Legislature(2009 - 2010)

03/23/2010 02:05 PM L&C

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                    ALASKA STATE LEGISLATURE                                                                                  
          SENATE LABOR AND COMMERCE STANDING COMMITTEE                                                                        
                         March 23, 2010                                                                                         
                           2:05 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Senator Joe Paskvan, Chair                                                                                                      
Senator Joe Thomas, Vice Chair                                                                                                  
Senator Kevin Meyer                                                                                                             
Senator Con Bunde                                                                                                               
MEMBERS ABSENT                                                                                                                
Senator Bettye Davis                                                                                                            
COMMITTEE CALENDAR                                                                                                            
SENATE BILL NO. 129                                                                                                             
"An   Act  relating   to  state   and  municipal   building  code                                                               
requirements for  fire sprinkler  systems in  certain residential                                                               
     - MOVED CSSB 129(L&C) OUT OF COMMITTEE                                                                                     
SENATE BILL NO. 296                                                                                                             
"An  Act   relating  to   long-term  care   insurance,  including                                                               
provisions  relating  to   incontestability,  nonforfeiture,  and                                                               
producer training  and authorizing  the long-term  care insurance                                                               
premium assistance program."                                                                                                    
     - HEARD AND HELD                                                                                                           
SENATE BILL NO. 278                                                                                                             
"An Act allowing certain teachers,  public employees, and private                                                               
sector employees  to take  leave without  pay when  their spouses                                                               
are on leave from deployment in a combat zone."                                                                                 
     - HEARD AND HELD                                                                                                           
SENATE BILL NO. 289                                                                                                             
"An Act  relating to  the adoption of  the Uniform  Disclaimer of                                                               
Property  Interests  Act,  to the  exemption  from  creditors  of                                                               
certain  retirement  plan interests,  and  to  the disclaimer  of                                                               
property rights under the Uniform Probate Code."                                                                                
     - SCHEDULED BUT NOT HEARD                                                                                                  
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: SB 129                                                                                                                  
SHORT TITLE: RESIDENTIAL SPRINKLER SYSTEMS                                                                                      
SPONSOR(s): SENATOR(s) MENARD                                                                                                   
02/27/09       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/27/09       (S)       CRA, STA, L&C                                                                                          
03/17/09       (S)       CRA AT 3:30 PM BELTZ 211                                                                               
03/17/09       (S)       Heard & Held                                                                                           
03/17/09       (S)       MINUTE(CRA)                                                                                            
03/19/09       (S)       CRA AT 3:30 PM BELTZ 211                                                                               
03/19/09       (S)       Moved SB 129 Out of Committee                                                                          
03/19/09       (S)       MINUTE(CRA)                                                                                            
03/20/09       (S)       CRA RPT  1DP 2NR                                                                                       
03/20/09       (S)       DP: MENARD                                                                                             
03/20/09       (S)       NR: OLSON, THOMAS                                                                                      
03/24/09       (S)       STA AT 9:00 AM BELTZ 211                                                                               
03/24/09       (S)       Moved SB 129 Out of Committee                                                                          
03/24/09       (S)       MINUTE(STA)                                                                                            
03/25/09       (S)       STA RPT   1DP 2NR 2AM                                                                                  
03/25/09       (S)       DP: MENARD                                                                                             
03/25/09       (S)       NR: MEYER, KOOKESH                                                                                     
03/25/09       (S)       AM: FRENCH, PASKVAN                                                                                    
03/02/10       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
03/02/10       (S)       Heard & Held                                                                                           
03/02/10       (S)       MINUTE(L&C)                                                                                            
03/09/10       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
03/09/10       (S)       Heard & Held                                                                                           
03/09/10       (S)       MINUTE(L&C)                                                                                            
BILL: SB 296                                                                                                                  
SHORT TITLE: LONG-TERM CARE INSURANCE                                                                                           
SPONSOR(s): SENATOR(s) MCGUIRE                                                                                                  
02/24/10       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/24/10       (S)       L&C, FIN                                                                                               
03/23/10       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
BILL: SB 278                                                                                                                  
SHORT TITLE: LEAVE FOR MILITARY SPOUSES                                                                                         
SPONSOR(s): SENATOR(s) WIELECHOWSKI                                                                                             
02/12/10       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/12/10       (S)       STA, L&C                                                                                               
02/25/10       (S)       STA AT 9:00 AM BELTZ 105 (TSBldg)                                                                      
02/25/10       (S)       Heard & Held                                                                                           
02/25/10       (S)       MINUTE(STA)                                                                                            
03/11/10       (S)       STA AT 9:00 AM BELTZ 105 (TSBldg)                                                                      
03/11/10       (S)       Moved CSSB 278(STA) Out of Committee                                                                   
03/11/10       (S)       MINUTE(STA)                                                                                            
03/12/10       (S)       STA RPT CS  2DP 2AM     NEW TITLE                                                                      
03/12/10       (S)       DP: MENARD, FRENCH                                                                                     
03/12/10       (S)       AM: PASKVAN, KOOKESH                                                                                   
03/23/10       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
WITNESS REGISTER                                                                                                              
SENATOR LINDA MENARD                                                                                                            
Alaska State Legislature                                                                                                        
Juneau, AK                                                                                                                      
POSITION STATEMENT: Sponsor of SB 129.                                                                                        
SENATOR LESIL MCGUIRE                                                                                                           
Alaska State Legislature                                                                                                        
Juneau, AK                                                                                                                      
POSITION STATEMENT: Sponsor of SB 296.                                                                                        
ERIN SHINE, staff to Senator McGuire                                                                                            
Alaska State Legislature                                                                                                        
Juneau, AK                                                                                                                      
POSITION STATEMENT: Commented on SB 296.                                                                                      
AMY OWNE, representing herself                                                                                                  
Anchorage, AK                                                                                                                   
POSITION STATEMENT: Supported SB 296.                                                                                         
LINDA HALL, Director                                                                                                            
Division of Insurance                                                                                                           
Department of Commerce, Community and Economic Development                                                                      
Juneau, AK                                                                                                                      
POSITION STATEMENT: Answered questions related to issues in SB
JOHN SHERWOOD, Medicaid Special Projects                                                                                        
Department of Health and Social Services (DHSS)                                                                                 
Juneau, AK                                                                                                                      
POSITION STATEMENT: Answered questions related to issues in SB
SENATOR BILL WIELECHOWSKI                                                                                                       
Alaska State Legislature                                                                                                        
Juneau, AK                                                                                                                      
POSITION STATEMENT: Sponsor of SB 278.                                                                                        
GEORGE ASCOT, staff to Senator Wielechowski                                                                                     
Alaska State Legislature                                                                                                        
Juneau, AK                                                                                                                      
POSITION STATEMENT: Explained the CS to SB 278 for the sponsor.                                                               
JEFFREY MITTMAN, Executive Director                                                                                             
American Civil Liberties Union (ACLU) of Alaska                                                                                 
POSITION STATEMENT: Supported SB 278.                                                                                         
AL TAMAGNI, Sr.                                                                                                                 
Pension Services International, Inc.                                                                                            
Anchorage, AK                                                                                                                   
POSITION STATEMENT: Opposed SB 278.                                                                                           
RIC DAVIDGE, President                                                                                                          
Viet Nam Veterans of America                                                                                                    
Chairman, Alaska Veterans Foundation                                                                                            
POSITION STATEMENT: Supported SB 278.                                                                                         
STACY BANNEMAN, representing herself                                                                                            
No address provided                                                                                                             
POSITION STATEMENT: Supported SB 278.                                                                                         
ACTION NARRATIVE                                                                                                              
2:05:08 PM                                                                                                                    
CHAIR JOE PASKVAN  called the Senate Labor  and Commerce Standing                                                             
Committee meeting  to order at 2:05  p.m. Present at the  call to                                                               
order were Senators Meyer, Bunde,  and Paskvan. Senator Davis was                                                               
              SB 129-RESIDENTIAL SPRINKLER SYSTEMS                                                                          
2:05:36 PM                                                                                                                    
CHAIR JOE  PASKVAN announced  SB 129 to  be up  for consideration                                                               
[CSSB 129(L&C) version M was  before the committee]. He said they                                                               
had extensive  testimony at the last  meeting and he had  set the                                                               
bill aside.  The Alaska Fire  Chief's Association had  offered to                                                               
prepare  and   provide  to  the  Labor   and  Commerce  Committee                                                               
additional   information  that   dealt   with   this  topic,   in                                                               
particular, the  Municipal Code adoption  process that  was being                                                               
followed. He  had received that  document and shared it  with his                                                               
committee  members. In  a letter  accompanying that  document the                                                               
president  of the  Fire Chiefs  stated: "Our  testimony has  been                                                               
that  municipalities  far  exceed  the minimum  standards  of  AS                                                               
29.25.020."  The spread  sheet that  was provided  supported that                                                               
assertion.  Chief  Tucker's  conclusion was  that  the  committee                                                               
substitute (CS) for SB 129 is not necessary.                                                                                    
On the  other hand  Chair Paskvan said  that the  bill's sponsor,                                                               
Senator  Menard,  contends that  the  minimum  standards for  the                                                               
public process  should be  extended for reasons  that are  in the                                                               
sponsor statement.                                                                                                              
2:06:04 PM                                                                                                                    
SENATOR JOE THOMAS joined the committee.                                                                                        
SENATOR  CON BUNDE  moved adoption  of Amendment  1, labeled  26-                                                               
                          AMENDMENT 1                                                                                       
     OFFERED IN THE SENATE       BY SENATOR BUNDE                                                                               
     TO:  CSSB 129(   ), Draft Version "M"                                                                                      
     Page 2, lines 19 - 22:                                                                                                     
          Delete all material.                                                                                                  
          Insert "ordinance amendment to be held within a                                                                       
     period of not less than 60 days and not more than 180                                                                      
SENATOR MEYER objected for purposes of discussion.                                                                              
SENATOR BUNDE explained  that in discussion with  the sponsor and                                                               
in order to reach both sides'  goals more readily they decided to                                                               
change the  60-day period to  a 60-day  period but no  longer 180                                                               
days. Free disclosure would happen at a local hearing.                                                                          
SENATOR MEYER removed his objection and Amendment 1 was adopted.                                                                
SENATOR  BUNDE  moved  adoption   of  Amendment  2,  labeled  26-                                                               
                          AMENDMENT 2                                                                                       
     OFFERED IN THE SENATE                                                                                                      
     TO:  CSSB 129(   ), Draft Version "M"                                                                                      
     Page 2, lines 4 - 8:                                                                                                       
          Delete all material.                                                                                                  
          Insert "other requirements relating to the                                                                            
      adoption of an ordinance, the governing body of the                                                                       
     municipality shall"                                                                                                        
     Page 2, line 9:                                                                                                            
          Delete "(2)"                                                                                                          
          Insert "(1)"                                                                                                          
     Page 2, lines 12 - 13:                                                                                                     
          Delete "and the cost-benefit analysis"                                                                                
     Renumber the following paragraph accordingly.                                                                              
SENATOR MEYER objected for discussion purposes.                                                                                 
SENATOR  BUNDE explained  that that  this amendment  removes what                                                               
could be  conceived by  some as an  unfunded mandate  by deleting                                                               
the cost  benefit analysis language.  His assumption is  that the                                                               
cost benefits  of requiring fire sprinklers  in residential homes                                                               
would be  adequately addressed  in having  two hearings  during a                                                               
six-month period.                                                                                                               
SENATOR MEYER  removed his  objection. Without  further objection                                                               
Amendment 2 was adopted.                                                                                                        
2:13:30 PM                                                                                                                    
SENATOR LINDA MENARD, sponsor of  SB 129, said she supported both                                                               
amendments. The  Home Builders and  realtors are okay  with them,                                                               
too.  The  Alaska Municipal  League  has  stated they  will  stop                                                               
opposing  the  bill  with  the  amendments  and  take  a  neutral                                                               
position. The 180-day cap was suggested by the Firefighters.                                                                    
2:15:15 PM                                                                                                                    
SENATOR  MEYER moved  to  report CSSB  129(L&C)  as amended  from                                                               
committee  with  individual  recommendations  and  attached  zero                                                               
fiscal note(s). There were no objections and it was so ordered.                                                                 
2:15:49 PM                                                                                                                    
CHAIR PASKVAN announced an at ease for signing.                                                                                 
2:18:10 PM                                                                                                                    
                SB 296-LONG-TERM CARE INSURANCE                                                                             
2:18:17 PM                                                                                                                    
CHAIR PASKVAN announced SB 296 to be up for consideration.                                                                      
2:18:30 PM                                                                                                                    
SENATOR LESIL  MCGUIRE, sponsor  of SB  296, explained  that this                                                               
bill was borne out of a working  group made up of people in long-                                                               
term  care  delivery and  insurance.  They  looked at  how  other                                                               
states  were addressing  long-term  care  strategies. Alaska  has                                                               
higher  costs  for assisted  living  and  home health  care,  but                                                               
overall all of  the states are facing this  similar challenge for                                                               
long term  care. The national  average for nursing home  costs is                                                               
$198/day; in  Alaska it  is over  $618/day. The  national average                                                               
for assisted living  cost is $3,131/mo; in Alaska at  the low end                                                               
it's  over $4,314  -  more  than 37  percent  above the  national                                                               
average. For  home health costs  that have an hourly  amount, the                                                               
national average  is $21/hr; in  Alaska it's $25/hr -  19 percent                                                               
above the national average.                                                                                                     
The group looked at the costs of  long term care and those in the                                                               
group, one  of whom  owns some assisted  living homes,  who would                                                               
speak later  said that around  90 percent  of her clients  are on                                                               
Medicaid. So,  the state is  paying in  her homes for  roughly 90                                                               
percent  of all  of the  people being  cared for.  People try  to                                                               
shift  assets and  look for  ways to  cover long  term care,  but                                                               
unfortunately by  the time you  have reached that point  in life,                                                               
your prospects  of going into  the workforce and changing  any of                                                               
the  decisions made  prior  to  that are  bleak.  So that  burden                                                               
shifts to the state.                                                                                                            
SENATOR MCGUIRE said  in the case of folks who  live in the Lower                                                               
48, the  majority of  them have  a tax  base that  is made  up of                                                               
actual taxpayers  - they have  a personal income tax,  sales tax,                                                               
or  consumption tax.  Alaska  doesn't  have a  tax;  all its  tax                                                               
revenue comes from the Trans  Alaska Pipeline System (TAPS). That                                                               
being said, they  have an obligation to think  about Alaska's tax                                                               
base because it may someday be borne by individual citizens.                                                                    
2:22:21 PM                                                                                                                    
The  idea behind  this bill  is  to create  a premium  assistance                                                               
program  within the  state  of Alaska.  Other  states have  asked                                                               
individual  citizens of  the state  to put  forward an  amount of                                                               
money from  their own wages  that would  be matched by  the state                                                               
and subsequently be  matched in an equal amount by  the long term                                                               
insurance provider, creating  a partnership. In the  end a policy                                                               
develops  which is  meant  to insure  that  person for  long-term                                                               
She added  that Medicare applies  to those  65 and older,  but in                                                               
the case  of long term care  the burden with very  few exceptions                                                               
falls back  to Medicaid.  Next year the  state projects  those 65                                                               
and  older to  increase by  5.1 percent.  In 2009,  8,300 elderly                                                               
were  enrolled  in  Medicaid  and  an  enrollment  of  22,300  is                                                               
projected for  2029 based on  that 5 percent average.  Looking at                                                               
the growth  Alaska would  experience in  the Medicaid  budget for                                                               
those  who  would  need  long  term  care,  she  thought  it  was                                                               
incumbent  on the  state to  start  looking for  ways to  address                                                               
that. SB 296 attempts to do that.                                                                                               
SENATOR  MCGUIRE  said  Alaska  is  unique  because  it  has  the                                                               
Permanent Fund Dividend  (PFD). When the click  to donate program                                                               
was  finally adopted  last year,  it  caused the  group to  start                                                               
thinking about what kind of an  application there might be for an                                                               
individual to  think both  at the time  they were  receiving that                                                               
dividend of how  they might want to give to  charity and how they                                                               
might want  to look at  their own health  needs and at  their own                                                               
long term care options for the future.                                                                                          
She said that  cynics like Senator Bunde might  say that Alaskans                                                               
should be  thinking about that already  and why do they  need the                                                               
government to remind them. He  is right; but unfortunately people                                                               
get busy and don't take that time  to think about it, and it is a                                                               
long ways away for most people.                                                                                                 
If  this bill  passes, they  are  hoping Alaskans  would have  an                                                               
opportunity when  they apply  for their PFD  to think  about long                                                               
term  care. She  said  they  have tried  to  minimize the  fiscal                                                               
implications  to  the  division  and will  ask  them  to  forward                                                               
information about this program to  Alaskans and let them consider                                                               
it and  decide. If they  do, they would  be giving $500  of their                                                               
own money that will be matched by  the state and then by the long                                                               
term care provider.                                                                                                             
2:27:30 PM                                                                                                                    
ERIN SHINE, staff to Senator  McGuire, said sections 1-14 conform                                                               
statutes to  allow for long  term care partnerships which  are in                                                               
place  in 23  other states.  It creates  a group  policy that  is                                                               
transferable  between  the  states  and it  adds  provisions  for                                                               
anyone who is  selling or administering long  term care insurance                                                               
as a partnership to do so under these guidelines.                                                                               
SENATOR MCGUIRE said  essentially the first part  of the sections                                                               
establishes the  mechanism, which  is the certificate  that would                                                               
come into  place once  an Alaskan elected  to create  the policy.                                                               
Other sections were  put in to deal  with preexisting conditions,                                                               
for example.  She highlighted  that the  committee might  want to                                                               
consider what liability  the state would have  with entering into                                                               
these transferability agreements.                                                                                               
2:31:21 PM                                                                                                                    
She said  a sectional  analysis goes  through the  mechanism. The                                                               
fiscal  note  is  fairly substantial,  which  is  important.  The                                                               
question comes down to whether  one believes that partnering in a                                                               
premium assistance program would offset  costs that come in later                                                               
on in  the form  of Medicaid  claims as people  age. By  2030 she                                                               
reminded  them that  23,000 Alaskans  will be  65 and  older, and                                                               
some of that burden will fall to the State of Alaska.                                                                           
SENATOR  BUNDE  said  he shared  their  concerns  about  Medicaid                                                               
costs, and said he wanted to  hear from the Department of Revenue                                                               
what the net gain would be  between someone going on Medicaid and                                                               
actually following this program.                                                                                                
SENATOR  MCGUIRE  agreed   and  said  there  is   a  federal  tax                                                               
incentive, but  to the extent  that the long term  care insurance                                                               
provider  got a  state  credit, they  would want  to  add up  the                                                               
dollars  on both  sides and  compare.  If the  committee ends  up                                                               
deciding there is  a benefit she thought it  would be interesting                                                               
to observe  it in  other areas  of the  Medicaid budget  as well,                                                               
because it is the one part  of the state's budget that is growing                                                               
at extraordinary levels.  She said 50 percent of  all live births                                                               
in Alaska are now paid for by the state, as one example.                                                                        
CHAIR PASKVAN said  someone purchasing a long  term care contract                                                               
has a  number of years  to pay for it.  It's not just  a one-time                                                               
click and  he asked if she  was representing that it  be done for                                                               
five years  or ten.  Is it  a fixed amount?  His concern  is that                                                               
people might  just check in one  year, but then lose  100 percent                                                               
of that  money because  they don't  click it  the next  year. And                                                               
then they don't have the benefit.                                                                                               
SENATOR  MCGUIRE responded  those were  excellent questions.  She                                                               
just asked  Hank Hodges, New  York Life, a similar  question. She                                                               
said that long term care insurance  is also for people who become                                                               
disabled. It was  May Owne's (assisted living  home owner) belief                                                               
that  by  the next  year  so  long  as  it wasn't  a  preexisting                                                               
condition, the person  would have a policy. How  many years would                                                               
you need  to pay into the  policy is another good  question. This                                                               
issue  was brought  to her  by  constituents who  deal with  this                                                               
every day.                                                                                                                      
2:38:02 PM                                                                                                                    
SENATOR BUNDE wanted  to know how this is impacted  by the recent                                                               
health care  reform, which  he thinks is  an unfunded  mandate on                                                               
our  grandchildren.  Is  it  more essential  than  car  or  house                                                               
insurance? If  the state is going  to subsidize one, would  it do                                                               
this for all kinds of insurance?                                                                                                
SENATOR MCGUIRE  said those were great  questions, especially how                                                               
it  relates to  Obama  care,  because the  definition  of a  pre-                                                               
existing condition  is now  changed. She also  wanted to  know if                                                               
there would be  federal incentives in the land  of stimulus money                                                               
that would  go toward a  program like  this. She would  find out.                                                               
The Litmus test would be at  what level the state has a financial                                                               
obligation in those other categories  for unfunded liability. The                                                               
issue with long  term care insurance is that the  state is paying                                                               
more  than  $4000-5000/mo.  out of  Medicaid  coffers  for  those                                                               
seniors who did not get long term care insurance.                                                                               
2:40:05 PM                                                                                                                    
AMY  OWNE,  representing  herself,  said she  has  four  assisted                                                               
living homes  in Anchorage,  but she  is not  directly affiliated                                                               
with this bill. However, it has  brought to her attention an area                                                               
of conservative  interest in  getting long  term care  costs back                                                               
into the  private sector. She said  she had been in  the assisted                                                               
living business since  2002; she has 20 beds and  has never had a                                                               
long  term  care insurance  client  even  approach her.  So  even                                                               
though they  have products, she  hasn't seen them. She  said it's                                                               
painful to  see these people  who have worked their  entire lives                                                               
spend down their  entire savings and go on to  become indigent to                                                               
get  into the  Medicaid  program. Because  when  they were  going                                                               
through  the depression  era and  afterwards, even  fathoming the                                                               
fact that  her assisted living  home could cost them  $7000/mo is                                                               
staggering. What do we do to help these people?                                                                                 
She  said that  Senator Bunde  actually  inspired a  lot of  this                                                               
conversation when a couple years  ago at an Anchorage caucus when                                                               
they were  struggling against the  rate freeze she  remembered he                                                               
said, "Well  if you don't  like it;  it's a business  decision to                                                               
stay  in the  environment."  Now  she is  back  to  say that  her                                                               
business model  for taking  care of  these residents  is actually                                                               
pretty sound;  so maybe it's  time to change the  environment and                                                               
find out what is wrong so  that Alaskan seniors can be taken care                                                               
of better.                                                                                                                      
MS. OWNE  said this  is what  she has  come up  with. If  you can                                                               
encourage people  to purchase the  long term care  insurance, the                                                               
partnership program  is an excellent way  to do it. She  found 22                                                               
states  with another  10-18 in  the  process of  creating it.  It                                                               
provides a  mechanism to purchase  the long term  care insurance.                                                               
If you purchase $100,000 worth  of coverage you can keep $100,000                                                               
worth  of  assets at  the  end  before  going into  the  Medicaid                                                               
program. So,  you wouldn't  have to give  up everything  you have                                                               
worked your whole life for.  She suggested using outside funds to                                                               
pay  down the  initial coverage  of  long term  expenses. Of  the                                                               
people who go  into long term care, 43 percent  of them will need                                                               
a nursing  home at  some point.  Of that  43 percent,  55 percent                                                               
will stay at least one year  and 21 percent will stay five years.                                                               
At current  rates ($610) staying in  a nursing home for  365 days                                                               
will cost $222,650  per year and you would have  to spend of your                                                               
own personal money  to be in there. Most adults  65 and older put                                                               
away about $170,000  for their own retirement. So  before the end                                                               
of the first year without any  kind of insurance they would be on                                                               
2:45:00 PM                                                                                                                    
CHAIR PASKVAN asked how much it  would cost to purchase long term                                                               
care coverage annually.                                                                                                         
MS. OWNE  answered that the goal  is probably set for  someone in                                                               
their 40s  to plan ahead.  A $300/day nursing home  benefit (half                                                               
of  what it  is in  Alaska but  more than  the standard  national                                                               
rate), with  $300/day for  staying at your  home, a  90-day wait,                                                               
and a  policy maximum of  $547,000, the premium would  be $897.87                                                               
annually.  This would  pay for  roughly  two years  in a  nursing                                                               
CHAIR  PASKVAN   calculated  that   $500  would  come   from  the                                                               
individual under her system and  the state's match would be $500.                                                               
Is there another match?                                                                                                         
MS. OWNE said the next match  is a discount. They tried to create                                                               
a three-legged stool so that  everyone was giving something. They                                                               
talked to  a couple  of providers  to get this  going on  a large                                                               
scale and  they could give  a 10  percent discount. This  is what                                                               
they  are trying  to make  happen.  It is  not supposed  to be  a                                                               
double dip from the state.                                                                                                      
SENATOR  BUNDE asked  why  a private  enterprise  would give  him                                                               
money for his long term care.                                                                                                   
MS.  OWNE answered  they would  give  him a  discount. Why  would                                                               
anyone  not  give  a  bulk  rate  to  a  large  corporation,  for                                                               
CHAIR PASKVAN  asked if the  state's involvement would  result in                                                               
gross cost savings to the consumer.                                                                                             
MS.  OWNE said  that  is  absolutely the  goal.  The  idea is  to                                                               
decrease the Medicaid budget.                                                                                                   
CHAIR PASKVAN  said he  is looking  at it  from the  premium cost                                                               
that  they would  be  putting  on the  market.  He  asked if  her                                                               
example   of   a   $900/annual  premium   assumed   the   state's                                                               
participation in the program or is that the current market.                                                                     
MS. OWNE answered that is the current market.                                                                                   
CHAIR PASKVAN asked  assuming the state gets  involved, does that                                                               
$900  become $750.  Does  the state  get  an 18-percent  discount                                                               
because it has a larger pool?                                                                                                   
MS. OWNE said that is exactly  the point. The companies they have                                                               
already talked to have offered  a 10 percent discount. Whether or                                                               
not that is legal  has to be worked out through  Ms. Hall and the                                                               
Division  of Insurance.  Her point  is that  they are  willing to                                                               
step up  to be  on the  short list of  companies that  offer this                                                               
2:50:02 PM                                                                                                                    
SENATOR BUNDE said his understanding  is that you would never get                                                               
more from  the state than  you put  in yourself under  this plan.                                                               
The  tax credit  on the  premium is  still basically  state money                                                               
somewhere along the line in terms  of taxes that didn't go to the                                                               
state. He  asked Ms. Owne  if Jeff, Labor and  Commerce committee                                                               
aide,  bought  long term  care  insurance  today, could  he  keep                                                               
$100,000 of his assets and still go on Medicaid.                                                                                
MS. OWNE explained that could  happen with the partnership. If he                                                               
bought a $100,000 policy under  this partnership plan, if he went                                                               
into a  nursing home,  the first  $100,000 would  be paid  by the                                                               
insurance  company. If  Jeff had  $1 million  in assets  he would                                                               
have to  spend down to $100,000  to go on Medicaid.  You couldn't                                                               
underinsure just to get on it.                                                                                                  
2:53:03 PM                                                                                                                    
LINDA  HALL,  Director,  Division  of  Insurance,  Department  of                                                               
Commerce, Community  and Economic  Development (DCCED),  said she                                                               
was  available to  answer questions  on SB  296, but  as she  had                                                               
listened  she  developed  comments.  The  first  section  through                                                               
section 14 are  policies that are part of a  model bill developed                                                               
through  the  National  Association  of  Insurance  Commissioners                                                               
(NAIC).{ They would  allow the Division of  Insurance to actually                                                               
approve  a  policy  form  if   an  insurance  company  wanted  to                                                               
participate in  one of  these long  term care  partnerships. This                                                               
policy is different  than the ones that the  department has filed                                                               
today; so they would need the  model language in order to approve                                                               
She explained  that her  staff worked  with Legislative  Legal in                                                               
drafting  policy regulatory  approval using  the NAIC  model, but                                                               
not on the actual working of  the long term care partnership. The                                                               
companies that  offer those policies in  other states participate                                                               
in some way  in a partnership. The first tax  credit in this bill                                                               
is  exactly that  -  against  their premium  tax,  which in  turn                                                               
reduces funds going into the general fund.                                                                                      
SENATOR  BUNDE  asked  if  the   current  state  benefit  package                                                               
provides  a  long term  care  option  and  what level  the  state                                                               
participates in  that. Would this  then provide an option  to the                                                               
rest of the citizens for something  that is only available now to                                                               
state employees?  He didn't think  there was any state  match for                                                               
the  current program.  If there  is,  will the  state program  be                                                               
undermined with the program?                                                                                                    
MS. HALL answered  that she understands there is  a state retiree                                                               
long term care  program. The daily limits are  relatively low and                                                               
she didn't  think there was  a state match, and  it is done  as a                                                               
group  program. Frequently  you will  have some  type of  reduced                                                               
premium  for group  participation,  although when  she does  rate                                                               
approvals she makes sure it's not unfairly discriminatory.                                                                      
2:56:48 PM                                                                                                                    
JOHN SHERWOOD,  Medicaid Special  Projects, Department  of Health                                                               
and Social  Services (DHSS), Juneau,  Alaska, said this  is "kind                                                               
of a novel program" for  the department in terms of administering                                                               
it. They made  the best assumptions they could in  costing it out                                                               
with limited  experience and information. He  said the department                                                               
is always  looking for ways of  fostering personal responsibility                                                               
and planning for the future to  avoid assuming more of the burden                                                               
for long  term care  in the  Medicaid program.  He said  there is                                                               
uncertainty  about  how much  this  program  would actually  save                                                               
A  lot of  the discussion  he  read comes  down to  how many  new                                                               
people this would encourage to  get insurance versus just provide                                                               
an  additional benefit  in  the Medicaid  program  to people  who                                                               
would  already buy  long  term care  insurance  to protect  their                                                               
assets. But  this kind of  program does have potential  of saving                                                               
Medicaid some  money long term.  They aren't able to  quantify it                                                               
and they wouldn't expect to see  the savings in the lifespan of a                                                               
fiscal note that only goes about five years out.                                                                                
CHAIR PASKVAN asked  if in general the assumption  is there would                                                               
be a fiscal  savings to the state because premiums  would be paid                                                               
that  defer  the state's  obligation.  Can  that be  measured  if                                                               
people buy in and stay bought in?                                                                                               
MR.  SHERWOOD replied  that  he wasn't  aware  of something  that                                                               
would  let them  quantify it  specific to  Alaska. Because  these                                                               
long term  care partnerships  do provide  an exemption  when they                                                               
look at  people's assets to  the extent the insurance  company is                                                               
paid  long  term  care  benefits, some  people  can  qualify  for                                                               
Medicaid quicker  because they  don't have to  spend down  all of                                                               
their  own  assets.  On  the  other  hand,  to  the  extent  this                                                               
encourages  more people  to buy  insurance so  that even  if they                                                               
qualify for  Medicaid, long term  care insurance is  still paying                                                               
for some benefit  or if the insurance substantially  puts off the                                                               
point  at which  they might  qualify for  Medicaid it  could save                                                               
money.  There is  a high  degree of  uncertainty in  knowing what                                                               
demographic  would be  attracted to  this program.  To date,  his                                                               
observation is that people tend  to seek long term care insurance                                                               
if they  have significant  assets that they  want to  protect. To                                                               
get the most  savings they would want something  that would reach                                                               
"a broader range of people."                                                                                                    
3:01:17 PM                                                                                                                    
CHAIR  PASKVAN said  he wonders  what happens  to the  failure to                                                               
renew  rate  people  have  if  they are  buying  long  term  care                                                               
insurance.  There have  to  be some  industry  standards on  that                                                               
where people start  out with the best of  intentions, spend $1000                                                               
a year, do it for three years  and then they can't do it anymore.                                                               
If the state  is involved in taking the money  that would have to                                                               
be addressed.                                                                                                                   
MS.  HALL   said  those  are   called  "lapse  rates"   and  that                                                               
information could be  found in the 5,000 long  term care policies                                                               
that are in  effect in the state today. She  said they could also                                                               
continue to pursue finding statistics from other states.                                                                        
3:02:33 PM                                                                                                                    
SENATOR BUNDE  noticed a representative  from the  Permanent Fund                                                               
Division, and in the past  those folks have been rather resistant                                                               
to getting  these check off  things because they  "Christmas tree                                                               
up." It would be good to hear their position.                                                                                   
CHAIR  PASKVAN said  they need  to receive  a lot  of information                                                               
before advancing this bill. He said  it would be held for further                                                               
3:03:49 PM                                                                                                                    
CHAIR PASKVAN announced an at ease from 3:03 - 3:05 p.m.                                                                        
               SB 278-LEAVE FOR MILITARY SPOUSES                                                                            
3:06:05 PM                                                                                                                    
CHAIR PASKVAN announced SB 278 to be up for consideration.                                                                      
3:06:09 PM                                                                                                                    
SENATOR  BILL WIELECHOWSKI,  sponsor  of SB  278, explained  that                                                               
this bill allows  spouses of soldiers serving in  combat zones to                                                               
take 10 days  of unpaid leave from work while  that soldier is on                                                               
leave from the field of battle.  He said the many of the concerns                                                               
have been  addressed. Two  changes were suggested  at the  end of                                                               
the  last  hearing.  One  was   to  fix  the  language  currently                                                               
describing a period of military  contact. The other change was at                                                               
Senator  Kookesh's request  to clarify  that schools  with 20  or                                                               
fewer employees are  not required to provide 10 days  of leave to                                                               
their  teachers without  pay, but  they are  also not  prohibited                                                               
from doing that.                                                                                                                
3:07:45 PM                                                                                                                    
GEORGE ASCOTT,  staff to Senator  Wielechowski, said  the changes                                                               
can be found in committee (CS)  that had not been adopted labeled                                                               
26-LS1034\C. The first  change was made because of  an error that                                                               
required Congress  to have formally  declared war in order  for a                                                               
person in the regular armed forces  to qualify for this. It turns                                                               
out that Congress  has not formally declared war  since WWII, but                                                               
they have authorized  it. That clarification was made  on page 3,                                                               
lines 7-8, page 5, line 22, and page 7, lines 11-12.                                                                            
The  second  change  was  on  page  2,  lines  1-4,  to  make  it                                                               
absolutely clear  that teachers that  work for schools  with less                                                               
than 20 employees, particularly rural  schools that may have only                                                               
one teacher, may  provide this leave if they want  to but are not                                                               
required to.                                                                                                                    
3:09:57 PM                                                                                                                    
SENATOR KEVIN MEYER asked how  this bill differs from the Federal                                                               
Family Medical Leave Act.                                                                                                       
MR. ASCOTT  explained the major  difference is that SB  278 would                                                               
allow  more Alaskan  soldiers to  qualify. Under  federal law  an                                                               
employee must  work for  an employer with  50 or  more employees.                                                               
This  bill applies  to an  employer  with 20  or more  employees.                                                               
Under the  federal act an  employee must  have worked for  a full                                                               
year  and  a total  of  1,250  hours  during  that year;  SB  278                                                               
requires an employee to have worked  more than 20 hours per week.                                                               
This is in response to  the fact that military families typically                                                               
tend to move  every couple of years; the spouse  is often raising                                                               
children  and can't  necessarily work  for a  full year  for that                                                               
many hours - or hasn't during a deployment.                                                                                     
CHAIR PASKVAN asked for the difference in hours per year.                                                                       
MR.  ASCOTT said  under  SB  278 an  employee  must  work for  an                                                               
employer that has  more than 20 employees for more  than 20 hours                                                               
per week.  Under the federal law  an employee has to  have worked                                                               
for a full year of not less than 1,250 hours to qualify.                                                                        
SENATOR MEYER asked how they arrived  at 20 employees or more; he                                                               
liked  the  federal  limit  of  50  because  more  employees  are                                                               
available to cover for the person who would be gone.                                                                            
MR. ASCOTT replied  they reviewed what other states  did; many of                                                               
them have a  20 employee limit and hadn't  discovered any problem                                                               
with meeting that criterion.                                                                                                    
SENATOR MEYER  mentioned he  liked the  correction that  they are                                                               
now  requiring  a two-week  notice.  That  gives the  employer  a                                                               
chance to get a temporary to fill in.                                                                                           
3:14:07 PM                                                                                                                    
JEFFREY  MITTMAN, Executive  Director,  American Civil  Liberties                                                               
Union (ACLU)  of Alaska, said  they worked with the  Senate State                                                               
Affairs Committee  on constitutional  issues on  SB 278  and they                                                               
now fully support  it. The current version is  in compliance with                                                               
the Alaska Supreme Court's ruling in AKCLU v Alaska.                                                                            
3:15:01 PM                                                                                                                    
AL   TAMAGNI,   Sr.,   Pension  Services   International,   Inc.,                                                               
Anchorage, said  they looked  at the House  version of  this bill                                                               
initially and determined  that the other states  had passed their                                                               
bills before  the enactment of  the Defense Authorization  Act of                                                               
2010 that was signed by President  Obama on October 28, 2009. The                                                               
federal  act  grants  5  days  of unpaid  leave  and  the  Alaska                                                               
proposal grants  10 working  days. He  didn't think  the sponsors                                                               
were aware of  this passed legislation when it was  in the House.                                                               
Basically the federal act takes  care of all these problems. Some                                                               
parts of the  CS are regulated by the  Employee Retirement Income                                                               
Security Act of 1974 (ERISA),  which can't be superseded by state                                                               
law.   Most importantly there  has been  no evidence at  all that                                                               
this  is being  abused by  Alaskan employers.  He considered  the                                                               
suggestion in  this bill a  "slap in our  face." It is  trying to                                                               
solve a problem that does not exist.                                                                                            
3:18:26 PM                                                                                                                    
CHAIR PASKVAN  asked if he  had a problem  with the 20  versus 50                                                               
employee limit.                                                                                                                 
MR. TAMAGNI answered yes.                                                                                                       
CHAIR  PASKVAN  asked if  he  had  a  problem with  the  two-week                                                               
MR.   TAMAGNI  replied   yes,  because   there  are   times  when                                                               
deployments happen that  they don't have two  weeks' notice. It's                                                               
military tactics to  change deployment times in the  event of war                                                               
so that no  one knows precise times of  transportation. He didn't                                                               
see why this  bill was needed because the federal  law takes care                                                               
of everything and has exempted  all small entities with less than                                                               
50 employees under the Family Medical Leave Act.                                                                                
SENATOR MEYER  followed up saying 50  is better than 20.  It just                                                               
seems like  20 employees didn't  give a whole lot  of flexibility                                                               
to an employer  for filling in for someone who  would be gone for                                                               
10 days. Fifty  days would give an employer enough  time to cover                                                               
for the person who is absent.                                                                                                   
MR. TAMAGNI agreed.  Just leave the federal act  in place because                                                               
it addresses everybody's concerns.                                                                                              
SENATOR MEYER  said that  was a  good point.  He didn't  know the                                                               
differences between the federal act and this bill.                                                                              
MR.  TAMAGNI said  the federal  act  allows five  days of  unpaid                                                               
leave for the  spouse. This bill wants 10 working  days of unpaid                                                               
leave and to  apply to employers who have more  than 20 employees                                                               
when the federal  act says 50. There is  no demonstrated evidence                                                               
of  any  abuse  or  problems.  He said  they  have  checked  with                                                               
employers  in  Anchorage  and  Fairbanks  and  lot  of  them  are                                                               
veterans themselves.                                                                                                            
3:21:59 PM                                                                                                                    
RIC DAVIDGE, President, Viet Nam  Veterans of America, said he is                                                               
also Chairman  of the  Alaska Veterans  Foundation. With  all due                                                               
respect  to the  person who  testified before  him, he  said that                                                               
military families  don't always get  much notice, and,  yes, most                                                               
Alaskan  businesses  have  been  very  helpful  for  spouses  and                                                               
families to spend  time with their warrior, but this  bill is not                                                               
just dealing with deployment and  return. It is also dealing with                                                               
when a soldier is  given R&R time but is unable  to return to the                                                               
country  and the  spouse would  like to  go over  and meet  their                                                               
warrior and  spend some time  with them too.  That is why  the 10                                                               
days is important.                                                                                                              
He thanked Senator Wielechowski for  sponsoring this. He said the                                                               
core issue  is that the  State of  Alaska is making  a statement,                                                               
preemptive  of problems,  to allow  10 working  days without  pay                                                               
with reasonable  notice to  be given  to a  spouse to  spend time                                                               
with their warrior during overseas deployments.                                                                                 
He said  a woman called the  Foundation last year and  would have                                                               
made an extraordinary  witness because her warrior  was, in fact,                                                               
wounded. Her  employer was unwilling to  give her time off  to go                                                               
overseas.  While they  were able  to eventually  resolve it,  the                                                               
situation  was unimaginable.  Having  a law  would  make it  very                                                               
clear and it is a reasonable request.                                                                                           
3:24:30 PM                                                                                                                    
STACY BANNEMAN, representing herself,  supported SB 278. Said she                                                               
is the wife of an active  duty Army Guard soldier who has already                                                               
served two  tours in Iraq.  He received  a bronze star  in combat                                                               
and  a combat  infantry badge.  During both  deployments she  was                                                               
working  full or  part time  for  employers for  whom the  recent                                                               
changes  to the  federal Family  Medical Leave  Ace for  military                                                               
families will never apply.                                                                                                      
She  explained that  for  the  first year  of  the  Viet Nam  war                                                               
married  men  were  exempt  from  the  draft;  married  men  with                                                               
children were  give draft  deferments because  it was  thought to                                                               
constitute too much of hardship  on the families. During Viet Nam                                                               
the  majority of  troops served  one tour  and comparatively  few                                                               
citizen soldiers  served in combat.  However, in  comparison, the                                                               
bulk of the boots on ground  in Afghanistan and Iraq are married,                                                               
they  have served  or are  serving multiple  tours; most  of them                                                               
have  children. "But  America  doesn't seem  to  care about  that                                                               
anymore even as military families  are increasingly stretched and                                                               
stressed to the breaking point."                                                                                                
She said nearly  70 percent of military spouses  work outside the                                                               
home, but  a lot of spouses  are unable to spend  time with their                                                               
loved one  immediately prior  to a  deployment during  a two-week                                                               
R&R if  it even happens  or when  their husband comes  home. With                                                               
every  single deployment  they have  to  make impossible  choices                                                               
between work and family. Forcing  military families to make these                                                               
choices over and over  again when a nation is at  war is the very                                                               
definition of a  lack of patriotism and a failure  to support the                                                               
troops and their military families.                                                                                             
Shortly  before  her husband's  most  recent  deployment she  had                                                               
started a  new job and couldn't  get any time off.  After several                                                               
months  of training  at  Ft. McCoy,  WI, he  left  for Iraq.  She                                                               
didn't see him for more than  a year, but he returned safely. But                                                               
the reality  is that some soldiers  are coming home in  a box and                                                               
some will  spend the rest of  their lives wishing for  those last                                                               
two weeks with them.                                                                                                            
She  acknowledged recent  changes to  the federal  Family Medical                                                               
Leave Act, but  they do not cover temporary,  part time, seasonal                                                               
or contract  workers. They  don't take  into account  the reality                                                               
and  frequency of  relocation required  of active  duty personnel                                                               
and their  families, and the fact  that many spouses have  to cut                                                               
back  to  part time  work  in  order  to  handle child  care  and                                                               
household responsibilities  during deployment (they are  also the                                                               
primary unpaid caretakers  of veterans as well).  The Act doesn't                                                               
take into account that most  Guard Reserve spouses work for small                                                               
businesses,  many in  rural communities,  or  that an  increasing                                                               
number of  employers are creating  a virtual workplace  in hiring                                                               
contract workers.                                                                                                               
She said  in order to be  eligible for the federal  law, military                                                               
spouses are required to have been  working for an employer for at                                                               
least 12 months, worked at least  1,250 hours during the prior 12                                                               
months and be located at a work  site where there are at least 50                                                               
employees  within a  75  mile  radius. So,  for  all intents  and                                                               
purposes  the federal  law  is meaningless  for  the majority  of                                                               
military family members.                                                                                                        
In 2008  Washington State  passed the  Military Family  Leave Law                                                               
and in 2009  Oregon State followed suit.  She strongly encouraged                                                               
Alaska to pass SB 278.                                                                                                          
SENATOR MEYER said he was a  little shocked that she couldn't get                                                               
some time off to meet her spouse.                                                                                               
MS.  BANNEMAN replied  she couldn't  get time  off during  either                                                               
SENATOR MEYER asked if that was an employer in Alaska.                                                                          
MS. BANNEMAN  answered no; it was  in the Lower 48,  but she said                                                               
her story  is not an anomaly.  The thing is they  can't afford to                                                               
complain  to their  employers.  When you  are  a military  spouse                                                               
enduring these deployments  your plate is so full  that you don't                                                               
have  the time  or  energy  to pursue  other  avenues and  filing                                                               
SENATOR MEYER  said he has never  heard of an employer  in Alaska                                                               
not letting an employee have time  off to see their spouse during                                                               
an R&R. He said Alaska really appreciates its military.                                                                         
CHAIR PASKVAN asked if she had lived here in the last six years.                                                                
MS. BANNEMAN  replied no; she  has lived in Washington  State and                                                               
in Oregon.                                                                                                                      
SENATOR  MEYER said  he takes  offense  at someone  who lives  in                                                               
Washington and Oregon saying Alaskans  don't appreciate and honor                                                               
its military because they do.                                                                                                   
MS. BANNEMAN  apologized if he  took offense. She  clarified that                                                               
she wasn't talking about Alaska.  She said this is her experience                                                               
and she had stated she has not lived in Alaska.                                                                                 
3:32:01 PM                                                                                                                    
CHAIR PASKVAN  said this bill  raises significant  policy changes                                                               
and he held SB 278  for further consideration. Finding no further                                                               
business to come  before the committee, he  adjourned the meeting                                                               
at 3:32 p.m.                                                                                                                    

Document Name Date/Time Subjects