Legislature(2019 - 2020)GRUENBERG 120
03/26/2019 03:00 PM House STATE AFFAIRS
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| Audio | Topic |
|---|---|
| Start | |
| HB96 | |
| HB71 | |
| HB31 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 96 | TELECONFERENCED | |
| + | HB 71 | TELECONFERENCED | |
| *+ | HB 31 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 96-PIONEERS' HOME AND VETERANS' HOME RATES
3:05:54 PM
CO-CHAIR KREISS-TOMKINS announced that the first order of
business would be HOUSE BILL NO. 96, "An Act relating to Alaska
Pioneers' Home and Alaska Veterans' Home rates and services."
3:06:21 PM
CO-CHAIR FIELDS, as prime sponsor of HB 96, relayed that the
proposed legislation would establish predictable rate increases
pegged to inflation to improve the financial stability of Alaska
Pioneer Homes (APH) while providing certainty and affordability
to the residents. He stated that APH are uniquely Alaskan;
they've existed since 1913 when the first home opened in Sitka
to serve the new incorporated territory. He said that the
newest home was built in Juneau in 1988; in 2007 the Palmer
Pioneer Home became certified by the U.S. Department of Veterans
Affairs (VA) to become the Alaska Veterans & Pioneers Home
(AVPH). There are also Pioneer Homes in Sitka, Anchorage,
Fairbanks, and Ketchikan; together, APH have always served
Alaska seniors as they age in The Last Frontier. He offered
that given the frontier nature of the state, APH have provided
key places for seniors to age in place near their families. He
continued by saying that APH create important space for family
members to age in place safely, in their home communities, and
close to the communities that Alaska elders helped build. The
APH are statutorily established and operated through the
Department of Health and Social Services (DHSS) and for
generations, the legislature has provided very modest general
fund (GF) support to keep them affordable for elders and to
ensure that elders can age here in Alaska instead of moving to
the Lower 48.
CO-CHAIR FIELDS relayed that [Governor Michael J. Dunleavy] has
proposed two significant policy changes that would undo the
State of Alaska's historic commitment to APH: 1) an $18 million
undesignated fund cut - a 53 percent reduction, and 2) very
large rate increases for residents - up to $15,000 per month -
proposed by DHSS. Co-Chair Fields maintained that it is
important to recognize that the two policy proposals exist in
tandem with one another; under the governor's direction, APH
have been mandated to shift in the direction of being self-
supporting. Co-Chair Fields emphasized that he considers this
shift to be unsustainable, and it fails to keep the faith with
Alaska elders that has been supported by legislators for many
generations. He relayed that these proposals have shocked and
concerned many caregivers, family members, and residents of the
homes. He has heard about these concerns directly from those at
the Anchorage Pioneer Home.
CO-CHAIR FIELDS offered that fortunately the House Health &
Social Services Finance Subcommittee has restored $20 million in
funds - half in GF and half through the ability to bill Medicaid
- effectively negating the need for the massive rate increases.
He stated that as DHSS has played a part in keeping APH
affordable through the budget, the legislature must do its part
in terms of legislation to provide sustainable and predictable
price increases rather than massive price increases. He offered
his concern that without HB 96, there could be a "death spiral"
for APH, in which the majority of APH residents who are private
payers would be incentivized to seek lower cost facilities in
the Lower 48. He asserted that the socio-economic mix in APH is
an important part of the institution; it is important that a
significant percentage of residents be able to pay their own way
as they always have and as most of them do today.
3:10:38 PM
REPRESENTATIVE FIELDS opined, "I think we can do better. The
legislature always has done better than this. We've always
supported the Pioneer Homes ..." He stressed that the proposed
legislation would provide predictable, fair rate increases
linked to the consumer price index (CPI). He said that there
are about two dozen [Alaska] statutes that link to CPI; it is a
common measure for trying to establish predictable rate
increases so that the cost of a given program does not grow over
time without necessary adjustments.
CO-CHAIR FIELDS related that the prices of APH have changed
about four times over the past decade; the proposed legislation
would increase rates at a faster pace than seen in the past
decade. He said that the rate increases have been sporadic and
uneven; and HB 96 would establish a more predictable process.
CO-CHAIR FIELDS concluded by recognizing the hard work and
public service of APH employees. He shared that the age of APH
residents has increased dramatically; the average age is
currently 87; many have dementia-related disorders; therefore,
the work of the employees has become more difficult in recent
years. The employees do incredible work under incredibly
difficult circumstances. He mentioned that the employees are
very innovative; they have started a new dementia care training
program for certified nursing assistants (CNAs); it is the first
of its kind in the state and serves as a model for the private
sector. He asked for legislative support for APH recognizing
not just the contribution of the elders, but the incredible work
of APH employees to honor elders.
3:12:29 PM
REPRESENTATIVE LEDOUX asked to know the portion of APH fees paid
by Medicare.
REPRESENTATIVE FIELDS responded that the overall payer source
breakdown for residents is as follows: 51 percent private pay;
20 percent Medicaid waiver; and 29 percent of residents have
some sort of payment assistance. He relayed that another
innovation by DHSS and the Division of Alaska Pioneer Homes
(DAPH) in the past few years has been identifying opportunities
to have Medicaid pay a growing share of APH bills. He stated
that there are different levels of care in APH: individuals for
whom Medicaid pays a significant portion of the bills tend to be
in the third level of care [Level III] - higher need and higher
acuity care. Level I and II - lower levels of care - tend to be
in the "self-pay" group.
REPRESENTATIVE LEDOUX asked whether there was any way to
formulate a program so that the state is not charging the
private pay residents more, but those getting Medicaid
assistance, because there is a federal match.
REPRESENTATIVE FIELDS stated that a Medicaid waiver is granted
for residential long-term care; it is referred to as a 1915(c)
[Home- and Community-Based Services (HCBS) waiver under Section
1915 of the Social Security Act]; it pays a daily rate of $162.
He expressed his concern that the proposed rate increases [by
the administration] greatly exceed what the state would receive
through a Medicaid waiver. He agreed that the state should
pursue rate increases that are designed to maximize federal
revenue. He offered that the proposed rate increases are so
steep that they do not correspond to what Medicaid can pay.
Comparing the rate of $15,000 per month with the $162-per-day
Medicaid 1915(c) waiver rate reveals a huge gap which most
likely would not be paid. At that rate the life savings of most
residents would be liquidated very quickly. He maintained that
it is pointless to have such a high advertised rate, knowing
that most people would not be able to pay it and Medicaid would
not pay it. He emphasized that the state should maximize
federal revenue, and the theoretical high rates are not
strategically designed to maximize federal revenue. He shared
that the current monthly rate for Level III is $6,700.
REPRESENTATIVE LEDOUX asked how people pay for Providence
[Health & Services Alaska] Extended Care.
REPRESENTATIVE FIELDS answered that in order to be eligible for
certain Medicaid programs, one must effectively liquidate most
of one's savings and place the remainder in a Miller [qualifying
income] Trust. He stated that essentially one cannot have too
much in assets to qualify; and there are different Medicaid
rates for different types of care. He noted that a Pioneer Home
is an assisted living facility, which is different from a
skilled nursing facility; the two have different rates. He said
that the reality is that APH provide a very high level of care
among assisted living facilities - much higher than one would
find in a home-based Medicaid waiver setting. For that reason,
Agnew::Beck [Consulting] has recommended that Alaska establish a
new daily rate for higher acuity assisted living facilities,
recognizing that facilities like APH should be able to bill at a
higher rate than the average home-based Medicaid provider. He
maintained that it is a logical recommendation but one that has
been overlooked in the rate increase proposals.
3:17:58 PM
CO-CHAIR KREISS-TOMKINS asked for a definition of higher acuity.
REPRESENTATIVE FIELDS responded that higher acuity refers to a
greater need for services. He explained that there are three
levels of care: 1) The lowest level is for people who want to
age in APH but live independently. They are a shrinking
percentage. 2) People in Levels II and III may have dementia-
related disorders or be in a wheel chair. They are a growing
percentage. Higher acuity represents higher intensity care, and
these residents pay higher rates under the existing payment
structure.
REPRESENTATIVE LEDOUX asked for an explanation of Medicaid
waiver.
REPRESENTATIVE FIELDS explained that Medicaid waiver is obtained
by an individual to pay for living in a long-term care assisted
living setting. He added that there are different Medicaid
waivers for different services. There are Medicaid waivers for
personal care services; these services are different from
residential supported living, which is what APH are.
REPRESENTATIVE LEDOUX asked, "A waiver from what?"
REPRESENTATIVE FIELDS replied that it is a waiver for an
individual to receive Medicaid (indisc.) to pay for long-term
care.
REPRESENTATIVE SHAW asked for the percentage of APH residents
who pay the full rate.
REPRESENTATIVE FIELDS responded that 51 percent are self-pay
residents.
REPRESENTATIVE SHAW offered his understanding that the AVPH in
Palmer is split into three [payment] sources: the VA pays a
portion; the state pays a portion; and the individual pays a
portion.
CO-CHAIR FIELDS concurred and added that 49 percent of residents
are private pay; the other half pay through a mix of public
sources, with the VA contributing the greatest share.
REPRESENTATIVE WOOL asked for confirmation that Medicare is
medical insurance for those over 65 but does not pay for long-
term care.
REPRESENTATIVE FIELDS expressed his understanding that Medicare
pays for healthcare and does not pay for assisted living, hence,
the need for a Medicaid waiver.
3:21:40 PM
REPRESENTATIVE STORY expressed that the rate increases proposed
- 138 percent - is extreme and poses challenges for seniors and
their families to plan; however, the rates have been low and the
cost of care needs adjustment. She asked whether the rates
should be adjusted before being subjected to the CPI formula.
REPRESENTATIVE FIELDS replied that he would welcome an amendment
to address that issue. He suggested applying inflation rates or
CPI healthcare inflation rates to the [APH] cost of care from a
decade ago and using that as a starting point. He said that he
also would be open to more levels of care; there is research
that supports doing so. He said that he agrees that rates
should be predictable and transparent, and APH should be
competitive and affordable for Alaska elders.
CO-CHAIR KREISS-TOMKINS noted that Section 5 of HB 96 [page 3,
starting on line 19] codifies the three levels of care in
statute. He asked whether the three levels of care are
currently in statute or exist in regulation only.
CO-CHAIR FIELDS answered that the three levels are currently in
regulation. He reiterated that he is open to discussion and
amendments.
REPRESENTATIVE VANCE asked what the actual costs of care are for
the three levels - the costs incurred by the homes.
REPRESENTATIVE FIELDS responded that the cost of care for Level
I services is $3,623 and the monthly rate is $2,588; for Level
II, the cost of care ranges from $6,569 to $11,185; for Level
III, the cost of care ranges from 11,185 to $13,333. He stated
that DHSS has proposed added a new level - Level V - with a
proposed rate of $15,000. He referred to Representative
LeDoux's question regarding maximizing federal revenue and
stated that the residential supported living [Medicaid] waiver
rate is $162 per day or about $4,881 per month. He added that
currently many individuals at the higher levels of care are in
the Medicaid waiver population.
3:26:57 PM
REPRESENTATIVE VANCE asked what the costs would be when based
upon the proposed daily rates under HB 96.
REPRESENTATIVE FIELDS responded that the rates for APH residents
would correspond to what DHSS believes to be the cost. He added
that the governor has made a policy decision that APH should
follow a self-sustaining model.
REPRESENTATIVE VANCE asked how HB 96 would change that outcome.
REPRESENTATIVE FIELDS replied that the proposed legislation
would set rate increases to correspond to inflation, thereby
limiting them. Under HB 96, residents would pay more than
currently but significantly less than under the governor's
proposal.
REPRESENTATIVE VANCE asked for confirmation that residents would
pay less than the actual cost.
CO-CHAIR FIELDS answered, yes.
REPRESENTATIVE VANCE referred to the fiscal note (FN)
[Identifier: HB096-DHSS-PH-3-22-2019, OMB Component Number:
2671] analysis [page 2] which read:
Under this legislation, the State will continue to
subsidize the cost of services to all residents,
including those with private pay ability.
REPRESENTATIVE VANCE asked how it would be determined who is in
greatest need for access to APH.
REPRESENTATIVE FIELDS explained that statute states that APH
rates need not reflect the cost of care; this is due to the
longstanding legislative decision to keep APH affordable.
Statute also states that residents will not be evicted for
inability to pay. The APH accept residents based on a
transparent and fair waitlist process and admit residents
regardless of ability to pay. When wait-listed residents are
accepted, they have a limited length of time to accept the
offer, move into the home, and work with staff on a payment
plan. Payment may be through self-pay or payment assistance.
3:30:07 PM
REPRESENTATIVE LEDOUX asked whether there are facilities outside
of APH that have long-term care. She mentioned the Providence
Extended Care facility near Boniface Parkway. She asked to know
the rates for that facility.
REPRESENTATIVE FIELDS referred to a recent presentation by DHSS
providing cost comparisons to the House Health & Social Services
[Finance Subcommittee]. He stated that costs at a private care
facility vary significantly depending on whether the facility is
assisted living or skilled nursing. He said that DHSS relayed
that in Seattle, the average cost at an assisted living facility
is $5,720 per month; the average cost at a skilled nursing
facility is more than twice that amount. In Portland, the
average cost at an assisted living facility is just under $5,000
per month; the average cost at a skilled nursing facility is
nearly twice that amount. In Anchorage, the average cost at an
assisted living facility is about $6,000 per month; the average
cost at a skilled nursing facility is in excess of $20,000.
CO-CHAIR FIELDS continued by posing the question: If people
were not in APH, would they be in an assisted living facility or
in a skilled nursing facility? He expressed his concern that
Alaska would have prices for APH that were so high that self-
paying assisted living residents would have no choice but to go
to private assisted living facilities and those facilities would
most likely be in the Lower 48 because of the limited private
sector options in Alaska. He acknowledged that Anchorage has
ample in-home care, but not facilities providing care comparable
to APH.
REPRESENTATIVE LEDOUX asked whether Marlow Manor [an assisted
living facility in Anchorage] and Providence [Health & Services
Alaska] accept residents under the Medicaid rates.
REPRESENTATIVE FIELDS replied that he does not know the payer
mix at Marlow Manor or Prestige Care [and Rehabilitation Center
of Anchorage].
REPRESENTATIVE LEDOUX suggested that virtually no one would have
the ability to pay $20,000 per month and speculated that they
would be under Medicaid rates.
REPRESENTATIVE FIELDS concurred that almost no one could pay
$15,000 per month, and Medicaid is a standard payer for long-
term care. He reiterated that he does not know the rates of the
private facilities mentioned.
REPRESENTATIVE LEDOUX offered that the disadvantage of Medicaid
is the necessity to liquidate one's assets. She suggested that
liquidating assets by being in long-term care affects the heirs
more than the residents.
CO-CHAIR FIELDS stated that he doesn't have a concern with an
Alaskan using his/her entire savings to provide for his/her
long-term care in APH. His concern is the massive "sticker
shock" - $15,000 per month - and the uncertainty of a rate
structure that is fundamentally unpayable; the only safeguard
against eviction is the statute, which could be revoked by the
legislature at any time; and the rate is three times the
Medicaid waiver rate.
3:35:13 PM
REPRESENTATIVE WOOL asked whether the governor's budget is the
impetus for introducing HB 96 or the need to implement
consistent and regular rate increases for APH. He mentioned the
rates increases - 8.5 percent in 2016 and 5 percent in 2009. He
asked to know what was wrong with the current system [of rate
increases], regardless of the governor's budget proposal.
REPRESENTATIVE FIELDS maintained that it would be advantageous
under any circumstance to have a predictable and sustainable
path for rate increases; however, with the budget proposal
paired with a regulatory proposal there is more urgency. He
offered that even if the legislature rejected the governor's
budget proposal, it would be within the regulatory power of DHSS
to raise rates dramatically. He offered his concern regarding
"driving out" the private payers, who have been an important
population in APH.
REPRESENTATIVE WOOL asked if the private pay rate is
artificially high to compensate for the lower Medicaid
reimbursement rate. He gave as an example: the true cost of
care is $10,000 per month and Medicaid reimbursement is $5,000.
He asked if state subsidies provide the balance.
3:37:32 PM
CLINTON LASLEY, Director, Division of Alaska Pioneer Homes
(DAPH), stated that APH rates have been set by regulation for
many years. He relayed that over a 15-year period there have
been four rate increases totaling 15 percent; during that same
time inflation was 35 percent. He stated that he put forward a
proposal in the governor's budget for a rate increase to be
reflective of the true cost to DAPH to provide services,
understanding statute clearly defines that a resident cannot be
evicted due to inability to pay and the payment assistance
program is in place to protect those who can't pay. Under the
current system, Alaska is subsidizing every individual who is in
APH regardless of need. He said that his proposal is to
establish a true need-based system so that individuals who need
assistance would receive it and individuals who can pay more
would pay what they can. In response to Representative Vance,
who asked the true cost of providing these services, he referred
to slide 14 of the PowerPoint presentation from the Office of
Management & Budget (OMB), included in the committee packet,
which states that the cost of Level I services is $3,623; the
cost of Level III services is $13,333.
MR. LASLEY offered that the $15,000 rate is for a subsection of
the population for whom the state is currently not providing
services. He referred to an Agnew::Beck study funded by the
Alaska Mental Health Trust Authority (AMHTA) [Staffing Plan and
Cost Impact Analysis for the Alaska Pioneer Homes, 11/29/18]
that explores the best way to serve community needs and the
level of care needs in the community and determines the staffing
structure. The study determined that there is a subsection of
the population - those with dementia and complex behaviors - who
are currently not being served in assisted living or many
nursing home settings and who inappropriately are being place in
emergency departments or the Alaska Psychiatric Institute (API).
He relayed that DAPH is currently building a complex behavior
neighborhood in the Anchorage Pioneer Home with capital budget
funding received in 2018. He maintained that the $15,000 per
month represents the rate for this subsection of the population
needing the highest level of care.
MR. LASLEY stated that DHSS put forward a regulatory package -
currently being reviewed by the Department of Law (DOL) - that
would establish rates reflecting the true cost of services.
Within the package is a proposal to tie future rate increases to
Social Security Administration (SSA) rate increases, which is
currently being used for individuals receiving payment
assistance. He summarized by saying that currently everyone in
APH is being subsidized by the state - regardless of payer
source - because of the artificially low rates.
REPRESENTATIVE WOOL asked for confirmation that everyone in APH
receiving Level I services is paying less than the actual cost
of $3,623 regardless of ability to pay.
MR. LASLEY responded, "You're correct." He added that for an
individual in APH who is receiving Lovel I services, it costs
the state $3,623 to provide those services, but the individual
only pays $2,588 - the advertised rate.
3:42:41 PM
REPRESENTATIVE WOOL referred to Mr. Lasley's statement that DAPH
would not evict a resident who was unable to pay the actual cost
of $13,333. He asked about an applicant who doesn't have the
ability to pay the $13,333; the state wouldn't subsidize the
care of that individual; and SSA, Medicaid, and Medicare doesn't
cover the cost. He asked, "Are those people just left out?"
MR. LASLEY replied that statute is clear that someone living in
the state who is 65 years of age or older can move into APH if
he/she is a resident of the state for at least one year and has
a medical need to be in APH. The DAPH does not ask about one's
ability to pay when put on the waitlist initially. When
individuals become ready to move into APH, they put themselves
on the activate waitlist; the state does not ask them about
their ability to pay. As rooms become available, DAPH contacts
individuals on the waitlist, asks them to move into a home, but
does not ask about ability to pay. It is only after an
individual accepts a room at APH that DAPH discusses the
person's finances, what he/she can pay, need for state
assistance, and qualification for Medicaid waiver. He
maintained that DAPH's challenge is that rates have not been
reflective of the true cost of care: therefore, DHSS has
proposed to show in regulation the true cost of providing
services - knowing that the payment assistance program exists.
Additional funds were added to the payment assistance program
budget to ensure that every individual who wanted or needed to
live at APH and could not pay for the services would be
subsidized by the state.
REPRESENTATIVE WOOL offered his understanding that currently
people are accepted into APH regardless of the ability to pay;
DHSS proposes charging the true rate; the change under HB 96 is
that someone who has the ability to pay through depleting
his/her assets will pay the full rate until they are out of
money, at which time they would be eligible for state subsidies.
He maintained that under the proposed legislation, the state
would get the full rate for a longer period than currently.
MR. LASLEY responded, "This is correct." He explained that
currently every resident is being subsidized regardless of need.
Under the DHSS proposed plan, by regulation, rates would be
raised, and the resident would use his/her resources to pay
whatever he/she could, based on the payment assistance program.
He gave an example: A resident moves into the home and can pay
the $13,333 rate for six months. Once he/she needs state
payment assistance, DHSS would process the individual through
the payment assistance program. The rules are set in statute
defining an individual's income, limited allowable resources,
and allowable deductions such as for taxes and insurance
premiums. The remainder is subsidized by the state. He
acknowledged that Representative Wool's analysis was correct: a
resident would pay what he/she can of the true cost of providing
services; at the time he/she needs assistance, he/she would be
qualified for the program. In this way [the payment assistance
program] truly would be a need-based system.
3:47:29 PM
CO-CHAIR KREISS-TOMKINS referred to the waitlist and activation
on the waitlist and asked, "How many people are presently on
that waitlist, and of all the people presently on the waitlist,
how many of them have activated themselves saying, 'I want a
room as soon as it becomes available.'?"
MR. LASLEY replied that there are about 5,500 people currently
on the inactive waitlist. These are people who have put
themselves on the list to move into a home at a future date.
Just over 200 individuals are ready to move into a home within
30 days, therefore, have activated themselves.
REPRESENTATIVE SHAW asked how the rate increases would affect
long-term care insurance.
MR. LASLEY responded that currently there are a group of
individuals with long-term care insurance that pays to APH. The
department has discovered that because it is not charging the
full amount for care, insurance is not paying the most it can
pay under the plan. He stated that a rate increase would not
affect the long-term care insurance.
REPRESENTATIVE SHAW asked whether long-term care insurance has a
limit.
MR. LASLEY answered that each insurance program has a limit as
far as maximum payout.
REPRESENTATIVE LEDOUX asked whether there must be a medical need
[for acceptance into APH] beside an age requirement. She
suggested that a surviving spouse might not feel comfortable
living on her own and asked whether that would constitute a
medical need.
MR. LASLEY relayed that under statute an individual must be [at
least] 65 years of age. The APH looks for individuals who are
not safe living at home or who cannot take care of themselves on
their own. He suggested that a person who forgets to turn off
the stove could fall into that category.
3:50:46 PM
REPRESENTATIVE WOOL asked how the state subsidy is allocated and
the mechanism for funding the state subsidy. He asked whether
that fund was secure.
MR. LASLEY answered that historically the payment assistance
program has been funded through GF and GF / Mental Health. He
added that the statute that states that APH neither accepts
individuals based on their ability to pay nor evicts individuals
due to their inability to pay is what secures the payment
assistance program.
REPRESENTATIVE WOOL asked whether the funding is separate from
the funding for APH itself. He asked about the fund's
availability to continue to pay the costs of care and make up
the difference between what Medicaid pays and the costs. He
mentioned that HB 96 was introduced due to a concern that rates
are exceeding people's ability to pay.
MR. LASLEY responded that the current payment assistance has
been paid out of the APH component of GF. He stated that under
the governor's proposal, there would be a separate unique
component developed - the payment assistance component. He
maintained that the purpose of developing this component is to
truly identify the amount that needs to be subsidized by the
state. Initially when the $15 million was put into the fund,
OMB and DHSS did not know what would be needed for state subsidy
because it was paid from GF. Individuals have never been asked
about their ability to pay. Under the proposed DHSS
regulations, DHSS would identify exactly what the needs of
individuals are for state subsidy and draw down that state
subsidy component by the amount needed. He gave an example: If
someone could pay $10,000 and needed $3,333 in subsidy, DHSS
would draw that amount down from the [payment assistance]
component and truly be able to identify what individuals need
for subsidy and not subsidize individuals merely because the
rates are low.
REPRESENTATIVE WOOL expressed his understanding that currently
every resident is subsidized because APH is not charging the
actual rate; under the proposal, the true rate would be charged,
and if a person cannot pay, it would be subsidized through the
new subsidy program. He asked whether there was ever more of a
residency requirement [for APH] beyond the current requirement
of one year.
MR. LASLEY answered that there was a requirement for longer
residency, but he does not know when it was changed to one year.
He clarified that under the proposal, the payment assistance
program would be intact as previously, and the difference would
be that DHSS would account for it in a separate component. He
stated that it is not a new program; the governor's proposal is
for the rates to reflect what it truly costs to provide
services, and to truly account for it.
3:55:49 PM
REPRESENTATIVE VANCE expressed her understanding as follows: If
the state raises the rates to reflect actual costs, it could
maximize its draw from insurance and federal funds, account for
the amount truly needed in the state budget and help the people
who truly need [the care]. She added that there is a clear
increase in the aging population in Alaska, and Alaska needs
many more private care facilities for seniors; however, with APH
subsidizing senior care, there is little incentive for people to
move into private facilities. She maintained that if the costs
of each were competitive and both were able to draw on the
insurance and federal funds, then APH truly could be need-based
- for people who cannot pay. She asked for confirmation that
she has accurately stated the motivation behind the governor's
proposal.
MR. LASLEY responded that when he introduced the proposal to
raise rates to reflect the cost of providing services, it was
not an easy decision - knowing that it would cause angst among
people living in the homes or planning to live in the homes. He
stated that the payment assistance program provides security.
He said that the APH system was developed to be a true need-
based system and serve individuals who need assistance and do
not have the ability to pay for care in the private sector. He
voiced that currently DAPH, by keeping its rates artificially
low, is competing with the private sector, and state government
should never compete with the private sector. He considered how
to raise rates - incrementally or one time. He mentioned that
the 8.5 percent rate increase in 2016 caused many issues for
residents. He said that his proposal was to raise rates to what
it costs to provide services rather than raise them multiple
times and to avoid competing with the private sector.
REPRESENTATIVE VANCE asked whether under the governor's
proposal, the rates for residents currently in the homes would
be "grandfathered" in and new residents would be subject to the
new rates.
MR. LASLEY answered, no. The current proposal is to increase
rates for every individual; he is unsure if DAPH could charge
varying rates for the same service. He reiterated that the rate
increase was for every individual; however, if assistance is
needed, the payment assistance component could be used or an
individual needing the highest level of care could draw down
his/her assets and qualify for a Medicaid waiver. He maintained
that the proposal represents a multitiered approach: higher APH
rates, Medicaid waiver reimbursement rates, and accounting for
individuals who need assistance.
4:00:28 PM
REPRESENTATIVE STORY related that the intent of APH was for
Alaska to take care of its seniors at the point they need the
care, and the state would help provide that care. She
maintained this has been the state's policy for a long time; the
governor's proposal represents a major shift in policy; the
change is a drastic and sudden change; and seniors and their
families have planned with the current rates in mind. She
relayed the percent increases listed in the table on slide 14,
entitled "Current vs. Proposed Monthly Rates," for the various
level of care categories: 40 percent, 40 percent, 138 percent,
65 percent, and 96 percent. She opined that the increases are
large. She expressed her desire to see more gradual increases
to allow people to plan and anticipate the costs. She
understands DAPH's viewpoint; however, it is a difficult
situation. Alaska does not have many places for seniors. It
would be unfortunate if they had to leave and not be by their
families. She asked whether DAPH has considered proposing a
more moderate increase.
MR. LASLEY answered yes, and that DAPH looked at multiple
different approaches. The beauty of the regulatory process is
that it is posted for 60 days for public comment and the rate
would be determined by the DHSS. He acknowledged that the true
cost of providing services does present "sticker shock"; there
is not easy way to rightsize DAPH. He mentioned that increasing
rates over a three-year period would require a regulation change
every year, public testimony every year, and a decision made
every year. He stated that DHSS advanced the proposal to have a
one-time rate increase, rightsize DAPH, and put a methodology in
place to propose future rate increases based on SSA benefits,
thereby avoiding multiple hard conversations but knowing that
the payment assistance program exists to protect all Alaskans 65
and older. He said that the governor and the administration is
committed to following the statute prohibiting any resident from
being evicted and ensuring that funds would be available.
REPRESENTATIVE WOOL mentioned the sticker shock, resident
expectations, and the possibility of a person needing to
liquidate all his/her assets. He referred to the possibility of
different rates for new residents versus someone grandfathered
in. He acknowledged that even though no one will be evicted,
the proposal causes residents stress.
MR. LASLEY agreed that it is a tough conversation to have. He
stated that for individuals moving into APH, it is their last
home, and they have been moving in at higher ages. He mentioned
that some come in at the lowest level of care and within a month
they have advanced to the higher level of care costing $6,700.
He said that it is a hard transition as individuals age in
place; the average age in the home is 87; over 50 percent are at
the highest level of care; most individuals expend their
resources at a rapid rate. If individuals at the higher level
of care meet resource and medical need requirements, they would
qualify for the Medicaid waiver. He mentioned the Miller Trust,
a qualifying income trust, into which an individual can put
resources, and those funds would pay the state what it had
subsidized through the Medicaid Waiver program.
CO-CHAIR KREISS-TOMKINS stated HB 96 would be held over.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB096 Bill Version A 3.25.19.PDF |
HHSS 4/9/2019 3:00:00 PM HHSS 4/23/2019 3:00:00 PM HSTA 3/26/2019 3:00:00 PM SHSS 2/12/2020 1:30:00 PM |
HB 96 |
| HB096 Sponsor Statement 3.25.19.pdf |
HHSS 4/9/2019 3:00:00 PM HHSS 4/23/2019 3:00:00 PM HSTA 3/26/2019 3:00:00 PM SFIN 3/9/2020 9:00:00 AM SHSS 2/12/2020 1:30:00 PM |
HB 96 |
| HB096 Sectional Analysis 3.25.19.pdf |
HHSS 4/9/2019 3:00:00 PM HHSS 4/23/2019 3:00:00 PM HSTA 3/26/2019 3:00:00 PM SHSS 2/12/2020 1:30:00 PM |
HB 96 |
| HB096 Fiscal Note DHSS-APHPA 3.25.19.pdf |
HHSS 4/9/2019 3:00:00 PM HHSS 4/23/2019 3:00:00 PM HSTA 3/26/2019 3:00:00 PM SHSS 2/12/2020 1:30:00 PM |
HB 96 |
| HB096 Fiscal Note DHSS-PH 3.26.19.pdf |
HHSS 4/9/2019 3:00:00 PM HHSS 4/23/2019 3:00:00 PM HSTA 3/26/2019 3:00:00 PM SHSS 2/12/2020 1:30:00 PM |
HB 96 |
| HB096 Supporting Document Alaska Pioneer Homes Advisory Board Report 2018 3.25.19.pdf |
HHSS 4/9/2019 3:00:00 PM HHSS 4/23/2019 3:00:00 PM HSTA 3/26/2019 3:00:00 PM SHSS 2/12/2020 1:30:00 PM |
HB 96 |
| HB096 Supporting Document Consumer Price Index in AK Statutes 3.25.19.pdf |
HHSS 4/9/2019 3:00:00 PM HHSS 4/23/2019 3:00:00 PM HSTA 3/26/2019 3:00:00 PM SHSS 2/12/2020 1:30:00 PM |
HB 96 |
| HB096 Supporting Document-PPT Presentation 3.5.19 HSS Finance Subcommittee, 3.25.19.pdf |
HHSS 4/9/2019 3:00:00 PM HHSS 4/23/2019 3:00:00 PM HSTA 3/26/2019 3:00:00 PM SHSS 2/12/2020 1:30:00 PM |
HB 96 |
| HB096 Supporting Document DHSS Budget Subcommittee Amendment No. 1 PASSED 3.26.19.pdf |
HHSS 4/9/2019 3:00:00 PM HHSS 4/23/2019 3:00:00 PM HSTA 3/26/2019 3:00:00 PM SHSS 2/12/2020 1:30:00 PM |
HB 96 |
| HB096 Letters of Support 3.25.19.pdf |
HHSS 4/9/2019 3:00:00 PM HHSS 4/23/2019 3:00:00 PM HSTA 3/26/2019 3:00:00 PM SHSS 2/12/2020 1:30:00 PM |
HB 96 |
| HB096 Supporting Document AK Dept of Labor Consumer Price Index 2018 3.25.19.pdf |
HHSS 4/9/2019 3:00:00 PM HHSS 4/23/2019 3:00:00 PM HSTA 3/26/2019 3:00:00 PM SHSS 2/12/2020 1:30:00 PM |
HB 96 |
| HB071 ver A 3.19.19.PDF |
HSTA 3/26/2019 3:00:00 PM |
HB 71 |
| HB071 Sponsor Statement 3.19.19.pdf |
HSTA 3/26/2019 3:00:00 PM |
HB 71 |
| HB071 Minimum Qualifications SOP04 3.19.19.pdf |
HSTA 3/26/2019 3:00:00 PM |
HB 71 |
| HB071 DOA Fiscal Note 3.19.19.pdf |
HSTA 3/26/2019 3:00:00 PM |
HB 71 |
| HB031 ver U 3.25.18.PDF |
HSTA 3/26/2019 3:00:00 PM |
HB 31 |
| HB031 Sponsor Statement 3.25.19.pdf |
HSTA 3/26/2019 3:00:00 PM |
HB 31 |
| HB031 Sectional Analysis ver U 3.25.19.pdf |
HSTA 3/26/2019 3:00:00 PM |
HB 31 |
| HB031 Presentation 3.26.19.pdf |
HSTA 3/26/2019 3:00:00 PM |
HB 31 |
| HB071 Supporting Document - Letter of Support 3.28.19.pdf |
HSTA 3/26/2019 3:00:00 PM |
HB 71 |
| HB031 Opposing Document - Letter in Opposition 4.24.19.pdf |
HSTA 3/26/2019 3:00:00 PM |
HB 31 |