Legislature(2015 - 2016)BUTROVICH 205
04/16/2015 09:00 AM Senate STATE AFFAIRS
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| Audio | Topic |
|---|---|
| Start | |
| HB135 | |
| SB74 | |
| HJR22 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 74 | TELECONFERENCED | |
| + | HB 135 | TELECONFERENCED | |
| + | HJR 22 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
SENATE STATE AFFAIRS STANDING COMMITTEE
April 16, 2015
9:18 a.m.
MEMBERS PRESENT
Senator Bill Stoltze, Chair
Senator John Coghill, Vice Chair
Senator Charlie Huggins
Senator Bill Wielechowski
MEMBERS ABSENT
Senator Lesil McGuire
COMMITTEE CALENDAR
HOUSE BILL NO. 135
"An Act establishing a Roth contribution program for the public
employees' deferred compensation program; and providing for an
effective date."
- MOVED HB 135 OUT OF COMMITTEE
SENATE BILL NO. 74
"An Act relating to permanent fund dividends; relating to a
medical assistance reform program; establishing a personal
health savings account program for medical assistance
recipients; relating to the duties of the Department of Health
and Social Services; establishing medical assistance
demonstration projects; and relating to a study by the
Department of Health and Social Services."
- MOVED CSSB 74(STA) OUT OF COMMITTEE
HOUSE JOINT RESOLUTION NO. 22
Urging the Canada Border Services Agency to keep the border
between Hyder, Alaska, and Stewart, British Columbia, open 24
hours a day.
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 135
SHORT TITLE: PUBLIC EMPLOYEE ROTH CONTRIBUTIONS
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
03/04/15 (H) READ THE FIRST TIME - REFERRALS
03/04/15 (H) L&C, FIN
03/23/15 (H) L&C RPT 6DP 1NR
03/23/15 (H) DP: TILTON, KITO, JOSEPHSON, COLVER,
LEDOUX, OLSON
03/23/15 (H) NR: HUGHES
03/23/15 (H) L&C AT 3:15 PM BARNES 124
03/23/15 (H) Moved HB 135 Out of Committee
03/23/15 (H) MINUTE(L&C)
03/31/15 (H) FIN AT 1:30 PM HOUSE FINANCE 519
03/31/15 (H) Heard & Held
03/31/15 (H) MINUTE(FIN)
04/06/15 (H) FIN AT 1:30 PM HOUSE FINANCE 519
04/06/15 (H) Moved HB 135 Out of Committee
04/06/15 (H) MINUTE(FIN)
04/07/15 (H) FIN RPT 9DP
04/07/15 (H) DP: SADDLER, KAWASAKI, PRUITT, WILSON,
GUTTENBERG, GATTIS, EDGMON, MUNOZ,
04/07/15 (H) THOMPSON
04/14/15 (H) TRANSMITTED TO (S)
04/14/15 (H) VERSION: HB 135
04/15/15 (S) READ THE FIRST TIME - REFERRALS
04/15/15 (S) STA, FIN
04/16/15 (S) STA AT 9:00 AM BUTROVICH 205
BILL: SB 74
SHORT TITLE: MEDICAID REFORM/PFD/HSAS/ER USE/STUDIES
SPONSOR(s): KELLY
03/13/15 (S) READ THE FIRST TIME - REFERRALS
03/13/15 (S) HSS, STA, FIN
03/13/15 (S) HSS AT 1:30 PM BUTROVICH 205
03/13/15 (S) -- MEETING CANCELED --
03/23/15 (S) HSS AT 1:30 PM BUTROVICH 205
03/23/15 (S) Heard & Held
03/23/15 (S) MINUTE(HSS)
04/01/15 (S) HSS AT 1:30 PM BUTROVICH 205
04/01/15 (S) Heard & Held
04/01/15 (S) MINUTE(HSS)
04/02/15 (S) STA AT 9:00 AM BUTROVICH 205
04/02/15 (S) <Pending Referral>
04/03/15 (S) HSS AT 1:30 PM BUTROVICH 205
04/03/15 (S) -- MEETING CANCELED --
04/08/15 (S) HSS AT 1:30 PM BUTROVICH 205
04/08/15 (S) Heard & Held
04/08/15 (S) MINUTE(HSS)
04/10/15 (S) HSS AT 1:30 PM BUTROVICH 205
04/10/15 (S) Moved CSSB 74(HSS) Out of Committee
04/10/15 (S) MINUTE(HSS)
04/11/15 (S) HSS RPT CS 3DP 1NR NEW TITLE
04/11/15 (S) DP: GIESSEL, ELLIS, STOLTZE
04/11/15 (S) NR: STEDMAN
04/13/15 (S) STA AT 8:00 AM BUTROVICH 205
04/13/15 (S) Heard & Held
04/13/15 (S) MINUTE(STA)
04/14/15 (S) STA AT 8:00 AM BUTROVICH 205
04/14/15 (S) Scheduled but Not Heard
04/15/15 (S) STA AT 8:00 AM BUTROVICH 205
04/15/15 (S) Heard & Held
04/15/15 (S) MINUTE(STA)
04/16/15 (S) STA AT 9:00 AM BUTROVICH 205
BILL: HJR 22
SHORT TITLE: STEWART-HYDER BORDER HOURS
SPONSOR(s): ORTIZ
04/02/15 (H) READ THE FIRST TIME - REFERRALS
04/02/15 (H) STA
04/09/15 (H) STA RPT 4DP
04/09/15 (H) DP: TALERICO, STUTES, KELLER, LYNN
04/09/15 (H) STA AT 8:00 AM CAPITOL 106
04/09/15 (H) Moved HJR 22 Out of Committee
04/09/15 (H) MINUTE(STA)
04/13/15 (H) TRANSMITTED TO (S)
04/13/15 (H) VERSION: HJR 22
04/14/15 (S) READ THE FIRST TIME - REFERRALS
04/14/15 (S) STA
04/16/15 (S) STA AT 9:00 AM BUTROVICH 205
WITNESS REGISTER
JOHN BOUCHER, Deputy Commissioner
Alaska Department of Administration
Juneau, Alaska
POSITION STATEMENT: Provided an overview of HB 135.
KATHY LEA, Chief Pension Officer
Division of Retirement and Benefits
Alaska Department of Administration
Juneau, Alaska
POSITION STATEMENT: Addressed questions regarding HB 135.
HEATHER SHADDUCK, Staff
Senator Pete Kelly
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Answered questions regarding SB 74.
JON SHERWOOD, Deputy Commissioner
Medicaid and Health Care Policy Division
Alaska Department of Health and Social Services
Juneau, Alaska
POSITION STATEMENT: Addressed questions regarding SB 74.
REPRESENTATIVE DAN ORTIZ
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Prime sponsor of HJR 22.
ACTION NARRATIVE
9:18:02 AM
CHAIR BILL STOLTZE reconvened and adjourned the April 15, 2015
Senate State Affairs Standing Committee meeting that was
recessed to the call of the Chair. He called the April 16, 2015
Senate State Affairs Standing Committee meeting to order at 9:18
a.m. Present at the call to order were Senators Coghill,
Huggins, and Chair Stoltze.
HB 135-PUBLIC EMPLOYEE ROTH CONTRIBUTIONS
9:19:39 AM
CHAIR STOLTZE announced the consideration of HB 135.
9:20:05 AM
JOHN BOUCHER, Deputy Commissioner, Alaska Department of
Administration, Juneau, Alaska, provided an overview of HB 135
as follows:
HB 135 is an act establishing a Roth contribution
option for public employees who choose to participate
in the deferred compensation program. This legislation
enables plan members to take control of one portion of
their retirement portfolio that they currently do not
have a choice over, essentially that is the timing of
the taxation of the contributions that they make to
their deferred compensation plan. The current statute
has been in effect since 1973 and the statute
currently only allows deferred compensation to be made
as part of a pretax contribution. HB 135 is an effort
to modernize and update the options that are available
to members of the plan to comport with changes that
have been made on a national level with other deferred
compensation plans.
CHAIR STOLTZE asked if the new opportunities are because of
federal laws.
MR. BOUCHER answered correct. He continued his overview as
follows:
In January of 2011, Congress passed legislation
enabling governments to implement a designated Roth
contribution option and HB 135 would allow for the
incorporation of this option to public employees who
participate in the State of Alaska deferred
compensation plan. The bill enables members to control
the timing of the taxation of their deferred
compensation contributions, whether it be at the time
that the contribution is made to the deferred
compensation plan or at the time of distribution.
Should HB 135 pass as purposed, it would enable
members to choose to have their contributions taxed at
the time of contribution, which would mean that the
income could be considered tax-free at the time of a
qualified dividend distribution. The default option
for existing members would be the current pre-tax plan
and members would have to positively elect to a Roth
investment to have their contributions changed to a
taxable status. This proposed legislation is in
response to requests by members to the Division of
Retirement & Benefits to offer this option to members.
9:21:58 AM
SENATOR WIELECHOWSKI joined the committee meeting.
CHAIR STOLTZE asked if the request was from organized employee
groups or individuals.
MR. BOUCHER replied that the request came from individual
employees.
CHAIR STOLTZE asked if there have been any formalized requests
from any employee groups or retired groups.
9:23:46 AM
KATHY LEA, Chief Pension Officer, Division of Retirement and
Benefits, Alaska Department of Administration, Juneau, Alaska,
explained that the requests have come to the division through
its regional counselors who travel all over the state and meet
individually with members. She specified that the option was
published a couple of years ago when Congress inaugurated the
bill and the option has been a topic of conversation.
SENATOR WIELECHOWSKI asked if the option is common in other
states.
MS. LEA answered that more states are adding a designated Roth
option. She detailed that approximately 12 states offered the
option.
SENATOR WIELECHOWSKI asked if the maximum that can be deferred
is the same as the current maximum.
MS. LEA answered that the current limit is $18,000. She detailed
that the Roth option would take on all of the rules and
contribution limits of the deferred compensation plan.
SENATOR WIELECHOWSKI asked if contributions can be "stacked"
where $18,000 is deferred to each plan or "split" where $9,000
is deferred to each plan.
9:25:36 AM
MS. LEA answered the contributions can be split as long as the
$18,000 limit is not exceeded.
SENATOR HUGGINS noted that education and healthcare workers have
a Roth 403(b) contribution option. He asked what the differences
were in the various retirement plans.
MS. LEA answered that she is not versed in Roth 403(b) details
because the division does not administer the plan.
SENATOR HUGGINS asked why public employees are not covered by
Social Security and how that came about officially.
MS. LEA explained that the early 1950s, the state's teachers had
an opportunity to come into Social Security and the option at
that time was the teachers did not need to opt into Social
Security due to an existing retirement plan. The State of Alaska
signed an agreement with Social Security that their teachers
would not participate, many states did the same. She revealed
that in 1980, state employees held a referendum and voted for a
Social Security replacement plan, the Alaska Supplemental
Annuity Plan. She noted that the option to choose has sunset and
Social Security only allows an option choice for new entities;
for example, when a borough and city merges.
9:28:28 AM
SENATOR HUGGINS asked if Ms. Lea had history on whether the
teachers supported the state not opting into Social Security.
MS. LEA answered that the division does not have any public
records.
SENATOR WIELECHOWSKI assumed that the same investment options
would be available that would be treated like deferred
compensation. He asked if there would be a separate state
account or could the deferred compensation be directed to a
personal Roth Individual Retirement Account (IRA). He inquired
that if there is a state account, would the same Alaska
Supplemental Annuity Plan (SBS-AP) and deferred compensation
investment options be offered.
MS. LEA answered as follows:
This is an option within the deferred compensation
program, so you would not be able to direct it to a
private IRA and this type of option is only allowed in
a 457 plan because the limits are higher for
contribution, it is a taxation option so the
investment lineup that are in the deferred
compensation plan don't change, it is the same
investments.
SENATOR WIELECHOWSKI asked if the investments are the same
investments that currently exist in the deferred compensation.
MS. LEA answered correct.
SENATOR WIELECHOWSKI asked if a state employee has the option of
rolling their Roth IRA into their own private Roth IRA when the
individual leaves state-service.
MS. LEA answered yes. She specified that the investment product
is "rollable" and can go into a Roth IRA.
9:30:38 AM
SENATOR WIELECHOWSKI asked if there is any opposition to the
bill.
MR. BOUCHER answered that he is not aware of any opposition.
SENATOR WIELECHOWSKI commented that the proposition looks like
another employee option.
MR. BOUCHER answered correct. He opined that the option depends
on how the future of taxation is viewed where a person decides
between the certainty in current rates and the uncertainty in
future rates. He noted that one option could be setting aside a
portion of tax-free income for an individual's heirs. He
summarized that the option is just another tool.
SENATOR COGHILL asked to verify that taxes are paid prior to
deferral.
MR. BOUCHER answered yes.
SENATOR COGHILL asked what tax rates are applied prior to
deferral.
MS. LEA answered that an individual is taxed at the applicable
rate during the time of the pay period contribution.
SENATOR COGHILL asked to verify that an individual decides on
what percentage of income is deferred.
MS. LEA answered correct. She specified that the contribution is
a positive election that the employee has to make.
9:33:46 AM
SENATOR WIELECHOWSKI assumed that excess money after taxes of
$18,000 could be put into a Roth IRA. He asked if a person has
to wait a certain amount of time for withdrawal.
MS. LEA answered that there are some restrictions that are
different from a personal IRA and withdrawal is allowed under
the following conditions:
· Account must be maintained for at least 5 years.
· In the case of a disability.
· A survivor may remove the money.
· Age 59-1/2 and employment has been terminated.
MS. LEA summarized that any investment earnings on the
contributions are not taxed as long as the qualifiers are met.
SENATOR WIELECHOWSKI asked to verify that a person strictly pays
taxes on the dividends or interest if money is withdrawn from
the plan within the first five years.
MS. LEA answered that money cannot be removed from a deferred
compensation plan unless a person is terminated from employment.
CHAIR STOLTZE asked if the plan can be used as a loan account
where an individual can borrow on the money and repay with
interest to oneself.
9:35:33 AM
MS. LEA answered that the state plans do not allow for a loan
option. She specified that a loan option is considered "leakage"
from an individual's retirement plan. She remarked that loans on
a retirement plan is considered robbing from an individual's
future.
CHAIR STOLTZE asked if the policy Ms. Lea described was a
decision that she made in presenting the bill and offering the
programs.
MS. LEA replied that the policy decision was made by the
Legislature when the deferred compensation plan was created.
CHAIR STOLTZE assumed that the policy decision was made with
guidance from the Department of Administration.
SENATOR HUGGINS asked if there is a provision that allows for
rolling over a different Roth IRA into the public employees'
Roth IRA.
9:37:19 AM
MS. LEA answered that private IRA roll-in is permissible except
for the SIMPLE (Savings Incentive Match PLan for Employees) IRA.
SENATOR COGHILL asked how a catch-up contribution works.
MS. LEA answered that a catch-up provision is allowed within
three years of an individual's normal retirement date. She
specified that contributions can be doubled in each of the three
catch-up years where the limit is $36,000 rather than $18,000.
SENATOR WIELECHOWSKI asked to verify that funds from a private
Roth IRA can be rolled into the bill's Roth IRA if the
legislation is passed.
MS. LEA answered yes.
SENATOR WIELECHOWSKI asked if unlimited amounts maybe rolled
into the plan.
MS. LEA answered that she is not sure what the limitation is.
9:39:05 AM
At ease.
9:40:09 AM
CHAIR STOLTZE called the committee back to order. He asked Mr.
Boucher if he had any closing comments.
MR. BOUCHER commented that the plan is a fantastic option for
people who may want to choose to have a portion of their
retirement income not taxed or taxed now and not taxed in the
future.
CHAIR STOLTZE asked to verify that the bill has a zero fiscal
note.
MR. BOUCHER answered correct.
9:41:23 AM
SENATOR COGHILL moved to report HB 135, [version 29-GH1015\A],
from committee with individual recommendations and the attached
zero fiscal note.
9:41:37 AM
CHAIR STOLTZE announced that hearing no objection, [HB 135 moved
out of Senate State Affairs Standing Committee].
9:42:04 AM
At ease.
SB 74-MEDICAID REFORM/PFD/HSAS/ER USE/STUDIES
9:44:08 AM
CHAIR STOLTZE announced the consideration of SB 74.
9:44:24 AM
HEATHER SHADDUCK, Staff, Senator Pete Kelly, Alaska State
Legislature, Juneau, Alaska, stated that the concept of SB 74 is
to slow the growth of Alaska's Medicaid program. She said
Alaska's Medicaid program is growing at a very unsustainable
rate which puts the entire program in jeopardy for the state's
most vulnerable Alaskans. SB 74 is an attempt to make sure that
the state has safeguards in place for a Medicaid program which
Alaska is federally obligated to provide. She set forth that the
bill gets payment reforms in place while trying new concepts
like managed care. She summarized that the bill starts Alaska
down the reform process.
CHAIR STOLTZE remarked that irrespective of whether an expansion
bill passes, SB 74 is a good policy measure.
MS. SHADDUCK added that SB 74 is a good policy call. She noted
that the current administration testified in yesterday's
committee meeting that Alaska's current Medicaid program is
unsustainable without reform.
CHAIR STOLTZE noted that the Department of Health and Social
Services (DHSS) responded to his request for Medicaid cost
projections. He said his intent was to point out Medicaid's
growth and sustainability without expansion. He voiced his
frustration that DHSS has not taken ownership of its Medicaid
cost forecasts.
9:46:58 AM
MS. SHADDUCK revealed that DHSS has been very open with Senator
Kelly's office. She disclosed that there was an exchange on
provisions that were agreed and disagreed upon. She pointed out
that DHSS paid for the Evergreen Economics Report. She added
that the Office of Management and Budget (OMB) and the Alaska
Division of Legislative Finance were excellent in providing
fiscal note and forecasting assistance.
CHAIR STOLTZE stated that perhaps Mr. Sherwood could explain why
DHSS does not want to take ownership of just a simple economic
fact on the fiscal realities of sustainability. He said DHSS has
been given ample opportunity to say what they expect to save;
however, their averting of the discussion of what current growth
is, causes suspicion and puts a little kink in the strong bond
of trust.
9:49:05 AM
JON SHERWOOD, Deputy Commissioner, Medicaid and Health Care
Policy Division, Alaska Department of Health and Social
Services, Juneau, Alaska, stated that DHSS never intended to
hide the numbers.
CHAIR STOLTZE declared that Mr. Sherwood is obligated to
audibilize projected year-by-year growth for the public record.
He reiterated that DHSS did not take ownership on providing
Medicaid growth projections.
9:50:10 AM
At ease.
9:51:51 AM
CHAIR STOLTZE called the committee back to order.
MR. SHERWOOD provided Medicaid spending projections from 2014
out to 2034 as follows:
· 2014: $1.5 billion,
· 2016: $1.7 billion,
· 2018: $2 billion,
· 2022: $2.5 billion,
· 2024: $3 billion,
· 2026: $3 billion,
· 2028: $3.5 billion,
· 2030: $4 billion,
· 2032: $4.2 billion,
· 2034: $4.5 billion.
He added that the general funds component is just over $1.5
billion by 2034.
9:53:13 AM
CHAIR STOLTZE asked to verify that DHSS's projections assume
that the federal government keeps all of its obligations.
MR. SHERWOOD answered that the forecast assumes that the match
rates stay approximately the same.
CHAIR STOLTZE noted that the forecast is absent of any
expansion.
MR. SHERWOOD confirmed that the DHSS forecast is absent of any
expansion or changes to the Medicaid program.
CHAIR STOLTZE appreciated that Mr. Sherwood put DHSS's Medicaid
spending forecast on the record. He asked that Mr. Sherwood
address areas that DHSS supports and does not support. He added
that the Senate Finance Committee will continue to deliberate
the bill and allow public input.
MR. SHERWOOD noted that Commissioner Davidson previously
testified about areas of particular concern about the bill. He
explained that DHSS wants to make sure it understands the
intention of Section 2 requiring a computerized income, asset,
and identity eligibility verification system. He divulged that
DHSS has moved forward on the assumption that the section would
be a separate component that would be an adjunct to the
department's existing computerized eligibility verification
system. He stated that the department has developed cost
estimates for adding components to the current system.
9:55:22 AM
MR. SHERWOOD pointed out that on line 4, the department is
instructed to pursue new payment processes. He said the
department recommends using "or" rather than "and" in the
section because potential conflicts between some of the methods
may occur. He reiterated that DHSS does not support Section 5
which requires Legislative approval prior to adding any
mandatory Medicaid coverage groups. He asserted that the bill
contains a number of beneficial reforms and the department
welcomes an opportunity to pursue those reforms.
CHAIR STOLTZE explained that the department's noted concerns
allows any member in the next committee to make an amendment. He
asked that Mr. Sherwood address the issue of privatization. He
asked if the department and the administration will allow
outsourcing in looking at finding fraud. He noted that Illinois
has been very aggressive in allowing a "different set of eyes"
outside of the institutions. He remarked that outsourcing may
allow the most analytical sets of eyes with a proven track
record to find savings and ferret out inherent abuse that
sometimes is not seen.
9:58:34 AM
MR. SHERWOOD replied that DHSS is always willing to consider
outsourcing when permissible under federal law. He noted that
restrictions exist; for example, eligibility determinations need
to be made by a civil servant. He revealed that DHSS currently
outsources a substantial amount of Medicaid audits and third
party recovery efforts. He disclosed that DHSS has been
instructed by the administration to consider cost effective
opportunities for outsourcing. He summarized that there is no
general philosophical opposition to outsourcing as long as the
department can ensure that programs are operated appropriately,
effectively, and desired outcomes are achieved.
CHAIR STOLTZE pointed out that technology exists to simply use
the internet for finding fraud. He asked if Mr. Sherwood found
internet searches as intrusive.
10:01:03 AM
MR. SHERWOOD replied that DHSS does an extensive amount of
verification; for example, cause for additional investigation
occurs when no income is reported when income generating assets
are noted. He asserted that taking advantage of new technology
must be done in a thoughtful and equitable manner that takes
into consideration privacy issues where people are not singled
out for the wrong sorts of reasons.
CHAIR STOLTZE remarked that the real substantive fraud abuse
cases have been brought on against large providers and
institutions rather than an individual making a bad decision. He
added that the real systematic fraud often occurs at the higher
levels.
10:04:05 AM
SENATOR WIELECHOWSKI noted that legislative staff members are
not permitted to use Facebook. He asked if DHSS employees are
allowed to use Facebook.
MR. SHERWOOD explained that state employees have to get
permission to use Facebook. He noted that an individual must
have a legitimate business purpose to access Facebook through
state resources.
SENATOR COGHILL addressed uncompensated care and noted that
based upon population, the federal government gives
disproportionate share payments to hospitals. He asked how the
disproportionate share payments are calculated.
MR. SHERWOOD answered that there are two kinds of
disproportionate share payments: Medicare and Medicaid. He
specified that the state does not have any direct involvement in
Medicare, but the state's Office of Rate Review calculates how
much an institution is eligible to receive.
SENATOR COGHILL asked to verify that disproportionate means
higher than the regular Medicaid payment. He inquired what
formulation is used.
10:06:45 AM
MR. SHERWOOD answered that he did not know formulation
specifics. He revealed that Alaska has historically not
allocated all of its federal Disproportionate Share Hospital
(DSH) allotment because the state did not have the matching
general funds to go along with it. He specified that the state's
current DSH payments are targeted toward the Alaska Psychiatric
Institute to the maximum extent allowed by federal law. He noted
that there are three other hospitals that provide psychiatric
services as well.
SENATOR COGHILL assumed that calculations are based upon a
hospital's billing volume which includes uncompensated care
flow. He advised that additional uncompensated care details be
provided to the Senate Finance Committee. He stated that
hospitals are probably paid fairly well by Medicaid, but smaller
payers are the ones that have felt the heat due to a payment
system lag. He pointed out that hospitals are able to shift
costs within hospitals and noted that imaging centers pay for
things like uncompensated care.
10:09:50 AM
CHAIR STOLTZE pointed out that hospitals in the Mat-Su region
are very competitive in retaining their profitable imaging
centers.
SENATOR WIELECHOWSKI asked how much the $100 million in
uncompensated care costs the average family in Alaska and how
much an average family would save if Medicaid was expanded.
MR. SHERWOOD answered that he did not have any cost estimates.
10:12:01 AM
SENATOR WIELECHOWSKI noted that 65 to 70 percent of Alaskans
receive government healthcare: state workers, federal workers,
military members, veterans, and Medicare recipients. He asked if
Mr. Sherwood had an estimate of what percentage of the total
state population is already on government healthcare.
MR. SHERWOOD answered that he does not have the information.
SENATOR WIELECHOWSKI replied that he would like to receive
information with a breakdown.
CHAIR STOLTZE asserted that a system that wants to add people on
requires some type of mechanism that is watching out for
institutional fraud before it gets too far and racks up real
numbers. He reiterated that privatization involves organizations
that specialize in ferreting out fraud. He asked if there is a
commitment to outside eyes that have total objectivity solely on
cost containment. He noted that are not always the most savory
during times of budgetary deficits.
10:14:42 AM
MR. SHERWOOOD answered that the department and the
administration are in complete agreement that limited resources
should go to meet the real needs of individuals and not go to
support fraud or abuse. He remarked that a role exists for
external entities in assisting the department in staying
appropriately focused on program integrity
SENATOR HUGGINS asked to confirm that Mr. Sherwood projected
Medicaid costs to increase by 300 percent from 2014 to 2034.
10:18:30 AM
MR. SHERWOOD answered correct.
SENATOR HUGGINS noted that Mr. Sherwood worked off of
assumptions that lower projected growth is due to cost
containment. He admitted that Mr. Sherwood's growth forecast's
big number frightens him if the calculations are incorrect. He
asked of the state's overall healthcare picture is under control
and sustainable.
10:20:10 AM
MR. SHERWOOD revealed that he has worked with the Medicaid
program for 25 years and during the entire time the department
has actively tried to manage and control costs. He remarked that
managing costs has not been the department's only objective and
noted the creation of the Denali KidCare program, expanded
coverage, and added services where needed. He detailed that the
20 year Medicaid cost forecast is based on historical spending
patterns and does not include program changes. He concurred that
the forecast is concerning, but admitted that he has lived with
the concern for 25 years. He said there are always ways to "bend
the curve" and noted that the 2012 forecast's 20 year projection
would have been $6 billion instead of $4.5 billion. He remarked
that Medicaid is not unique and noted that healthcare in general
has seen its expenses rise where its share of the economy
increases due to inflation. He said DHSS will work vigorously to
manage the Medicaid program.
10:22:34 AM
SENATOR HUGGINS asked to verify that Mr. Sherwood has been
involved with Medicaid for 25 years.
MR. SHERWOOD answered yes.
SENATOR HUGGINS asked what the state has done with Denali
KidCare over time.
MR. SHERWOOD explained that Denali KidCare was started in 1999.
CHAIR STOLTZE added that Denali KidCare was part of "Smart
Start."
MR. SHERWOOD explained that the Children's Health Insurance
Program (CHIP) was an option that was added to expand Medicaid
for children. He detailed that existing coverage for low income
children and pregnant women was rolled into a package and called
Denali KidCare. He specified that income limits were set at 200
percent of the poverty level.
CHAIR STOLTZE asked what the program's starting cost was and
what the current costs are.
MR. SHERWOOD answered that he could not provide specific
numbers.
CHAIR STOLTZE asked that Mr. Sherwood provide legislators with
Denali KidCare's growth analysis.
10:24:39 AM
SENATOR COGHILL moved to report CSSB 74(STA) from committee with
individual recommendations and attached fiscal note(s).
10:24:58 AM
CHAIR STOLTZE announced that without objection, CSSB 74(STA),
[version: 29-LS0692\F], moves out of the Senate State Affairs
Standing Committee.
10:25:12 AM
At ease.
HJR 22-STEWART-HYDER BORDER HOURS
10:26:09 AM
CHAIR STOLTZE announced the consideration of HJR 22.
10:26:21 AM
REPRESENTATIVE DAN ORTIZ, Alaska State Legislature, Juneau,
Alaska, prime sponsor, provided an overview of HJR 22 as
follows:
HJR 22 is a resolution that calls on the Canadian
Border Services Agency (CBSA) to reopen a border that
exists between Hyder, Alaska and Stewart, British
Columbia on a 24 hour basis. As of April 1, the border
between Stewart and Hyder was closed and is closed
between midnight and 8:00 a.m.
He said the border closing has created issues for Hyder's 87
residents and Stewart's 500 residents. He explained that Hyder
residents do not have emergency access to hospital facilities.
He added that economic issues are involved where tourism is
impacted and access to the mine on the Hyder side is affected.
He specified that the resolution calls on CBSA to look at their
decision and perhaps reopen the border on a 24 hour basis, at
least during the border's peak-time during the summertime. He
disclosed that he has met with Hyder and Stewart residents at a
town meeting and both communities are very much concerned about
CBSA's decision. He added that U.S. Senator Murkowski's office
and the Governor have been involved as well.
10:28:53 AM
CHAIR STOLTZE asked if there has been an issue raised about
changing the border hours at the Skagway crossing as well.
REPRESENTATIVE ORTIZ answered that he is unaware of a border
issue with Skagway.
CHAIR STOLTZE stated that he will talk to Representative Munoz
regarding the Skagway border. He asked how the proposed daylight
savings bill is being received in Southeast Alaska.
REPRESENTATIVE ORTIZ answered that Southeast folks are happy
that the bill is on hold.
CHAIR STOLTZE asked if the situation with daylight savings will
cause issues with the crossing.
REPRESENTATIVE ORTIZ replied that the issue with daylight
savings has not played into the border crossing discussions.
10:30:30 AM
CHAIR STOLTLZE noted that the committee is lacking a quorum and
recessed the meeting to a call of the Chair. [The committee did
not reconvene this day therefore, HJR 22 was held in committee.]