SB 5-MEDICAL ASSISTANCE ELIGIBILITY  2:38:17 PM CHAIR DAVIS announced that the next bill before the committee was SB 5. She noted that at the previous meeting the CS for SB 5, version I, was adopted. SENATOR MEYER asked if anyone from the Department of Law was present. JEAN MISCHEL, Attorney, Legislative Legal Counsel, Legislative Legal and Research Services, Legislative Affairs Agency, answered questions pertaining to SB 5. SENATOR MEYER pointed out that the new version [I] of the bill addresses previous concerns about abortion funding. By [maintaining] Medicaid coverage for children over 12 at 175 percent of the federal poverty level (FPL), the risk of funding more abortions is reduced. He asked if two classes of people were being created by the bill; those over 12 who are funded at 175 percent of the FPL and those 12 and under who are funded at 200 percent of the FPL. He questioned if SB 5 could be challenged in court for that reason. He requested a legal explanation of what the court would likely do if the bill is challenged. MS. MISCHEL replied that she did consider the equal protection issue that might be raised when drawing a line regarding eligibility based on age. She said she could not predict if the bill will be challenged for that reason; however, she opined if the bill is challenged on equal protection grounds, it would likely survive constitutional scrutiny because Medicaid has many age categories for both mandatory and optional services. Under an equal protection analysis, the courts would examine whether or not children over 13 are similarly situated to the expanded income eligibility category that version I of SB 5 provides. That would be a hurtle for a challenger because teenagers have different types of health problems and the legislature has the ability to make cost decisions and provide services that the legislature considers, from a policy standpoint, valuable and cost effective. MS. MISCHEL explained that Congress provides that for mandatory coverage, all states that participate in Medicaid must provide mandatory medical services for kids age six and younger at 133 percent of FPL. That demonstrates that there already is an age cutoff. Some states only provide for that age group; Nevada is an example. She continued to say if a family is at or below 100 percent of the FPL, that age limit goes away. SB 5 goes well above the mandatory minimums. MS. MISCHEL stated that if the court found that teenagers were similarly situated to kids under 13, then the court would look at whether or not there is a fundamental interest at stake. She said she could not answer that complicated question. She stressed that it is up to the legislature to articulate either a compelling interest or a legitimate interest, depending on what the court determines is at stake. Because there is a potential for dealing with reproductive services for teenagers, the court could apply the compelling interest standard if they found that teenagers were similarly situated. She noted that would be a higher burden for the state to meet, but not an impossible burden. There are many potential state interests, such as to provide medical services to a more vulnerable population, or to cover immunizations for school-age children. The legislature would have to justify treating similarly situated individuals. If a court found that it was just an economic interest, the state would need to articulate a legitimate interest for drawing the age distinction and provide some rational basis for cutting off the age limits. MS. MISCHEL related that she could not find any cases that looked at age limits that would have precedential value. She gave an example of a Washington state case for home care services in which an "age of 13", along with "a child living at home", was found to be arbitrary. The court would be looking to see if the age cutoff was arbitrary. SB 5 is neutral about what type of care is provided. She concluded that it is up to the legislature to draw the distinctions. Age categories are common distinctions made for Medicaid purposes. She gave examples of age categories. She said SB 5 just deals with an added income limit. MS. MISCHEL stated that the risk to the state is fairly low because if an equal protection challenge did prevail, after first a finding that the younger kids are similarly situated to the older ones, and that the state either didn't have a compelling interest or legitimate interest that is reasonably related to the change in the law, the result would not be to eliminate Medicaid care for children in general, it would be to go back to the 175 percent category. MS. MISCHEL pointed out that the other thing version I of SB 5 does is include the added income category for children under the age of 13 in the cost-sharing provision, just as it does for children under 19 years old who are from homes with incomes over 175 percent of the FPL. 2:50:36 PM SENATOR MEYER summarized that if the courts would find SB 5 to be unconstitutional, the statute would revert back to 175 percent of the FPL for everyone. MS. MISCHEL said yes. The court would invalidate the change. SENATOR MEYER noted that the reason the age distinction was being made in the bill was due to the possibility of abortions. He asked if the court would find that reason arbitrary and capricious. MS. MISCHEL said she did not know, but thought it extremely unlikely. The Alaska Supreme Court has already found that the state has a legitimate interest in protecting children and providing medically necessary services. In the parental consent case, it was found that parents and the state have a legitimate interest in preventing abortions for children to the extent that is allowed under the privacy interests in the state. She did not think "arbitrary" would be considered. The question is whether or not the court would say the only reason the legislature has limited the increased eligibility category is to exclude abortion coverage. She opined that someone might be able to argue the case on privacy grounds. The court would apply a compelling interest standard and that interest would have to be narrowly tailored to the change. Even under the higher level of scrutiny, the court could find compelling state interest, as they did in the parental notice litigation. SENATOR MEYER gave an example of a qualifying child, age 12, losing eligibility at age 13. MS. MISCHEL agreed with Senator Meyer's example. SENATOR DYSON thanked Ms. Mischel for her work. He guessed that the bill would be challenged, and that it would be difficult for the amendment to survive the court challenge. 2:54:23 PM MS. MISCHEL suggested articulating additional policy reasons for the age cutoff, in addition to preventing teen abortions or pregnancies. She gave examples such as how many children are affected, the cost benefit analysis, and types of medical care younger children need versus older children. SENATOR DYSON understood it was up to the state to demonstrate a compelling state interest for the position it is taking on the amended version of SB 5 in order to meet any challenges. CHAIR DAVIS said the bill would not go to Senate Finance, but rather to Senate Rules. She requested that the bill be moved from committee. SENATOR MEYER asked about the new fiscal notes. CHAIR DAVIS said fiscal notes will be attached when the bill goes to the Rules Committee. At-ease from 2:57 p.m. to 2:58 p.m. 2:58:23 PM SENATOR EGAN moved to report the CS for SB 5, version I, from committee with individual recommendations and the forthcoming fiscal notes. SENATOR DYSON objected. A roll call vote was taken. Senators Meyer, Egan, and Davis voted in favor of the motion and Senator Dyson voted against it. Therefore, CSSB 5(HSS) moved from the Senate Health and Social Services Committee by a 3:1 vote.