SENATE BILL NO. 87 "An Act expanding medical assistance coverage for eligible children and pregnant women; relating to cost sharing for certain recipients of medical assistance; and providing for an effective date." SENATOR BILL WIELECHOWSKI, SPONSOR, explained that the goal of SB 87 is to increase the eligibility requirements for DKC to 200 percent. He stated that 80 percent of children without health insurance are from working families. Private insurance for children can cost thousands of dollars, with a large deductable and co-pay. This bill would allow families with incomes up to 300 percent of the FPL to buy into DKC using a sliding fee scale for premiums and a 20 percent co- pay. Those with the greatest means would reimburse the state roughly 90 percent of its costs. An opportunity exists to take advantage of millions of federal dollars and provide the opportunity to allow all children access to health insurance. 10:19:53 AM Mr. Wielechowski opined that the bill would save the state money. He stated that Providence and Alaska Regional Hospitals in Anchorage report providing $89 million in uncompensated care in 2006. All premiums are increased when hospital care is uncompensated. In 2005, the total cost of health care in Alaska for the uninsured (excluding costs paid out-of-pocket by the uninsured) was $125 million (Families USA). He estimated that every Alaskan family would pay $2248 in 2010 for increased premiums. The opportunity exists to spend millions of federal dollars resulting in significant cost savings for all Alaskans including the state's 14,000 employees. Providing health insurance to multiple families will ultimately save millions of dollars. He noted that there was not an increment in the HESS budget for DKC, which leads him to believe that the administration is not anticipating increase costs due to raising the eligibility limits. 10:22:38 AM Co-Chair Stedman stated that the fiscal note included language regarding staff increases. Senator Wielechowski answered that he had been working with the administration to seek efficiencies in the administration of the bill. Co-Chair Hoffman stated that even though the money for the expanded program is not in the operating budget, the fiscal note is a method of accommodating the increases, if the legislation passes. 10:24:13 AM MICHELLE SYDEMAN, STAFF, SENATOR WEILECHOWSKI, mentioned the original fiscal note. She noted that there had been numerous meetings with the department to review the overall costs in terms of the general fund as well as the number of required positions. She stated that there is a revised fiscal note based on new understanding about available federal funds. She assured that the amount was substantially less than the one listed before the committee. The assumption is that there would be some changes in the bill with regard to the co-pay amount. The new fiscal note shows significantly fewer staff. Co-Chair Stedman asked for the number of staff listed on the new fiscal note. Ms. Sydeman understood that there were eleven staff listed on the most current fiscal note. She stated that she had not seen the note. Senator Huggins asked how many staff are employed. Senator Thomas asked how many full time positions would be required for the changes in the bill. Senator Wielechowski answered that the number of additional children in SB 13 is roughly 1500, and the number of additional children in SB 87 is roughly 1500. Co-Chair Stedman stated that he would like to wait until he had updated information on SB 13. 10:27:13 AM Senator Elton questioned the point that there was not a requested increment for DKC, even with the eligibility increase from 175 percent of the FPL to 200 percent of the FPL. He suggested that there might not be a requested increment because there is anticipation by the department of a co-pay/premium structure in place by the next fiscal year. Senator Wielechowski answered that the Health and Social Services(HSS) committee had not addressed the increment increase. The co-pay and premium system would require additional staff. Senator Elton suggested that new staff would be necessary with a co-pay system. He asked for the additional increment of positions needed if the program increased from 200 to 300 percent of the FPL. Senator Wielechowski stated that SB 87 does include a co-pay system from 200 to 300 percent of the FPL. Senator Elton asked that if additional staff are required to implement a co-pay system for a program serving 150 to 200 percent of the FPL, could the same level of staff handle a co-pay system between 200 and 300 percent of the FPL? Senator Wielechowski answered that he would rather see the co-pay begin at 200 percent of the FPL and extend to 300 percent of the FPL. He felt concern about dropping the co- pay system down to 150 percent of the FPL. Senator Elton explained that he was not suggesting that the co-pay drop to serve 150 percent of the FPL. He wanted to know what the number of additional staff required to implement the increase to 200-300 percent of the FPL. 10:31:02 AM Senator Olson asked how the same number of staff needed to serve 200 percent of the FPL could also serve 300 percent of the FPL. Senator Wielechowski answered that the increase from 175 percent to 200 percent adds an additional 1579 people. To extend from 200 percent of the FPL to 300 percent of the FPL with the co-pay system adds an additional estimated 1500 children and pregnant women to the program. 10:31:52 AM DAHNA GRAHAM ANCHORAGE FAITH AND ACTION CONGREGATIONS TOGETHER (AFACT) (testified via teleconference). She spoke in favor of income limits for DKC at 200 percent of poverty level. Above 200 percent of the FPL, she maintained that a co-pay or premium system would be appropriate. PAT SENNER, ALASKA NURSES ASSOCIATION (testified via teleconference) She requested the exploration of cost sharing methods. She did not agree with cost sharing for people below 200 percent of the FPL. She spoke in favor of exploring all options to allow an increase of children covered above 200 percent of the FPL. 10:35:38 AM ROD BETIT, PRESIDENT, ALASKA HOSPITAL ASSOCIATION, spoke in support of SB 87. He agreed with sharing financial responsibility as income increases. He agreed with language in SB 87 discouraging a shift of people currently covered by private plans to a public plan. The approach in SB 87 is similar to that of other countries' successful health plans. JORDEN NIGRO, PRESIDENT, ALASKA ASSOCIATION OF HOMES FOR CHILDREN, stated that the Alaska Association of Homes for Children would like to see a co-pay established for families over 200 percent of the FPL only. MARIE DARLIN, PRESIDENT, AARP CAPITAL CITY TASK FORCE, spoke in support of SB 87. She agreed that raising the floor to 200 percent was the most important factor. 10:41:06 AM Co-Chair Stedman asked for the administration's view of the program expansion. Mr. Sherwood stated that the administration supports expanding the program and cost sharing. He stated that he could not provide a position on the bill. Senator Elton asked if additional staff would be required to implement cost sharing for 200 to 300 percent of the FPL. Mr. Sherwood answered that the administration's position is not to implement cost sharing for groups currently served. Pregnant women are exempt from cost sharing. The administration does not have plans to administer new staff to collect premiums or administer the co-pay provisions. Senator Elton asked if the department was exempting expansion. He asked if the department was considering cost sharing from 175 to 200 percent of the FPL if SB 13 passes. Mr. Sherwood stated that the administration's response to cost sharing has not been determined in regard to SB 13. The department will not implement cost sharing with SB 13. He assumed that the department would respect legislative intent. 10:44:59 AM SB87 was HEARD and HELD in Committee for further consideration. 10:46:08 AM