03/07/2011 01:30 PM Senate HEALTH & SOCIAL SERVICES

             SB   5-MEDICAL ASSISTANCE ELIGIBILITY                                                                          
                                                                                                                              
1:45:40 PM                                                                                                                    
CHAIR DAVIS announced  the next order of business would  be SB 5,                                                               
the Denali Kid Care bill.                                                                                                       
                                                                                                                                
TOM OBERMEYER,  staff to  Senator Davis,  said SB  5 is  the same                                                               
bill that  was introduced as  SB 13  last year. That  bill passed                                                               
both houses  but was  vetoed by  Governor Parnell.  He summarized                                                               
the bill, as follows:                                                                                                           
                                                                                                                                
     This  bill increases  and restores  to original  levels                                                                    
     established   14  years   ago  the   qualifying  income                                                                    
     eligibility  standard to  200  percent Federal  Poverty                                                                    
     Level (FPL)  for the State Children's  Health Insurance                                                                    
     Program  (SCHIP)  called   Denali  KidCare  in  Alaska.                                                                    
     Alaska  as one  of  the nation's  wealthiest states  is                                                                    
     only one of  four states which funds  its SCHIP program                                                                    
     below  200   percent  FPL.   This  bill   makes  health                                                                    
     insurance  accessible   to  an  estimated   1,277  more                                                                    
     uninsured children  and 225  pregnant women  in Alaska.                                                                    
     Denali KidCare  is an "enhanced"  reimbursement program                                                                    
     receiving up to 70 percent federal matching funds.                                                                         
                                                                                                                                
     Denali  KidCare   serves  an  estimated   7,900  Alaska                                                                    
     children and  remains one of  the least  costly medical                                                                    
     assistance programs  in the state  at about  $1,700 per                                                                    
     child with  full coverage,  including dental,  which is                                                                    
     about 20 percent of the  cost of adult senior coverage.                                                                    
     Early  intervention and  preventive  care will  greatly                                                                    
     increase   Alaska    children's   health    and   yield                                                                    
     substantial  savings  to  the   state  and  public  and                                                                    
     private  sector  hospital  emergency rooms  which  must                                                                    
         admit indigent and uninsured patients for non-                                                                         
     emergency treatment.  It is  estimated that  the 18,000                                                                    
     or  9  percent  uninsured  children in  Alaska  with  a                                                                    
     medical need  are five  times as likely  not to  have a                                                                    
     regular doctor as insured children  and four times more                                                                    
     likely to use emergency rooms at a much higher cost.                                                                       
                                                                                                                                
MR.   OBERMEYER  further   stated   that  a   similar  bill   was                                                               
overwhelmingly passed with bipartisan  support by the Legislature                                                               
in  2010.  Governor Parnell  subsequently  vetoed  the bill  over                                                               
concerns  that  increased  eligibility to  Denali  KidCare  would                                                               
require  an  increase  in state-funded  abortion  services  which                                                               
amounted  to  about 0.18%  of  the  $217 million  Denali  KidCare                                                               
budget. Denali  KidCare is  required under  a 2001  Supreme Court                                                               
ruling  to fund  "medically necessary"  abortion services  if the                                                               
program is to  remain part of the state's  Medicaid program. This                                                               
bill,  however, is  not about  abortions. It  is about  providing                                                               
quality health care for our  most vulnerable low income youth and                                                               
pregnant  women.  It is  pro-family,  pro-life,  and imbued  with                                                               
Alaska values by  caring for the least able among  us on the last                                                               
frontier.                                                                                                                       
                                                                                                                                
1:47:46 PM                                                                                                                    
Medicaid  funds 51  percent  of  births in  Alaska.  In order  to                                                               
continue  to  receive  federal funding  for  the  state  Medicaid                                                               
program and  in order to  comply with  state law, the  state must                                                               
provide medical services for  pregnant women, including medically                                                               
necessary  terminations, as  well  as  pre-natal and  post-partum                                                               
care. The Alaska Department of  Health and Social Services (DHSS)                                                               
estimated  that no  more  than 22  more  of induced  terminations                                                               
would  result from  increasing the  Denali Kid  Care Eligibility.                                                               
Induced  terminations under  the entire  Denali Kid  Care program                                                               
cost about  $384,000 annually,  or less than  .18 percent  of the                                                               
Denali Kid  Care budget. Denali Kid  Care is a small  fraction of                                                               
the   state  Medicaid   budget.   This   law  is   uncomplicated,                                                               
manageable, and could take effect immediately.                                                                                  
                                                                                                                                
1:49:51 PM                                                                                                                    
CHAIR DAVIS opened public testimony.                                                                                            
                                                                                                                                
SENATOR  DYSON  asked  if there  were  any  material  differences                                                               
between SB 5 and the bill vetoed by the governor last year.                                                                     
                                                                                                                                
CHAIR DAVIS answered no; it is identical.                                                                                       
                                                                                                                                
MARIE DARLIN,  representing AARP, said her  organization supports                                                               
SB  5.  AARP is  one  of  the  world's largest  organizations  of                                                               
grandparents. Many grandparents  are raising their grandchildren.                                                               
As  of  October  2007,  Alaska   had  8,188  children  living  in                                                               
grandparent  headed  households, which  was  4.3  percent of  all                                                               
children in the state. Of  those, 5,110 were living there without                                                               
either parent present. A total  of 5,419 grandparents report they                                                               
are responsible  for their grandchildren;  67.4 percent  of those                                                               
are under the  age of 60, and  many are still in  the work force.                                                               
Eleven percent  of these  live below  the federal  poverty level.                                                               
This bill  only raises the  eligibility back to  previous levels.                                                               
Thousands of  children could be  receiving health care  from this                                                               
program.                                                                                                                        
                                                                                                                                
1:54:43 PM                                                                                                                    
ELIZABETH RIPLEY, Mat-Su Health  Foundation, said that the Mat-Su                                                               
Health Foundation is  a 501(c)(3) organization that  owns part of                                                               
the Mat-Su Regional Medical Center.  They use revenues from their                                                               
local hospital  to make  grants to improve  the health  of Mat-Su                                                               
residents. Their  mission is to  improve the health  and wellness                                                               
of Alaskans  living in the Mat-Su  area, and their goal  is to be                                                               
the healthiest  borough in the  state of Alaska. One  strategy is                                                               
to  reduce  barriers  to  health  care  access.  Lack  of  health                                                               
insurance is a large barrier.                                                                                                   
                                                                                                                                
In  2007, of  the 22,991  children in  Mat-Su, approximately  6.5                                                               
percent  were  uninsured.  However,  a  startling  650  of  these                                                               
children fell  below 200  percent of  the federal  poverty level.                                                               
The rate  of uninsured children  is higher  the closer we  get to                                                               
the federal  poverty level.  Since Alaska  decreased eligibility,                                                               
the rate of uninsured children has  grown each year by one or two                                                               
percentage points. Alaska  has also seen a 31  percent decline in                                                               
the  number  of children  covered  by  private health  insurance.                                                               
Uninsured children are  nine times less likely to  have a regular                                                               
doctor, four times more likely to  be taken to an emergency room,                                                               
and 20  times more  likely to miss  school. Medicaid  cost growth                                                               
can  be   slowed  by  prevention   and  maintenance   of  health.                                                               
Increasing income  eligibility levels  will increase  health care                                                               
access  for  children and  families  and  improve overall  public                                                               
health outcomes for Alaskan children.  Under current federal law,                                                               
states may  implement coverage up  to 300 percent of  the federal                                                               
poverty level.  Alaska is one of  a tiny majority of  states with                                                               
eligibility  levels as  low  as 175  percent.  The Mat-Su  Health                                                               
Foundation Board of Directors has  passed a resolution in support                                                               
of  Denali Kid  Care  eligibility levels  being  increased to  at                                                               
least  200 percent  of the  federal  poverty level.SENATOR  MEYER                                                               
said everyone on  the committee wants to provide  health care for                                                               
women  and children  in need,  but it  seems likely  the governor                                                               
will veto the bill again.                                                                                                       
                                                                                                                                
WILLIAM  J.  STREUER,  Commissioner,  Department  of  Health  and                                                               
Social Services, said it is the same bill.                                                                                      
                                                                                                                                
SENATOR MEYER asked if the governor would veto it again.                                                                        
                                                                                                                                
COMMISSIONER STREUER said the department  is vigorously trying to                                                               
find a middle ground to allow the bill to go forward.                                                                           
                                                                                                                                
SENATOR MEYER said he appreciates the intent.                                                                                   
                                                                                                                                
COMMISSIONER STREUER said it has not happened yet.                                                                              
                                                                                                                                
SENATOR MEYER asked if talks were ongoing.                                                                                      
                                                                                                                                
COMMISSIONER STREUER said yes.                                                                                                  
                                                                                                                                
SENATOR MEYER asked if the  new federal health care program would                                                               
affect Denali Kid Care.                                                                                                         
                                                                                                                                
COMMISSIONER  STREUER  said  the  Affordable Care  Act  does  not                                                               
affect  this  population.  It  would   expand  Medicaid  but  the                                                               
population covered in SB 5 is not affected.                                                                                     
                                                                                                                                
JOHN  SHERWOOD, Medical  Assistance Administrator,  Department of                                                               
Health and Social  Services, said there is  maintenance of effort                                                               
requirement through 2019, but no guarantee of long-term funding.                                                                
                                                                                                                                
SENATOR DYSON  asked where  the money comes  from to  fund Denali                                                               
Kid Care.                                                                                                                       
                                                                                                                                
COMMISSIONER  STREUER answered  that it  comes through  the State                                                               
Children's Health Insurance  Program (SCHIP) authorization, which                                                               
is 75 percent federal and 25 percent state.                                                                                     
                                                                                                                                
MR. SHERWOOD  said it  is actually blended  funding. SCHIP  is 65                                                               
percent, then  pregnant women under Medicaid.  Tribal health care                                                               
is  100 percent  funded, so  they  take that  funding first.  The                                                               
fiscal notes show a blending of different claiming rates.                                                                       
                                                                                                                                
SENATOR DYSON said  so either federal taxpayers  or state revenue                                                               
subsidize the  program. There  is no  guarantee that  the federal                                                               
program will continue indefinitely.                                                                                             
                                                                                                                                
MR. SHERWOOD said  the SCHIP program is  authorized through 2015,                                                               
with  maintenance of  effort provisions  through 2019.  There are                                                               
limits  to the  current authorizations.  It is  not uncommon  for                                                               
federal programs to require reauthorization.                                                                                    
                                                                                                                                
SENATOR DYSON stated,  "So there is no  requirement that Congress                                                               
fund this."                                                                                                                     
                                                                                                                                
MR. SHERWOOD  said the program  is funded through  allocations to                                                               
the  states,  and  Congress  has discretion  whether  or  not  to                                                               
continue funding it.                                                                                                            
                                                                                                                                
2:09:31 PM                                                                                                                    
CHAIR DAVIS said if  it goes to 2019 we should  be in good shape,                                                               
and she doubts  if the federal government will  drop it. Congress                                                               
supports the program.                                                                                                           
                                                                                                                                
SENATOR  DYSON  noted some  funding  may  be jeopardized  at  the                                                               
federal level and  we might look for another way  to take care of                                                               
this issue.                                                                                                                     
                                                                                                                                
CHAIR DAVIS  said that tribal  health is 100  percent reimbursed,                                                               
and the state should make better use of this.                                                                                   
                                                                                                                                
SENATOR  EGAN said  the committee  is discussing  a bill  that he                                                               
personally believes  means a  lot to many  people in  this state,                                                               
and asked if the administration is negotiating in good faith.                                                                   
                                                                                                                                
CHAIR DAVIS said  she understands that this bill  might be vetoed                                                               
again, and she has been  working with the present administration,                                                               
trying to  convince the  governor not  to veto  it. She  said she                                                               
told him, "If you can't sign the bill, just let it go into law."                                                                
                                                                                                                                
SENATOR DYSON noted the governor  did support funding health care                                                               
for children in need and would have  been glad to let the bill go                                                               
through until he was informed of  the abortion issue. He has been                                                               
trying to find a way to go  forward, but it is a very significant                                                               
human rights issue.                                                                                                             
                                                                                                                                
CHAIR  DAVIS said  she would  not close  testimony but  set SB  5                                                               
aside for further consideration.