN) as the sponsor of                                                                
the bill.                                                                                                                       
JANE CONWAY, Staff                                                                                                              
Senator Cathy Giessel                                                                                                           
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: On behalf of Senator Giessel, sponsor,                                                                    
presented a sectional analysis of CSSB 37(FIN).                                                                                 
LILY LOU, MD                                                                                                                    
Chief Medical Officer                                                                                                           
Central Office                                                                                                                  
Division of Public Health                                                                                                       
Department of Health and Social Services (DHSS)                                                                                 
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified and answered questions regarding                                                               
CSSB 37(FIN).                                                                                                                   
JILL LEWIS, Deputy Director (Juneau)                                                                                            
Central Office                                                                                                                  
Division of Public Health                                                                                                       
Department of Health and Social Services (DHSS)                                                                                 
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Provided a PowerPoint presentation titled                                                                
"SB 37 Renewal of Alaska Vaccine Assessment Program."                                                                           
DAVID TEAL, Legislative Fiscal Analyst                                                                                          
Director, Legislative Finance Division                                                                                          
Legislative Agencies and Offices                                                                                                
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified and answered questions regarding                                                               
CSSB 37(FIN).                                                                                                                   
NANCY MERRIMAN, Executive Director                                                                                              
Alaska Primary Care Association (Alaska PCA)                                                                                    
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of CSSB 37(FIN).                                                                    
PATTY OWEN, Director                                                                                                            
Board of Directors                                                                                                              
Alaska Public Health Association                                                                                                
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of CSSB 37(FIN).                                                                    
ACTION NARRATIVE                                                                                                              
3:10:18 PM                                                                                                                    
CO-CHAIR  TIFFANY ZULKOSKY  called  the House  Health and  Social                                                             
Services  Standing  Committee  meeting  to  order  at  3:10  p.m.                                                               
Representatives  Drummond,  Tarr,  Spohnholz, and  Zulkosky  were                                                               
present at the  call to order.  Representative  Pruitt arrived as                                                               
the meeting was in progress.                                                                                                    
         HB 96-PIONEERS' HOME AND VETERANS' HOME RATES                                                                      
3:11:01 PM                                                                                                                    
CO-CHAIR  ZULKOSKY announced  that  the first  order of  business                                                               
would be HOUSE BILL NO. 96,  "An Act relating to Alaska Pioneers'                                                               
Home and Alaska Veterans' Home  rates and services."  [Before the                                                               
committee was CSHB 96(STA).]                                                                                                    
3:11:26 PM                                                                                                                    
REPRESENTATIVE ZACK  FIELDS, Alaska  State Legislature,  As prime                                                               
sponsor, presented  HB 96.   He said the  bill's goal is  to keep                                                               
Alaska's  Pioneer Homes  thriving.   He explained  that inflation                                                               
has reduced  the real value of  rates paid at the  Pioneer Homes.                                                               
He said  rates have  been adjusted  a few  times since  2004, but                                                               
rates have  not kept pace with  inflation.  He said  CSHB 96(STA)                                                               
would rebase  rates to keep pace  with inflation since 2004.   It                                                               
would give  the Department of  Health and Social  Services (DHSS)                                                               
the  ability  to have  care  levels  of  Level  IV and  Level  V.                                                               
Representative  Fields stated  that there  is a  need for  higher                                                               
intensity of  care, given that  the average age of  residents has                                                               
risen to  about 87, and  given a growing population  of residents                                                               
with dementia.   Consistent with the Agnew  Beck Report [November                                                               
29, 2018],  the proposed bill would  allow a Level V  care, which                                                               
is a totally  separate billing structure for  what the department                                                               
and  Agnew  Beck  envision as  behavioral  health  neighborhoods.                                                               
These  neighborhoods  would  be  physically  separate  but  still                                                               
within  the  Pioneer Homes.    He  emphasized the  importance  of                                                               
behavioral  health neighborhoods  for  broader  cost control  and                                                               
quality of care issues.                                                                                                         
REPRESENTATIVE  FIELDS stated  the  CSHB 96(STA)  would effect  a                                                               
change from  a Consumer  Price Index (CPI)  to a  Social Security                                                               
cost-of-living  adjustment  (COLA),   which  the  department  has                                                               
indicated is its  preference.  He remarked that he  does not have                                                               
a strong  preference on what the  index rate is.   He pointed out                                                               
that  the  CSHB  96(STA)   represents  a  substantive  compromise                                                               
between the original  bill and where the department  is trying to                                                               
3:13:44 PM                                                                                                                    
The committee took a brief at-ease.                                                                                             
3:14:10 PM                                                                                                                    
REPRESENTATIVE  FIELDS  noted that  the  first  Pioneer Home  was                                                               
established  in  1913  in  Sitka.   The  Pioneer  Homes  expanded                                                               
steadily throughout  the Twentieth Century, with  the newest home                                                               
constructed in Juneau  in 1988, and there are  currently homes in                                                               
six  communities.   There was  a major  improvement in  2007 when                                                               
Representative   Shaw  helped   establish  the   first  certified                                                               
Veterans' Home  in Palmer  while he was  the commissioner  of the                                                               
Department of Military and Veterans Affairs.                                                                                    
REPRESENTATIVE  FIELDS explained  that the  rates at  the Pioneer                                                               
Homes  are established  by regulation.   Because  the rates  have                                                               
failed to keep pace with inflation  going back to 2004, the state                                                               
has lost  about 15  percent of  real value since  then.   He said                                                               
CSHB 96(STA)  would make a  significant rate update to  keep pace                                                               
with inflation.   Unique about  the Pioneer  Homes is the  mix of                                                               
residents in  terms of income  levels and  intensity of care.   A                                                               
large  percentage of  residents are  private pay,  and while  the                                                               
rates  currently don't  capture the  full cost  of care,  they do                                                               
capture a substantial amount of the cost of care.                                                                               
REPRESENTATIVE  FIELDS discussed  the topic  of what  would be  a                                                               
sustainable financial model long into  the future for the Pioneer                                                               
Homes.  He  said it is to the state's  and department's advantage                                                               
to  maintain a  robust share  of residents  who are  private pay,                                                               
whether they  are paying full  cost of  care or 70-90  percent of                                                               
the cost of care.   If 51 percent of the  residents are paying at                                                               
least a substantial  portion of the cost of care,  that is a more                                                               
secure  place  to be  financially  than  if  100 percent  of  the                                                               
residents  are being  completely subsidized,  because that  would                                                               
entail more general fund obligations to the Pioneer Homes.                                                                      
REPRESENTATIVE   FIELDS  stated   he  is   concerned  about   the                                                               
department's proposed  new rates, because  the rate jumps  are so                                                               
high  and the  rate levels  so high  that many  fewer self-paying                                                               
residents will enter  and stay in the Pioneer Homes.   He posited                                                               
that rather than simply capturing  those much higher rates, there                                                               
would  be adverse  selection and  the population  at the  Pioneer                                                               
Homes  would  quickly  shift  to  a  much  larger  percentage  of                                                               
residents who are almost wholly being subsidized by the state.                                                                  
REPRESENTATIVE  FIELDS  said  he  supports the  State  of  Alaska                                                               
subsidizing  residents  to  the extent  necessary,  including  to                                                               
seniors with less means.   However, he cautioned, the legislature                                                               
should  be careful  to not  unintentionally push  out self-paying                                                               
residents.   Even a  resident paying  80 percent  of the  cost of                                                               
care is a lot more than 0 percent.   That is an important part of                                                               
the financial  sustainability of the Pioneer  Homes going forward                                                               
and, hence, the rates in the proposed bill are a compromise.                                                                    
3:17:30 PM                                                                                                                    
REPRESENTATIVE FIELDS  said there  are currently three  levels of                                                               
care.   He related that  internally DHSS is  preparing, including                                                               
through  regulation, to  go  to  five levels  of  care, which  is                                                               
consistent  with the  Agnew Beck  recommendations  that are  very                                                               
detailed  and  based on  good  research.    The bill  before  the                                                               
committee would allow five levels of  care and would not cap base                                                               
Level V because that is  a separate category of reimbursement for                                                               
much more  intensive behavioral health  care where a  much higher                                                               
reimbursement rate can  be captured than the  daily Medicaid rate                                                               
for  assisted living.   Pioneer  Homes are  assisted living,  not                                                               
nursing  homes,  and because  of  that  [the  state] has  a  more                                                               
limited ability  to capture  a higher  daily rate  from Medicaid.                                                               
Pioneer Homes happen  to be a relatively more  acute intense form                                                               
of assisted living, but they  are still assisted living, and that                                                               
does limit [the state's] federal revenue potential.                                                                             
REPRESENTATIVE FIELDS stated that  while the rates proposed under                                                               
CSHB 96(STA) are  a significant [increase], they are  a much more                                                               
modest increase  for Levels I,  II, and  III.  The  proposed bill                                                               
would  allow a  new Level  IV, plus  a new  Level V  that is  not                                                               
capped,  based  on  the  ability   to  capture  potentially  more                                                               
3:19:03 PM                                                                                                                    
REPRESENTATIVE FIELDS  provided a  comparison of rates:   current                                                               
costs of care that  go back to 2004 for Levels I,  II, and III; a                                                               
comparison  of the  current monthly  rate  with the  department's                                                               
proposed rates; and  the rates proposed under CSHB  96(STA).  The                                                               
bill represents a compromise and  would cap rate increases in the                                                               
future to  the Social Security cost-of-living  adjustment (COLA),                                                               
which  would  provide  certainty   for  residents  following  the                                                               
significant bump  in rates to catch  up with inflation.   He said                                                               
this is important for residents  and for older folks and families                                                               
who are saving for their final years.                                                                                           
REPRESENTATIVE  TARR observed  sponsor  information stating  that                                                               
the rate increases  may be annual and then will  be capped at the                                                               
most   recent  Social   Security   COLA.     She  asked   whether                                                               
consideration was given  between the words "may" and  "shall".  A                                                               
challenge  she  has   seen  over  the  years  is   that  in  some                                                               
circumstances, using  "may" creates a  need to allow  for receipt                                                               
authority, so  [DHSS] could collect  more in fees.   She inquired                                                               
whether "shall  do an annual  adjustment" should be used  so that                                                               
it is built in.                                                                                                                 
3:21:07 PM                                                                                                                    
TRISTAN WALSH,  Staff, Representative  Zack Fields,  Alaska State                                                               
Legislature,  replied  that  CSHB   96(STA)  describes  the  rate                                                               
increase mechanism on page 4,  lines 17-21, Section 4(g), and the                                                               
word  "shall"  is used.    He  explained  he  used "may"  in  the                                                               
PowerPoint because the  Social Security cost-of-living adjustment                                                               
isn't necessarily always raised, sometimes it is held flat.                                                                     
REPRESENTATIVE TARR expressed  her hope that this would  set up a                                                               
new way of doing things because  the Pioneer Home is not the only                                                               
state service that  has been limited in this way,  where the user                                                               
of the  service would be  willing to pay  more if the  state were                                                               
asking more.                                                                                                                    
3:22:22 PM                                                                                                                    
REPRESENTATIVE FIELDS resumed his  presentation.  He talked about                                                               
what the Social  Security COLA has been historically.   The rates                                                               
of inflation were  much higher in the 1970s, and  in recent years                                                               
they have  been more modest.   This  provision in the  bill would                                                               
allow for keeping pace with gradual increases in costs.                                                                         
CO-CHAIR SPOHNHOLZ  inquired about  the relationship  between the                                                               
Social  Security  COLA and  the  CPI  and  asked why  the  Social                                                               
Security COLA was picked versus the CPI.                                                                                        
MR.  WALSH responded  that in  discussions  with the  department,                                                               
DHSS  related  that  it has  historically  preferred  the  Social                                                               
Security  COLA  because that  is  more  directly linked  to  most                                                               
residents' direct source of income.   Broadly speaking the Social                                                               
Security  COLA is  still largely  relative  to the  CPI, so  they                                                               
generally track with each other.                                                                                                
3:23:44 PM                                                                                                                    
REPRESENTATIVE FIELDS summarized that  CSHB 96(STA) would provide                                                               
certainty for  the residents  and for the  department.   It would                                                               
provide  more  certainty for  DHSS  in  terms of  capturing  some                                                               
additional revenue,  but hopefully at prices  that are affordable                                                               
for residents.   The  bill would ensure  timely and  orderly rate                                                               
increases,  and these  would be  more regular  than in  the past.                                                               
Limiting the rate  increases to the rate of inflation  as per the                                                               
Social  Security  COLA  would  provide   peace  of  mind  to  the                                                               
residents.  The proposed update to  the levels of care would more                                                               
accurately  correspond to  the population  of  residents who  are                                                               
currently in  the Pioneer Homes,  which has many  older residents                                                               
and a higher and growing percentage of residents with dementia.                                                                 
3:24:44 PM                                                                                                                    
REPRESENTATIVE TARR inquired about the bill's fiscal notes.                                                                     
REPRESENTATIVE FIELDS replied  the fiscal notes are  complex.  He                                                               
said historically the Pioneer Homes  have been subsidized through                                                               
general fund.  The administration's  proposal is general fund and                                                               
payment assistance.   The  bill is written  so it  would maintain                                                               
the  department's flexibility  to  use general  fund funding  for                                                               
general  support of  the Pioneer  Homes  and payment  assistance.                                                               
The bill  would give  DHSS the  ability to shift  more to  a need                                                               
based model while  still allowing for the prices to  be below the                                                               
cost  of care  for some  levels of  care.   The bill  would raise                                                               
revenue relative  to the status quo.   He deferred to  Mr. Lasley                                                               
of DHSS to explain the fiscal notes.                                                                                            
3:26:09 PM                                                                                                                    
CLINTON  LASLEY, Director,  Central  Office,  Division of  Alaska                                                               
Pioneer Homes,  Department of Health and  Social Services (DHSS),                                                               
stated  that the  budget put  forward by  the governor,  and then                                                               
amended by  the governor at the  end of March, would  raise rates                                                               
reflective  of what  it truly  costs  to provide  services.   The                                                               
structure in  which the  fiscal notes  were set  up was  that the                                                               
entire general fund (GF) portion  of the Pioneer Homes component,                                                               
which is  the component that  operates the homes  themselves, was                                                               
removed and general funds were put  into a new component that was                                                               
specifically   for   assisting   those  individuals   that   need                                                               
assistance to pay,  so it is a payment assistance  component.  In                                                               
the  subcomponent  for  the   Pioneer  Homes  payment  assistance                                                               
component there is $20.9 million,  but in the governor's proposal                                                               
there is no  funding and currently the $33 million  that has been                                                               
in the Pioneer  Homes component is no longer there.   The purpose                                                               
of that was because current  statute protects all elders who live                                                               
in any  of the  Pioneer Homes  such that if  they cannot  pay the                                                               
rates  that  are   charged,  they  may  apply   for  the  payment                                                               
assistance  program.    Statute  specifies how  that  program  is                                                               
managed and  there are specifications  on income limits  and what                                                               
portion a  resident may keep  for personal needs and  for federal                                                               
taxes  and a  spouse in  the  community.   The remaining  portion                                                               
would be  paid to the  Pioneer Homes and whatever  the difference                                                               
between the  rates at the Pioneer  Homes and the amount  that the                                                               
resident  needs for  assistance  would  be paid  by  the state  -                                                               
historically  out   of  normal  general  funds,   but  under  the                                                               
governor's proposal  it would come  out of a new  component which                                                               
is specifically  only to be  used for payment assistance,  so for                                                               
those that truly need assistance.                                                                                               
3:28:48 PM                                                                                                                    
REPRESENTATIVE FIELDS  interjected that  a key question  here is,                                                               
What is the elasticity of demand  for people to enter and stay in                                                               
a Pioneer  Home?  He argued  that by setting price  points at the                                                               
cost of care  the department's assumption is that  demand for the                                                               
Pioneer  Homes  is highly  inelastic  -  whatever price  is  set,                                                               
people are  going to enter the  Pioneer Homes at that  level.  He                                                               
said it  is fair to assume  that demand for the  Pioneer Homes is                                                               
relatively  inelastic, but  that it  definitely isn't  completely                                                               
inelastic.  This  bill is important because right  now 51 percent                                                               
of the residents are self-paid  people and it is really important                                                               
to  retain a  payer mix  that includes  some self-pay  along with                                                               
people who are  very reliant on the state for  subsidies.  Losing                                                               
the  self-pay  population  is  not  wanted.    From  a  financial                                                               
perspective  it is  better to  have someone  who is  paying 80-90                                                               
percent of the cost  of a given level of care than  it is to have                                                               
someone who is paying 0 percent of the cost.                                                                                    
REPRESENTATIVE  FIELDS  related  that   he  compared  prices  for                                                               
assisted living  throughout the  region.  He  said he  found that                                                               
the cost of  assisted living in the  Pacific Northwest frequently                                                               
ranges  between $5,000  and $6,000  per month,  which is  why the                                                               
bill has an attractive rate structure  to get people in the door.                                                               
It  would   remain  competitive   at  Level   II  and   would  be                                                               
significantly  more expensive  at Levels  III and  IV, but  he is                                                               
trying  to  get   people  in  the  door   because  that  self-pay                                                               
population is  really important for  the financial health  of the                                                               
Pioneer Homes.  He has no  objection to the ethical decision that                                                               
[the state] should go to a  need-based model.  As proposed by the                                                               
Pioneer Homes,  his concern is  an economic  one.  If  prices are                                                               
set  too high  in a  competitive marketplace,  customers will  be                                                               
lost.   There aren't  a lot  of institutions  out there  like the                                                               
Pioneer Homes, but when families  are looking around the country,                                                               
regardless of whether they have  limited or significant means, if                                                               
the prices  are that high, he  is worried the Pioneer  Homes will                                                               
lose a significant percentage of the self-pay population.                                                                       
3:31:02 PM                                                                                                                    
REPRESENTATIVE  TARR acknowledged  that there  is a  fast growing                                                               
senior  population  and  so  it  seems that  demand  won't  be  a                                                               
problem.   She  said she  appreciates the  department wanting  to                                                               
make sure there  were funds available for people  who didn't have                                                               
the  ability to  pay and  she  also appreciates  the move  toward                                                               
capturing the  people who can.   She  noted the bill  would raise                                                               
the  rates  and  secondarily  would  try  to  maintain  this  new                                                               
[needs]-based pot of money that was  going to be the general fund                                                               
portion.   The  fiscal  note  says the  difference  would be  $13                                                               
million to  fund the gap  between charge  rates and full  cost of                                                               
services for the  residents on private pay.  There  would be some                                                               
increase  in revenue  from the  increased rates  and hopefully  a                                                               
healthy  percentage   of  fully   private-pay  people   would  be                                                               
maintained.  The  increased rates would also help  offset what is                                                               
trying to be accomplished by  having the needs-based system.  She                                                               
asked how to blend the two sets of numbers.                                                                                     
3:32:45 PM                                                                                                                    
MR. LASLEY  responded that the  current structure of  the Pioneer                                                               
Homes is a needs-based system,  but [the department] has not been                                                               
charging the rates  that reflect the needs.   Therefore, everyone                                                               
who lives  in the Pioneer  Homes, regardless of whether  they are                                                               
private pay today,  is being subsidized by the state  and this is                                                               
anywhere from 40  percent to a little over 100  percent.  That is                                                               
where  the  $33  million  the department  has  been  spending  in                                                               
general fund in the Pioneer  Homes component comes in because the                                                               
department isn't charging rates  equivalent.  Under CSHB 96(STA),                                                               
if the current pair mix and the  current level of care mix in the                                                               
home is  looked at and what  is anticipated for fiscal  year (FY)                                                               
2020, the maximum  amount that [the department] would  be able to                                                               
charge is  $13 million  less than  what it  costs to  provide the                                                               
service.  There  would need to be $13 million  in general fund in                                                               
the Pioneer  Homes component in  order to make up,  because under                                                               
the  current proposal  from the  governor the  payment assistance                                                               
component is  only for payment  assistance.  For example,  if the                                                               
rate was $13,000 and [the  department] was only charging $10,000,                                                               
[the department]  couldn't draw  that extra  $3,000 a  month from                                                               
the  payment assistance  component  because the  resident is  not                                                               
truly  on payment  assistance, [the  department] is  not charging                                                               
the resident for it.  Same  today - for those individuals who are                                                               
on Medicaid,  for example,  [the department]  charges a  rate for                                                               
Medicaid,  [the department]  only  gets  a certain  reimbursement                                                               
rate; that  cannot be drawn  down from payment assistance.   "And                                                               
so,"  Mr.  Lasley  continued,   the   intent  of  this  from  the                                                               
governor's  bill is  to truly  charge  what it  costs to  provide                                                               
services  knowing that  there  is the  protection  in place  that                                                               
those  individuals that  are on  Medicaid -  it would  not affect                                                               
Medicaid Waiver  because we have  a set rate -  those individuals                                                               
that are currently  on payment assistance it would  not affect in                                                               
any way  because they're already  paying the maximum  amount that                                                               
they can  under the  formula of  the payment  assistance program.                                                               
And those  individuals who are  currently private pay,  but still                                                               
being  subsidized by  the state,  would pay  what they  could pay                                                               
under the  payment assistance formula  that's set in  statute and                                                               
the  remainder amount  would be  subsidized by  the state  and be                                                               
captured in that payment assistance component.                                                                                  
3:35:34 PM                                                                                                                    
REPRESENTATIVE  TARR  surmised the  difference  is  from the  $33                                                               
million to the  $13 million.  The bill would  get [the state] $20                                                               
million ahead in  the financial problem because it  would go from                                                               
the $33 million for the general  fund subsidy down to $13 million                                                               
with implementation of the bill.                                                                                                
MR. LASLEY  answered there still  would be the $33  million; just                                                               
$20 million is  in the payment assistance  general fund component                                                               
and $13 million.  When  doing the original analysis for proposing                                                               
the rate increases, and looking at  the budget and how to pay for                                                               
services if [the  state] truly needs to not spend  more than what                                                               
it is  earning, [the state] can't  earn the money if  [the state]                                                               
is not  at least charging  for it.   Proposing rate  increases of                                                               
that amount was  not an easy decision to make.   The proposal put                                                               
forward  is  a  true  needs-based  system,  [the  state]  is  not                                                               
subsidizing those  individuals who  may have  the ability  to pay                                                               
for the  services.  Everyone  would use  the program that  is set                                                               
forward under statute, which is  payment assistance, and pay what                                                               
they  can pay,  and  the  remainder would  be  subsidized by  the                                                               
state.   So, in any  of these  proposals the general  fund amount                                                               
really doesn't change, it just is  where the money is coming from                                                               
  whether it is coming  from true payment assistance or mandating                                                               
the  $13 million  under  the  bill because  not  enough is  being                                                               
charged  to provide  the services.   In  the initial  analysis of                                                               
raising the rates  to what it truly costs to  provide services it                                                               
was  estimated that  revenue  would be  increased  by about  $5.7                                                               
million, which  is still nowhere  near what it costs  [the state]                                                               
to provide the service.                                                                                                         
3:37:40 PM                                                                                                                    
REPRESENTATIVE  FIELDS   said  the   aforementioned  is   a  good                                                               
description.  Put  another way, he continued, is  that either the                                                               
bill or the proposed rates  and regulation would increase revenue                                                               
to  the state  next year.   If  the administration's  regulations                                                               
went through, the question is how  much of that would actually be                                                               
captured in revenue  because very few people will be  able to pay                                                               
that.  The Medicaid daily  rate for residential support living is                                                               
$162.70 per  day, which comes  out to  a little less  than $5,000                                                               
per month.  So, once  the department has captured people's assets                                                               
and they have  qualified for Medicaid, the state is  not going to                                                               
capture anywhere near the department's  advertised rates.  If the                                                               
department adopts these  rates, the question is what  will be the                                                               
gap  between   advertised  rate  and  what   the  state  actually                                                               
captures.  An analogous question  is what the complex interaction                                                               
will  be  in  two  to  five  years  of  some  private-pay  people                                                               
departing from the Pioneer Homes.   Representative Fields posited                                                               
that there  would be a larger  mix of people who  are effectively                                                               
paying nothing or are on the  Medicaid daily rate.  But under his                                                               
bill, he posited further, more  of those private-pay people would                                                               
stay in  the system  with the  relatively more  affordable rates.                                                               
Either way  the state is going  to increase revenue in  the short                                                               
term and his  hope is that revenue is increased  in a sustainable                                                               
manner that does not unintentionally  push private-pay people out                                                               
of the system.                                                                                                                  
3:39:34 PM                                                                                                                    
CO-CHAIR  SPOHNHOLZ requested  clarification from  Representative                                                               
Fields that he said only 54 percent are currently self-pay.                                                                     
REPRESENTATIVE  FIELDS clarified  that 51  percent are  self-pay.                                                               
He acknowledged Mr. Lasley correctly  stated that self-pay is not                                                               
self-pay  per se,  because they  are  not paying  the full  rate.                                                               
However, he continued, they are  paying a significant amount that                                                               
does make  the homes more  financially sustainable.  He  wants to                                                               
ensure  that [the  Pioneer  Homes] still  have  a large  self-pay                                                               
population even if it is only 80 percent of the full cost.                                                                      
CO-CHAIR SPOHNHOLZ  compared the current rates  to those proposed                                                               
by the  administration and those  proposed by CSHB 96(STA).   She                                                               
noted  that for  Level  I the  current rate  is  almost $2,600  a                                                               
month, the  administration has proposed  $3,800 a month,  and the                                                               
bill proposes  $3,100, which is  still a substantial  increase in                                                               
rates.    For the  highest  [level]  the  current rate  is  about                                                               
$6,800,  the administration  is proposing  $13,000, and  the bill                                                               
proposes $10,000.                                                                                                               
REPRESENTATIVE FIELDS  responded that  Level IV is  a challenging                                                               
level because these  are largely going to be  folks with dementia                                                               
with a  very high acuity level  for assisted living.   He said he                                                               
doesn't know that  $10,000 is the perfect number,  but $13,000 is                                                               
such a high  rate compared to other assisted living  care in this                                                               
region that  it could cause  people to  flee and deter  them from                                                               
ever entering the Pioneer Homes to begin with.                                                                                  
CO-CHAIR  SPOHNHOLZ asked  Mr. Lasley  whether dementia  patients                                                               
are typically Level IV, because  her understanding was that these                                                               
patients  are  typically  Level  V.   She  requested  Mr.  Lasley                                                               
describe the difference between Level IV and Level V.                                                                           
MR. LASLEY answered  that a little over 50 percent  of the elders                                                               
in the  Pioneer Homes are at  the current Level III,  the highest                                                               
level of care, and those  individuals primarily would move to the                                                               
new Level  IV.   He said  the gap is  primarily in  [the current]                                                               
Level II.   Individuals move  into the home  at Level I  or Level                                                               
II, but there  is a big gap  at the Level II  because the current                                                               
Level II requires  that the individual only  receive nursing care                                                               
during the  day.  As  individuals age  in place they  maybe don't                                                               
need 24-hour a day nursing care  seven days a week, so they don't                                                               
move to the  current Level III.  As their  acuity level continues                                                               
to increase,  they sort of get  trapped at that high  level of II                                                               
because they don't  meet that definition of Level III.   So, [the                                                               
Pioneer Homes  would] try to move  the current 50 percent  of the                                                               
population up  to a Level  IV, and then  Level II would  be split                                                               
into  two levels  of  care.   The  Level V  that  is proposed  is                                                               
individuals with  complex behaviors that [the  Pioneer Homes] are                                                               
not currently serving.                                                                                                          
CO-CHAIR SPOHNHOLZ  stated that a current  challenge in providing                                                               
for  Alaska's  elder  community is  ensuring  adequate  care  for                                                               
people with dementia.  She  inquired about the difference between                                                               
Level IV and Level V as  they relate to that and further inquired                                                               
what "complex care"  means.  She requested Mr. Lasley  to be more                                                               
specific about the  kinds of care at Level V  and whether care is                                                               
being provided to people with dementias at Level IV.                                                                            
MR. LASLEY replied that the  proposed Level V, complex behaviors,                                                               
are individuals with dementia that  may have excessive wandering,                                                               
elopement  issues where  they try  to leave  the building,  self-                                                               
harm,  aggressive to  themselves or  others.   Under the  current                                                               
model,  the  Pioneer   Homes  have  not  been   caring  for  this                                                               
population, but oftentimes  these individuals are inappropriately                                                               
placed  in  emergency  rooms  or  maybe  the  Alaska  Psychiatric                                                               
Institute  (API).   Last year  capital funding  was requested  to                                                               
help take  a neighborhood within  the Anchorage Pioneer  Home and                                                               
build out  a complex  behavior neighborhood  to serve  that need.                                                               
Current Level III  individuals with dementia can  progress in the                                                               
dementia through their life, so  [the homes] may have individuals                                                               
at the  lower level of dementia  all the way up  to starting some                                                               
wandering or  a lot of memory  loss, who cannot do  activities of                                                               
daily living on their  own, and then all the way  to the point of                                                               
getting closer  to end of life  to where they are  heavy dementia                                                               
but bedridden.  So there is a large gap in there.                                                                               
3:45:33 PM                                                                                                                    
REPRESENTATIVE FIELDS  added that Level  V is an  important thing                                                               
to mention  because this is  actually a significant  cost savings                                                               
opportunity for  the state at large.   Right now there  are folks                                                               
who could be  in a prospective behavioral  health neighborhood in                                                               
the  Anchorage Pioneer  Home.   These  folks  currently cost  the                                                               
state over  $500,000 a  year at  API or  similar levels  at other                                                               
facilities  that aren't  well suited  for these  seniors; API  is                                                               
really not an  ideal place to house these seniors.   So, while it                                                               
sounds expensive to have Level V  in the Pioneer Homes, the Agnew                                                               
Beck Report  details that  this would actually  save the  state a                                                               
lot of money and would be safer for seniors.                                                                                    
CO-CHAIR SPOHNHOLZ  agreed with  the aforementioned,  noting that                                                               
back-of-the-hand math indicates it costs  the state about $40,000                                                               
a month to  keep somebody at API.   He said if it can  be done at                                                               
half of that at the Pioneer  Home, which is a more supportive and                                                               
home-like environment, that is probably  better for everyone.  As                                                               
well,  it would  be a  very  significant cost  savings and  would                                                               
ensure that  API can be  used for people  that only API  can care                                                               
for, which is a very significant population.                                                                                    
REPRESENTATIVE  FIELDS related  that Mr.  Lasley did  a good  job                                                               
describing  to  the  State Affairs  Standing  Committee  how  the                                                               
population  at the  Pioneer Homes  has  changed over  time.   Mr.                                                               
Lasley said  the population used  to be  more of a  cocktail hour                                                               
crowd   self-supporting  people who have a  great assisted living                                                               
facility to  live out their  final years.   Whereas now it  is an                                                               
older population  with a  greater spectrum  and higher  acuity of                                                               
need and  CSHB 96(STA) really reflects  that.  The Level  V shows                                                               
how much that spectrum has broadened as the needs have changed.                                                                 
3:47:37 PM                                                                                                                    
CO-CHAIR ZULKOSKY  asked whether it  is correct that  the Pioneer                                                               
Homes, through regulation,  are able to adjust the  rates with or                                                               
without this legislation.                                                                                                       
REPRESENTATIVE FIELDS  confirmed that  is correct.   He  said the                                                               
bill would effectively cap the  extent to which the Pioneer Homes                                                               
can  raise the  rates and  it would  allow the  Pioneer Homes  to                                                               
capture significantly more revenue.   However, the bill would not                                                               
allow the  Pioneer Homes to set  as high of rates  as proposed in                                                               
the current draft regulations.                                                                                                  
CO-CHAIR ZULKOSKY  offered her understanding  that the  bill does                                                               
increase  rates  as Co-Chair  Spohnholz  indicated,  but with  an                                                               
intention to find some rationale  for basing those costs and also                                                               
finding some compromise in bringing in receipts where possible.                                                                 
REPRESENTATIVE FIELDS confirmed  that is correct.   He related he                                                               
has heard  from many  people who  are scared  or angry  about the                                                               
proposed rate increases.  He  sympathizes with the department and                                                               
how  DHSS wants  to  capture new  revenue, but  he  thinks it  is                                                               
really  important to  share respect  for the  state's elders  and                                                               
have  rates  that  are  affordable and  that  the  Pioneer  Homes                                                               
3:49:00 PM                                                                                                                    
REPRESENTATIVE  PRUITT  asked  when   the  rates  had  last  been                                                               
MR. LASLEY responded that there  was an 8.5 percent rate increase                                                               
in 2016, a 1 percent [increase]  in 2017, which was equivalent to                                                               
Social Security, and no rate increase in 2018.                                                                                  
REPRESENTATIVE  PRUITT  surmised  the  rates  have  been  changed                                                               
fairly regularly as needed.                                                                                                     
MR. LASLEY  answered that  they have  not been  raised at  a rate                                                               
that  has kept  up with  inflation.   He said  the department  is                                                               
trying  to  make  a  correction  now and  then  come  up  with  a                                                               
methodology in  policy that would  set an expectation  that rates                                                               
would be raised (indisc.) some form,  whether it be CPI or Social                                                               
Security.   There  are many  variations of  CPI.   A health  care                                                               
economist recently  advised him  that [the department]  should be                                                               
looking at  the health care  CPI, which  is much higher  than the                                                               
CPI shown in  the slides from Representative Fields.   Last year,                                                               
for  instance, health  care  CPI in  the state  of  Alaska was  7                                                               
percent.    So,  the  challenge  has been  that  even  with  rate                                                               
increases, this  bill does not  get to  what it truly  costs [the                                                               
department] to  provide service.   Secondly, [the  department] is                                                               
not  keeping up  with the  cost of  health care  in the  state of                                                               
REPRESENTATIVE  PRUITT  inquired  about the  annual  increase  in                                                               
delivering care through the Pioneer Homes.                                                                                      
MR.  LASLEY  replied that  after  talking  with the  health  care                                                               
economist he  looked at the  budgets from  the past 15  years and                                                               
looked at the cost of health  care CPI for urban Alaska, which is                                                               
the sector  to look at,  and the cost is  right in line  with the                                                               
health care CPI.   On average in the state of  Alaska it is about                                                               
4.5-5.0 percent  a year for  health care  cost in the  state, and                                                               
last year was 7 percent.                                                                                                        
REPRESENTATIVE  PRUITT  surmised  that  those  changes  are  made                                                               
through a  regulation change  with a  public process  and comment                                                               
time, so therefore it takes a bit of time to make those changes.                                                                
MR. LASLEY responded  correct.  He said that  currently when [the                                                               
department]  puts forward  the proposed  rate increases  it's not                                                               
like [the department] is saying this  is the rates that are going                                                               
to  be; [the  department] is  not  mandating that  these are  the                                                               
rates at the  end of the regulatory process.   The purpose of the                                                               
process being in  regulation is to allow for public  comment.  It                                                               
is now  currently published and  is a 60-day process,  and during                                                               
the 60 days  individuals have the ability to  either make comment                                                               
through public  meetings or send  them in  writing.  All  of that                                                               
information is then  gathered, and the commissioner  looks at all                                                               
of that data  and determines what is in the  best interest of the                                                               
department and the division and the elders.                                                                                     
REPRESENTATIVE PRUITT  asked whether  the bill would  provide the                                                               
ability to recover  costs and [make] change, or  whether the bill                                                               
would provide a cap  and once that cap was hit  there would be no                                                               
way to recover any costs or  make those changes or go through the                                                               
60-day process  of changing regulations  to deal with  the impact                                                               
of increased CPI for medical in Alaska.                                                                                         
MR.  LASLEY answered  that, if  passed, the  bill would  take the                                                               
ability  for  the  department  to  manage  the  finances  of  the                                                               
division and  put it with  the legislature since it  would become                                                               
statute,  so  [the  department] would  not  have  the  regulatory                                                               
REPRESENTATIVE  PRUITT  remarked that  this  would  be a  classic                                                               
scenario  of "it  takes  an  act of  Congress  to  make a  change                                                               
there.   In this case it would  take an act of the legislature to                                                               
be able  to make these  changes.  He  inquired about how  easy it                                                               
would be to make changes in  this particular case and whether Mr.                                                               
Lasley  sees  this  as pretty  much  permanent.    Representative                                                               
Pruitt posited that  the fiscal note is probably  wrong in regard                                                               
to the  set amount of  cost and  therefore it should  be expected                                                               
that  there would  be  an  increase to  the  State  of Alaska  in                                                               
general fund because the number will  have been set at a specific                                                               
amount that cannot be raised.                                                                                                   
MR. LASLEY replied  it would be the anticipation  under this bill                                                               
that the  department would  have to  come before  the legislature                                                               
every year  and re-look at  this because if anything  changes and                                                               
there  is additional  cost to  the division  there is  no way  to                                                               
recapture those funds  and they would be set in  statute and [the                                                               
department]  would be  set to  a formula  that it  has no  way of                                                               
managing.   As the  subject matter  experts the  department would                                                               
have to come and ask for a change.                                                                                              
3:55:42 PM                                                                                                                    
REPRESENTATIVE FIELDS noted that as  a practical reality, CPI has                                                               
risen twice  as fast as rates  since 2004 and, as  pointed out by                                                               
Mr. Lasley, health  care costs have grown much  faster than that.                                                               
So, he said,  the regulatory process has not kept  up with costs.                                                               
He pointed  out that the  bill would  re-base rates to  take into                                                               
account some  of the growth  in costs.   There is a  point beyond                                                               
which  price  increases  are  kind   of  theoretical  because  of                                                               
people's ability  to pay.  The  charge could be $30,000  a month,                                                               
but  if no  one  can  actually pay  that  then  more money  isn't                                                               
actually being  captured and helping  the financial  situation of                                                               
the  Pioneer Homes.    It is  important to  have  rates that  are                                                               
reality based that people can pay.                                                                                              
REPRESENTATIVE  PRUITT stated  that his  point was  just made  by                                                               
Representative  Fields.   Rates  haven't increased  at the  level                                                               
that it costs;  rates have been increased  through the regulatory                                                               
process at  half the CPI.   [The bill]  would set in  statute the                                                               
inability to  raise them  at all,  so as  the CPI  increases [the                                                               
department]  is  going   to  have  to  come  in   front  of  [the                                                               
legislature] every  single time [the  department] has to  make an                                                               
adjustment.  Setting  a rate from which to  start this particular                                                               
year may make  sense, but [the bill] doesn't give  the ability to                                                               
recoup  the cost  going  forward and  that is  a  binding of  the                                                               
hands.  This legislation doesn't look  to the future, it looks to                                                               
what the current situation is and isn't forward thinking.                                                                       
3:57:22 PM                                                                                                                    
CO-CHAIR SPOHNHOLZ  offered her  understanding that  CSHB 96(STA)                                                               
would re-base the rates and would  allow for rates to be adjusted                                                               
annually based on Social Security cost-of-living adjustment.                                                                    
REPRESENTATIVE  FIELDS confirmed  Co-Chair Spohnholz  is correct.                                                               
Addressing  Representative Pruitt,  he  said the  bill does  look                                                               
forward.  By  giving the department the authority  to raise rates                                                               
annually  it's designed  to keep  [the state]  from falling  back                                                               
into this hole like [the stated] did last time.                                                                                 
CO-CHAIR SPOHNHOLZ  said that  in many  respects CSHB  96(STA) is                                                               
designed to be  forward thinking and to make sure  that the cost-                                                               
of-living  adjustment is  taken  into account  and  that a  major                                                               
reform effort  does not have  to be  launched in order  to adjust                                                               
rates moving forward.                                                                                                           
REPRESENTATIVE FIELDS concurred.  He  offered that if it would be                                                               
the committee's  preference to have  a medical CPI as  the annual                                                               
cost  inflator, he  would be  supportive.   He noted  he has  had                                                               
discussion with the department about  what is the best annual way                                                               
to keep pace with increasing cost.                                                                                              
CO-CHAIR SPOHNHOLZ  recalled Mr.  Lasley's statement  that health                                                               
care inflation went up 7 percent  last year.  But, she noted, not                                                               
all the costs at the Pioneer  Homes are health care related; many                                                               
are akin  to traditional  CPI because they  are costs  for people                                                               
who do laundry,  deliver food, or other  day-to-day living costs.                                                               
She therefore inquired how the  department came up with using the                                                               
Social Security  COLA to Representative Fields  instead of health                                                               
care inflation or CPI.                                                                                                          
MR. LASLEY answered that when  he talked to Representative Fields                                                               
before  they  were  talking  about   under  the  current  payment                                                               
assistance program, for which  the Social Security cost-of-living                                                               
increase  has always  been used  because it  was determined  that                                                               
individuals on  payment assistance  have no  additional resources                                                               
to pay for services and so  the state is already subsidizing them                                                               
an  amount determined  under the  formula of  payment assistance.                                                               
The  only additional  increase in  revenue that  they would  have                                                               
every  year  is primarily  Social  Security,  and  it is  set  in                                                               
statute  that   [the  department]   would  have  to   review  any                                                               
additional  revenue  that they  have.    When talking  about  the                                                               
health  care  CPI, 81  percent  of  the  cost for  operating  the                                                               
Pioneer  Homes is  personnel and  almost  all of  that is  direct                                                               
care.  Out of the 600 staff  within the homes, 150 are not direct                                                               
care staff operating the 24-hour  facility and 144 of those staff                                                               
are laundry,  housekeeping, and food service  currently.  Usually                                                               
those individuals  are at the  lower end of  the wage scale.   Is                                                               
health  care CPI  the right  number?   That was  a recommendation                                                               
made to  him by a  health care economist  listening in on  one of                                                               
the board  meetings.  It is  known that the Social  Security rate                                                               
of increase is not keeping up  with the cost of inflation and the                                                               
cost of providing the services.   That is why he did a comparison                                                               
of what  was it costing to  provide the services knowing  that 81                                                               
percent  of that  is personnel.   He  compared it  against health                                                               
care CPI after the health  care economist's recommendation and it                                                               
was pretty close to the same.                                                                                                   
CO-CHAIR  SPOHNHOLZ  asked  whether  Mr. Lasley  just  said  that                                                               
health care  inflation is  pretty close to  what the  increase in                                                               
[Pioneer Home] expenses is from year to year.                                                                                   
MR.  LASLEY replied  yes.    When doing  the  comparison he  took                                                               
health care  CPI and looked back  15 years at the  Pioneer Homes'                                                               
true cost  of providing services  and it  is almost in  line with                                                               
4:01:49 PM                                                                                                                    
REPRESENTATIVE  DRUMMOND inquired  whether  the  State of  Alaska                                                               
owns all the  Pioneer Homes and Veterans Homes and  that they are                                                               
not leased.                                                                                                                     
MR. LASLEY responded correct.                                                                                                   
REPRESENTATIVE   DRUMMOND  surmised   that   these  rates   cover                                                               
operating costs  and services  delivered to  the residents.   She                                                               
asked whether [the division] has  money set aside for maintenance                                                               
or major  maintenance or  whether that  is something  the Pioneer                                                               
Home  system has  to come  to the  state for  if a  major capital                                                               
improvement or roof repair is  needed.  She further asked whether                                                               
money is  set aside for  that or whether  it goes on  the capital                                                               
budget as a separate request.                                                                                                   
MR. LASLEY  answered it is  both.   Minor repairs are  set within                                                               
[the  division's] budget  and  the capital  budget  pays for  the                                                               
large projects, so those are a capital request.                                                                                 
CO-CHAIR SPOHNHOLZ asked  how much of [the  division's] costs are                                                               
related to health care delivery.   She clarified she is trying to                                                               
understand the  distinction between what  sort of a  standard CPI                                                               
adjustment and  what is  related to  health care  cost increases,                                                               
and what the ratio is.                                                                                                          
MR.  LASLEY replied  he does  not have  the exact  percentage and                                                               
will get back to the committee with an answer.                                                                                  
CO-CHAIR SPOHNHOLZ said understanding  that ratio is important to                                                               
her because she appreciates that  the bill would allow for annual                                                               
cost  of living  increases that  will be  faced that  the current                                                               
rate  structure hasn't  taken into  account and  which has  meant                                                               
that every  once in a  while [the  department] has done  a little                                                               
jump-up that  hasn't kept up with  cost of services.   [The bill]                                                               
finds a  compromise position  because there is  a lot  of concern                                                               
amongst people  who are at the  Pioneer Homes and the  people who                                                               
love  them.   Providing some  certainty is  important and  to her                                                               
there is a value statement that  caring for the state's elders is                                                               
an important thing  when she thinks about the  people who changed                                                               
their children's diapers, put their  children through school, and                                                               
helped their children along their way.   There is value in caring                                                               
for elders  and it  isn't necessarily important  to her  that 100                                                               
percent of  the cost of doing  services is recovered.   There are                                                               
some things  that are  just a good  thing to do  and that  she is                                                               
proud of  as an  Alaskan.  She  would like to  come up  with some                                                               
sort of  a compromise that  works that recognizes what  true cost                                                               
growth is.   It's probably not 100 percent  health care inflation                                                               
and probably not just CPI.   It would be helpful if some rational                                                               
compromise  is identified  that is  based on  what percentage  of                                                               
monthly expenses are related to health care and what are not.                                                                   
MR. LASLEY responded he agrees  with Co-Chair Spohnholz.  He said                                                               
the proposal put forward was not  an easy decision to make and he                                                               
struggles with  it every day because  his job is to  care for the                                                               
state's elders.  The governor's proposal  is to truly make this a                                                               
needs-based  system  and what  is  being  proposed is  that  [the                                                               
department] charge what it costs  to provide services.  Yes, [the                                                               
Pioneer Homes]  are classified  as assisted  living but  they are                                                               
providing  services through  the  end  of life.    Many of  those                                                               
individuals who  are primarily at  [the current] Level  III would                                                               
not be accepted at a  traditional assisted living facility.  [The                                                               
division's] mission  is to provide  elders a home in  a community                                                               
celebrating life  through its  final breath  and that  is exactly                                                               
what [the division] does.  The  governor's proposal in this is to                                                               
provide  the  assurance  that  there   is  a  payment  assistance                                                               
program, which  is set in statute,  and to charge the  rates that                                                               
truly reflect what it costs  [the state] to provide services, but                                                               
knowing that  there is that  payment assistance program  that has                                                               
been set  in statute for  many years to protect  every individual                                                               
65 and older  that needs to live in a  Pioneer Home regardless of                                                               
their ability to pay.                                                                                                           
4:06:55 PM                                                                                                                    
CO-CHAIR  SPOHNHOLZ offered  her  appreciation  for Mr.  Lasley's                                                               
comments.   She said  she thinks  it is  an honest  difference of                                                               
opinion around the  rate proposals being put  forward by Governor                                                               
Dunleavy's administration  is that  it's always highest  and best                                                               
that the  Pioneer Homes  charge the  highest rates.   There  is a                                                               
certain amount  of value  and dignity  in being  able to  pay for                                                               
yourself that a lot of people  would like to continue to be self-                                                               
pay for  as long as  possible.  Increasing rates  so dramatically                                                               
will require a  lot of people to spend down  all of their assets,                                                               
sending them  into public assistance, which  is psychologically a                                                               
difficult burden  for a  lot of people.   Historically  the state                                                               
has said  the Pioneer Homes didn't  have to operate on  full cost                                                               
recovery.   She has heard from  people in emails and  phone calls                                                               
that  this forces  them to  spend down  every last  bit of  their                                                               
assets and go  on to public assistance much earlier.   There is a                                                               
perceived  lack  of dignity  that  comes  with  that and  she  is                                                               
included to go with her elders on this difference of opinion.                                                                   
REPRESENTATIVE  FIELDS  added  that  a  particularly  challenging                                                               
circumstance is  that of a  married couple  with one spouse  in a                                                               
Pioneer Home  and the other spouse  living independently, perhaps                                                               
in the  home they  shared for 50  years.  He  has heard  from his                                                               
constituents  that the  very, very  high  rates are  particularly                                                               
threatening for  those independent  couples where one  person has                                                               
dementia and  the other  is still working  trying to  self-pay at                                                               
the Pioneer  Home, and  these new proposed  very high  rates from                                                               
the administration just put them  in an impossible situation.  It                                                               
is different than  just one person who  is on his or  her own and                                                               
maybe they pay  or maybe they can't, and they  are in the Pioneer                                                               
Home already.  [The state]  should be respectful of those couples                                                               
where one spouse is caring for another in the Pioneer Home.                                                                     
4:09:48 PM                                                                                                                    
CO-CHAIR  ZULKOSKY noted  there is  no invited  testimony on  the                                                               
bill.  She opened public testimony.                                                                                             
4:10:31 PM                                                                                                                    
BRAD RIDER  testified in support of  HB 96.  He  said his parents                                                               
are in the  Pioneer Home, and that the Pioneer  Homes are amazing                                                               
and something  that should be held  up for everyone to  see.  The                                                               
state long  ago offered to  help its  seniors and that  should be                                                               
continued.  Cultures from the  beginning of time across the world                                                               
have  taken care  of their  elders.   For this  administration to                                                               
have said "it's time to rip the Band-Aid off is disgusting.                                                                     
4:11:57 PM                                                                                                                    
FRED KOKEN  testified in  support of  HB 96.   He  said he  was a                                                               
financial consultant  for 30 years  and understands the  need and                                                               
the wisdom  for a balanced  budget.  However, the  proposed level                                                               
of increase  for the Pioneer Homes  going forward is scary.   His                                                               
wife  is currently  a Level  III resident  in the  Juneau Pioneer                                                               
Home and  the amount of  increase they  are looking at  is scary.                                                               
While a  balanced budget is  important, it shouldn't  be balanced                                                               
on the backs of the most vulnerable citizens  Alaska's seniors.                                                                 
4:13:26 PM                                                                                                                    
LUANN MCVEY  testified in support  of HB 96.   She stated  she is                                                               
very worried  about the proposed  current draft  regulations that                                                               
would  make the  Pioneer Homes  unaffordable to  people like  her                                                               
parents who  have lived in Juneau  since 1957.  In  the mid-1980s                                                               
her  88-year-old   father  retired   from  the   National  Marine                                                               
Fisheries  Service and  her 87-year-old  mother retired  from the                                                               
U.S.  Forest Service.    They  have continued  to  live in  their                                                               
Juneau home  assuming they could  eventually move to  the Pioneer                                                               
Home and  afford to  pay for it  themselves.  It  was and  is the                                                               
only affordable long-term  care option available to  them here in                                                               
Juneau.   They applied to and  remain on the Juneau  Pioneer Home                                                               
inactive list.   So far, they  haven't needed to move  there, but                                                               
eventually  they  will.    The rate  increases  proposed  in  the                                                               
governor's  regulations would  make the  Pioneer Home  absolutely                                                               
unaffordable to them.   Her parents are very worried,  as is she,                                                               
about  what is  going to  happen  to them.   She  urged that  the                                                               
Pioneer Home rates be kept  reasonable so people like her parents                                                               
who have spent their lives in  Alaska will not have to spend down                                                               
all their assets and go on public assistance.                                                                                   
4:16:01 PM                                                                                                                    
MARK BADGER  testified in  support of  HB 96.   He  said he  is a                                                               
caregiver for his  parents in Anchorage.  He  recalled visiting a                                                               
102-year-old  man in  the Fairbanks  Pioneer Home  in 1969  whose                                                               
pilot license was signed by Orville  Wright.  It was clear to him                                                               
back then that the Pioneer Homes are  a shrine to a great deal of                                                               
wisdom.  He  has spent the last three years  learning the details                                                               
of Medicaid,  Alzheimer's resources,  and assisted  living homes.                                                               
It is  a very difficult  and people  do not understand  what they                                                               
are going to have  to field at the end of life  and that it isn't                                                               
what they  expect.   There is  no golden net  to catch  people as                                                               
they reach the end of their  lives.  The rate increase is putting                                                               
to a parallel  of private nursing homes, while  the Pioneer Homes                                                               
do not have the same patient to  nurse ratio and are not the same                                                               
as  going  into  private  nursing homes.    The  administration's                                                               
managers are  in charge of executing  this incredibly destructive                                                               
rate increase.   They are saying  no one will be  discharged from                                                               
the  Pioneer Homes  but  will  be moved  to  Medicaid, while  the                                                               
administration  has made  its  disdain clear  for  the number  of                                                               
people on  Medicaid.  He expressed  his strong support for  HB 96                                                               
because it  would provide a  reasoned approach to  the adjustment                                                               
of  rates  and  because  he  believes  that  regulatory  or  rate                                                               
increases should be in the hands of the legislature.                                                                            
4:19:24 PM                                                                                                                    
LAURA BONNER  testified in  support of  HB 96.   She said  she is                                                               
retired and nearly  70 years old and the bill  would keep Pioneer                                                               
and  Veterans homes  affordable.   The  notice  recently sent  to                                                               
residents  is a  slap in  the face  and another  example of  cost                                                               
shifting  in the  governor's  plan for  Alaska.   Alaskans  still                                                               
value their veterans and seniors  and have since 1913.  Residents                                                               
in the homes  nearing the ends of their lives  and their families                                                               
need predictability  in what  the rates  will be.   She may  be a                                                               
[Pioneer Home]  resident in  the future and  she would  need that                                                               
predictability.   The  legislature needs  to find  ways to  raise                                                               
revenues other than from veterans and elders who may be frail.                                                                  
4:21:10 PM                                                                                                                    
SUSAN MILLER  testified in support of  HB 96.  She  said the bill                                                               
attempts to  restrain the effort  of DHSS  to raise the  rates at                                                               
the  Pioneer Homes  well  beyond what  an  average Alaskan  could                                                               
possibly afford.  Because the  rates in the department's proposed                                                               
regulations are  so extraordinarily high, she  can only speculate                                                               
that the goal  is not to pay  the full cost of  all services, but                                                               
rather  to  eliminate the  Pioneer  Homes  entirely or  privatize                                                               
them.   By focusing  on costs the  department ignores  the reason                                                               
for  having  and  needing  the  Pioneer  Homes.    Based  on  her                                                               
experience, people  do not  choose to live  in the  Pioneer Homes                                                               
because they are  looking for a comfortable place to  stay.  They                                                               
live  there  because they  desperately  need  the services  these                                                               
homes provide.   They live there because they can  no longer live                                                               
at home, they  can no longer receive the care  they need at home.                                                               
Her mother  lived in  the Anchorage  Pioneer Home  from 2000-2008                                                               
because  she had  Alzheimer's disease,  a form  of dementia  that                                                               
gradually and inevitably destroys  a person's ability to function                                                               
and eventually kills  them.  She visited her  mother almost every                                                               
night  for  eight  years,  so  she is  quite  familiar  with  and                                                               
appreciative of the Anchorage Pioneer  Home.  She hopes she never                                                               
needs the  facility, but it  would be a  tragedy to take  it away                                                               
from those  Alaskans who do  and will  need those services.   The                                                               
department may  argue that  it has  a payment  assistance program                                                               
that helps  those who cannot afford  the rates they set.   But to                                                               
get that payment  assistance a person must first  pay every penny                                                               
of the person's savings and then  pay all their monthly income if                                                               
they have  any, making the person  a pauper.  The  bill is needed                                                               
to  protect  Alaskans  from  the   unreasonable  fees  that  DHSS                                                               
proposes.   The bill,  however, is  not without  its flaws.   The                                                               
fees in  Section 5 are  too high, especially the  $10,000 monthly                                                               
rate.    She is  also  concerned  that  there  appears to  be  no                                                               
definition of  the terms used  to describe the  services provided                                                               
at  each level.   The  terms for  those services  in the  statute                                                               
differ from those used in  the department's proposed regulations.                                                               
She  receives many  services from  the state  for which  she pays                                                               
nothing, and she  is not sure why her government  has chosen such                                                               
an important  service as the Pioneer  Homes as one for  which its                                                               
users must pay full costs.                                                                                                      
4:24:39 PM                                                                                                                    
SHARON LONG testified in support of  HB 96.  She said her husband                                                               
came to Alaska with  the U.S. Air Force in the  1960s and fell in                                                               
love with  Alaska.  After two  tours he knew Alaska  was home and                                                               
left the Air Force rather than  be transferred.  Now 84 years old                                                               
he  has  spent his  entire  professional  career in  the  private                                                               
sector in  Alaska.  Due  to advancing Parkinson's Disease  he now                                                               
requires the  assisted living services  of the  Anchorage Pioneer                                                               
Home.  She is relating this  so the committee will understand the                                                               
depth of importance  and meaning to her family of  the concept of                                                               
pioneer and home.  The  new supposedly comparable rates suggested                                                               
by  the administration  and, frankly,  the compromise  bill [CSHB                                                               
96(STA)]  before the  committee,  reflect  rates in  institutions                                                               
that  offer individual  rooms  with  considerably greater  square                                                               
footage with  kitchenettes or full kitchens,  private rather than                                                               
shared  bathrooms, heating  and cooling  controls that  work, bed                                                               
sheets  changed  weekly,  ceilings   that  don't  leak  into  the                                                               
residents' rooms, and dependable hot  water for bathing, which is                                                               
not the case  in the Anchorage Pioneer Home.   The administration                                                               
has  not  done  an  apples-to-apples  assessment.    She  thanked                                                               
members   for   attempting   a  legislative   solution   to   the                                                               
unconscionable  approach the  administration  is  pursuing.   She                                                               
encouraged the  committee to craft a  bill that:  1)  repeals the                                                               
regulatory  authority under  which the  administration is  making                                                               
these unprecedented,  ham fisted,  and draconian changes  to both                                                               
the  mission and  the  operation  of the  Pioneer  Homes; and  2)                                                               
confirms the current  existing rates in statute  and links future                                                               
increases  to  the  Social  Security  cost-of-living  adjustment,                                                               
which  is a  rational approach  to increases  and something  that                                                               
families could plan for.  Her  husband of 40 years and his fellow                                                               
residents who write a check every  month to the state are fearful                                                               
of these machinations which threaten  to drive them from the only                                                               
place they call home and  financially break their families.  They                                                               
are scared  and bewildered.   She is  at the Pioneer  Home nearly                                                               
every  day and  has  come  to know  and  appreciate  many of  the                                                               
residents who  are truly pioneers  and dedicated Alaskans  who in                                                               
many cases  have served the state  long and well.   She urged the                                                               
committee to do right by them.                                                                                                  
4:27:45 PM                                                                                                                    
ROCKY PLOTNICK  testified in support  of HB  96.  She  stated she                                                               
lives  in her  own home  while her  husband is  currently in  the                                                               
Anchorage Pioneer Home.  She agreed  with Ms. Long that people in                                                               
the Pioneer Home are afraid.   They fear the proposed regulations                                                               
will  go  forward  and  be  implemented  and  these  people  feel                                                               
helpless.   She  encouraged the  committee to  move forward  with                                                               
some version of HB 96.  While the  bill may not be perfect, it is                                                               
a  limit, and  somewhat of  a compromise.   Knowing  the timeline                                                               
with the  legislature and that  the public comment  [deadline] on                                                               
the regulations is 5/28/19, time is  ticking.  So she hopes HB 96                                                               
will be moved soon or that there  will be a companion bill in the                                                               
Senate because a bill is hope to the seniors.                                                                                   
4:29:48 PM                                                                                                                    
JANET MACCLARENCE  testified in support of  HB 96.  She  said she                                                               
is currently  a resident of  the Pioneer  Home and will  be until                                                               
4/25/19.   She  has  given  notice that  she  is  moving into  an                                                               
apartment with one bedroom and one  bath for $1,300 a month, plus                                                               
$100  in utilities,  plus whatever  she adds  to it  for support.                                                               
The combination of  expenses for herself and her  husband will be                                                               
less  than the  $5,000  a  month they  are  currently paying  and                                                               
certainly much less than the $7,200  a month they would be paying                                                               
with the  proposed increase.   She has Crohn's Disease,  which is                                                               
aggravated by  stress, and  she is the  caretaker of  her husband                                                               
who is  the survivor of  a massive stroke.   She and  her husband                                                               
were co-presidents  of the  Resident Council,  but had  to resign                                                               
because  they  needed  to  be   in  a  less  stressful  and  more                                                               
predictable environment.   The bill would  go a long way  to make                                                               
the Pioneer Homes a more  predictable environment.  She concurred                                                               
that the  atmosphere in the  Pioneer Home is fearful,  people are                                                               
very  concerned about  their ability  to continue  to retain  any                                                               
kind  of dignity  in an  environment that  forces them  to become                                                               
complete paupers  in order  to receive services.   She  urged the                                                               
committee to support  and honor the people who have  done so much                                                               
and who deserve an honorable exit.                                                                                              
4:33:08 PM                                                                                                                    
JUSTIN PARISH testified in support of HB  96.  He said it is only                                                               
right to  provide some assurance  to elders that the  rates won't                                                               
be  doubled at  the whim  of  the state.    It is  a clear  moral                                                               
imperative to  take care of  the state's  elders, as is  done for                                                               
the state's  youth.  Some  degree of assurance must  be provided,                                                               
and the bill would  do a great job of that.   The automatic price                                                               
adjustment with  time is appreciated  and he hopes it  won't need                                                               
to be revisited in the future.  He thanked the bill's sponsors.                                                                 
4:35:01 PM                                                                                                                    
DEBBIE TILSWORTH testified  in support of HB 96.   She stated the                                                               
bill is a thoughtful piece of  legislation and an attempt to find                                                               
middle  ground  between  Mr.  Lasley's  proposed  rates  and  the                                                               
current  rate  structure.    She  said  bravo  to  Representative                                                               
Spohnholz'  statement  about  dignity  and  respect.    When  her                                                               
mother, who self-pays,  moved into the Pioneer Home  no one asked                                                               
her how  much money she had.   The new model  worries her because                                                               
she  can foresee  a  day when  seniors are  looked  at as  either                                                               
assets or  liabilities.  If  the state starts treating  people as                                                               
transactions rather than valued elders,  then the state will be a                                                               
colder and  poorer place to  be.   Increases of the  magnitude in                                                               
the bill,  which are  20-30 percent,  need to  be phased  in over                                                               
time.    Current  residents  should  be  grandfathered  into  the                                                               
current  rate structure  with  annual cost  of  living or  modest                                                               
increases.   Fifteen years ago  the University of  Alaska changed                                                               
its  benefits   structure  and   it  grandfathered   the  current                                                               
employees with benefits in effect  at that time; future employees                                                               
would come  in under  different rules.   The university  ended up                                                               
with  Tier 1,  2,  and 3  benefits; the  rules  did not  suddenly                                                               
change  for  existing  employees.   The  state  wisely  used  the                                                               
approach of  phasing in the new  structure and she asks  for that                                                               
same wisdom  now.  She does  not buy into the  governor's premise                                                               
or Mr. Lasley's  shock therapy that huge  increases are necessary                                                               
in one year.  It would  create havoc with the residents' personal                                                               
budgets, and  it would not  gain the  state much money  after the                                                               
first year  or two.   While  [the administration]  estimated $5.7                                                               
million,  she came  up with  $4.8  million; and  while the  state                                                               
might get that in year one, what  about years two and three?  The                                                               
state won't gain what [the  administration] thinks it will and it                                                               
will  drive self-paying  residents  like her  mother  out of  the                                                               
Pioneer Home.   One thing she  does agree with in  the governor's                                                               
approach, as well as the  co-sponsors of the legislation, is that                                                               
the current services of the Pioneer  Homes need to continue.  The                                                               
staff is excellent,  the care is superb, and she  has nothing but                                                               
admiration for  the way the Fairbanks  Pioneer Home is run.   She                                                               
applauded the committee for taking  the concerns of the residents                                                               
and their  families into account  as the committee  goes forward.                                                               
She  urged the  committee  to  take a  reasoned  approach to  the                                                               
rising  costs of  care at  Alaska's  Pioneer Homes,  which are  a                                                               
treasure that need to be protected for future generations.                                                                      
4:38:28 PM                                                                                                                    
URBAN RAHOI testified  in support of HB  96.  He said  he and his                                                               
wife  married in  1940 and  lived happily  on $100  a month.   He                                                               
added he agrees  with the previous testimony because he  is a 73-                                                               
year resident  of Fairbanks and  has done  a lot for  the country                                                               
and appreciates  being in the Pioneer  Home because it is  a good                                                               
place  for  people  who  need  help.   He  thanked  the  previous                                                               
witnesses for saying the things he would like to say.                                                                           
BARBARA PARKER testified in support of  HB 96.  She stated she is                                                               
a  current resident  of  the  Fairbanks Pioneer  Home.   She  has                                                               
noticed a  great deal of concern  and downright fear in  the home                                                               
over  the  proposed changes,  especially  in  the monthly  rates.                                                               
Most of the  residents don't have a lot and  when legislators are                                                               
talking  about tying  it  to the  Social  Security increase,  she                                                               
thinks what increase?  She has  $18 a month extra, which is eaten                                                               
by  her Part  D payment.   The  care and  staff at  the Fairbanks                                                               
Pioneer Home  are wonderful.  She  is single and 74  and moved in                                                               
voluntarily.   She is healthy  but came  to the home  because she                                                               
wanted to  have a safe,  clean, healthy environment as  she ages.                                                               
She hopes she  doesn't hurt herself, but knows that  if she does,                                                               
she  will get  care.   She asked  the committee  to consider  the                                                               
residents who are  on fixed incomes and alone and  who have lived                                                               
in the state  40-50 years.  Other countries respect  and care for                                                               
their elders and Alaska should do the same.                                                                                     
4:41:29 PM                                                                                                                    
SUSAN CARTER  testified that she  is a resident of  the Fairbanks                                                               
Pioneer Home.   She  related that  a friend of  hers, as  well as                                                               
many residents,  have had to  turn over their  homes, properties,                                                               
savings, and investment income.   She asked what happens to those                                                               
assets and  to that money because  it is never mentioned,  but it                                                               
always has to  be turned over to the state  if a resident doesn't                                                               
have enough  money to  self-pay.  Those  assets are  an important                                                               
consideration  and should  be put  into the  budget, given  those                                                               
assets are thousands  of dollars for each person and  most of the                                                               
homes and  properties have  been paid  off because  the residents                                                               
lived in them for so long.  She  is in her eighties and she heard                                                               
that the average  age in her home  is 88.  That  means people are                                                               
coming  into  the   home  in  their  eighties,   not  sixties  or                                                               
seventies,  and  that  means  they are  staying  in  their  homes                                                               
because they  cannot yet  afford the  Pioneer Home  charges until                                                               
they are forced to come in and  turn over all their assets to the                                                               
state.   She  urged that  these  assets are  considered and  that                                                               
information about these  assets and what has been  done with that                                                               
money be provided somewhere.                                                                                                    
4:43:47 PM                                                                                                                    
CAROL KLOPF  testified she lives  in the Fairbanks  Pioneer Home.                                                               
She apologized  for not  being informed  of what  HB 96  would do                                                               
except raise rates.   She urged that any new  rates be applied to                                                               
the future  residents and that  everyone now living in  the homes                                                               
be grandfathered  into the rates  that they understood  when they                                                               
applied  and moved  in.    She saved  and  planned  for what  she                                                               
estimated her  costs would be  and then  chose her time  to enter                                                               
accordingly.  She thinks she has  enough to pay for her estimated                                                               
lifespan, she is 85, but if  the rates are doubled, which is what                                                               
the threat seems to  be, she is going to run  out of money, which                                                               
is scary.  Others are justifiably  scared as well.  Residents are                                                               
told "no  worries, the state  will pay for it  if you run  out of                                                               
money."   However, it's not that  easy.  A person  must apply for                                                               
state assistance  and there are  requirements.  She had  a friend                                                               
who  didn't know  some  of  the requirements  and  was unable  to                                                               
control some  of the others and  got denied.  What  happens then?                                                               
It is  scary and  unfair, and  residents should  be grandfathered                                                               
into what they agreed to and  understood when they moved in.  The                                                               
new rules  should be  applied to  people who are  not yet  in the                                                               
Pioneer Homes.                                                                                                                  
4:46:40 PM                                                                                                                    
WILLIAM  HARRINGTON  testified he  is  70  years  old and  is  an                                                               
 unaffiliated old  person.   He  said he  did not hear  the words                                                               
"boomer tsunami"  or discussions  of its effect  and that  of the                                                               
vastly increasing longevity.  Subsidizing  elders for a dignified                                                               
sunset of life is a fine  goal and with money available should be                                                               
a real  bonus.  He  said [state]  spending priorities as  a whole                                                               
are under  attack and some  amendments are needed:   1) privatize                                                               
the system;  2) build  1,000-1,500 more units;  and 3)  the state                                                               
needs to govern and not involve itself in private businesses.                                                                   
CO-CHAIR ZULKOSKY left public testimony open.                                                                                   
[HB 96 was held over.]                                                                                                          
          SB 37-RENEWAL OF VACCINE ASSESSMENT PROGRAM                                                                       
4:47:49 PM                                                                                                                    
CO-CHAIR  ZULKOSKY announced  that  the final  order of  business                                                               
would be CS FOR SENATE BILL  NO. 37(FIN), "An Act relating to the                                                               
statewide immunization  program; and  providing for  an effective                                                               
4:48:40 PM                                                                                                                    
The committee took a brief at-ease.                                                                                             
4:49:49 PM                                                                                                                    
SENATOR  CATHY  GIESSEL,  Alaska   State  Legislature,  as  prime                                                               
sponsor, introduced CSSB  37(FIN).  She explained  the bill would                                                               
renew  the  Alaska Vaccine  Assessment  Program  (AVAP) that  was                                                               
established  in  2014.   The  bill  would authorize  a  statewide                                                               
vaccine program in  the Department of Health  and Social Services                                                               
(DHSS).  Because it is scheduled  for repeal in 2021, the bill is                                                               
a proactive action  to extend it.   This was a bill  in 2014 that                                                               
she  sponsored.   It  monitors,  purchases,  and distributes  all                                                               
childhood  vaccines  and  some  adult  vaccines  to  health  care                                                               
providers, allowing more access for Alaskans.                                                                                   
SENATOR GIESSEL  stated the bill  is an innovative solution  to a                                                               
challenging problem.   She related  that before this  program was                                                               
in play  many health care  providers had  to buy two  supplies of                                                               
vaccines.   One  supply  was  for those  people  who had  private                                                               
insurance or cash  pay.  The other supply was  for folks who were                                                               
Medicaid  beneficiaries  or   beneficiaries  of  some  government                                                               
program such as Vaccines for Children.   The reason for these two                                                               
supplies is that the private pay  vaccines had to be purchased by                                                               
the  providers themselves  at the  full retail  prices.   The two                                                               
supplies could not be interchanged  because the government supply                                                               
was obtained  by the  state using  bulk pricing  at a  much lower                                                               
price.   The two  supplies had  to be  kept separate  in separate                                                               
refrigerators and the  nurses had to keep track  of the insurance                                                               
and which supply of vaccine to  use.  If a provider had purchased                                                               
its own  supply for  private payers  and if  out of  a box  of 10                                                               
vaccines only 9 were used and  then the last one then expired, it                                                               
had to be thrown away.   Providers had to manage their supply and                                                               
the  expiration  dates  so  there was  full  utilization.    This                                                               
program eliminates that confusion and duplication.                                                                              
SENATOR   GIESSEL  noted   the   program   is  a   private-public                                                               
partnership that  is funded  by the  insurers and  the government                                                               
programs.    Everyone pools  their  money  and uses  the  state's                                                               
ability to  buy at bulk prices,  which results in lower  cost for                                                               
the vaccines.  The program  helps the insurance companies because                                                               
it allows  them to  maximize the bulk  buying potential  that the                                                               
state has, thereby keeping costs down  for them, and they in turn                                                               
supply the vaccine for their  subscribers with just the charge of                                                               
the  injection fee  or clinic  visit fee.   The  state asks  [the                                                               
insurers] how  many vaccines for,  say, measles are  needed, they                                                               
estimate that, the state assesses  them that amount of money, and                                                               
then the state makes a big  purchase and stores the vaccines in a                                                               
central  location in  Anchorage.   For  more  distant clinics  in                                                               
places like Bethel,  Nome, or Kotzebue the  manufacturer may ship                                                               
directly to those locations versus the central location.                                                                        
SENATOR GIESSEL  reported the program has  been wildly successful                                                               
and  has reduced  costs, but  more importantly  it has  increased                                                               
vaccine rates.  [The state]  has gotten some awards for increased                                                               
vaccination rates  over the years  that this program has  been in                                                               
place.   The bill would simply  renew that, as well  as provide a                                                               
funding mechanism.                                                                                                              
4:54:16 PM                                                                                                                    
JANE  CONWAY,   Staff,  Senator   Cathy  Giessel,   Alaska  State                                                               
Legislature, on  behalf of Senator Giessel,  sponsor, paraphrased                                                               
from the  written sectional analysis  of [CSSB  37(FIN)] included                                                               
in  the  committee  packets,  which  read  [original  punctuation                                                               
     Section 1:                                                                                                               
     Amends AS  18.09.200(b)(1) by  removing the  "phase in"                                                                    
     language from statute as  the Alaska Vaccine Assessment                                                                    
     Program is now fully implemented.                                                                                          
     Section 2:                                                                                                               
     Amends  AS  18.09.220(a)  by removing  the  "phase  in"                                                                    
     language from statute as  the Alaska Vaccine Assessment                                                                    
     Program is now fully implemented.                                                                                          
     Section 3:                                                                                                               
     Amends  18.09.230 by  creating  the vaccine  assessment                                                                    
      fund"  in   the  general  fund  for   the  purpose  of                                                                    
     providing   funds  for   the  program   that  will   be                                                                    
     appropriated by the legislature,  that can also include                                                                    
     program receipts,  penalties, money from  other sources                                                                    
     along  with  interest  earned   from  the  fund.  These                                                                    
     appropriations to the fund will not lapse.                                                                                 
     Section 4:                                                                                                               
     Repeals   and   reenacts  AS.18.09.230   allowing   the                                                                    
     commissioner to  administer the  fund in  accordance to                                                                    
     the provisions of the statewide immunization program.                                                                      
     Section 5:                                                                                                               
     Amends 37.05.146(c)(75) changing  the word "account" to                                                                    
     Section 6:                                                                                                               
     Repeals  AS  18.09.220(e)  by removing  the  "opt  out"                                                                    
     option for assessees since the  program is no longer in                                                                    
     the "phase-in" stage.                                                                                                      
     Section 7:                                                                                                               
     Repeals the  sunset provisions  (to repeal  the program                                                                    
     in 2021) that  were in section 5 of  the original bill,                                                                    
     [Senate Bill] 169 in 2014.                                                                                                 
     Section 8:                                                                                                               
     Sets effective date for July 1, 2019.                                                                                      
4:57:03 PM                                                                                                                    
CO-CHAIR ZULKOSKY passed the gavel to Co-Chair Spohnholz.                                                                       
CO-CHAIR SPOHNHOLZ invited Dr. Lou to continue the introduction                                                                 
of CSSB 37(FIN).                                                                                                                
4:57:48 PM                                                                                                                    
LILY LOU, MD, Chief Medical  Officer, Central Office, Division of                                                               
Public Health,  Department of Health and  Social Services (DHSS),                                                               
stated she  served on the  Alaska Vaccine Assessment  Council for                                                               
the first  three years.  She  is a pediatrician and  is president                                                               
of the American Academy of  Pediatrics, Alaska Chapter.  She said                                                               
she  is  disclosing  this  because  there  is  a  letter  in  the                                                               
committee packet  in support of the  bill that was signed  by her                                                               
as the chapter  president a few days before she  took her current                                                               
position with the State of Alaska.                                                                                              
DR. LOU explained  the bill would reauthorize  the Alaska Vaccine                                                               
Assessment  Program  (AVAP),  a  program  that  makes  access  to                                                               
vaccines universal  for all Alaskans.   It expands  coverage from                                                               
the subset of  children who are covered by  Vaccines for Children                                                               
to all  children and  it also  covers some  adults.   The program                                                               
more than  pays for itself, it  allows for Alaska to  get a 20-30                                                               
percent discount in the cost  of vaccines.  She brought attention                                                               
to a  graph in the  committee packet,  which shows that  over the                                                               
three to four  years that this program has been  in effect Alaska                                                               
has saved $11 million in the cost of vaccines.                                                                                  
4:59:44 PM                                                                                                                    
REPRESENTATIVE  TARR surmised  the savings  is because  the state                                                               
would otherwise be  responsible for the cost of  the vaccines for                                                               
the  beneficiaries under  state-run  health programs.   By  doing                                                               
bulk purchasing  the state  is realizing  those savings  on those                                                               
individual vaccinations.                                                                                                        
DR. LOU  replied it  is a  volume discount  because the  state is                                                               
purchasing  vaccines  for  all Alaskans  rather  than  piecemeal,                                                               
including  some  retail  pricing.    The  payers,  the  insurance                                                               
companies  who pay  into the  program, have  realized savings  by                                                               
doing it this way.                                                                                                              
CO-CHAIR  SPOHNHOLZ  asked  which adult  populations  this  would                                                               
apply to.                                                                                                                       
DR. LOU  responded that  the unique part  of Alaska's  program is                                                               
that  the state  offers payers  and  practitioners to  opt in  to                                                               
cover vaccines  for uninsured  adults.  Also  doing this  are the                                                               
states of Vermont and Rhode Island.                                                                                             
DR. LOU continued her presentation  on CSSB 37(FIN).  She pointed                                                               
out  that  this  bill  and   this  program  would  [continue  to]                                                               
streamline  the process  of giving  immunizations  into a  single                                                               
system.  Pediatricians would [continue  with not needing] to have                                                               
two refrigerators, two log systems,  and two completely separated                                                               
bookkeeping systems.  The program was  created in 2015 and is due                                                               
to sunset in  2021.  In 2018 the program  covered 366,000 people,                                                               
50 percent of Alaskans.  [The  state] has demonstrated a trend of                                                               
improving its  vaccination rates through  this system.   She drew                                                               
attention  to a  document in  the committee  packet and  said the                                                               
left half  of the graph  is pretty  flat for these  vaccines, but                                                               
after the  start of  AVAP there  is an increase.   She  noted the                                                               
graph doesn't show all of the types of vaccines.                                                                                
CO-CHAIR SPOHNHOLZ  offered her understanding that  it was stated                                                               
during  a hearing  before the  House Finance  Standing Committee,                                                               
Health & Social  Services Finance Subcommittee, that  some of the                                                               
vaccination  rates  had gone  down  and  subsequently Alaska  had                                                               
higher influenza  rates.   She asked  whether the  graph includes                                                               
influenza vaccine.                                                                                                              
5:02:27 PM                                                                                                                    
JILL LEWIS,  Deputy Director  (Juneau), Central  Office, Division                                                               
of  Public  Health, Department  of  Health  and Social  Services,                                                               
replied that  the graph includes  some of the  selected vaccines,                                                               
but does  not include the  flu [vaccine]  for which the  rate has                                                               
not gone up.                                                                                                                    
CO-CHAIR  SPOHNHOLZ asked  whether this  program would  allow the                                                               
state to increase flu vaccination.                                                                                              
MS. LEWIS responded yes it would,  but noted it doesn't happen to                                                               
show on the chart.                                                                                                              
DR. LOU added  that flu vaccination tends  to fluctuate depending                                                               
on the vaccine  for the year and  how people feel about  it.  She                                                               
confirmed it  is one  of the covered  vaccinations in  the Alaska                                                               
Vaccination Assessment Program.                                                                                                 
DR. LOU  pointed out  that Alaska was  recognized by  the Centers                                                               
for Disease  Control and Prevention  (CDC) for increases  in both                                                               
teen vaccines  and pneumococcal vaccine  for the  population over                                                               
65.     She  said  both   are  important  populations   and  they                                                               
demonstrate that when  something new comes along  this program is                                                               
nimble  enough to  do something  like the  human papilloma  virus                                                               
(HPV) vaccine that prevents cancer.   The department has seen the                                                               
benefits of this program and that it is proven to be effective.                                                                 
DR. LOU recapped  that CSSB 37(FIN) would  reauthorize the Alaska                                                               
Vaccine  Assessment  Program  to remove  the  phase-in  language,                                                               
including  the   opt-in  language,  and  to   remove  the  sunset                                                               
language.  It would not  impact any regulations about exemptions,                                                               
so it is only the provision  of vaccinations.  Alaskans will gain                                                               
the  following  from  reauthorization:   1)  Improves  access  to                                                               
vaccines,  one  of the  few  absolutely  proven effective  health                                                               
interventions; 2)  Removes the  barriers, particularly  for small                                                               
practices  that would  have to  buy a  box of  ten to  give eight                                                               
vaccinations;  3)  Allows  [the   state]  to  take  advantage  of                                                               
discounted  volume  vaccine  pricing;  4) Allows  the  use  of  a                                                               
unified inventory  system, allowing  [the state]  to redistribute                                                               
according  to  need and  not  according  to  box number;  and  5)                                                               
Decreases the cost  as well as the pain and  suffering of vaccine                                                               
preventable diseases.                                                                                                           
DR.  LOU  closed by  reiterating  that  this program  has  proven                                                               
itself  since it  began in  January 2015.   It  has been  a great                                                               
public-private  partnership.   The training  wheels can  be taken                                                               
off  and [the  program] continued  into the  future with  greater                                                               
health for all Alaskans.                                                                                                        
5:05:52 PM                                                                                                                    
MS.  LEWIS provided  a PowerPoint  presentation, entitled  "SB 37                                                               
Renewal  of Alaska  Vaccine Assessment  Program," to  explain how                                                               
the  program  operates.    She  brought  attention  to  slide  2,                                                               
entitled  "SB 37,"  and  stated the  bill  would reauthorize  the                                                               
program,  would take  out  from the  new  language the  temporary                                                               
phase-in  period that  has  already ended,  would  not use  state                                                               
general  funds,  and  would restructure  the  vaccine  assessment                                                               
MS.  LEWIS  turned to  slide  3,  entitled  "What is  the  Alaska                                                               
Vaccine Assessment Program?"   She said the  program provides all                                                               
childhood  and  certain  adult  vaccines  for  privately  insured                                                               
children, which does  not exclude the uninsured  children as they                                                               
are covered under a different  program that is a federal program.                                                               
The program also covers the majority of adults.                                                                                 
CO-CHAIR SPOHNHOLZ  recalled that  earlier it was  described that                                                               
this covers  uninsured adults.   She  asked which  adult vaccines                                                               
are not included.                                                                                                               
MS.  LEWIS  answered that  the  formulary  of what  vaccines  are                                                               
covered  is provided  in the  committee  packet.   She said  [the                                                               
program]  covers  the  vaccines   that  are  recommended  by  the                                                               
national committee that makes vaccine recommendations.                                                                          
DR. LOU  added that  the program  follows the  recommendations of                                                               
the  [Advisory  Committee   on  Immunization  Practices  (ACIP)].                                                               
There  are some  vaccines [the  program] likes,  for example  the                                                               
human papilloma virus  vaccine that is provided  to young adults.                                                               
Part  of  that is  because  the  vaccines  are  felt to  be  most                                                               
effective when  they are given  as soon as  they can be  in young                                                               
adulthood.   She  referred members  to the  information in  their                                                               
packet for the specific details.   Things like SHINGRIX [shingles                                                               
vaccine] are  covered, so the  program is nimble enough  to bring                                                               
new  vaccines  on  board  and the  assessment  is  just  adjusted                                                               
according  to  what  is  available and  what  is  recommended  by                                                               
scientific evidence as effective.                                                                                               
5:08:34 PM                                                                                                                    
MS. LEWIS resumed  her discussion of slide 3.   She explained the                                                               
program  collects   money  by  assessing  health   plans,  health                                                               
insurers,  as well  as  other program  participants.   The  state                                                               
pools  that money  together and  buys vaccines  at the  wholesale                                                               
[price] at a  greatly discounted rate off of  a federal contract.                                                               
It is a price that the  private sector cannot achieve on its own.                                                               
The state is  in a unique position to provide  this benefit.  The                                                               
state purchases and then distributes  the vaccine.  So really the                                                               
bill is about vaccine purchasing and distribution.                                                                              
MS. LEWIS moved to slide 4,  entitled "What is the Alaska Vaccine                                                               
Assessment  Program?"   She said  Alaska is  the only  state that                                                               
gives the providers  the option to cover  their uninsured adults.                                                               
Two  other  states  cover  adults,   but  only  for  the  insured                                                               
population, the  reason being that  there is no assessment  to be                                                               
paid if there is no insurance  coverage to provide the funds.  In                                                               
Alaska there is  an option that if a provider  has a large amount                                                               
of  uninsured patients  they can  choose to  opt in  and pay  the                                                               
assessment,  which allows  them  to get  that  same price  break.                                                               
Health  plans are  mandated to  participate,  but providers  that                                                               
want  to get  this price  point  for their  uninsured adults  can                                                               
volunteer  and then  pay  that.   About 9  percent  of what  [the                                                               
program]  covers  is related  to  the  uninsured adults.    About                                                               
32,000  lives  are covered  under  the  program,  so this  is  an                                                               
important option.  Alaska is the only state able to offer that.                                                                 
DR. LOU  pointed out  that the options  for providers  that don't                                                               
opt-in to  the uninsured  adult coverage are  that they  pay full                                                               
price for vaccine or they don't vaccinate those patients.                                                                       
CO-CHAIR SPOHNHOLZ commented  that given what is  known about the                                                               
 herd  protection factor   and how  important  it is  to get  the                                                               
maximum  amount  of people  vaccinated;  she  thinks most  people                                                               
would support getting the maximum number of people vaccinated.                                                                  
5:11:28 PM                                                                                                                    
MS. LEWIS addressed slide 5,  entitled "AVAP."  She explained the                                                               
Vaccine Assessment Council sets the  assessment rate once a year.                                                               
The current rate  is $8.61 per member per month  for children and                                                               
88 cents for adults per member per  month.  That rate is going to                                                               
decrease  for 2019    it  will  go down  to $7.44  and 53  cents.                                                               
Those rates  are adjusted  each year and  are prospective,  so if                                                               
the vaccines didn't cost as much  as was thought then that amount                                                               
is  factored  into the  next  year's  rate.   Every  quarter  the                                                               
assessed entities, the payers, pay  their assessment based on the                                                               
amount of covered lives they have  for that quarter.  This allows                                                               
the payers to  adjust their numbers during the year  if they have                                                               
a change  in the number  of members participating.   The Division                                                               
of Public Health pools that money and  then uses it to buy off of                                                               
a federal contract at a  discounted price.  Either [the division]                                                               
ships the vaccine  to the providers or it is  shipped directly to                                                               
them.   [The  division] does  not  charge the  providers for  the                                                               
vaccine  because the  insurance plans  have already  paid for  it                                                               
upfront.   Providers then  cover their  patients and  provide the                                                               
vaccines  and the  only thing  they can  bill for  is the  office                                                               
visit, the charge to administer  the vaccine, because that is not                                                               
part of what  this program is collecting assessments  for.  Every                                                               
quarter the providers are required  to report their vaccine usage                                                               
to the department so  it is known how much has  been used and the                                                               
inventories can be monitored and  then [the department] uses that                                                               
information  to  provide  information  back to  the  council  for                                                               
setting the next year's rate.                                                                                                   
5:13:57 PM                                                                                                                    
MS.  LEWIS  displayed  slide  6,  entitled  "Vaccine  Cost,"  and                                                               
related that the state is able  to achieve a vaccine cost that is                                                               
about 20-30  percent lower.   She explained  the slide  shows how                                                               
much just for  the cost to vaccinate a person  through age 18 and                                                               
the  difference  in  the  cost  between  the  Vaccine  Assessment                                                               
Program and the private sector.                                                                                                 
MS. LEWIS  turned to  slide 7,  entitled "Vaccine  Coverage," and                                                               
said  that  in regard  to  the  state's increase  in  vaccination                                                               
rates,  the  program  already  covers about  50  percent  of  the                                                               
population, 44  percent of  the children, and  52 percent  of the                                                               
adults.    Uninsured  children  are  covered  under  a  different                                                               
program and are not represented on the slide.                                                                                   
MS.  LEWIS moved  to slide  8, entitled  "Successes," and  stated                                                               
that overall  it is a win  for everyone.  The  Division of Public                                                               
Health  benefits because  it gets  to reduce  vaccine preventable                                                               
disease,  which  is  one  of   the  division's  main  objectives.                                                               
Providers  get  improved  health outcomes  for  their  vaccinated                                                               
individuals and they  also have a lot easier  stock management of                                                               
their vaccine.   The health insurance industry  pays less overall                                                               
for the cost  to vaccinate.  All Alaskans save  money in the long                                                               
run due to  fewer medical costs and secondary  costs from vaccine                                                               
preventable diseases.                                                                                                           
MS. LEWIS skipped slide 9 and  went on to slide 10, entitled "For                                                               
every $1 spent on  a vaccine in the US...."   She stated that the                                                               
slide  shows how  much can  be saved  for every  $1 spent  on the                                                               
individual types of vaccines in the  U.S.  For example, for every                                                               
$1 spent  on the measles,  mumps, and rubella (MMR)  vaccine, $26                                                               
is saved.                                                                                                                       
MS.  LEWIS concluded  with slide  11,  entitled "In  Closing...."                                                               
She said  reauthorizing this program  ensures a  healthier future                                                               
for all  Alaskans at  a lower  cost, plus  no state  general fund                                                               
5:16:20 PM                                                                                                                    
REPRESENTATIVE TARR  referred to  the nationwide  discussion that                                                               
is  going  on  about  vaccination and  some  people  being  anti-                                                               
vaccination  with subsequent  outbreaks.    She inquired  whether                                                               
this  discussion  is  being  seen in  Alaska  or  is  influencing                                                               
anything in  Alaska.  She  further inquired whether  the division                                                               
is doing anything to overcome that to ensure participation.                                                                     
DR.  LOU stressed  that this  is  an important  issue across  the                                                               
country.   However,  she continued,  vaccine  hesitancy is  quite                                                               
separate from  this bill, which  is only about  vaccine purchase.                                                               
In  regard  to  vaccine  hesitancy, she  said  Alaska  does  have                                                               
vaccine  rates that  are close  to  the borderline  and for  each                                                               
vaccine  there  is  a  different  percentage  that  confers  herd                                                               
immunity.   It  is not  just the  overall immunization  rate that                                                               
matters, but that  collections of people who have  a large number                                                               
of unvaccinated people are where outbreaks can start.                                                                           
REPRESENTATIVE  TARR  concurred it  isn't  one  of the  technical                                                               
details of  the bill.  But,  she noted, one of  the overall goals                                                               
of having  AVAP is  to increase participation  by Alaskans.   For                                                               
example,  when HPV  first came  out there  was some  hesitancy by                                                               
parents around  that vaccine, so  she is inquiring  about whether                                                               
these kinds of things influence participation in the program.                                                                   
DR.  LOU  replied  that  as  a pediatrician,  what  she  and  her                                                               
colleagues do  every day is  try to answer people's  questions so                                                               
they  can  make  those  decisions.     This  bill,  in  terms  of                                                               
vaccination  rates,  would remove  barriers  to  people who  have                                                               
decided to get  vaccinated and the bill would  mean more offices,                                                               
even small  ones, are able to  provide that.  Some  doctors might                                                               
not  vaccinate because  they cannot  afford to  keep a  stock and                                                               
patients might not go somewhere  else that does provide vaccines.                                                               
The bill would  impact that by making it less  difficult and less                                                               
expensive for  people to  get immunized.   She said  she believes                                                               
the increase in vaccination rates is from removing barriers.                                                                    
5:20:23 PM                                                                                                                    
REPRESENTATIVE PRUITT requested  clarification on provider opt-in                                                               
payments.  He  offered his understanding that  the state assesses                                                               
a fee  on [opt-in] providers  to cover  the cost of  the program.                                                               
He asked  whether there  are people  on the  outside of  this who                                                               
might seek to be a part of it, such as individual doctors.                                                                      
MS. LEWIS explained  the program mandates that  the insurers, the                                                               
health  plans, pay  the assessment,  but  it is  voluntary for  a                                                               
provider or  a clinic  to join.   So a  provider's office  is not                                                               
assessed, but  the health insurance  industry is.   Providers can                                                               
opt in  because that way they  can also get 20-30  percent off of                                                               
their vaccine cost, which otherwise  they wouldn't be able to do.                                                               
The most  likely types  of provider  offices that  are interested                                                               
are  the ones  that  see  a large  proportion  of the  uninsured.                                                               
Quite a few  that have opted in  are in the tribal  system or the                                                               
Federally Qualified  Health Centers (FQHCs) because  they have to                                                               
see everyone who  comes to them whether or not  they are insured.                                                               
The providers all  have to look at  that and see if  it costs out                                                               
for them given  the amount of the uninsured  population that they                                                               
REPRESENTATIVE PRUITT  offered his  understanding that  he cannot                                                               
look at the  financials and determine that that is  the amount of                                                               
actual usage.  He asked how  many providers have chosen to opt-in                                                               
to the program.  He further  asked whether the limitation is just                                                               
the cost  aspect of  it, or  if in  some cases  smaller providers                                                               
don't have  the personnel to  look at this and  determine whether                                                               
it makes sense.   He also asked whether there  could be a greater                                                               
participation  in  the  program  by  providers  who  may  not  be                                                               
utilizing it.                                                                                                                   
MS. LEWIS  responded she does not  have the number of  the actual                                                               
providers that  are paying in  at the  moment, but it  amounts to                                                               
about 32,000  lives that they cover.   That will be  looked at as                                                               
the  program continues  and more  outreach  will be  done to  the                                                               
provider community  to let  them know about  the program  and the                                                               
opportunity.  Until now most of  the outreach has been focused on                                                               
the payer community,  the health plans and those  mandated to pay                                                               
the  assessments, because  there  was that  phase-in period  that                                                               
allowed  it to  be optional,  so it  was important  that all  the                                                               
mandated assessment payers were brought on board.                                                                               
DR. LOU  offered her belief  that there is information  about the                                                               
opt-in providers,  but that  it doesn't  really reflect  what she                                                               
believes Representative  Pruitt's question  is trying to  get at.                                                               
There could  be providers that  don't take  care of kids  or that                                                               
only  have two  uninsured patients  and so  it may  not be  worth                                                               
joining the program.  But if  a provider has 100 patients then it                                                               
becomes worthwhile for them to engage  with the program.  So just                                                               
looking  at the  percentage of  providers wouldn't  represent the                                                               
distribution of uninsured adults.                                                                                               
5:25:30 PM                                                                                                                    
CO-CHAIR  SPOHNHOLZ inquired  about the  mechanism that  requires                                                               
insurers to participate.                                                                                                        
MS. LEWIS answered  that the current statute  requires the payers                                                               
to participate.                                                                                                                 
CO-CHAIR SPOHNHOLZ  further asked what the  authorizing mechanism                                                               
is that  says insurers must  do this.   For example,  whether the                                                               
statute says that anybody who  provides insurance in the state of                                                               
Alaska must do this.                                                                                                            
DR. LOU  replied that in  2014 [the division] asked  for everyone                                                               
to  be  required  to  participate, but  the  bill  was  initially                                                               
written  to allow  for  payers to  opt out  for  the first  three                                                               
years.   During  that  period she  served on  the  council and  a                                                               
growing number  of participants was  seen because they  knew they                                                               
would be required to after three  years anyway.  That gave payers                                                               
the opportunity  to see how  the program  worked and to  join on.                                                               
Essentially all of the payers  participate now, including TRICARE                                                               
CO-CHAIR SPOHNHOLZ offered her belief  that there is an incentive                                                               
to the  payers to participate but  that she wanted to  know about                                                               
the rule.                                                                                                                       
DR. LOU added  that [in 2014] it  was a new program  and now that                                                               
the program  has proven  itself [CSSB  37(FIN)] would  remove the                                                               
sunset.  She offered her belief  that the program has also proven                                                               
itself in the minds of the payers.                                                                                              
MS. LEWIS  noted the mechanism  is in AS  18.09.240.  She  said a                                                               
penalty could  be assessed for  non-compliance.  She  offered her                                                               
belief  that  some  interest  has  been  assessed,  but  not  any                                                               
penalties  for non-compliance  because  the  phase-in period  was                                                               
open for a duration.                                                                                                            
CO-CHAIR SPOHNHOLZ asked what the penalty is.                                                                                   
MS. LEWIS responded  she would get back to the  committee with an                                                               
5:29:22 PM                                                                                                                    
DAVID  TEAL, Legislative  Fiscal  Analyst, Director,  Legislative                                                               
Finance Division,  Legislative Agencies and Offices,  stated that                                                               
CSSB 37(FIN)  is a short and  simple bill that extends  a program                                                               
that  has  been  proven  successful at  both  reducing  cost  and                                                               
increasing the  availability of vaccines.   Although  the program                                                               
operates at  no net  cost to  the state,  there are  three fiscal                                                               
notes.   In February when reviewing  the bill in the  Senate, his                                                               
division  suggested  the  program  be re-established  as  a  fund                                                               
capitalization  rather than  as a  fund transfer.   The  existing                                                               
financing  mechanism is  a fund  transfer method,  which requires                                                               
money to be transferred, or  appropriated, into the fund and then                                                               
appropriated out  of the  fund.  That  meant double  counting the                                                               
money  and a  fixed  appropriation available  to the  department.                                                               
That is because in the appropriation  bill simply said the sum of                                                               
$10 million  is appropriated to  the department, the  $10 million                                                               
being a surmised assessment.                                                                                                    
MR. TEAL  explained that  a fund  capitalization differs  in that                                                               
money only needs to be appropriated  into the fund but not out of                                                               
the fund.  On  the way out in Section 4 of the  bill it says that                                                               
the   commissioner   can   spend  the   money   without   further                                                               
appropriation.   The  constitution  only requires  that money  be                                                               
appropriated once, not twice.   A fund capitalization methodology                                                               
provides increased  flexibility.   If more  providers sign  on to                                                               
the program, or  a new vaccine is added, or  there is an outbreak                                                               
of  flu  or  measles,  or   other  illness,  the  department  can                                                               
immediately   increase  its   expenditures  without   legislative                                                               
action, so it is more flexible.   If there is not enough money in                                                               
the  fund, more  assessments can  come in  without appropriation;                                                               
whatever  amount is  collected is  appropriated to  the fund  and                                                               
there is  no legislative action  required to have  the department                                                               
then  respond  to  the  outbreak.    It  also  eliminates  double                                                               
accounting.  By permitting money in  the fund to be spent with no                                                               
further  appropriation,  the fund  isn't  subject  to the  annual                                                               
sweep of  sub-funds into the constitutional  budget reserve (CBR)                                                               
fund.   That may  not be  important, it hasn't  been in  the past                                                               
because there  has always been a  vote to reverse the  sweep, but                                                               
if there isn't at some  point, that constitutional sweep into the                                                               
CBR could end  the program if health care insurers  refuse to pay                                                               
an assessment  that didn't  get used for  vaccine purposes.   Any                                                               
money that  is left in  the fund carrying  over from one  year to                                                               
the next would be swept into the CBR.                                                                                           
MR TEAL added  that he doesn't see any disadvantage  to moving to                                                               
a fund capitalization  because of the increased  flexibility.  He                                                               
doesn't think that there is a  fiscal problem with it.  There are                                                               
lots of  fund capitalizations out there.   It is a  simpler, more                                                               
direct, less  double counting method,  which is why  his division                                                               
recommended it.                                                                                                                 
CO-CHAIR SPOHNHOLZ commented that it is very practical.                                                                         
5:33:51 PM                                                                                                                    
REPRESENTATIVE  PRUITT offered  his  understanding that  revenues                                                               
generated in a  particular year would have  carry forward ability                                                               
to  the  next  year if  all  of  them  were  not needed  and  the                                                               
assessments would be adjusted based on that.                                                                                    
MR. TEAL  replied the fund would  be non-lapsing, so money  in it                                                               
would carry forward from year to year.                                                                                          
REPRESENTATIVE PRUITT  recognized that Mr. Teal  is explaining it                                                               
would  go from  the  vaccine assessment  account  to the  vaccine                                                               
assessment fund.  He offered  his understanding that currently in                                                               
an account it  doesn't lapse and because it is  an account within                                                               
the  sub-fund the  legislature must  appropriate  the money  into                                                               
that  account   and  then   subsequently  the   legislature  must                                                               
appropriate that money to the actual program.                                                                                   
MR. TEAL responded correct.                                                                                                     
REPRESENTATIVE PRUITT  surmised it  is just like  forward funding                                                               
education,  where the  legislature funds  the fund  and it  would                                                               
automatically pay  for it the  next year as the  legislature then                                                               
put money into the public education fund.                                                                                       
MR.  TEAL answered  correct and  said that  the public  education                                                               
fund  is a  good example  of an  appropriation that  goes in  and                                                               
doesn't  lapse and  then  it flows  to  school districts  without                                                               
further  appropriation per  a formula.    In this  case it  would                                                               
simply flow without further appropriations  as needed to purchase                                                               
CO-CHAIR  SPOHNHOLZ stated  that  an important  element of  using                                                               
[the proposed]  model is  that it would  allow for  responding to                                                               
health challenges in the community.   So, if there were a need to                                                               
dramatically  increase   the  number   of  immunizations   for  a                                                               
particular health crisis [the state]  would be able to respond by                                                               
utilizing the  funds already  on hand,  eliminating the  need for                                                               
having to  come back for  an emergency supplemental,  which would                                                               
be important in an emergency situation.                                                                                         
5:36:29 PM                                                                                                                    
CO-CHAIR SPOHNHOLZ opened public testimony on CSSB 37(FIN).                                                                     
5:36:45 PM                                                                                                                    
NANCY   MERRIMAN,  Executive   Director,   Alaska  Primary   Care                                                               
Association (Alaska  PCA), testified in support  of CSSB 37(FIN).                                                               
She spoke as follows:                                                                                                           
     The  Alaska  Primary   Care  Association  supports  the                                                                    
     operations   and  the   development   of  Alaska's   27                                                                    
     community  health center  organizations.   And together                                                                    
     with  the leaders  of the  community health  centers in                                                                    
     this state,  we strongly  support SB 37  to reauthorize                                                                    
     the Vaccine Assessment Program.   Alaska's 27 community                                                                    
     health centers  are committed  to community  health and                                                                    
     have as one of their  primary and reportable measurable                                                                    
     objectives   to  promote   immunization  for   infants,                                                                    
     children,  and  adults.    In  2014,  when  the  Alaska                                                                    
     [Vaccine]  Assessment Program  legislation was  passed,                                                                    
     health centers were among  the strongest of supporters.                                                                    
     And  a quick  review of  participating providers  today                                                                    
     shows  that  26  of  the  27  community  health  center                                                                    
     organizations  actively  rely  on  this  program  as  a                                                                    
     reliable source for their  immunizations.  This program                                                                    
     allows  these  nonprofit  practices a  streamlined  and                                                                    
     cost effective way to  purchase, manage, and administer                                                                    
     vaccinations  to  their  patients.    The  assembly  of                                                                    
     private and public dollars  to purchase vaccine through                                                                    
     the  AVAP eliminates  the need  for  health centers  to                                                                    
     manage  and maintain  two separate  stores of  vaccine.                                                                    
     Very  importantly  for  health centers  who  serve  all                                                                    
     patients  who walk  through their  doors regardless  of                                                                    
     their ability  to pay,  it also affords  them a  way to                                                                    
     provide  vaccination  to  lower  income  and  uninsured                                                                    
     adults, preventing  them from  contracting debilitating                                                                    
     infectious  diseases.    The measles  outbreak  in  the                                                                    
     Lower 48,  now having affected 555  children and adults                                                                    
     reminds  us  of  the  toll  of  preventable  infectious                                                                    
     disease   on  an   economy   and   the  public   health                                                                    
     infrastructure.   We  should want  to do  everything we                                                                    
     can  to   make  immunizations  easily   accessible  and                                                                    
     affordable.   This innovative program has  succeeded in                                                                    
     making  both procurement  and  distribution of  vaccine                                                                    
     efficient  and  effective  for  the  State  of  Alaska,                                                                    
     payers,  and  health   care  providers  across  Alaska.                                                                    
     Alaska  community  health  centers work  every  day  to                                                                    
     improve  the immunization  rates  of  all children  and                                                                    
     adults regardless of their ability  to pay and the AVAP                                                                    
     gives them the  framework and cost savings  to do this.                                                                    
     Alaska  PCA strongly  supports  the reauthorization  of                                                                    
     the   Alaska  [Vaccine]   Assessment  Program   through                                                                    
     passage of SB 37.                                                                                                          
5:40:02 PM                                                                                                                    
PATTY OWEN,  Director, Board of  Directors, Alaska  Public Health                                                               
Association, testified in support of  CSSB 37(FIN).  She said the                                                               
Alaska Public  Health Association would  be remiss if  it weren't                                                               
here today  because of the  connection between public  health and                                                               
immunizations.   Immunizations  are one  of the  main pillars  of                                                               
public  health.   An  affiliate  of  the American  Public  Health                                                               
Association,  the  Alaska  association   has  about  150  members                                                               
statewide  of public  health  professionals  and other  community                                                               
members  dedicated  to  improving  the health  and  wellbeing  of                                                               
Alaskans.  The association strongly  supports the bill's passage.                                                               
This innovative  public partnership  will make  vaccinations more                                                               
accessible  to  more  Alaskans.     Thanks  to  immunizations  in                                                               
general,  particularly  childhood immunizations,  [Alaskans]  are                                                               
benefitting  from increased  life expectancy  largely due  to the                                                               
prevention of infectious diseases.   Immunizations have become so                                                               
successful  in  preventing  diseases   that  people  have  become                                                               
complacent  and  resurgence  of   outbreaks  is  being  seen,  so                                                               
vigilance is needed.  Vaccines  are among the most cost effective                                                               
clinical preventive  service and  core component  of preventative                                                               
service that  can be offered.   A strong immunization  program is                                                               
essential to public health infrastructure.                                                                                      
5:42:27 PM                                                                                                                    
CO-CHAIR SPOHNHOLZ left public testimony open.                                                                                  
CO-CHAIR SPOHNHOLZ announced that CSSB 37(FIN) was held over.                                                                   
5:43:18 PM                                                                                                                    
There being no  further business before the  committee, the House                                                               
Health  and  Social  Services   Standing  Committee  meeting  was                                                               
adjourned at 5:43 p.m.                                                                                                          

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