Legislature(2003 - 2004)
04/09/2003 09:05 AM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
CS FOR SENATE BILL NO. 105(HES)
"An Act relating to eligibility requirements for medical
assistance for certain children, pregnant women, and persons
in a medical or intermediate care facility; and providing for
an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
Co-chair Wilken informed that this bill would amend "the
eligibility income levels for Denali KidCare and Medicaid under the
special income limits for nursing homes and home and community
based waiver services."
JOEL GILBERTSON, Commissioner, Department of Health and Social
Services, explained that this bill was introduced by Governor Frank
Murkowski and was subsequently amended by the Senate Health,
Education & Social Services (HES) Committee. He stated that the
Governor's bill specified that the eligibility income levels for
the Denali KidCare program and pregnant women "would be frozen" at
the federal maximum allowable poverty level of 200 percent, and at
300 percent of the special income standards for individuals in
long-term care under the Medicaid program and for individuals
receiving home and community based waiver services.
Commissioner Gilbertson continued that the HES version of the bill
amends these levels to 175 percent of poverty levels for the Denali
KidCare program and pregnant women program, and he noted that a new
negative $7,151,300 fiscal note, dated April 8, 2003 from the
Department of Health and Social Services accompanies the HES
version of the bill. He stated that the poverty level specified in
the HES version of the bill would eliminate an additional 1,200
individuals from the Title 21 Denali KidCare and pregnant women
programs above the number specified in the Governor's bill. He
stated that some of the impact "is buffered" by provisions
specifying that pregnant women and children in the Denali KidCare
program who establish eligibility by June 30, 2003 would continue
to be provided coverage for nine months and six months,
respectively, under existing eligibility rules.
Commissioner Gilbertson stated that the Governor continues to
support the bill at the 200 percent of poverty level for children
in the Denali KidCare program and pregnant women and 300 percent
for individuals needing long-term care.
Co-Chair Green asked whether Alaska's poverty calculation receives
additional adjustments at the federal level.
Commissioner Gilbertson explained that the State currently
specifies the eligibility level for the Denali KidCare and pregnant
women program at 200 percent of the federal poverty level, which he
noted, is adjusted and inflation-proofed annually. Furthermore, he
declared, the federal government awards the State of Alaska an
additional inflation factor of 25 percent. Therefore, he clarified;
the State's established poverty level for these programs is 200
percent above the national poverty level calculated for Alaska.
Additionally, he pointed out that individuals in the programs are
held harmless for their permanent fund dividends (PFDs). He
qualified that "the income standards are uniquely adjusted for the
Alaska situation" in terms of the federal calculated poverty level
and "the hold harmless clause" for the PFDs.
Commissioner Gilbertson reiterated that the Governor continues to
support the levels specified in the original bill as opposed to the
HES version's amended levels.
Co-Chair Green calculated that the State's poverty level for these
programs "is 250 percent above" the normed federal poverty level.
Commissioner Gilbertson stated that when comparing Alaska's poverty
level standards to the national standard poverty level for the
"Lower 48," that is correct.
Co-Chair Green asked whether additional adjustments result from a
State-conducted asset test regarding the Denali KidCare program.
Commissioner Gilbertson clarified that the State does not conduct
an asset test for the Denali KidCare program.
Co-Chair Green noted therefore "it is a fairly short window of an
income level at a certain level that qualifies a person for this
program."
Commissioner Gilbertson responded yes.
Co-Chair Green specified that the program recipients "could either
be uninsured or underinsured."
Commissioner Gilbertson concurred.
Senator Hoffman declared that this bill reduces health care to
pregnant women, children, and the disabled to save less than
$300,000 in general funds. He noted that other cost saving options
must be available "that have less impact" on those in need. He
asked for confirmation that the Administration supports these cuts
that would affect approximately 800 individuals to save this level
of funding.
Commissioner Gilbertson responded that, were the Governor's bill
adopted, approximately 800 people would be affected. However, he
clarified that the HES version, which is before the Committee,
would narrow the program further. He clarified that the savings
resulting from the Senate HES version would be $7.2 million.
Commissioner Gilbertson informed the Committee that this bill is an
effort by the Administration to contain "the rapid escalation of
growth of our program, 40 percent growth in the last five years" of
these three Medicaid programs. He advised that to strengthen the
program and ensure continuing Medicaid benefits "for low income
beneficiaries, …. this is the size of a Medicaid program that the
we can support in terms of the number of eligible individuals." He
stated that the State currently has the highest income standards
allowed under federal law, and that the Governor's bill "would lock
in" those standards.
Commissioner Gilbertson continued that rather than being a
statement that this reduction would have "no impact," the State
"has undergone exponential growth in our Medicaid program," and in
order to continue the program, "some of the optional categories"
must be addressed. He continued that the State must acknowledge
that it "has reached a capacity where further growth in those
programs will threaten the viability of the program itself and
threaten the ability of the State itself to fund the core services
that are covered for individuals currently enrolled in the
program." He stated that the poverty levels in the Governor's bill
would not jeopardize those individuals currently in the program
provided they not experience an increase in their income level, but
would allow for a downsizing of the program over time. He stated
that the Senate HES committee version "would roll back the
standards," and consequently incur a larger reduction. He stated
that the bill recognizes that there are benefits to the
continuation of these types of programs such as reducing the amount
of low birth rate babies and providing insurance coverage for
pregnant women, children and the disabled; however the costs of
these programs "coupled together" is leading to a situation wherein
the ability of the State "to pay for good services and have good
reimbursement rates for those individuals who are currently
covered" is being threatened.
Senator Hoffman expressed that while this bill might produce short-
term savings, the long-term costs might increase.
Commissioner Gilbertson acknowledged that there are savings
resulting from providing State funded insurance coverage although
other health care options, such as community health centers, "3-30
grants and clinics," uncompensated care awards, volunteer services
by providers, and other insurance coverage might be available. He
acknowledged that the State does "have a problem with individuals
being uninsured or underinsured." However, he continued, as the
programs continue to experience growth and "the State's income
standards rise to the point where we see individuals that are
moving into higher income brackets being eligible for State
programs," the State might not have the resources "to provide its
match so we can have a good reimbursement rate for low income
individuals and provide needed services."
Senator Hoffman acknowledged this, but asked whether the fiscal
note's projected program savings or other State programs would be
negatively affected by not providing these services to the three
identified groups.
Commissioner Gilbertson clarified that the HES committee
substitute, rather than the Governor's version of the bill, would
affect program eligibility standards. He stated that the HES
committee substitute is projected to produce $7.1 million in
savings, and he continued, research does not indicate additional
demand would be placed on other services the Department provides.
He stated that pregnant women currently in the program would
continue to receive care. He acknowledged that prenatal care has
positive results in terms of health care dollars spent and that it
is unknown what health care options future pregnant women could
receive, but "it is expected that they would still receive care."
Senator Hoffman voiced that the long-term costs of the HES version
of the bill would outweigh the short-term savings.
Commissioner Gilbertson stated that the Administration agrees that
savings do occur from providing health care to children and
pregnant women, and that is the reason the Governor's bill proposes
to "lock in" the current standards.
Senator Hoffman asked whether the Department supports the HES
amended standards.
Commissioner Gilbertson expressed that the Governor's
administration does not support the HES committee substitute.
Senator Hoffman voiced support of the Governor's version of the
bill.
Co-Chair Wilken asked for clarification that 150 percent of the
federal poverty level is the minimum level the State could
authorize, as referenced in the "2003 Federal Poverty Guidelines
for Alaska" [copy on file] chart provided by the Department.
Commissioner Gilbertson responded, that in order "to access the
federal enhanced match rate," the State must establish a minimum
150 percent of federal poverty level standard. He shared that the
enhanced match rate increases the federal match contribution for
the Denali KidCare program from 60 percent to 71 percent.
Co-Chair Wilken asked for confirmation that the income figures in
the chart do not include the permanent fund dividend.
Commissioner Gilbertson replied that is correct.
Senator B. Stevens asked whether the information in the chart
includes the 25 percent Cost of Living Allowance (COLA).
Commissioner Gilbertson responded that it does.
Co-Chair Wilken noted that 1,200 individuals "would lose services."
He asked the Department to provide detailed information as to who
would be affected.
Commissioner Gilbertson responded that this information is included
on page two of the HES fiscal note. He noted that both the HES and
Governor's version of the bill maintain the 300 percent of the
special income standard for individuals requiring long-term care or
home or community based waiver services. He stated that the
Governor's 200 percent of federal poverty standard would reflect a
net decease of 61 cases in the Denali KidCare program in 2004,
whereas the HES version would incur a net decrease of 1,213 cases.
Co-Chair Wilken asked the deadline for individuals to qualify under
the existing standards.
Commissioner Gilbertson responded that it is June 30, 2003.
Co-Chair Wilken asked the total number of individuals in the
affected programs.
Commissioner Gilbertson responded that the total number of
individuals in the program would be supplied. He estimated that
approximately 26,000 children are in the Denali KidCare program;
therefore, he calculated that approximately four percent of the
children in the program would be affected.
Co-Chair Wilken asked the Department to provide the total number of
individuals in the programs as well as information regarding other
health care options.
Senator Hoffman questioned the percentage calculation of those
being affected by changes in the Denali KidCare program.
Co-Chair Wilken asked the Department to confirm the percentage of
program participants who would be affected.
Co-Chair Green moved to report CS SB 105 (HES) from Committee with
individual recommendations and accompanying fiscal note.
Senator Hoffman objected.
A roll call was taken on the motion.
IN FAVOR: Senator Bunde, Senator B. Stevens, Co-chair Green, and
Co-chair Wilken
OPPOSED: Senator Hoffman, Senator Olson
ABSENT: Senator Taylor
The motion PASSED (4-2-1)
CS SB 105(HES) was REPORTED from Committee with a new negative
$7,151,300 fiscal note, dated April 8, 2003 from the Department of
Health and Social Services.
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