Legislature(2005 - 2006)BUTROVICH 205


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Heard & Held
Moved CSSB 78(HES) Out of Committee
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                    ALASKA STATE LEGISLATURE                                                                                  
SENATE HEALTH, EDUCATION AND SOCIAL SERVICES STANDING COMMITTEE                                                               
                       February 23, 2005                                                                                        
                           1:33 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Senator Fred Dyson, Chair                                                                                                       
Senator Gary Wilken, Vice Chair                                                                                                 
Senator Lyda Green                                                                                                              
Senator Kim Elton                                                                                                               
Senator Donny Olson                                                                                                             
MEMBERS ABSENT                                                                                                                
All members present                                                                                                             
COMMITTEE CALENDAR                                                                                                            
SENATE BILL NO. 70                                                                                                              
"An Act  relating to controlled  substances regarding  the crimes                                                               
of  manslaughter,  endangering  the   welfare  of  a  child,  and                                                               
misconduct involving  a controlled  substance; and  providing for                                                               
an effective date."                                                                                                             
     HEARD AND HELD                                                                                                             
SENATE BILL NO. 78                                                                                                              
"An  Act establishing  the senior  care program  and relating  to                                                               
that program;  creating a  fund for the  provision of  the senior                                                               
care program;  repealing ch.  3, SLA 2004;  and providing  for an                                                               
effective date."                                                                                                                
     MOVED CSSB 78(HES) OUT OF COMMITTEE                                                                                        
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: SB 70                                                                                                                   
SHORT TITLE: CRIMES INVOLVING CONTROLLED SUBSTANCES                                                                             
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR                                                                                    
01/21/05       (S)       READ THE FIRST TIME - REFERRALS                                                                        
01/21/05       (S)       HES, JUD                                                                                               
02/23/05       (S)       HES AT 1:30 PM BUTROVICH 205                                                                           
BILL: SB 78                                                                                                                   
SHORT TITLE: SENIOR CARE PROGRAM                                                                                                
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR                                                                                    
01/24/05       (S)       READ THE FIRST TIME - REFERRALS                                                                        
01/24/05       (S)       HES, FIN                                                                                               
02/16/05       (S)       HES AT 1:30 PM BUTROVICH 205                                                                           
02/16/05       (S)       Heard & Held                                                                                           
02/16/05       (S)       MINUTE(HES)                                                                                            
02/23/05       (S)       HES AT 1:30 PM BUTROVICH 205                                                                           
02/23/05       (S)       Moved CSSB 78(HES) Out of Committee                                                                    
02/23/05       (S)       MINUTE(HES)                                                                                            
02/24/05       (S)       HES RPT CS 2AM 1DP 1NR SAME TITLE                                                                      
02/24/05       (S)       AM: DYSON, GREEN                                                                                       
02/24/05       (S)       DP: ELTON                                                                                              
02/24/05       (S)       NR: WILKEN                                                                                             
WITNESS REGISTER                                                                                                              
Frank Apple                                                                                                                     
Alaska Commission on Aging (ACA)                                                                                                
6424 Hampton Dr.                                                                                                                
Anchorage, AK   99504                                                                                                           
POSISTION STATEMENT: Supports SB 78.                                                                                          
Pat Luby                                                                                                                        
Advocacy Director of AARP                                                                                                       
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Supports SB 78.                                                                                           
Bob Peters                                                                                                                      
Glennallen, Alaska                                                                                                              
POSISTION STATEMENT: Supports SB 78 and SB 70.                                                                                
Timothy Birt                                                                                                                    
Department of Public Safety                                                                                                     
6255 Alaway Ave.                                                                                                                
Juneau, Alaska   99801                                                                                                          
POSISTION STATEMENT: Supports SB 70.                                                                                          
James Steele, Manager                                                                                                           
Southcentral Office of Children's Services                                                                                      
POSISTION STATEMENT: Supports SB 70.                                                                                          
Dr. Mandsager, Director                                                                                                         
Division of Public Health                                                                                                       
Juneau, Alaska   99801                                                                                                          
POSISTION STATEMENT: Supports SB 70.                                                                                          
Dean Guaneli, Chief Assistant Attorney General                                                                                  
Department of Law (DOL)                                                                                                         
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT: Commented on SB 70.                                                                                       
Joel Gilbertson, Commissioner                                                                                                   
Department of Health and Social Services                                                                                        
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT: Sponsor of SB 78.                                                                                         
John Sherwood, Deputy Commissioner                                                                                              
Department of Health and Social Services                                                                                        
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSISTION STATEMENT: Sponsor of SB 78.                                                                                        
ACTION NARRATIVE                                                                                                              
CHAIR FRED DYSON  called the Senate Health,  Education and Social                                                             
Services  Standing  Committee meeting  to  order  at 1:33:25  PM.                                                             
Present  were Senators  Kim  Elton, Gary  Wilken  and Chair  Fred                                                               
          SB 70-CRIMES INVOLVING CONTROLLED SUBSTANCES                                                                      
CHAIR DYSON announced that SB 70 would be considered.                                                                           
1:33:43 PM                                                                                                                    
DEAN GUANELI, Department of Law  (DOL), said methamphetamine labs                                                               
and the  latest methamphetamine  production methods  have reached                                                               
Alaska.  The  new  methods  are cheaper  and  less  complex  than                                                               
earlier  methods  and  consequently   anyone  with  access  to  a                                                               
hardware   store   and   a  pharmacy   can   easily   manufacture                                                               
methamphetamine. Methods  generate poisonous and  explosive gases                                                               
that pose a great risk to anyone in their vicinity.                                                                             
1:36:25 PM                                                                                                                    
MR. GUANELI stated  one of the purposes  of SB 70 is  to make the                                                               
manufacture of  methamphetamine with  reckless disregard  for the                                                               
possibility of exposing children  to harmful substances a higher-                                                               
level crime than the law  currently provides. The bill would make                                                               
it  illegal  to  possess  an  organic  methamphetamine  precursor                                                               
compound with the intent to extract methamphetamine from it.                                                                    
SENATOR  ELTON  noted  page,  3  line 27  refers  to  the  phrase                                                               
"methamphetamine  salts",  but  elsewhere   the  bill  refers  to                                                               
"methamphetamine or its salts".  He asked whether the discrepancy                                                               
was due  to a drafting error  or if it refers  to methamphetamine                                                               
MR.   GUANELI   deferred   the  question   to   law   enforcement                                                               
1:39:54 PM                                                                                                                    
MR. GUANELI  said the bill  also clarifies that if  one knowingly                                                               
manufactures or  delivers a controlled substance  in violation of                                                               
state drug laws and if another  person dies as a direct result of                                                               
ingesting that  substance, then  the manufacturer  or distributor                                                               
has committed the crime of manslaughter.                                                                                        
SENATOR GREEN arrived at 1:41.                                                                                                  
CHAIR   DYSON   asked   whether   someone  who   made   his   own                                                               
methamphetamine   and  had   it  stolen   would   be  guilty   of                                                               
manslaughter  under the  provision  even he  took precautions  to                                                               
safeguard it.                                                                                                                   
MR.  GUANELI  responded   such  a  person  would   be  guilty  of                                                               
CHAIR DYSON  asked whether  any other  equipment or  substance is                                                               
treated this way.                                                                                                               
MR. GUANELI responded  the provision applies to any  drug that is                                                               
manufactured  in violation  of  state drug  laws.  He added  that                                                               
there are  no other  substances with  such deadly  potential that                                                               
are routinely manufactured for ingestion.                                                                                       
CHAIR  DYSON  asked  whether  other  jurisdictions  have  similar                                                               
MR.   GAUNELI   answered    many   jurisdictions   have   similar                                                               
legislation,  but penalties  range  from  first-degree murder  to                                                               
CHAIR DYSON  restated his former question  regarding stolen drugs                                                               
manufactured for personal use.                                                                                                  
MR. GUANELI  answered he  never heard of  such a  case. Pertinent                                                               
cases usually involve people who  inject each other or sell drugs                                                               
to inexperienced users who overdose.                                                                                            
CHAIR  DYSON remarked  there  seems to  be  a difference  between                                                               
someone who sells  drugs for money and someone who  is only doing                                                               
it for themselves and taking reasonable precautions.                                                                            
SENATOR ELTON  said the  logic of the  provision could  assign an                                                               
equal degree of culpability to  someone who illegally sold liquor                                                               
to a minor that later caused him to die in a car accident.                                                                      
MR.  GUANELI said  there are  penalties for  providing liquor  to                                                               
underage    persons   but    supplying    illicit   drugs    like                                                               
methamphetamine is much more dangerous than supplying alcohol.                                                                  
SENATOR ELTON said  state law defines the role of  alcohol in the                                                               
aforementioned examples  as an aggravating  factor. He  asked Mr.                                                               
Guaneli  if he  had  considered defining  the  analogous role  of                                                               
drugs as an aggravating factor.                                                                                                 
MR.  GUANELI  noted applying  aggravating  factors  to enhance  a                                                               
penalty is one way to deal  with such a situation, but it assumes                                                               
that  a  person has  already  been  convicted  of a  felony.  The                                                               
administration believes  that drugs  such as  methamphetamine are                                                               
inherently dangerous and lead to  death in a sufficient number of                                                               
cases that the manslaughter charge is appropriate.                                                                              
SENATOR ELTON said he understands  the state could charge several                                                               
people  with manslaughter  for their  association  with a  single                                                               
incident. He  asked whether this was  the case or if  it was only                                                               
the last party that was subject to a manslaughter charge.                                                                       
MR. GUANELI  responded the provision  applies to everyone  in the                                                               
manufacture-distribution chain  and added that it  was the belief                                                               
of the administration that all the  members of the chain have the                                                               
same culpability since  they all know what they  are dealing with                                                               
and what it can cause.                                                                                                          
1:50:14 PM                                                                                                                    
SENATOR GREEN asked whether there  were any legitimate reasons to                                                               
manufacture methamphetamine.                                                                                                    
MR. GUANELI responded  he could not directly  answer the question                                                               
and  would like  to  defer  it to  chemistry  or law  enforcement                                                               
SENATOR GREEN asked whether it  is currently legal to manufacture                                                               
MR. GUANELI responded that it is not legal at all.                                                                              
SENATOR  GREEN asked  whether the  term  "illegal substance"  was                                                               
interchangeable with  the term "controlled  substance" or  if the                                                               
term  "controlled  substance" was  used  to  apply to  a  greater                                                               
variety of harmful substances.                                                                                                  
MR.  GUANELI  responded the  phrase  chosen  on  page 1  is  'the                                                               
manufacture and  delivery of a controlled  substance in violation                                                               
of AS.11.71". He noted AS.11.71  represents Alaska drug laws that                                                               
lists prohibited substances and divides them into schedules.                                                                    
SENATOR  GREEN  asked  the  reason   legislation  uses  the  term                                                               
"controlled substance" instead of "illegal substance".                                                                          
1:52:10 PM                                                                                                                    
CHAIR DYSON voiced concern about  a bill that makes manufacturing                                                               
and   distributing   codeine   and  morphine,   both   controlled                                                               
substances, such  a serious  violation, even  if one  takes great                                                               
pains to prevent its inappropriate use by some one else.                                                                        
MR. GUANELI  asserted the manufacture of  legitimate prescription                                                               
medication would  not constitute  a violation of  AS.11.71, which                                                               
concerns   illegal  manufacturing.   If  manufacturing   is  done                                                               
according to  the appropriate standards and  with the appropriate                                                               
licenses,  then   federal  law  takes  precedence.   If  however,                                                               
legitimate  drugs are  stolen from  a pharmacy  and then  cause a                                                               
death, anyone involved in the  illegal sale or procurement of the                                                               
stolen drugs would be in violation of the provision.                                                                            
JAMES STEELE,  children's services  manager for  the southcentral                                                               
region  of the  Office  of Children's  Services  (OCS), said  two                                                               
years ago his  team seized 30 labs in the  Mat-Su area. Last year                                                               
it increased to  over 50 seizures. He said  the manufacture sites                                                               
are  extremely  dangerous  since   lab  operators  use  extremely                                                               
volatile  and  poisonous  chemicals.  He  described  two  cooking                                                               
processes; one is the red-phosphorus  method, which can cause the                                                               
release   of   hydrogen-chloride   gas,  an   extremely   caustic                                                               
substance.  The  other method  is  called  the nazi-dope  method,                                                               
which  involves anhydrous-ammonia,  also  extremely caustic,  and                                                               
lithium, which can violently ignite  in water. A major concern of                                                               
the OCS is the extent of  the contamination of home-labs by fumes                                                               
generated  in  the  manufacturing  process. A  typical  round  of                                                               
manufacture  produces five  to seven  pounds  of hazardous  waste                                                               
that can be found anywhere in the house.                                                                                        
2:02:25 PM                                                                                                                    
MR. STEELE  asserted the  primary concern of  OCS is  the extreme                                                               
effects  methamphetamine has  upon the  behavior of  children who                                                               
are exposed to  contaminated sites. He noted  that some long-term                                                               
effects of methamphetamine must be monitored for several years.                                                                 
CHAIR DYSON asked  the number of children in need  of aide (CINA)                                                               
kids  have  come  from  homes   where  methamphetamine  had  been                                                               
MR. STEELE responded the Mat-Su  OCS office gets about 40 reports                                                               
a month  that involve some  aspect of methamphetamine.  Last year                                                               
about  ten cases  were taken  into  custody. He  noted OCS  often                                                               
tries to ensure the safety  of such children without taking legal                                                               
CHAIR DYSON  asked him  to give  the committee  some idea  of the                                                               
physical and mental  problems typical of children  that have been                                                               
exposed to a meth lab environment.                                                                                              
MR. STEELE  said some  of the problems  are shortness  of breath,                                                               
dizziness,  and  fatigue.  He  has  encountered  literature  that                                                               
mentioned liver  and kidney  damage, and  long-term developmental                                                               
SENATOR  ELTON  asserted the  definition  of  a building  in  the                                                               
provision was  very broad and  asked Mr.  Steele if such  a broad                                                               
definition was appropriate to address child endangerment.                                                                       
JAMES STEELE  responded based  on his  experience, he  thought it                                                               
was  appropriate because  fumes can  permeate from  one end  of a                                                               
complex to the other and thus contaminate the entire building.                                                                  
2:07:45 PM                                                                                                                    
BOB PETERS expressed support for SB 70.                                                                                         
2:10:11 PM                                                                                                                    
TIMOTHY BIRT,  Department of Public Safety,  testified in support                                                               
of  SB  70. Clandestine  laboratories  throughout  the state  are                                                               
operated by people with little  knowledge of chemistry who employ                                                               
unsafe  laboratory practices  and have  little regard  for either                                                               
the safety of themselves or others including children.                                                                          
2:12:05 PM                                                                                                                    
SENATOR ELTON asked his former  question regarding the bill's use                                                               
of  terms "methamphetamine  and its  salts" and  "methamphetamine                                                               
MR. BIRT responded  he could not explain why the  terms were used                                                               
in  the aforementioned  manner, but  noted he  could explain  the                                                               
difference  between  methamphetamine   in  organic  solution  and                                                               
methamphetamine in  solution. It could  be washed with  a solvent                                                               
such as acetone  and trace amounts of  that methamphetamine could                                                               
still  exist  in  the acetone  wash  forming  methamphetamine-in-                                                               
solution.  This  is  distinct  from  methamphetamine  in  organic                                                               
solution, commonly  referred to as methamphetamine  oil, which is                                                               
a  late-stage  compound   in  the  methamphetamine  manufacturing                                                               
processes commonly found in Alaska.                                                                                             
CHAIR DYSON  asked whether people who  manufacture and distribute                                                               
methamphetamine  are  also  commonly involved  in  other  illegal                                                               
activities such as firearms violations and income tax evasion.                                                                  
MR. BIRT  responded such  people are  commonly involved  in those                                                               
crimes  as well  as assault,  theft, burglary,  criminal mischief                                                               
and property damage.                                                                                                            
CHAIR DYSON  asked whether the manufacturers  and distributors of                                                               
methamphetamine were  usually the victims or  the perpetrators of                                                               
theft and violence.                                                                                                             
MR. BIRT responded they were more commonly the victims.                                                                         
CHAIR  DYSON  asked   whether  methamphetamine  manufacturers  in                                                               
Southeast Alaska have difficulty getting their supplies.                                                                        
MR.  BIRT responded  they do  not have  difficulty getting  their                                                               
supplies since  they typically use the  anhydrous ammonia method,                                                               
the  reagents  of  which  are  usually  stolen  from  local  fish                                                               
processing  plants. He  noted  Southeastern  manufactures do  not                                                               
usually  have  access  to  the  reagents  required  for  the  red                                                               
phosphorus method that is typically used in Interior and South-                                                                 
central Alaska.                                                                                                                 
CHAIR DYSON  asked Mr. Birt  and Mr. Guaneli to  consider whether                                                               
or not  people who store  and distribute such reagents  should be                                                               
asked to  exercise greater internal  security. He asked  Mr. Birt                                                               
if he had any suggestions.                                                                                                      
MR.  BIRT  responded he  did  not  have  any suggestions  at  the                                                               
moment, but would consider the matter.                                                                                          
2:18:05 PM                                                                                                                    
DR.  MANDSAGER,   director,  Division  of  Public   Health  (DPH)                                                               
supported Sections  3 and  4 of  the bill  and noted  exposure to                                                               
both  the  byproducts  and   reagent  chemicals  associated  with                                                               
methamphetamine  labs   and  the  aggressive,   erratic  behavior                                                               
typical of the  adults who operate them,  has tremendous negative                                                               
physical and psychological impacts on children.                                                                                 
CHAIR DYSON asked  him to describe some of  the clinical symptoms                                                               
of methamphetamine use among adults.                                                                                            
DR. MANDSAGER responded  methamphetamine is incredibly addicting,                                                               
so much  so that  people have  been known to  get addicted  to it                                                               
after using  only one dose  and that the psychoactive  effects of                                                               
the  drug can  last for  up  to two  to three  days during  which                                                               
people often  do not eat  or sleep  and become very  paranoid and                                                               
violent.  He noted  long-term  affects  include paranoia,  severe                                                               
skin irritation, and dangerous levels of weight loss.                                                                           
SENATOR WILKEN  asked whether there  were any  legitimate reasons                                                               
to manufacture methamphetamine.                                                                                                 
DR.  MANDSAGER  responded he  was  not  aware of  any  legitimate                                                               
reason to use or make methamphetamine.                                                                                          
SENATOR  OLSON  asked whether  methamphetamine  is  a Schedule  2                                                               
DR. MANDSAGER did not know.                                                                                                     
SENATOR OLSON  said methamphetamine  is used in  certain clinical                                                               
situations but  it is obvious that  manufacturing methamphetamine                                                               
outside a controlled lab is not good.                                                                                           
2:22:28 PM                                                                                                                    
CHAIR DYSON asked whether there was  a provision in Alaska law to                                                               
proceed against  someone who  caused brain damage  to a  child by                                                               
exposing him to methamphetamine fumes.                                                                                          
MR. GUANELI responded although there  are statutes that make it a                                                               
very  serious  crime  to  intentionally  cause  someone  physical                                                               
injury  and make  it a  less  serious crime  to recklessly  cause                                                               
physical injury  with a dangerous  instrument, it would be  a bit                                                               
of a stretch  to consider an illegal drug  a dangerous instrument                                                               
for the purposes of the assault statutes.                                                                                       
CHAIR  DYSON said  it  seemed  logical to  him  that someone  who                                                               
inadvertently  caused   someone  else  injury  as   a  result  of                                                               
producing  methamphetamine should  be  charged  with assault.  He                                                               
asked  the sponsor  to  provide a  clearer  cause for  proceeding                                                               
against someone who  caused injury to another person  as a result                                                               
of  manufacturing or  distributing methamphetamine  and said  the                                                               
bill would be held until Friday.                                                                                                
2:25:55 PM                                                                                                                    
SENATOR  ELTON  asked  whether a  paranoia-induced  murder  would                                                               
trigger manslaughter up the chain.                                                                                              
MR. GUANELI said  no, the bill only concerns the  person who dies                                                               
as  a  direct result  of  ingestion.  The  reason being  that  an                                                               
overdose  is  more  foreseeable and,  therefore,  there  is  more                                                               
2:27:49 PM                                                                                                                    
CHAIR  DYSON noted  Senator French  had  a bill  to add  anabolic                                                               
steroids  to Alaska's  list of  controlled  substances and  other                                                               
bills, HB 149, SB 106, HB  141 require greater precautions on the                                                               
part of industries that use  methamphetamine precursors. He asked                                                               
Mr. Guaneli  and Dr. Mandsager  to determine the position  of the                                                               
administration and  the bill sponsor towards  rolling the content                                                               
and intent of those bills into SB 70.                                                                                           
SENATOR GREEN asked  whether there were many  cases of recidivism                                                               
among  methamphetamine  user-manufacturers given  the  relatively                                                               
low cost and ease of  manufacturing methamphetamine. She asked if                                                               
bail was ever denied to prevent such recidivism.                                                                                
MR. GUANELI said the Alaska Supreme  Court has ruled that one has                                                               
a  constitutional right  to  bail, but  there  are no  provisions                                                               
requiring that the bail amount  be reasonable. There are statutes                                                               
that specify  the considerations  that the court  should consider                                                               
when setting bail.                                                                                                              
SENATOR  GREEN  asked  whether the  current  bill  addressed  the                                                               
possibility  of   recidivism  by  citing  suggestions   for  bail                                                               
MR. GUANELI said the bill did not address that possibility.                                                                     
SENATOR  GREEN said  she would  support  inserting language  that                                                               
addressed her concern about recidivism.                                                                                         
2:31:22 PM                                                                                                                    
CHAIR DYSON asked whether a judge  could order a defendant not to                                                               
relocate until his  case was adjudicated in order  to prevent him                                                               
from setting up a new lab in a new area.                                                                                        
MR.   GUANELI   explained   judges  often   impose   geographical                                                               
limitations as a condition of bail.                                                                                             
CHAIR DYSON held SB 70 in committee.                                                                                            
                   SB 78-SENIOR CARE PROGRAM                                                                                
2:34:38 PM                                                                                                                    
CHAIR DYSON announced SB 78 to be up for consideration.                                                                         
2:35:09 PM                                                                                                                    
COMMISSIONER  JOEL GILBERTSON,  Department of  Health and  Social                                                               
Services (DHSS), said SB 78 was  submitted by the Governor as one                                                               
part of  his senior care initiative  concerning prescription drug                                                               
assistance and  continuing cash assistance for  some seniors. The                                                               
bill provides drug assistance for  seniors with incomes below 300                                                               
percent  of the  poverty level  and cash  assistance for  seniors                                                               
below 135  percent of  the poverty level  after the  new Medicare                                                               
drug bill comes into effect.                                                                                                    
COMMISSIONER  GILBERTSON  noted  DHSS   has  provided  a  written                                                               
response to  questions that  the committee  asked in  last week's                                                               
meeting and  he was present  to answer additional  questions from                                                               
the committee.                                                                                                                  
COMMISSIONER GILBERTSON  said he  could not find  any information                                                               
on  how other  states  propose  to respond  to  the new  Medicare                                                               
prescription drug benefit under Part  B, but he found information                                                               
on  current  programs. He  said  most  of the  prescription  drug                                                               
programs are in  eastern states, but there are  six programs west                                                               
of the  Mississippi that provide direct  drug assistance: Nevada,                                                               
Wyoming,  Kansas, Minnesota,  and Missouri.  Of these  states the                                                               
most generous  is Nevada, which  covers about 235 percent  of the                                                               
federal poverty level with a  benefit limit of about $5,000, with                                                               
$10 to $25 co-payments.                                                                                                         
The  next most  generous  is Missouri,  which  covers seniors  to                                                               
about  185  percent  of  the  poverty level  with  a  40  percent                                                               
copayment  and a  deductible  based  on income  with  a limit  of                                                               
$5,000. Kansas  covers up  to about 135  percent and  requires 30                                                               
percent in  co-payments with  a much  smaller maximum  benefit of                                                               
$1,200. Wyoming  has the most  austere program, which  covers 100                                                               
percent   of  the   poverty  level   and   only  provides   three                                                               
prescriptions per month without age limit.                                                                                      
It  is challenging  to  compare the  current  program with  other                                                               
states because  many have not  yet responded to the  new Medicare                                                               
prescription drug  benefit that comes  into effect next  year and                                                               
will replace to some extent  the various existing state programs.                                                               
He said  Alaska's program was,  on a dollar basis,  fairly frugal                                                               
at  $670  per  beneficiary  compared   to  $5,000  allowed  under                                                               
Nevada's program.                                                                                                               
CHAIR DYSON noted the cost  of living varies throughout the state                                                               
and asked how the price  of prescription drugs in Alaska compares                                                               
to that of other states.                                                                                                        
COMMISSIONER GILBERTSON  responded the retail cost  of medication                                                               
is higher in rural Alaska, but  the price of drugs in urban chain                                                               
stores is comparable to that of prices in the Lower 48.                                                                         
CHAIR DYSON noted  SB 78 does not allow  for regional differences                                                               
in drug prices.                                                                                                                 
COMMISSIONER  GILBERTSON  responded  the legislation  would  only                                                               
cover the premium and subsidy  for the new Medicare drug benefit,                                                               
the price of which is consistent throughout the country.                                                                        
2:42:05 PM                                                                                                                    
COMMISSIONER  GILBERTSON stated  the  administration proposes  an                                                               
entry  threshold  level of  300  percent  of the  poverty  level.                                                               
Attachment  1  shows the  number  of  individuals that  would  be                                                               
affected  by different  threshold  levels. There  was a  question                                                               
concerning language that  allows an absence from  the state while                                                               
continuing to  receive the  benefits. Allowable  absence language                                                               
from the Permanent  Fund and the old Longevity  Bonus Program was                                                               
provided  in  the  report. The  administration  was  not  greatly                                                               
concerned  about the  language being  broadened, but  was greatly                                                               
concerned about excessively limiting the allowable exceptions.                                                                  
2:44:46 PM                                                                                                                    
SENATOR ELTON  asked how much  the cost  of the program  would be                                                               
increased if the  exceptions in the bill were  like those allowed                                                               
in the Permanent Fund Program.                                                                                                  
COMMISSIONER  GILBERTSON  responded he  did  not  think it  would                                                               
raise  the cost  of the  program at  all. The  exception language                                                               
used in the bill was a good  faith effort to show a commitment to                                                               
the  state. Currently  the state  does not  have any  capacity to                                                               
enforce the exception rules.                                                                                                    
SENATOR ELTON moved Amendment 1 to  insert "and is for one of the                                                               
reasons listed  in AS.43.23.008 which  is the list  of exceptions                                                               
for the  Permanent Fund Dividend."  He proposed the  amendment in                                                               
light of  the Commissioner's remark  that adopting  the Permanent                                                               
Fund exception  language would not  create a big cost  impact. He                                                               
said  this  would  make  it easier  for  someone  receiving  both                                                               
Medicare  benefits  and a  Permanent  Fund  check to  follow  one                                                               
recipe  instead of  two. Changes  could  be made  to reflect  the                                                               
interests of  seniors such as eliminating  the military exception                                                               
language. Seniors are often dealing  with family issues and these                                                               
are reasonable absences.                                                                                                        
2:47:08 PM                                                                                                                    
SENATOR  GREEN  objected  saying  she thought  the  language  was                                                               
adequate as is.                                                                                                                 
CHAIR  DYSON  supported  Senator  Elton and  noted  many  seniors                                                               
provide great  support to their  families during times  of crisis                                                               
and should not have to face a penalty for such efforts.                                                                         
CHAIR  DYSON asked  whether seniors  would  have to  apply for  a                                                               
waiver to receive an exception under the bill.                                                                                  
COMMISSIONER GILBERTSON  responded if the absence  is longer than                                                               
30 days  and is  not made  for a  medical reason,  the individual                                                               
would have  to get  a waiver from  the department.  He reasserted                                                               
the department  had no intention  of establishing  an enforcement                                                               
2:50:39 PM                                                                                                                    
COMMISSIONER  GILBERTSON noted  it  did not  mean the  department                                                               
expected everyone to be in compliance.                                                                                          
Roll  call  proved Amendment  1  passed.  Senators Dyson,  Elton,                                                               
Olson, and Wilken voted yea; Senator Green voted nay.                                                                           
COMMISSIONER  GILBERTSON  said  the report  provided  information                                                               
that  answered  Senator  Olson's   question  about  where  senior                                                               
services  were  being provided.  Figures  in  the report  largely                                                               
concerned seniors living below the  poverty line and do not allow                                                               
an accurate  extrapolation to those  living under 300  percent of                                                               
poverty  level,  which  are  probably  increasingly  concentrated                                                               
among urban populations. He noted  DHSS was not able to determine                                                               
the  number of  seniors who  would  be eligible  for both  Indian                                                               
Health Services and premium benefits.                                                                                           
2:53:21 PM                                                                                                                    
JOHN SHERWOOD,  Deputy Commissioner, DHSS,  said in the  event of                                                               
lacking   appropriations,  coverage   for  the   Medicare  part-B                                                               
deductible is first eliminated,  followed by Medicare-B premiums,                                                               
and finally benefits for cash recipients.                                                                                       
CHAIR  DYSON asked  how  much income  the  300 percent  threshold                                                               
allows a senior to have and still qualify.                                                                                      
COMMISSIONER GILBERTSON  answered $36,400  for an  individual and                                                               
$46,800 for a couple.                                                                                                           
CHAIR DYSON asked how the 300 percent threshold was decided.                                                                    
COMMISSIONER GILBERTSON responded the  administration felt it was                                                               
the right level.                                                                                                                
2:57:26 PM                                                                                                                    
CHAIR DYSON said  he understands the Governor's letter  to say 40                                                               
percent of Alaska  seniors can't afford to live in  the state and                                                               
need  some sort  of public  welfare  in order  to maintain  their                                                               
COMMISSIONER  GILBERTSON said  the administration  would strongly                                                               
disagree  with that  statement. By  an extension  of that  logic,                                                               
Medicare is a  welfare program since the  taxpayers subsidize it.                                                               
Medicare has provided  a host of health care  benefits to seniors                                                               
over  the past  40 years  and seniors  have come  to rely  on it.                                                               
Prescription  drugs are  a new  benefit available  under Medicare                                                               
and the state is facing a  legitimate risk that seniors below 300                                                               
percent  of the  poverty level  may not  be able  to receive  the                                                               
benefits  of part-B.  This does  not mean  that they  are welfare                                                               
recipients and they cannot care of themselves.                                                                                  
CHAIR  DYSON asked  whether 40  percent of  Alaska seniors  would                                                               
qualify for the program.                                                                                                        
COMMISSIONER  GILBERTSON responded  40 percent  would be  covered                                                               
under current rates.                                                                                                            
3:00:56 PM                                                                                                                    
BOB PETERS,  Glennallen resident, said simplicity  is a desirable                                                               
and  important part  of  the Medicare  system,  which is  already                                                               
pretty confusing for some seniors.                                                                                              
PAT LUBY,  Advocacy Director,  AARP, testified  in support  of SB                                                               
78. He  said it addresses  the AARP's concerns about  seniors not                                                               
signing up  for Medicare-B. He  asserted prescription  drugs play                                                               
an important preventative role in the health care of seniors.                                                                   
3:03:23 PM                                                                                                                    
FRANK  APPLE,  member, Commission  for  the  Aging, testified  in                                                               
support for SB 78.                                                                                                              
3:05:45 PM                                                                                                                    
SENATOR ELTON  noted he accidentally  eliminated exclusion  for a                                                               
30-day  excused  absence for  a  business  trip in  his  proposed                                                               
amendment. He proposed  to amend Amendment 1 by  inserting "for a                                                               
vacation or  a business trip  of 30 days or  less and for  one of                                                               
the  following reasons  listed in  the  AS.43.23.008", after  the                                                               
word "temporary," on page 5, line 30.                                                                                           
3:07:28 PM                                                                                                                    
CHAIR DYSON  moved to adopt  the revised version of  Amendment 2.                                                               
Hearing no objections, the motion carried.                                                                                      
3:12:52 PM                                                                                                                    
SENATOR  ELTON moved  CSSB 78(HES)  Version G,  out of  committee                                                               
with individual recommendations and attached fiscal notes.                                                                      
SENATOR  WILKEN  objected  to  express  concerns  about  the  $20                                                               
million fiscal note. He removed his objection.                                                                                  
Having  no   further  objections,  CSSB  78(HES)   moved  out  of                                                               
There being  no further  business to  come before  the committee,                                                               
Chair Dyson adjourned the meeting at 3:13:28 PM.                                                                              

Document Name Date/Time Subjects