Legislature(1993 - 1994)

03/28/1994 09:00 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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                             MINUTES                                           
                    SENATE FINANCE COMMITTEE                                   
                         March 28, 1994                                        
                            9:00 a.m.                                          
                                                                               
  TAPES                                                                        
                                                                               
  SFC-94, #51, Side 2 (300-end)                                                
  SFC-94, #55, Side 1 (000-end)                                                
  SFC-94, #55, Side 2 (end-345)                                                
                                                                               
  CALL TO ORDER                                                                
                                                                               
  Senator  Drue  Pearce,  Co-chair,  convened the  meeting  at                 
  approximately 9:00 a.m.                                                      
                                                                               
  PRESENT                                                                      
                                                                               
  In  addition to  Co-chair  Pearce,  Senators Rieger,  Kelly,                 
  Sharp and Kerttula  were present.   Co-chair Frank,  Senator                 
  Jacko joined the meeting after it was in progress.                           
                                                                               
  ALSO  ATTENDING:  Commissioner  Nancy Bear Usera, Department                 
  of  Administration; Connie  Sipe, Executive  Director, Older                 
  Alaskans  Commission,  Department  of  Administration;  John                 
  Barnett,   Executive  Director,   Board   of  Storage   Tank                 
  Assistance,  Division  of  Spill  Prevention  and  Response,                 
  Department  of  Environmental  Conservation;   Mike  Conway,                 
  Director,   Division  of   Spill   Prevention  &   Response,                 
  Department  of  Environmental Conservation;  David Skidmore,                 
  aide to  Co-chair Frank; Kimberly Busch,  Director, Division                 
  of  Medical  Assistance,  Department  of  Health  &   Social                 
  Services; Kevin Henderson, John Sherwood, and Dave Williams,                 
  Medical  Assistance  Administrators,  Division   of  Medical                 
  Assistance, Department of  Health & Social Services;  Dennis                 
  Murray, Administrator,  Heritage Place; Don  Koch, Marketing                 
  Surveillance, Division of Insurance,  Department of Commerce                 
  &  Economic Development;  Dana  LaTour  and Susan  Sorensen,                 
  fiscal  analysts,  and  Mike Greany,  Director,  Legislative                 
  Finance  Division;  aides  to committee  members  and  other                 
  members of the legislature.                                                  
                                                                               
  TELECONFERENCE:    Phil  Petrie,  Child Support  Enforcement                 
  Division, Department of Revenue, from Anchorage.                             
                                                                               
  SUMMARY INFORMATION                                                          
                                                                               
  CSSB 249(HES): An  Act  relating to  assisted  living homes;                 
                 relating  to the  conversion  of an  assisted                 
                 living  home  to  a nursing  home;  repealing                 
                 references  to  residential   facilities  for                 
                 dependent adults; abolishing the authority of                 
                 certain   municipalities   to    license   or                 
                                                                               
                                                                               
                 supervise institutions  caring for  dependent                 
                 adults; and providing for an effective date.                  
                                                                               
                 Commissioner  Nancy   Usera,  Department   of                 
                 Administration,  and  Connie  Sipe, Director,                 
                 Older  Alaskans  Commissioner,  Department of                 
                 Administration, spoke in  support of SB  249.                 
                 Discussion followed by Senators  Kerttula and                 
                 Rieger regarding nursing care.  CSSB 249(HES)                 
                 was  REPORTED OUT  of  committee  with a  "do                 
                 pass,"  and   zero  fiscal   notes  for   the                 
                 Department of  Administration, Department  of                 
                 Health  &  Social   Services,  Medicaid   and                 
                 Claims, and a  fiscal note  in the amount  of                 
                 $154.3 for  the Department of Health & Social                 
                 Services, MH/DD Administration.                               
                                                                               
  SB 289:        An Act making  appropriations to satisfy  the                 
                 agreed-upon   monetary   terms   of   certain                 
                 collective bargaining agreements  for certain                 
                 public  employees;  and   providing  for   an                 
                 effective date.                                               
                                                                               
                 Commissioner  Nancy   Usera,  Department   of                 
                 Administra-tion,  spoke  in  support  of  the                 
                 bill.  Discussion was had by Senators Rieger,                 
                 Kelly, Kerttula, and  Sharp regarding  health                 
                 insurance   and   cost   of  living   issues.                 
                 Commissioner  Usera was in  support of SB 289                 
                 being  HELD  in   committee  until  4   other                 
                 contracts had been settled  for incorporation                 
                 into  this  bill.     SB  289  was   HELD  in                 
                 committee.                                                    
                                                                               
  CSSB 295(JUD): An Act relating  to financial assistance  for                 
                 certain  owners  or operators  of underground                 
                 petroleum storage tank systems; and providing                 
                 for an effective date.                                        
                                                                               
                 John  Barnett,  Executive Director,  Board of                 
                 Storage  Tank  Assistance, Division  of Spill                 
                 Prevention   and   Response,   Department  of                 
                 Environmental Conservation, and  Mike Conway,                 
                 Director, Division of  Spill Preven-tion  and                 
                 Response,  Department  of  Environmental Con-                 
                 servation,  spoke  in  support of  the  bill.                 
                 Discussion  was  had  by  Senators  Kerttula,                 
                 Sharp,  and  Co-chair  Frank,  regarding  the                 
                 Underground  Storage  Tank   Program  as   it                 
                 related to bigger  businesses, fees, and  the                 
                 bush  and rural  areas.   CSSB  295(JUD)  was                 
                 REPORTED  OUT  of  committee with  individual                 
                                                                               
                                                                               
                 recommendations,  and  zero fiscal  notes for                 
                 the Department of Environmental Conservation,                 
                 and  the  Department  of  Transportation  and                 
                 Public Facilities.                                            
                                                                               
  SB 366:        An  Act  relating  to   medical  support  for                 
                 children; allowing a member of the  teachers'                 
                 retirement  system  or the  public employees'                 
                 retirement    system    to   assign    to   a                 
                 Medicaid-qualifying trust the  member's right                 
                 to  receive  a   monetary  benefit  from  the                 
                 system;   relating   to  the   effect   of  a                 
                 Medicaid-qualifying trust on  the eligibility                 
                 of  a person  for Medicaid;  relating  to the                 
                 recovery  of  certain Medicaid  payments from                 
                 estates  and  trusts;  requiring persons  who                 
                 receive  Medicaid services  to be  liable for                 
                 sharing in the cost of  those services to the                 
                 extent   allowed   under   federal  law   and                 
                 regulations; and providing  for an  effective                 
                 date.                                                         
                                                                               
                 Dave Skidmore, aide  to Co-chair Frank, spoke                 
                 in  support  of  SB  366.    Kimberly  Busch,                 
                 Director; Kevin Henderson, John Sherwood, and                 
                 Dave     Williams,     Medical     Assistance                 
                 Administrators,    Division    of     Medical                 
                 Assistance,  Department  of  Health &  Social                 
                 Services;   Dennis   Murray,   Administrator,                 
                 Heritage   Place;    Don   Koch,    Marketing                 
                 Surveillance,    Division    of    Insurance,                 
                 Department    of    Commerce    &    Economic                 
                 Development; and Phil  Petrie, Child  Support                 
                 Enforcement Division, Department  of Revenue,                 
                 via   teleconference   from   Anchorage,  all                 
                 testified  in support of  SB 366 and answered                 
                 questions.   Discussion was  had by  Senators                 
                 Rieger,  Sharp,  Kerttula and  Co-chair Frank                 
                 regarding  federal  requirements,  the estate                 
                 recovery program, Medicaid  co-payments, etc.                 
                 SB 366 was HELD in committee until amendments                 
                 and letter of intent language were drafted.                   
                                                                               
  CS FOR SENATE BILL NO. 249(HES):                                             
                                                                               
       An Act relating  to assisted living homes;  relating to                 
       the conversion of an assisted living home to a  nursing                 
       home;  repealing  references to  residential facilities                 
       for  dependent  adults;  abolishing  the  authority  of                 
       certain   municipalities   to   license  or   supervise                 
       institutions caring for dependent adults; and providing                 
       for an effective date.                                                  
                                                                               
                                                                               
  Co-chair  Pearce  announced  that  SB  249  was  before  the                 
  committee.    She  invited Commissioner  Nancy  Bear  Usera,                 
  Department of  Administration, to  join the  members at  the                 
  table.                                                                       
                                                                               
  COMMISSIONER USERA  asked Connie  Sipe, Executive  Director,                 
  Older Alaskans Commission, Department of Administration,  to                 
  join her.  She said SB 249 had had numerous hearings.   This                 
  bill authorized the licensing of assisted living facilities.                 
  She stated there was a great demand for some type of interim                 
  care, particularly for seniors but  this also effected other                 
  individuals.   It gave a lot of  flexibility for alternative                 
  care for individuals  that could use  help but did not  want                 
  institutionalization.   She felt it  was a great  option for                 
  the state of  Alaska, and  would prove effective.   It  came                 
  about, in  part, because of  the success  and experience  in                 
  this area in the Pioneer Homes.   She strongly supported the                 
  bill.                                                                        
                                                                               
  In  answer to Senator  Kerttula, CONNIE  SIPE said  it would                 
  take about six months to get regulations in place to license                 
  and relicense those facilities which explained the effective                 
  date of January 1, 1995.                                                     
                                                                               
  Again, in  answer to Senator  Kerttula, Ms.  Sipe said  that                 
  individuals could receive  home health  nursing care for  60                 
  days  from  Medicare  if  they  had  just come  out  of  the                 
  hospital, or  they could  get a  personal care  attendant or                 
  chore service at home.   She explained that nursing  in your                 
  own home was  legal.  What was  not legal was nursing  in an                 
  adult foster care home or adult residential care home.  If a                 
  person lived  in their own  home, he/she could  get nursing.                 
  If a person lived  in someone else's home, he/she  could not                 
  get nursing care unless they moved to a nursing home.                        
                                                                               
  Senator  Kerttula asked Senator Rieger  if he wanted to make                 
  any comments  since the  HESS Committee  had held  extensive                 
  hearings  on  the bill.    Senator Rieger  mentioned concern                 
  regarding nursing authority that was referenced in the bill.                 
  The  Nurses'  Association wrote  a  letter saying  that they                 
  thought  it should  be watched  carefully.   Ms. Usera  said                 
  those provisions were governed  by the Board of  Nursing and                 
  the bill did not effect any authority or responsibilities in                 
  regard to the conduct of nursing activities.                                 
                                                                               
  In answer to Senator Kerttula,  regarding cost to the state,                 
  Ms. Usera said  that SB  249 provided for  the licensing  of                 
  additional facilities by the private sector.  She went on to                 
  explain  that   through  the  consolidation  of  the  senior                 
  programs, the administration  had been  able to absorb  this                 
  activity within the Division of Senior Services.  The fiscal                 
  note was  for licensing  other facilities  that might  serve                 
  different constituencies, such as  developmentally disabled,                 
                                                                               
                                                                               
  or certain youth.                                                            
                                                                               
  Senator  Rieger  MOVED  for passage  of  CSSB  249(HES) from                 
  committee  with  individual recommendations.    No objection                 
  being heard,  CSSB 249(HES)  was REPORTED  OUT of  committee                 
  with a "do  pass," zero fiscal  notes for the Department  of                 
  Administration,  Department  of  Health  & Social  Services,                 
  Medicaid and Claims, and a fiscal note for the department of                 
  Health  & Social  Services-MH/DD Administration  for $154.3.                 
  Senators Rieger, Kelly,  Sharp and  Jacko signed "do  pass."                 
  Co-chairs  Pearce, Frank  and  Senator Kerttula  signed  "no                 
  recommendation."                                                             
                                                                               
  SENATE BILL NO. 289:                                                         
                                                                               
       An Act making appropriations to satisfy the agreed-upon                 
       monetary   terms   of  certain   collective  bargaining                 
       agreements for certain public  employees; and providing                 
       for an effective date.                                                  
                                                                               
  Co-chair  Pearce  announced  that  SB  289  was  before  the                 
  committee.   She asked Commissioner  Usera to return  to the                 
  table.  At this  time, Co-chair Pearce said she  intended to                 
  hold the bill  and roll the  dollars into the budget  unless                 
  Co-chair Frank wished otherwise.                                             
                                                                               
  Commissioner Usera said she was in support of holding SB 289                 
  because   there  were   four  other   contracts   that  were                 
  outstanding.  The terms of  those agreements could be  added                 
  to this bill and it could serve  as a complete package.  She                 
  went on  to say that  an amendment covered  the confidential                 
  employees unit  and represented a  two year agreement.   She                 
  said  it  contained   consistencies  in  regard   to  health                 
  insurance  and overtime  standards.   She  said  that a  2.5                 
  percent cost of  living increase was allowed  effective July                 
  1995 and  provided for a three  year hiatus for  any cost of                 
  living  increase.    The  $9,000  fiscal note  provided  for                 
  incidental costs associated with the contract.                               
                                                                               
  In  answer to  Senator  Kelly, Ms.  Usera  said it  differed                 
  between  bargaining units  but  the cost  to  the state  for                 
  health insurance was about $423.50 a month per employee.                     
                                                                               
  In answer  to Senator  Rieger, Ms. Usera  said the  contract                 
  provided  for  the  state  health  insurance  plan  but  the                 
  bargaining units  would have  the option  to choose  another                 
  plan within the same price  range.  She was pleased  to note                 
  that employees having to pay a small 5 percent co-pay amount                 
  had had a significant effect on cost containment.                            
                                                                               
  In answer to Senator Sharp, regarding  the fact there was no                 
  cap on  insurance, Ms. Usera  said the budget  process would                 
  keep that in  check.  Another conclusion with  the agreement                 
                                                                               
                                                                               
  was that there  was going to  be many  changes in regard  to                 
  health  insurance,   and  the  administration   needed  some                 
  flexibility.     A   state  employee   survey  shocked   the                 
  administration  with a  strong  choice towards  an insurance                 
  package.    Senator  Sharp voiced  his  opinion  that health                 
  insurance needed  a cap.  Ms. Usera said  there was a cap in                 
  the sense that if the union decided  to go to a trust, there                 
  was a limit set but when management was designing the health                 
  plan, there was not.                                                         
                                                                               
  Senator Rieger made  a statement regarding the  SBS account.                 
  He felt it was inevitable that eventually a basic plan would                 
  be   offered   to  employees   with   the  ability   to  add                 
  supplementals at the employee's expense.  Ms. Usera agreed.                  
                                                                               
  In answer to  Senator Kerttula, Ms.  Usera said that in  the                 
  last round of  bargaining, employees were willing  to forego                 
  wage increases or large cost of living increases in order to                 
  maintain an adequate health package.                                         
                                                                               
  In answer to Senator  Kelly, Ms. Usera spoke to  the impasse                 
  of one negotiation.  She said that after seventeen months of                 
  bargaining, mediation would be attempted on April 11.                        
                                                                               
  Co-chair  Pearce  announced that  SB  289 would  be  HELD in                 
  committee.                                                                   
                                                                               
  CS FOR SENATE BILL NO. 295(JUD):                                             
                                                                               
       An  Act relating  to financial  assistance for  certain                 
       owners or  operators of  underground petroleum  storage                 
       tank systems; and providing for an effective date.                      
                                                                               
  Co-chair  Pearce  announced  that  SB  295  was  before  the                 
  committee.                                                                   
                                                                               
  JOHN  BARNETT, Executive  Director,  Board  of Storage  Tank                 
  Assistance,  Division  of  Spill  Prevention  and  Response,                 
  Department  of  Environmental Conservation  (DEC), testified                 
  that  SB 295  was requested  by the Alaska  Underground Tank                 
  Owners and Operators Association.  The Board of Storage Tank                 
  Assistance worked in  cooperation with  DEC to administer  a                 
  grant   and  loan  program   for  underground   tank  owners                 
  throughout the state.   The Board  acted as an appeal  Board                 
  and  the  first section  of  the bill  clarified  the appeal                 
  authority of  the Board.   Currently only tank  owners could                 
  appeal if DEC determined that  certain costs were ineligible                 
  for reimbursement.   This clarification allowed tank  owners                 
  to  appeal  if  they had  been  determined  ineligible.   At                 
  present  there  were 152  applications  which DEC  said were                 
  totally  ineligible  and had  no appeal  rights.   This bill                 
  would provide a  forum for and  give the Board authority  to                 
  hear those appeals.  The second section of the bill gave the                 
                                                                               
                                                                               
  closure and upgrade program a statutory deadline of December                 
  31, 1994.                                                                    
                                                                               
  Senator Kerttula asked  if that date  needed to be  extended                 
  because of rural problems.   Mr. Barnett felt that  the bush                 
  was always a  challenge, but  public workshops and  outreach                 
  had been  done in  the fall  of 1990  throughout the  state.                 
  Media advertising  had been done  and a newsletter  had gone                 
  out  to  all   known  tank  owners  listed  in   a  database                 
  established in 1986.  He felt  most of the rural areas  were                 
  aware of the program.   Senator Kerttula asked for assurance                 
  that all rural areas and river communities had been noticed.                 
                                                                               
  MIKE  CONWAY,  Director,  Division  of  Spill  Prevention  &                 
  Response, Department of  Environmental Conservation,  stated                 
  that most river communities used  above ground storage tanks                 
  and this legislation  targeted underground  tanks.  He  said                 
  there  were problems with  above ground tanks  too but there                 
  was no state program  to deal with it if the  tank held less                 
  than 10,000 barrels.                                                         
                                                                               
  Mr. Barnett  said very few small communities  had applied to                 
  this program.   He went  on to  explain that  the Board  was                 
  working  with the  Rural Bulk  Fuel Task Force to share what                 
  it had learned  in order to  address some the problems  they                 
  faced.                                                                       
                                                                               
  Co-chair Frank  felt that SB 295  was a good bill  and asked                 
  Mr. Barnett  or Conway  to speak  to the  concern that  this                 
  program somehow benefited large companies.                                   
                                                                               
  Mr.  Barnett  thanked Co-chair  Frank  for bringing  up this                 
  issue.   He  said that  at the  beginning of  the program  a                 
  registration fee was paid to defer some  of the costs, and a                 
  ranking system was established using a score.  Fifty percent                 
  was scored if  the tank related  to a public health  threat.                 
  The  other  half the  score related  to  the distance  to an                 
  alternate fuel source, including details how many tanks were                 
  owned  with  higher  points for  fewer  tanks  owned (giving                 
  smaller businesses the  advantage).   Twenty percent of  the                 
  score was  insurability.  If a person was not self-insurable                 
  they  would  receive 20  points.   This  definitely targeted                 
  small mom and  pop businesses.   There were large  companies                 
  that  belonged  to   this  program   but  they  paid   large                 
  registration fees each year and waited  for a longer time to                 
  receive funding.  He estimated the  program to take at least                 
  10 years to complete.                                                        
                                                                               
  Co-chair Frank asked  Mr. Barnett  to provide the  committee                 
  with the latest funding  and criteria for the program.   Mr.                 
  Barnett  said  that  information  was  available from  their                 
  annual report and funding was in the $4-5M range.                            
                                                                               
  End SFC-94 #51, Side 2                                                       
                                                                               
                                                                               
  Begin SFC-94 #55, Side 1                                                     
                                                                               
  In answer  to  Senator Sharp,  Mr.  Barnett said  that  DEC,                 
  DOT&PF, and the Board of  Storage Tank Assistance, supported                 
  SB 295.   He said that the  position paper should be  in the                 
  members' files.  Mr. Barnett restated that about 400 upgrade                 
  and closure applicants  were on  a waiting  list for  funds.                 
  What this bill provided for those applicants, already on the                 
  list and acting in good faith,  was eligibility for clean up                 
  after the clean  up program  deadline closed.   He said  the                 
  bill would allow an extra six  months to do outreach for the                 
  closure and  upgrade  list and  those people  would also  be                 
  eligible for the clean up program.  After December 31, 1994,                 
  there would be a finite list of all applicants outlining the                 
  scope of the problem.                                                        
                                                                               
  Mr.  Conway  said that  DEC was  in  support of  the program                 
  because it was  a prevention  program.  It  kept owners  and                 
  operators involved in the clean-ups,  helped the rural areas                 
  stay  in business,  and, if  not funded,  the response  fund                 
  would have to be used "after  the fact" at a bigger  expense                 
  to the  state.  There also  could be health problems  if the                 
  program was not in place.                                                    
                                                                               
  In  answer  to  Senator  Sharp,  Mr. Conway  said  that  DEC                 
  continued to get federal funds  for the technical assistance                 
  part of  the program.  He stated it was a state fund with no                 
  other assistance.                                                            
                                                                               
  Co-chair Frank MOVED for passage of CSSB  295 from committee                 
  with individual recommendations.   No objection being heard,                 
  it   was  REPORTED   OUT   of  committee   with  "individual                 
  recommendations," and  zero fiscal notes for  the Department                 
  of Transportation & Public Facilities  and the Department of                 
  Environmental  Conservation.    Co-chair   Pearce,  Senators                 
  Rieger,  Kerttula,  and  Sharp signed  "no  recommendation."                 
  Senator Jacko and Co-chair Frank signed "do pass."                           
                                                                               
  SENATE BILL NO. 366:                                                         
                                                                               
       An  Act  relating  to  medical  support  for  children;                 
       allowing a member of the teachers' retirement system or                 
       the public employees' retirement system  to assign to a                 
       Medicaid-qualifying trust the member's right to receive                 
       a monetary  benefit from  the system;  relating to  the                 
       effect  of   a   Medicaid-qualifying   trust   on   the                 
       eligibility of a  person for Medicaid; relating  to the                 
       recovery of certain Medicaid payments  from estates and                 
       trusts; requiring persons who receive Medicaid services                 
       to be liable for sharing in  the cost of those services                 
       to   the  extent   allowed   under   federal  law   and                 
       regulations; and providing for an effective date.                       
                                                                               
                                                                               
  Co-chair  Pearce  announced  that  SB  366  was  before  the                 
  committee.                                                                   
  She  said  that  Phil   Petrie,  Child  Support  Enforcement                 
  Division,   Department  of   Revenue,   was  on   line   via                 
  teleconference from  Anchorage.  She invited  David Skidmore                 
  to join the committee.                                                       
                                                                               
  DAVID SKIDMORE, aide to Co-chair Frank, said that SB 366 was                 
  introduced  at  the  request  of  the  Division  of  Medical                 
  Assistance, Department of Health & Social Services.  He said                 
  that the  statutory changes  in the  bill were  necessary to                 
  comply with  the 1993 Federal Omnibus  Budget Reconciliation                 
  Act (OBRA93).   These changes fell  in three areas;  medical                 
  support  orders,  Medicaid  estate  recovery,  and  Medicaid                 
  qualifying trusts.   Medical support  orders had to  do with                 
  orders  for minor children,  usually through divorce decrees                 
  in  regard  to health  insurance coverage.    He went  on to                 
  detail those  provisions.   OBRA93 also  required states  to                 
  provide  a  Medicaid  estate  recovery  program  to  collect                 
  amounts paid by Medicaid to  individuals receiving long term                 
  care  services, such as  nursing home care,  unless it would                 
  prove an  undue hardship.  In regard  to Medicaid qualifying                 
  trusts,  OBRA93  changed  the  law  so that  individuals  in                 
  nursing facilities who  dispose of resources during  a 2-1/2                 
  year period before they apply for  Medicaid were not subject                 
  to a  punitive  delay  in  eligibility if  it  caused  undue                 
  hardship.                                                                    
                                                                               
  Mr. Skidmore said that the fourth  part of SB 366 had to  do                 
  with co-payments  and  was not  contained in  OBRA93.   This                 
  would reduce cost to the state in regard to Medicaid.                        
                                                                               
  In answer to Senator Rieger,  regarding Section 20, KIMBERLY                 
  BUSCH,  Director, Division of Medical Assistance, said Kevin                 
  Henderson, Medical Assistance Administrator, had  done a lot                 
  of work on this bill.  She said the department supported the                 
  bill  and  it would  enable  the department  to  continue to                 
  receive federal funding  for long  term care.   She said  it                 
  also  supported the provision  allowing PERS and  TERS to be                 
  put into  a trust.   It  also allowed  individuals to  enter                 
  other  nursing homes  other  than the  Pioneer  Homes.   She                 
  thanked Co-chair  Frank for  taking the  initiative on  this                 
  bill.                                                                        
                                                                               
  In regard to Section 20, Ms.  Busch said it embraced federal                 
  regulations.   Individuals  could  put social  security  and                 
  other income (not including their  assets) into a qualifying                 
  trust in order to receive long term care.  In return, at the                 
  time of  death, the state and the  federal government should                 
  be able to recover from the  trust what it had paid out  for                 
  long term  care benefit  (probably in  excess of  $100,000 a                 
  year, $50,000 state and $50,000 federal).                                    
                                                                               
  Senator  Rieger asked the difference between an estate and a                 
                                                                               
                                                                               
  trust.  Ms. Busch said  a trust was a way to put  the income                 
  aside so it was  not counted for Medicaid eligibility.   The                 
  estate could include  a home that  was left.  Generally  the                 
  home was not counted  if the individual could return  to it,                 
  or, in rare  circumstances, if there  was a spouse at  home.                 
  She agreed with the  statement that when a person  died, the                 
  state had a claim on that person's net worth.                                
                                                                               
  In answer to  Senator Rieger, KEVIN HENDERSON said  that the                 
  language in the bill  was taken from OBRA93.  He  went on to                 
  say that there were  only limited situations when a  lien on                 
  someone's  real property was  appropriate.  They  went on to                 
  discuss other language  regarding liens, and  exceptions and                 
  exclusions regarding trusts and liens.                                       
                                                                               
  JOHN SHERWOOD,  Medical Assistance  Administrator, said  the                 
  lien was only extinguished when a  person would go home from                 
  long term nursing care.  The  state could still recover from                 
  the estate (the  remaining income trust)  if the person  was                 
  over 55 when they entered long term care.                                    
                                                                               
  Senator  Sharp  asked  how the  bill  addressed  the current                 
  situation regarding a person's monthly income if it was over                 
  $1100.  Ms. Busch said that the income cap  was around $1340                 
  in Alaska, as  high as allowable,  and the balance could  be                 
  assigned  to an income trust.   What gives some individual's                 
  problems was their assets, such as stocks.  This bill should                 
  solve this problem for many people.                                          
                                                                               
  Senator Kerttula  asked  if grandchildren  were included  on                 
  page 11,  lines 1-5.  Mr. Henderson  said that grandchildren                 
  were not allowed and again, language had been taken directly                 
  from federal law.  Ms. Busch  said the department would look                 
  at adding grandchildren.  She understood  the state could be                 
  more  restrictive  than federal  law  but not  more liberal.                 
  Senator  Kerttula   pointed  out  that   grandchildren  were                 
  sometimes the main care givers.   She reminded him that this                 
  legislation targeted  people in  long term  care facilities.                 
  Mr. Henderson said that the  section he was questioning  may                 
  be protecting the rights to certain individuals who may have                 
  a right to real property.  Senator Kerttula maintained, from                 
  personal experience, his belief that grandchildren should be                 
  included.                                                                    
                                                                               
  PHIL PETRIE, Child  Support Enforcement Division, Department                 
  of Revenue,  via teleconference from  Anchorage, offered  to                 
  answer any questions from the committee.                                     
                                                                               
  In answer to Senator Rieger, in reference to medical  orders                 
  of  support,  Mr.  Petrie said  that  as  federal  and state                 
  statutes exist, a medical support order was required of AFDC                 
  of a general  nature which  required the  obligor to  obtain                 
  insurance when it was available through an employer or union                 
  policy.   The state  did not have  to pursue it  any further                 
                                                                               
                                                                               
  than that unless  the custodial parent had  outstanding, out                 
  of pocket  expenses and those  were reduced to  a judgement.                 
  SB 366 provided a  new area where  the state could go  after                 
  retirement plans and trusts.  Currently, the department only                 
  pursued Qualified  Domestic  Relations  Orders  (QDRO)  when                 
  income was attached.  This bill provided a Qualified Medical                 
  Support  Order  which would  increase the  workload although                 
  there were not many cases like this.                                         
                                                                               
  Mr. Petrie confirmed Senator Rieger's  statement that SB 366                 
  allowed the state  to go after  the obligor for the  state's                 
  Medicaid  outlays  to the  extent  the person  had insurance                 
  available through a union group or  policy only.  Again, Mr.                 
  Petrie said that it would have to be reduced to a judgement.                 
                                                                               
  Senator  Rieger  then  asked the  department  for  a comment                 
  regarding recovery.   Mr. Henderson  said that  it would  be                 
  part of an on-going program to  recover as much as possible.                 
  Ms. Busch said that in third party recovery, the provider of                 
  the medical care would bill the  third party except for such                 
  things as pharmaceuticals.                                                   
                                                                               
  Senator  Rieger  said if  there was  a  case where  the non-                 
  custodial parent  had an order  to buy health  insurance for                 
  the child, and  if that  child went on  Medicaid, the  state                 
  would not file  a claim against  the custodial but could  go                 
  after the non-custodial parent.  Mr. Petrie agreed with that                 
  statement.  Senator Rieger objected to this philosophy.  Mr.                 
  Petrie pointed out  that individuals going on  Medicaid were                 
  probably  already  on  AFDC.    With this  legislation,  the                 
  department  would not have to go to the Department of Law to                 
  have child(ren) added to  a parent's health insurance.   The                 
  employer  would  be  required  to   add  child(ren)  by  the                 
  department's request through the court order.                                
                                                                               
  Senator Sharp asked  if all  non-custodial parents would  be                 
  eligible for this judgement.  Mr. Henderson said that anyone                 
  determined by  the Court that  had insurance was  subject to                 
  this  law and that  included military health  coverage.  Mr.                 
  Petrie said  that child(ren) of divorced  military personnel                 
  remained  eligible for  medical coverage  and if not  near a                 
  military facility, CHAMPUS covered military  dependents in a                 
  civilian facility.   He said that  there were some  problems                 
  with Indian Health Service Benefits  which was being debated                 
  by the feds.  He gave more details about that area.                          
                                                                               
  End SFC-94 #55, Side 1                                                       
  Begin SFC-94 #55, Side 2                                                     
                                                                               
  Senator Sharp  stated that considering the Native population                 
  in Alaska, this would effect a large number  of people.  Mr.                 
  Petrie agreed but said  that at present there were  not many                 
  native  obligors  that  were  employed  in  businesses where                 
  medical insurance was available.                                             
                                                                               
                                                                               
  DENNIS MURRAY,  Administrator,  Heritage  Place,  a  nursing                 
  facility in  Soldotna operated  by Lutheran  Health Systems,                 
  testified in support of SB 366.  He said the question of the                 
  qualifying trust had been problematical  for persons who had                 
  combinations of  retirements.   The critical  issue was  the                 
  upper threshold for  eligibility and  this bill would  allow                 
  the  individual to establish the trust,  the income would go                 
  into the  trust, and at  the time of  death, escheat to  the                 
  state.  He encouraged passing the bill.                                      
                                                                               
  DON  KOCH, Marketing  Surveillance,  Division of  Insurance,                 
  Department  of Commerce & Economic Development, said section                 
  3 had  sizeable revisions to the Unfair Trade Practices Act.                 
  He said  that page 4, line 3, needed an amendment adding the                 
  words  "as  defined   in  AS  21.86.900;"  after   the  word                 
  "organization."                                                              
                                                                               
  Mr. Koch  went on  to speak  to concerns regarding  reaching                 
  some insurance companies and self-insured plans mentioned in                 
  provisions on page 4, items 2 and 5.  In answer  to Co-chair                 
  Frank, Mr.  Koch said  that he  would not  remove the  self-                 
  insureds from the legislation but be advised that they could                 
  not be reached.  He suggested it be added in other  parts of                 
  the  statutes  where self-insured's  could  be reached.   He                 
  closed his comments  saying the  department did support  the                 
  bill.                                                                        
                                                                               
  Co-chair Frank  brought up the  co-payment issue.   He asked                 
  Dave Williams to speak to it.                                                
                                                                               
  Ms.  Busch  said essentially,  the  recipient went  to their                 
  medical  provider,  and there  was  an expected  amount that                 
  would be co-paid.   If the amount was not known  at the time                 
  of service, the individual could not be denied service.  The                 
  provider needed to know the category  of the individual.  On                 
  a Medicaid coupon  and on the automated  eligibility system,                 
  it  told  the  provider  the   category  of  the  recipient.                 
  Different services were  going to be  examined to see if  it                 
  was even cost effective to  pay.  She asked Mr. Williams  to                 
  speak further on this issue.                                                 
                                                                               
  DAVE WILLIAMS, Medical  Assistance Administrators,  Division                 
  of  Medical  Assistance,  Department  of  Health   &  Social                 
  Services,  added  that  SB 366  would  allow  deductible co-                 
  insurance or co-pay.  Every state he was aware  of had found                 
  the  co-pay  system  the  most reasonable  way  to  ask  for                 
  contributions toward  cost  of care.   The  federal law  was                 
  broad in allowing states to administer co-pay.  He wanted to                 
  investigate the most  practical way  other states had  used.                 
  Places  to enlist co-pay  could include services, equipment,                 
  and in  and out-patient hospital care.   He felt that SB 366                 
  was a good tool in managing co-pay.  He added that a word on                 
  page 10, line  11, should be changed to read "to the maximum                 
                                                                               
                                                                               
  extent  practicable"  instead  of  "to  the  maximum  extent                 
  allowable."                                                                  
                                                                               
  Co-chair Frank said  he wanted a  clear statement in SB  366                 
  and was hesitant to make that change.  He said the House had                 
  decided to take  a more flexible approach  and delineate all                 
  co-payments.  He wanted the department  to implement this as                 
  soon  as possible.    The word  practicable  could give  the                 
  department another message.                                                  
                                                                               
  Mr. Williams understood the intent  behind the bill but felt                 
  there could  be  some intent  language added  to solve  this                 
  problem.  He then spoke to the fiscal note.                                  
                                                                               
  Co-chair  Frank  announced that  SB  366  would be  HELD  in                 
  committee.                                                                   
                                                                               
  ADJOURNMENT                                                                  
                                                                               
  The meeting was adjourned at approximately 10:50 a.m.                        

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