Legislature(2003 - 2004)
01/27/2004 01:48 PM House FIN
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 374
An Act establishing the SeniorCare program and relating
to that program; and providing for an effective date.
Co-Chair Harris MOVED to ADOPT work draft #23-GH2123\V,
Mischel, 1/26/04, as the version of the legislation before
the Committee. There being NO OBJECTION, it was adopted.
PETER ECKLUND, HOUSE FINANCE COMMITTEE STAFF, REPRESENTATIVE
BILL WILLIAMS, noted that version "V" incorporates the two
amendments previously passed at the last Committee meeting.
Additionally, a change was made to Page 5, proposing to set
up a Senior Care Fund with the direct purpose to pay for the
Senior Care services. The purpose is to send a "strong"
signal to all the seniors associated with the program that
the State program would be fully funded until the federal
program takes effect sometime in FY06.
Mr. Ecklund also noted that Page 5, Line 21, Section "C",
clarifies that if there is left over balance in that fund,
it would lapse back to the general fund at the termination
of the program.
Mr. Ecklund noted the technical change to the fiscal notes.
Currently, it is indicated that the funding source would be
paid from the Senior Services Fund and that will be changed
to the Senior Care Fund.
Co-Chair Harris interjected that the committee substitute
would not change any of the programs. Mr. Ecklund agreed,
and that it remained as introduced by the Administration.
JOEL GILBERTSON, COMMISSIONER, DEPARTMENT OF HEALTH & SOCIAL
SERVICES, addressed the new version of the bill. He noted
that the Administration has the program "on track to be up &
running by April 1, 2004". The proposed program will
provide cash for drug assistance for low-income seniors in
the State, who are below the 140% poverty level. They will
have the choice to receive either the $120 dollars cash per
month or a prescription by subsidy benefit in the amount of
$1600 dollars per year. He added that the combination with
the $600 dollar Medicare subsidy and availability of a
discount prescription card for seniors, means that seniors
below 135% poverty level would have no out of pocket expense
for their first $2,500 dollar drug coverage. He reiterated
that seniors would have a choice between the cash, drug
assistance and/or access to a $1,000 dollar per year
prescription drug subsidy.
Commissioner Gilberson added that the program will begin
st
April 1, 2004. Applications should be processed during
March 2004 and that the program will continue until January
st
federal program. He guaranteed that there would be no gap
in coverage. The program is being administered through the
Senior Information Office.
Co-Chair Harris clarified that the program would be funded
through FY06 and would end at that point. Commissioner
Gilbertson stated that information was drafted in the
committee substitute and it would be fully funded through
st
January 1, 2006, the commencement of the federal program.
Representative Joule noted that the federal government was
currently revising their guidelines. He asked if the
proposed legislation would also be changing. Commissioner
Gilbertson noted that the legislation sites different
federal poverty guidelines. Those guidelines are adjusted
on a yearly basis and the income levels are currently
updated levels. The legislation will adjust on an annual
base with the federal poverty guidelines.
Representative Joule voiced concern that if it changes, it
might not accommodate the same people each year.
Commissioner Gilbertson acknowledged that the program and
the adjustments to the federal poverty guideline should
determine eligibility. If the income levels increase, more
individuals will be eligible and that such assumptions are
taken into account.
ROBERT BRIGGS, (TESTIFIED VIA TELECONFERNCE), ATTORNEY,
DISABILITY LAW CENTER, SITKA, testified on HB 374,
addressing the many Alaskans that receive disability. There
is another Medicare population that has similar needs to the
seniors. Those Alaskans receive only Medicare and their age
is under 65. Some of these people are not capable of
providing for their own prescription drugs. The only health
insurance some of these people receive is Medicare.
Mr. Briggs commented on the Medicare Buy-In Program, which
does not help some people on Medicare, who have a certain
income bracket. There is a population of Alaskans who have
high medical expenses, who receive Medicare and are under
the age of 65. He suggested that the bill be amended to
address that population. He did recommend that the bill be
passed from Committee and not slowed by the addition of that
language. He requested that language be reviewed, as there
are approximately 225 Alaskans in the described category and
estimated it would cost $290 thousand extra dollars to
provide a prescription drug benefit to those people.
Commissioner Gilbertson commented that the purpose of the
proposed Senior Care Program as brought forward by Governor
Murkowski is to serve seniors in the State of Alaska. He
acknowledged that there are individuals with other needs and
offered to work with the Committee to address that
population.
Commissioner Gilbertson questioned the numbers provided by
Mr. Briggs. He admitted that there is a high degree of
uncertainty regarding the numbers. The Department estimates
that the cost of adequate drug coverage in cash assistance
will be close to $7.3 million dollars, largely resulting
from the $6 million allocated for the cash option segment.
He reiterated that the purpose of the bill is to provide
assistance to the seniors of Alaska.
Co-Chair Harris interjected that the proposed legislation is
an answer to the elimination of the Longevity Bonus program
and is intended to address the most urgent needs for
prescription drug benefits for low-income seniors. He
commented that the group referenced by Mr. Briggs would not
have been affected one way or another. Commissioner
Gilbertson interjected that they would not be eligible
unless they met the age and residency criteria.
Representative Chenault inquired if the State might be
creating a "constitutional issue" by offering services for a
select group of persons in the State. Commissioner
Gilbertson advised that the constitution does grant
authority to develop programs that differentiate by age.
The Department is required by law that the persons who meet
that criterion are treated equally. There are numerous
programs in State government that differentiate between age
and condition. The proposed program is constitutional and
is consistent with that type of program.
Vice Chair Meyer asked if the proposed program was
consistent with the percent of poverty level offered in
Denali Kid Care. Commissioner Gilbertson responded that it
is not. The income criterion for that program was at 200%
of the federal poverty level and was reduced to 175% during
the last legislative session. The proposed bill ends
eligibility at the 150% poverty level.
Co-Chair Williams noted that AMENDMENT #3 had been
WITHDRAWN, and that Representative Croft might bring it up
on the House Floor.
Representative Joule MOVED to ADOPT Amendment #4. (Copy on
File). Co-Chair Harris OBJECTED.
Representative Joule explained that the amendment would
offer "treatment" for the individual. Additionally, the
amendment inserts a new paragraph on Page 3, Line 31, to
read:
"to accompany the individual's parent, spouse, sibling,
grandchild, child, or stepchild who is receiving
medical treatment outside the state; or".
Representative Joule added that the amendment would delete
"30" days and insert "60" days on Page 4, Line 1, the amount
of time that a person eligible for the Longevity Bonus could
have been out-of-State.
Commissioner Gilbertson stated that the bill as currently
drafted and proposed by the Governor would allow for
individuals to maintain and assure their Alaska residency
for the program by only taking absence for medical treatment
or vacations, and/or business trips for 30 consecutive days.
It would include medical treatment for immediate family
members and is consistent with the permanent fund standards.
The Department believes that as currently drafted, the
committee substitute does provide ample room for any
individuals to leave the State. He added that they do not
specifically object to Representative Joule's amendment.
Co-Chair Harris understood that Representative Joule was
attempting to clarify length of duration of medical
treatment time for the individual under consideration by
adding a new section. Commissioner Gilbertson suggested
that the bill draft before the Committee does provide ample
opportunity for individuals to leave the State, however, the
Administration does not have specific objections to the 60-
day recommendation.
Co-Chair Harris asked if anyone had been excluded from their
benefits because of the language. Representative Joule
responded that under the new language, it would make the
language consistent with that of the Permanent Fund excused
absences. He did not know if anyone had been affected.
Co-Chair Harris maintained his objection. Representative
Joule inquired if a person was out-of-state for more than
30-days, would they continue to be eligible to receive
benefits. Commissioner Gilbertson reiterated that the
language of the bill would limit an individual to only 30-
days out-of-state in order to continue their benefits.
ANGELA SALERNO, DIVISION OF PUBLIC ASSISTANCE, DEPARTMENT OF
HEALTH & SOCIAL SERVICES, stated that in the Longevity Bonus
program, the allowable absence had been 60-days. At the end
of that program, individuals were allowed to stay away as
long as needed. They could not get their benefits forwarded
to them but they became eligible again when they returned.
She reiterated that it had been 60-days.
Co-Chair Harris MOVED to AMEND Amendment #4, leaving the
first two sections in tact and deleting the "30 - 60" day
change.
Vice Chair Meyer asked how long could an individual be out-
of-state and still qualify for the benefit. Commissioner
Gilbertson responded that an individual could be out-of-
state for longer than 30-days but not continuously. The
version before the Committee does not remove eligibility for
individuals who stay within the consecutive days out-of-
state.
Representative Chenault questioned what the "special
circumstances" are noted on Line 2. Commissioner Gilbertson
responded that the Department has not enumerated those
specific standards. The intent is to allow for the
discretion of the Department for cases of undue hardship.
The authority is discretionary and determined case by case
and should pass a common sense test.
Representative Joule clarified the intent of the change
proposed by Co-Chair Harris deleting the last portion of
Amendment #4.
There being NO OBJECTION, the amendment to the amendment was
adopted.
Co-Chair Harris WITHDREW his OBJECTION to the amended
Amendment #4. There being NO further OBJECTION, the amended
Amendment #4 was adopted.
Representative Joule MOVED to ADOPT Amendment #5. (Copy on
File). Co-Chair Harris OBJECTED.
Representative Joule stated that the amendment would allow
the Legislature to make the decision regarding termination
of the program rather than the Commissioner of the
Department of Health & Social Services. Commissioner
Gilbertson advised that the amendment would eliminate the
sunset. He pointed out that the sunset was not tied to a
specific date, instead to the actual implementation of the
Medicare prescription benefit. As currently drafted, it
would be the Commissioner that would then certify that
benefit had become available. Representative Joule
maintained that the Legislature rather than the Department
should determine the program.
Co-Chair Harris noted that the Legislature does have and
will continue to have the authority to extend the program
into the future through the funding of it. The question is
regarding the process and if it is on the books and should
it exists in statute. Co-Chair Harris maintained his
opposition to the amendment.
Representative Stoltze agreed with Co-Chair Harris.
A roll call vote was taken on the motion.
IN FAVOR: Joule, Moses
OPPOSED: Chenault, Fate, Foster, Hawker, Meyer,
Stoltze, Harris, Williams
Representative Croft was not present for the vote.
The MOTION FAILED (2-8).
Representative Joule MOVED to ADOPT Amendment #6. (Copy on
File). Co-Chair Harris OBJECTED.
Representative Joule commented that the amendment would
address the sections that deal with proration. The
amendment would delete language on Page 2, Lines 18-22(d)
and Page 3, Lines 22-25(i). Commissioner Gilbertson
clarified that the amendment would establish the program as
an entitlement program and therefore eliminate any
restriction on the amount of expenditures by the Department
for the program as the amount prorated by the Legislature.
The second portion of the amendment would eliminate the
proration of benefits for individuals in the program for
less than one year. He stressed that the current plan
provides an annual benefit of $1,600 dollars in drug subsidy
and $120 dollars per month in cash assistance. He
maintained that the Senior Care proposal provides a solid
and annual benefit. He maintained that if a person is only
eligible for one month, they then should not be receiving a
benefit.
A roll call vote was taken on the motion.
IN FAVOR: Joule, Moses
OPPOSED: Chenault, Fate, Foster, Hawker, Meyer,
Stoltze, Harris, Williams
Representative Croft was not present for the vote.
The MOTION FAILED (2-8).
Representative Joule MOVED to ADOPT Amendment #7. (Copy on
File). Co-Chair Harris OBJECTED.
Representative Joule explained the intent of the amendment,
which would insert after "public institution" on Page 4,
Line 27, "state" governmentally owned establishment.
Commissioner Gilbertson advised that the amendment would
change the definition of public institution to restrict
interpretation to only those operated by the State of
Alaska. He pointed out that on Page 3, Line 26, directs the
Department not to make payments to individuals who are
residing in public institutions and nursing facilities.
TAPE HFC 04 - 12, Side B
Commissioner Gilbertson stated that there are a series of
arrangements including prescription drugs. Under the
amendment, it would largely exempt the Native owned
facilities. He reiterated that as currently drafted, it
would not apply to the Alaska Native Medical Center but
rather the long-term care bed capacity in the Alaska Native
Health Care system. Commissioner Gilbertson clarified that
on a policy level, the Administration would not support
something that would differentiate the ability to receive
the benefits, as there must be equality in the programs.
Representative Joule WITHDRAWN Amendment #7.
Representative Joule MOVED to ADOPT Amendment #8. (Copy on
File). Co-Chair Harris OBJECTED.
Representative Joule explained that the amendment would
change "may" to "shall" on Page 1, Line 8 and Page 2, Line
19.
Representative Stoltze asked if that amendment had been
adopted during the previous meeting. Commissioner
Gilbertson clarified that the previous amendment addressed
brand name drugs paid for by the Department. Amendment #8
would alter two provisions providing assistance and the
payments of the $120 dollars. The amendment is consistent
with the intent of the legislation and the manner in which
the fiscal note was drafted. He noted that the Department
would not object to the amendment.
Co-Chair Harris maintained his objection.
Representative Joule discussed the reduction of the
Department of Health & Social Services BRU. He added that
the Commissioner does have latitude of where funds can be
shifted. Incorporating "shall" guarantees the intent and
latitude. He understood that there would be a broader
discussion regarding compressing the BRU's.
Representative Hawker noted that he did support the
amendment. Commissioner Gilbertson noted that the amendment
would direct the Department to implement the program and to
make the payments.
Co-Chair Harris inquired if the Department supported the
amendment. Commissioner Gilbertson clarified that they do
not oppose the amendment.
Co-Chair Harris WITHDREW his OBJECTION. There being NO
further OBJECTION, Amendment #8 was adopted.
Representative Joule asked about the $12 million dollar
fiscal note fund source and if it would be amended. Co-
Chair Harris noted that the current notes had been updated
and would come out of the general fund.
Brief At-Ease.
Co-Chair Harris clarified that the fiscal notes do not
reflect the Senior Care fund. The committee substitute
creates a new fund called the Senior Care Fund. That fund
has no money in it at this point but will be funded through
the supplemental. The $12 million dollars in the other fund
has been placed in the Marine Highway Stabilization Fund.
Representative Foster MOVED to report CS HB 374 (FIN) out of
Committee with individual recommendations and with the
accompanying fiscal notes. There being NO OBJECTION, it was
so ordered.
CS HB 374 (FIN) was reported out of Committee with a "do
pass" recommendation and with five new fiscal impact notes
by the Department of Health & Social Services.
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