Legislature(2005 - 2006)BUTROVICH 205
02/16/2005 01:30 PM Senate HEALTH, EDUCATION & SOCIAL SERVICES
| Audio | Topic |
|---|---|
| Start | |
| SB82 | |
| SB78 | |
| SB79 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 82 | TELECONFERENCED | |
| *+ | SB 78 | TELECONFERENCED | |
| *+ | SB 79 | TELECONFERENCED | |
| + | TELECONFERENCED |
SB 78-SENIOR CARE PROGRAM
2:30:06 PM
SENATOR DYSON announced SB 78 to be up for consideration.
COMMISSIONER JOEL GILBERTSON, Department of Health and Social
Services, advised he was addressing his comments to the
committee substitute (CS). The bill deals with extending
SeniorCare benefits to Alaska seniors - particularly around
prescription drug coverage. The Legislature passed a bill last
session that established a $120.00 per month cash assistance
program for low-income seniors living below 135 percent of
poverty and a prescription drug subsidy for seniors that are
between 135 and 150 percent of poverty.
That benefit program expires on January 1, 2006 at which time
the new, Part D, federal Medicare drug benefit will become
effective and provide seniors with prescription drug benefits.
Parts A and B are what most Alaska seniors have. Part A relates
to in-patient hospital services for seniors; Part B relates to
out-patient physician reimbursements; Part C deals with managed
care plans under Medicare but isn't used in Alaska; and Part D
is the new prescription drug benefit.
Each part has associated costs. Part A has its own deductible;
Part B has its own premium and deductible for seniors to pay;
and Part D will have a premium deductible. Therefore, as seniors
enroll in Medicare Part D, those above 135 percent of poverty
will be responsible for some premium and deductible costs. Those
are first dollar costs, which means they must satisfy those
before they may receive benefits under the prescription drug
benefit.
SB 78 is a proposal under SeniorCare. He emphasized that:
First and foremost this legislation states that for
seniors above 135 percent of poverty and below 300
percent of poverty, the State of Alaska will cover the
premium and deductible costs for those seniors to
ensure that there is no senior in this state ... that
will not be able to enroll in a comprehensive
prescription benefit plan beginning next year.
Prescription drugs represent a sizeable part of health care and
many seniors in the state are forced to choose between food,
rent or prescription drugs. By itself the Medicare drug benefit
won't ease that decision for many low-income seniors, but the
extension of the $120 per month cash assistance for low-income
seniors below 135 percent of poverty will help some.
He referenced a chart that looks at what the qualifications and
benefits mean in real dollars, and said it's important when
talking about income levels. The cash assistance benefit
continues at $120 per month or for seniors below 135 percent of
poverty. Those individuals won't get state help with
prescription drug expenses because the federal government will
cover the costs for them. Instead the state acknowledges they
have other costs and recognizes that cash is much more flexible.
Therefore, seniors below 135 percent of poverty, which is just
under $16,000 per individual and about $21,000 per couple, will
continue to receive the $120 per month cash assistance. They
will receive the Medicare drug benefit with no premium and no
deductible. The state expects to serve about 7,000 seniors,
which is about the same as the cash assistance program under
SeniorCare.
The new benefit under SB 78 deals with prescription drug
assistance for seniors above 135 percent of poverty and up to
300 percent of poverty. That amounts to just less than $35,000
for an individual and just under $47,000 for a couple. Following
an asset test, the state will step in and cover monthly premium
and deductible costs, but individuals will still have out of
pocket expenses for coinsurance and prescription drugs. Under
this proposal, DHSS expects to serve about 10,000 seniors.
2:36:31 PM
Comparing old and new SeniorCare prescription drug benefits, he
pointed out the considerable savings that seniors would enjoy
under the new proposal.
2:38:20 PM
As previously stated, DHSS expects to serve about 7,000 people
with cash assistance. For the original SeniorCare program, the
estimates were accurate for the cash assistance benefit in the
135 percent of poverty bracket, but were somewhat inaccurate
between 135 and 150 percent of poverty, which means there is a
surplus in the SeniorCare Trust Fund. The surplus will be used
to pay for start up and a portion of the first year costs.
The fiscal notes indicate increased expenses for the first year
because the Medicare drug benefit doesn't begin until the second
half of the next state fiscal year.
2:40:00 PM
SENATOR KIM ELTON asked the reason the old program didn't
eliminate residents in the Pioneer/Veteran Homes while the new
proposal does.
JON SHERWOOD, Medicaid specialist, Department of Health and
Social Services, said both the current program and SB 78 contain
provisions for temporary stay in the home. Since the original
bill, other statutes have defined public institutions to exclude
Pioneer/Veteran Homes. Prior to last session they were included
in some definitions so that's why they decided to specify them
separately.
COMMISSIONER GILBERTSON said the justification for excluding
those residents is that this would be a redundant benefit since
there is already a Pioneer Home Assistance Program.
2:41:44 PM
SENATOR ELTON said he was working from Version \A even though
Version \G was under consideration so some of his questions
might have already been answered.
He noted seniors are limited to 30-day out of state trips with
exceptions for out of state medical treatment or to accompany a
family member who is receiving medical treatment outside the
state. However, it isn't an exception to leave the state to care
for an ill family member that lives out of state because the
senior isn't accompanying the family member outside.
COMMISSIONER GILBERTSON agreed with the interpretation and said
the point is legitimate. He recalled working on the issue last
year and acknowledged it would be advantageous to use the
language they settled on at that time. He thought there was a
waiver process that was established for the department to have
discretion on a case-by-case basis.
2:44:38 PM
SENATOR ELTON suggested the committee look at the exception
language for Permanent Fund dividends to accommodate medical
treatment for an immediate family member. He then questioned the
effective date.
MR. SHERWOOD explained the committee substitute (CS) simplifies
the language to have the bill take effect when Medicare Part D
becomes available in Alaska.
SENATOR ELTON remarked in five years the program would be more
expensive than the Longevity Bonus Program.
MR. SHERWOOD replied he didn't have five-year numbers, but the
projection is to serve about 17,000 seniors in the first year
for about $17 million and the Longevity Bonus Program was to
serve 15,000 seniors for $38 million.
2:47:43 PM
SENATOR ELTON acknowledged that because of the phase out, no one
would have been served without this program.
CHAIR DYSON asked for an explanation of the differences between
Versions \A and \G.
MR. SHERWOOD described four changes: conforming language
changes; clarifying reference to the Medicare Modernization Act;
adding SeniorCare Benefit to the statutory list of items that
can not be garnished; and changing effective date to eliminate
reference to January 1.
2:49:52 PM
SENATOR ELTON moved to adopt Version \G as the working document.
There being no objection, the motion carried.
CHAIR DYSON suggested the committee entertain a conceptual
amendment to make eligibility the same as for the Permanent Fund
Dividend as far as traveling out of state.
SENATOR ELTON said he would like to review that before moving
the bill since he didn't remember the language precisely.
CHAIR DYSON expressed agreement and said he is uncomfortable
that seniors must go through a waiver process to go outside for
medical reasons. He added the department would have an
opportunity to speak against the change here and in the Senate
Finance Standing Committee.
COMMISSIONER GILBERTSON said the department really doesn't
monitor senior travel patterns and that particular change in the
program management might be minimal. Acknowledging that it is
within Legislature's purview to change, he said the current
language has proved to be adequate to address the issue in the
last year.
SENATOR WILKEN suggested it is important for the committee to
know how many other states have this type of program and how
other states are treating the federal drug prescription program.
He suggested that western states were of particular interest.
COMMISSIONER GILBERTSON said he would make the information
available at the next hearing, but other states haven't begun to
respond to the integration between the state pharmacy assisted
plan and Medicare drug benefits. The Medicare, Part D, drug
benefit would be delivered in a different way than Medicare Part
A and Part B. Part D would essentially be delivered through
private insurance - pharmacy benefit management firms. At least
two firms would bid on each region after which the region is
assigned an actuarial value per life of individuals that would
be served. Then the actuarial/cash value is converted to a
benefit for the consumers.
He suggested many states are digesting the information and
deciding how to convert what used to be a Medicaid benefit to a
supplement to Medicare.
2:56:05 PM
SENATOR WILKEN said he would prefer not to move the bill from
committee in order to provide time for further clarification.
CHAIR DYSON asked the process used to decide that 300 percent of
the federal poverty level was the right number to use.
COMMISSIONER GILBERTSON replied he would provide information
regarding what the various income threshold options mean. To
some extent, he said, the line is discretionary and there is
nothing to peg it to in the private market place. Governor
Murkowski has taken the position that the threshold should be
low enough so that seniors in need are served. He doesn't want
any senior in the state not to be enrolled in a prescription
drug benefit next year because they aren't able to afford the
premium or deductible, which is sizeable. The out of pocket
expense before the first benefit is received is around $700.
After reviewing the income levels, the governor decided that for
a senior who makes less than $35,000 per year a $670 deductible
is high so that's where he drew the line.
CHAIR DYSON asked whether the poverty level is $10,000 per year
for a single person.
COMMISSIONER GILBERTSON replied the Alaska poverty level is
higher than the national average by 25 percent and in Alaska,
100 percent of poverty is between $11,000 and $12,000 per year.
Where you draw the poverty line is the discretion of policy
makers, he emphasized.
2:59:56 PM
CHAIR DYSON asked whether there is an asset test.
COMMISSIONER GILBERTSON said yes, for the seniors who receive
the $120 cash assistance benefit, the liquid asset limit per
individual is $6,000. The secondary benefit, the prescription
drug subsidy liquid asset level is $50,000.
CHAIR DYSON asked about non-liquid assets.
COMMISSIONER GILBERTSON replied there is none.
CHAIR DYSON noted the in state advertisements for restructuring
assets to qualify for different programs and remarked that some
of it looks like scam.
COMMISSIONER GILBERTSON agreed and said it has been a constant
struggle for states and the federal government to keep up with
lawyers that work to reduce senior's assets. The fiscal crisis
in Medicaid is largely associated with senior and disability
services. Middle and upper middle income Americans are spending
down parents and transferring assets when they need long-term
care. Although both federal and state look-backs have become
stricter, a great number of lawyers are still helping seniors
become eligible for programs such as this.
3:02:39 PM
CHAIR DYSON said if 40 percent of the senior population would
qualify that means that that 40 percent of seniors are living
under the 300 percent of federal poverty level.
COMMISSIONER GILBERTSON replied it's a rough estimate, but if
17,000 seniors are served it's about 40 percent.
CHAIR DYSON announced he would hold the bill and would be
interested in the department looking into the qualifications for
being out of state and whether the permanent fund is a good
model.
SENATOR WILKEN said he would like to know what other states are
doing with regard to the federal program.
3:04:33 PM
CHAIR DYSON said he would be interested in comparisons with
Colorado and Idaho.
SENATOR DONNY OLSON asked for information on the distribution of
rural participants.
COMMISSIONER GILBERTSON agreed to do so.
CHAIR DYSON asked for information about what additional benefits
people might qualify for.
COMMISSIONER GILBERTSON said he would get the information and
clarified there would be some dual eligibility so the program
would be available to Alaska Natives who are eligible for Indian
Health Service (IHS) benefits. He would provide information on
the number of dual eligibilities and the benefits they have
access to, but it is well established in law that benefits will
be provided to all individuals regardless of whether or not they
are eligible under IHS or a Native health corporation.
3:07:00 PM
CHAIR DYSON said he could appreciate that, but doesn't want
someone to receive payment twice for the same drug.
SENATOR ELTON expressed interest in whether the previous program
had pro rata language and also in departmental discussions about
inserting pro rata language in this bill.
3:08:24 PM
CHAIR DYSON held SB 78 in committee.
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