04/23/1996 03:43 PM Senate STA

           HB 384 PIONEERS' HOME - INABILITY TO PAY                          
                                                                               
 TAPE 96-31, SIDE A                                                            
                                                                               
 Number 001                                                                    
                                                                               
 CHAIRMAN SHARP called the Senate State Affairs Committee to order             
 at 3:43 p.m. and brought up HB 384 as the first order of business             
 before the committee.  He called the prime sponsor to testify.                
                                                                               
 REPRESENTATIVE NORMAN ROKEBERG, prime sponsor of HB 384, stated the           
 bill would make statutory what has been standard policy since the             
 beginning of the Pioneers' Homes in Alaska: that residents who                
 cannot pay are not evicted.  Representative Rokeberg read the                 
 sponsor statement for HB 384.  He drew committee members' attention           
 to the new rate schedule contained in their bill packets.  That               
 rate schedule will take effect for residents of pioneers' homes on            
 July 1, 1996.  It will increase the cost pioneers' home residents             
 pay over a seven year period, after which, rates paid would be                
 equal to the cost of care.  Rates will increase 50% in FY 97.  If             
 residents do not have enough money to pay the fees, they need the             
 protection that HB 384 will provide.  The Ombudsman issued a memo             
 to the Speaker of the House and the President of the Senate this              
 year which asked the legislature to put into statute or regulation            
 every department policy that has not been set in statute or                   
 regulation.  This issue is one of a number of unwritten policies of           
 the State of Alaska.  HB 384 would not result in any additional               
 cost to the State of Alaska.  The department supports the bill.               
 Right now, the Governor's budget calls for $2,500,000.00 in                   
 increased revenues this year from the pioneers' home fee schedule             
 increases, while it is estimated that only $1,500,000.00 will not             
 be provided from people who cannot pay.                                       
                                                                               
 REPRESENTATIVE ROKEBERG stated two primary issues were brought up             
 in the House relating to HB 384.  One was the spending down                   
 phenomenon, or what would happen if a person going into a pioneers'           
 home attempted to avoid payments by dispersal of their assets.                
 Currently there are regulations and statutes requiring that the               
 department look back for two years at a new resident's total asset            
 picture to ensure there was no giving away or selling at less than            
 market value of assets.  The department is looking at extending               
 that picture to three years.  So that concern is addressed.  The              
 second issue came up in the House State Affairs Committee.  That              
 issue was perhaps holding harmless existing residents, but giving             
 no protection to future residents.  Representative Rokeberg stated            
 there is a legal opinion in members' bill packets stating a                   
 provision like that would be unconstitutional.  Other people have             
 asked how we could do that with the longevity bonus in that case,             
 but Representative Rokeberg thinks that's probably unconstitutional           
 also.  He asked for support of HB 384.                                        
                                                                               
 Number 155                                                                    
                                                                               
 SENATOR RANDY PHILLIPS asked how much money the pioneers' homes get           
 in fees from residents.                                                       
                                                                               
 REPRESENTATIVE ROKEBERG replied he doesn't have that figure.                  
                                                                               
 CHAIRMAN SHARP offered that it is about $4,500,000.00 to                      
 $5,000,000.00.                                                                
                                                                               
 SENATOR RANDY PHILLIPS stated the homes are not paying for                    
 themselves through residents.  We are also spending another                   
 $73,000,000.00 on the longevity bonus program.                                
                                                                               
 REPRESENTATIVE ROKEBERG thinks that an empty-nest couple in this              
 state probably has benefits in excess of $11,000.00 per year.                 
                                                                               
 SENATOR RANDY PHILLIPS stated that oil revenues are declining, and            
 we want to reduce the budget.  So there is a dilemma that we are              
 spending this money.                                                          
                                                                               
 REPRESENTATIVE ROKEBERG agreed with Senator Phillips that we need             
 to look at all of these programs, and that we need to make                    
 reductions.  But the Governor, in raising the fee schedule, answers           
 that question.  Certainly, the long-range financial projections are           
 such that the residents will be making a greater contribution to              
 the cost of those homes.  But we all recognize that many of these             
 people do not have the financial capabilities to do that.  One                
 alternative that's been discussed is to make the pioneers' homes              
 eligible for medicaid payments in the state.  We could easily do              
 that, however, there is the phenomenon of medi-grants.                        
 Representative Rokeberg predicts that within one year the State of            
 Alaska will be faced with a block grant for medicaid money.                   
 Therefore, we would simply be taking that money out of one pocket             
 and putting it in another.  That really wouldn't help the state               
 financially.  He thinks it would end up hurting the state, because            
 we would be putting more of our assets into senior services and the           
 pioneer homes than we would for other eligible medicaid                       
 requirements.  Raising the fees is a good long-range proposition.             
                                                                               
                                                                               
 REPRESENTATIVE ROKEBERG stated that in law is the term "promissory            
 estoppel" is applicable to this situation.                                    
                                                                               
 SENATOR RANDY PHILLIPS asked if fees at pioneers' homes include               
 food.                                                                         
                                                                               
 REPRESENTATIVE ROKEBERG responded the fees include room and board.            
 Over 80% of residents are in assisted living or other levels of               
 care.                                                                         
                                                                               
 Number 255                                                                    
                                                                               
 SENATOR LEMAN disagreed that the changes made to the longevity                
 bonus program were unconstitutional; that was not the advice                  
 received from the Department of Law.                                          
                                                                               
 REPRESENTATIVE ROKEBERG replied he meant to say that may be                 
 unconstitutional.                                                             
                                                                               
 CHAIRMAN SHARP stated he has heard concern voiced by people in the            
 Fairbanks Pioneers' Home over the fee increases also.  HB 384 would           
 resolve a lot of doubt that residents and their families have.  He            
 asked if there were any other comments on the bill.  Hearing none,            
 he asked the pleasure of the committee.                                       
                                                                               
 Number 300                                                                    
                                                                               
 SENATOR LEMAN made a motion to discharge HB 384 from the Senate               
 State Affairs Committee with individual recommendations.                      
                                                                               
 Number 310                                                                    
                                                                               
 CHAIRMAN SHARP, hearing no objection, stated HB 384 was discharged            
 from the Senate State Affairs Committee.