02/25/2009 09:00 AM Senate FINANCE

SENATE BILL NO. 13                                                                                                            
                                                                                                                                
     "An Act relating to eligibility requirements for                                                                           
     medical assistance for certain children and pregnant                                                                       
     women; and providing for an effective date."                                                                               
                                                                                                                                
SENATOR BETTYE DAVIS, SPONSOR,  noted that there had not been                                                                   
opposition to this particular  bill. She stated that the bill                                                                   
had  received  support  in  the   form  of  telephone  calls,                                                                   
letters,   and  e-mails   with  the  goal   of  raising   the                                                                   
eligibility level for Denali Kid  Care (DKC) from 150 percent                                                                   
to 200 percent of the federal poverty level (FPL). She                                                                          
requested that the committee refrain from amending the bill.                                                                    
                                                                                                                                
     DON BURRELL, STAFF, SENATOR DAVIS, explained that SB
 increases and restores the qualifying income                                                                            
     eligibility standard for the Denali Kid Care Program                                                                       
     to 200% of the Federal Poverty Line (FPL) to its                                                                           
     original levels 12 years ago. As you know, Alaska is                                                                       
    one of the nation's wealthiest states yet Alaska is                                                                         
     only one of five states that still fund our SCHIP                                                                          
     program below 200% FPL. SB 13 makes health insurance                                                                       
     accessible to approximately 1,277 uninsured children                                                                       
     and 225 pregnant women in Alaska.                                                                                          
                                                                                                                                
     Denali Kid Care is an "enhanced" reimbursement program                                                                     
     with Alaska currently receives about 66% under the                                                                         
     federal government's State Children's Health Insurance                                                                     
     Program (SCHIP), created in 1997.  Congress                                                                                
     reauthorized the SCHIP program and President Obama                                                                         
     signed into law on February 4, 2009. This                                                                                  
     reauthorization expanded the coverage to 4 million                                                                         
     additional children and is re-authorized through                                                                           
     2013.                                                                                                                      
                                                                                                                                
     Consider the following information from the Kaiser                                                                         
     Commission on Medicaid and the Uninsured, January,                                                                         
     2009:                                                                                                                      
                                                                                                                                
           · 45 states, including D.C., cover children in                                                                       
             families with incomes at 200% FPL or higher.                                                                       
                                                                                                                                
           · 33 states cover children in families with                                                                          
             income between 200% and 250% FPL.                                                                                  
                                                                                                                                
           · 19 states including D.C., cover children in                                                                        
             families with income at 250% or higher.  10 of                                                                     
             these states cover children in families with                                                                       
             income at 300% FPL or higher.                                                                                      
                                                                                                                                
           · 35 states allow premiums or enrollment fees,                                                                       
             and 24 states have co-payments for selected                                                                        
             services in SCHIP programs on a sliding scale                                                                      
             of  FPL.                                                                                                           
                                                                                                                                
          · 46 states do not require asset tests.                                                                               
                                                                                                                                
                                                                                                                                
     Denali Kid Care 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% of the cost of adult senior coverage.                                                                            
                                                                                                                                
     It is estimated that uninsured children 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. Early                                                                       
     intervention and preventative  care under SB 13 will                                                                       
     greatly increase Alaska children's  health and yield                                                                       
     substantial savings to the  state, public and private                                                                      
     sector hospitals, emergency  rooms which are required                                                                      
     to admit indigent and uninsured patients for non-                                                                          
     emergency treatment.                                                                                                       
                                                                                                                                
     There are still an estimated 18,000 uninsured children                                                                     
     in Alaska. This is about 9% of the children age 18 and                                                                     
     under.  Private health care coverage for children has                                                                      
     declined over 30% in the last ten years, and the                                                                           
     deepening recession is pulling more children and                                                                           
     families into the uninsured  ranks.  Alaska should do                                                                      
     its share and take advantage of available federal                                                                          
     matching funds by insuring its low income children and                                                                     
     pregnant women up to and  including 200% FPL under SB
.                                                                                                                        
                                                                                                                                
                                                                                                                                
9:45:36 AM                                                                                                                    
                                                                                                                                
Co-Chair  Stedman asked  for additional  questions. He  noted                                                                   
three fiscal notes  from the Department of Health  and Social                                                                   
Services  (DHSS) showing  an $886  thousand  increase in  the                                                                   
general fund spending for FY10.                                                                                                 
                                                                                                                                
Senator  Bettye Davis  asked if  the  committee received  the                                                                   
updated fiscal notes.                                                                                                           
                                                                                                                                
9:46:32 AM     AT EASE                                                                                                        
9:46:42 AM     RECONVENED                                                                                                     
                                                                                                                                
Co-Chair Stedman  stated that the committee did  not have the                                                                   
updated fiscal notes.                                                                                                           
                                                                                                                                
Co-Chair Hoffman noted that approximately  7,900 children are                                                                   
served  today by  Denali  Kid Care  (DKC)  and 18,000  remain                                                                   
uninsured.    The    proposed   legislation    would    allow                                                                   
approximately  1300  additional  children into  the  program,                                                                   
increasing the number served to  9,200. The change would drop                                                                   
the number  of uninsured  children to  16,700. Senator  Davis                                                                   
agreed that Senator Hoffman's estimates were correct.                                                                           
                                                                                                                                
9:48:07 AM                                                                                                                    
                                                                                                                                
CARLETTA  MACK, DIRECTOR,  COVENANT  HOUSE ALASKA  (testified                                                                   
via  teleconference). She  spoke  in support  of  SB 13.  She                                                                   
maintained that  Covenant House seeks health  care outside of                                                                   
the emergency  room for cost benefit purposes.  Expanding the                                                                   
number of youth eligible for health  care coverage would lead                                                                   
to greater  health and  decreased use  of the emergency  room                                                                   
for medical care and long-term costs.                                                                                           
                                                                                                                                
DAHNA  GRAHAM,  ANCHORAGE  FAITH   AND  ACTION  CONGREGATIONS                                                                   
TOGETHER (AFACT),  ANCHORAGE (testified via  teleconference).                                                                   
She  spoke  in  support  of  SB  13.  She  opined  that  this                                                                   
legislation  was a  bargain for  the state,  in light of  the                                                                   
federal  contribution.  She  stated   that  a  visit  to  the                                                                   
emergency room fee would equal that of DKC's annual fee.                                                                        
                                                                                                                                
9:51:45 AM                                                                                                                    
                                                                                                                                
ROD BETIT,  PRESIDENT, ALASKA HOSPITAL ASSOCIATION  (ASHNHA),                                                                   
noted  that   his  membership  strongly  supports   SB13.  He                                                                   
believed  that  the legislation  was  the next  logical  step                                                                   
considering  the  available  economic   stimulus  funds.  The                                                                   
members of ASHNHA  do not believe that the  legislation would                                                                   
preempt recommendations of the Health Care Commission.                                                                          
                                                                                                                                
Senator Huggins asked  about elements of the  task force. Mr.                                                                   
Betit answered  that there were many recommendations,  but he                                                                   
could not report on the outcome.  He believed that DHSS would                                                                   
have the information regarding recommendations.                                                                                 
                                                                                                                                
9:53:38 AM                                                                                                                    
                                                                                                                                
JORDEN NIGRO,  PRESIDENT OF THE  ALASKA ASSOCIATION  OF HOMES                                                                   
FOR  CHILDREN, approved  of preventative  care and  supported                                                                   
the bill in its entirety. She  explained that raising the DKC                                                                   
eligibility  rate to  200 percent  of  the FPL  would have  a                                                                   
drastic affect  on behavioral health  services, as it  is the                                                                   
primary funding  source. Many  children are unable  to access                                                                   
services because they are on the cusp of eligibility.                                                                           
                                                                                                                                
MARIE  DARLIN, COORDINATOR,  AARP  CAPITOL  CITY TASK  FORCE,                                                                   
spoke in favor  of SB 13. She  noted that AARP is  one of the                                                                   
nation's   largest   organizations  of   grandparents.   Many                                                                   
grandparents  are  responsible  for raising  children,  while                                                                   
dependent on  Medicare themselves.  She expressed  support of                                                                   
SB 13.                                                                                                                          
                                                                                                                                
9:57:35 AM                                                                                                                    
                                                                                                                                
LORIE  MORRIS,  EXECUTIVE  DIRECTOR  FOR  AK  BAPTIST  FAMILY                                                                   
SERVICES (testified  via teleconference),  She noted  support                                                                   
for SB 13.                                                                                                                      
                                                                                                                                
JON SHERWOOD, DIRECTOR, OFFICE  OF PROGRAM REVIEW, DEPARTMENT                                                                   
OF HEALTH  AND SOCIAL  SERVICES, (DHSS)  spoke in support  of                                                                   
increasing the eligibility limits  to 200 percent of the FPL,                                                                   
and expressed  the administration's interest in  cost sharing                                                                   
provisions.                                                                                                                     
                                                                                                                                
Senator  Elton asked what  the administration  meant  by cost                                                                   
sharing. Mr. Sherwood answered  that cost sharing can include                                                                   
premiums  or co-payments.  He  noted that  there are  federal                                                                   
limits to  cost sharing  of 5 percent  of a family's  income.                                                                   
The department  prefers premiums  because they are  easier to                                                                   
track, although there are also advantages to co-payments.                                                                       
                                                                                                                                
Senator  Elton  asked if  support  for  the bill  depends  on                                                                   
additional  cost sharing  provisions.  Mr. Sherwood  answered                                                                   
that  the department  does  not oppose  an  expansion to  200                                                                   
percent of the FPL.                                                                                                             
                                                                                                                                
10:01:22 AM                                                                                                                   
                                                                                                                                
Senator Huggins  referred to a  memorandum to  Senator Bettye                                                                   
Davis from  Jennifer Saunders (Copy  on File). He  noted that                                                                   
the  second paragraph  stated  that under  provisions of  the                                                                   
Deficit  Reduction Act,  states  generally  could not  impose                                                                   
cost sharing  on children  in families  with an income  below                                                                   
150  percent of  the federal  poverty  guidelines, except  in                                                                   
certain  circumstances. He  asked about  the increase  to 200                                                                   
percent of the FPL given this information.                                                                                      
                                                                                                                                
Mr. Sherwood answered that the  department looked at imposing                                                                   
cost sharing on  income groups above 175 percent  of the FPL.                                                                   
Below 150  percent of  the FPL,  limitations on cost  sharing                                                                   
are cumbersome.  A limited ability  to cost share  exists due                                                                   
to the exclusion of children.                                                                                                   
                                                                                                                                
Senator Huggins  agreed that all children  deserve affordable                                                                   
health  insurance.  He  asked   for  an  explanation  of  the                                                                   
hesitation he noticed during Mr. Sherwood's testimony.                                                                          
                                                                                                                                
Mr. Sherwood  expressed that his  hesitation was  due largely                                                                   
to  the  fact  that  the  department   had  proposed  federal                                                                   
regulations on cost sharing. The  new administration withdrew                                                                   
the regulations, and the department  expects to see new ones.                                                                   
He stated that he was reluctant  to disclose specifics due to                                                                   
the  possibility  that  federal regulations  may  change.  He                                                                   
thought that  above 150 percent  of the FPL,  co-payments for                                                                   
emergency  services,   care  for  the  terminally   ill,  and                                                                   
preventative care  remained acceptable. Above 150  percent of                                                                   
the FPL,  the rules are  straightforward, yet are  limited to                                                                   
charging  less  than  5  percent   of  the  family's  income.                                                                   
Tracking co-pays  can prove cumbersome, but  he believed that                                                                   
there were reasonable methods available.                                                                                        
                                                                                                                                
10:05:10 AM                                                                                                                   
                                                                                                                                
Co-Chair Stedman asked  if the cost and burden  placed on the                                                                   
department to track the co-pays  above 150 percent of the FPL                                                                   
equated  to  a  net  benefit  for  the  state.  Mr.  Sherwood                                                                   
answered that  the administration  does support some  kind of                                                                   
cost sharing. Premiums  are easier to track  against the five                                                                   
percent cap.                                                                                                                    
                                                                                                                                
Co-Chair   Hoffman   noted   that   the   sponsor   statement                                                                   
illustrates  that   Alaska  currently  receives   66  percent                                                                   
federal  funds under  this  program, and  will  receive a  70                                                                   
percent  match.  He  asked  if   the  70  percent  match  was                                                                   
contingent upon the passage of this legislation.                                                                                
                                                                                                                                
Mr. Sherwood believed that the  70 percent is the combination                                                                   
of children  served for  which the current  match rate  is 66                                                                   
percent. Services  provided through  tribal health  providers                                                                   
are  included   and  claimed   at  100  percent.   The  State                                                                   
Children's  Health Insurance  Program (SCHIP)  match rate  is                                                                   
currently under 66  percent and will move down  to 65 percent                                                                   
in  the  next  few years.  Co-pays  or  premiums  may  offset                                                                   
expenditures.                                                                                                                   
                                                                                                                                
Senator Olson  asked if  Mr. Sherwood  referred to  5 percent                                                                   
per family  or 5 percent  per child. Mr. Sherwood  understood                                                                   
that the  5 percent  limit exists  for the individual  versus                                                                   
the whole family, and pregnant  women are not subject to cost                                                                   
sharing provisions.                                                                                                             
                                                                                                                                
10:08:43 AM                                                                                                                   
                                                                                                                                
Senator Thomas  asked when the  administration would  be able                                                                   
to  present information  regarding  cost  sharing within  the                                                                   
federal  regulations.  Mr.  Sherwood  answered  that  he  was                                                                   
hesitant  to set a  target date.  He planned  to address  the                                                                   
subject  later.  He  hoped  to revisit  the  committee  in  a                                                                   
reasonable amount of time.                                                                                                      
                                                                                                                                
Senator  Thomas opined  that the  payment  of premiums  would                                                                   
encourage individuals  to seek lesser  plans that may  or may                                                                   
not include preventative care.                                                                                                  
                                                                                                                                
10:11:05 AM                                                                                                                   
                                                                                                                                
Mr. Sherwood  stated that  the department  intended  to offer                                                                   
all  enrolled recipients  of  Medicaid  full benefits,  which                                                                   
includes  preventative care.  Federal  law does  not allow  a                                                                   
program  to  offer health  care  to  children that  does  not                                                                   
include preventative care.                                                                                                      
                                                                                                                                
Senator Davis wrapped up by repeating  her initial statement.                                                                   
She  stated  that she  had  an  opportunity to  address  cost                                                                   
sharing, and  had consulted with  the National  Conference of                                                                   
State  Legislatures  (NCSL),  and  she  understood  that  the                                                                   
administration's  intention  was to  cost  share. She  stated                                                                   
that  she had  not found  evidence  of administrative  action                                                                   
regarding cost  sharing. She recommended against  waiting for                                                                   
the  administration  to  create   a  plan  including  federal                                                                   
regulations. She understood that  the money is present in the                                                                   
current  budget to  cover the  increase. She  asked that  the                                                                   
bill pass out in a timely manner.  There is not opposition to                                                                   
this  bill.  She  maintained  that  her  goal  was  to  bring                                                                   
eligibility  requirements for  DKC up to  200 percent  of the                                                                   
FPL.                                                                                                                            
                                                                                                                                
Co-Chair  Stedman appreciated  the volume  of Senator  Davis'                                                                   
voice as it made it easy to understand her position.                                                                            
                                                                                                                                
SB  13   was  HEARD  and   HELD  in  Committee   for  further                                                                   
consideration.                                                                                                                  
                                                                                                                                
10:15:14 AM