03/03/1994 03:00 PM House HES

  HJR 52 - INCREASE IN FEDERAL MEDICAID FUNDING                                
                                                                               
  Number 309                                                                   
                                                                               
  REP. JIM NORDLUND, Prime Sponsor of HJR 52, addressed the                    
  resolution.  He stated that the resolution deals with the                    
  issue of fairness regarding the state of Alaska.  He said                    
  currently the federal Medicaid rates vary nationwide from                    
  50% to 70% based on relative per capita income of the                        
  various states.  He explained that Alaska's high cost of                     
  living is not taken into account when reimbursement is set.                  
  The purpose of the resolution is to amend the Social                         
  Security Act to take into account Alaska's high cost of                      
  living and to set the differential accordingly.  He pointed                  
  out another disadvantage in the way Medicaid rates are set                   
  for the state.  He said, "although, the cost of living is                    
  considered in terms of deciding who is eligible to receive                   
  Medicaid, therefore increasing the Medicaid pool, in turn we                 
  do not receive the difference... in receiving the greater                    
  amount of money... or that's not taking into                                 
  consideration... the cost of living is not taken into                        
  consideration in setting the rate."  He said that if the                     
  state had a 25% increase, which is approximately what the                    
  cost of living difference is for the state, it would mean an                 
  additional $31 million dollars to the state of Alaska.                       
                                                                               
  REP. NORDLUND indicated that the resolution also recognizes                  
  the work that Senator Stevens has been doing in Congress to                  
  make the necessary changes.                                                  
                                                                               
  Number 387                                                                   
                                                                               
  CHAIR BUNDE asked for testimony from Kim Busch.                              
                                                                               
  Number 390                                                                   
                                                                               
  KIM BUSCH, Director, Division of Medical Assistance,                         
  Department of Health and Social Services, testified in                       
  support of HJR 52.  She stated that the Medicaid federal                     
  matching percentage is based on per capita income with a                     
  floor of 50%.  She said if the floor did not exist, Alaska                   
  would receive an even lower match rate.  She said the                        
  formula is also used for AFDC, the JOBS program, and other                   
  federally funded programs.  She explained that the                           
  government uses a 25% cost of living differential to set the                 
  poverty level in Alaska.  She said the result for FY 94 is                   
  $48.8 million that are not coming into Alaska.  Medicaid                     
  would receive an extra $33 million and AFDC would receive                    
  $15.7 million.                                                               
                                                                               
  MS. BUSCH felt it was critical to insert the provisions in                   
  Title 19 of the Social Security act now, because all of the                  
  health care reform legislation that is before Congress is                    
  using the same formula and Alaska is seriously                               
  disadvantaged.                                                               
                                                                               
  Number 487                                                                   
                                                                               
  REP. TOOHEY asked when the resolution would take effect.                     
                                                                               
  Number 490                                                                   
                                                                               
  MS. BUSCH said it would take effect when the legislature                     
  adopts it.  She said if Congress moves the resolution, it                    
  would take effect this fall.                                                 
                                                                               
  CHAIR BUNDE closed public testimony.                                         
                                                                               
  Number 512                                                                   
                                                                               
  REP. BRICE made a motion to pass the CS for HJR 52 out of                    
  committee with individual recommendations.                                   
                                                                               
  CHAIR BUNDE objected as to explain his no vote.  He stated                   
  that the additional funds from the federal government would                  
  still be taken from the general public's pockets.  He said                   
  it is not free money.  He maintained that the Medicaid                       
  program is wildly out of control and he thought Alaska                       
  should lead by example and not ask for extra money.                          
                                                                               
  Number 538                                                                   
                                                                               
  REP. VEZEY asked what would happen if the cost of living in                  
  Anchorage turned out to be lower than Washington, D.C.                       
                                                                               
  MS. BUSCH stated if the cost of living changed dramatically                  
  and was no longer higher than most, the state would not need                 
  the differential.  She asserted that the situation currently                 
  is grossly unfair.  She also said that Congress must find                    
  savings in order to fund the increase, indicating that                       
  savings would be found within Title 19 to fund increase for                  
  Alaska.  She said that many other congressmen have been able                 
  to act to get consideration for increases for their state.                   
                                                                               
  Number 606                                                                   
                                                                               
  REP. BRICE said, "Better to buy... have this money come to                   
  the state in the form of extra federal money for Medicaid,                   
  Medicare, whatever, than to be buying whatever on the East                   
  Coast for nonproductive use, which is another thing that our                 
  federal government is known for.  Buicks or bombs, that's                    
  what I say."                                                                 
                                                                               
  CHAIR BUNDE said, "It's federal, it's free."                                 
                                                                               
  Number 623                                                                   
                                                                               
  REP. G. DAVIS agreed with Chair Bunde's point, but said the                  
  system is a match program that is mandated by the federal                    
  government.  He said, "It's a mandate from the feds, and                     
  it's a match program.  So it's costing state dollars.  At                    
  the current rate the mandate from the feds is mandating that                 
  the state spend so many dollars.  Under this resolution the                  
  mandate is that the state will not need to spend so much                     
  dollars.  So, I can certainly agree with that."                              
                                                                               
  Number 641                                                                   
                                                                               
  REP. NICHOLIA stated that there is definitely a higher cost                  
  of living in the rural areas.  She said it is very expensive                 
  for rural residents to go to Anchorage and Fairbanks for                     
  medical treatment, citing that many forgo medical treatment                  
  until the illness has gone past the point of medical care,                   
  resulting in people dying unnecessarily.  She felt that                      
  Medicaid dollars could go far for those people.  She also                    
  reminded the committee that a large percentage of people on                  
  Medicaid are children.  She said a no vote would deny                        
  children better medical services.  She further stated that                   
  in regards to the JOBS program there are a limited number of                 
  people who are allowed to go to job training, and she felt                   
  that number would increase as a result of the resolution.                    
                                                                               
  Number 685                                                                   
                                                                               
  CHAIR BUNDE asked if most Natives are covered under the                      
  Native Health Service.                                                       
                                                                               
  Number 688                                                                   
                                                                               
  REP. NICHOLIA indicated that federal funding is also limited                 
  for Indian Health Services.  She said a lot of people are                    
  turning to Medicaid.  She then pointed out that the interior                 
  has the highest cancer rate for the whole state of Alaska.                   
                                                                               
  Number 710                                                                   
                                                                               
  CHAIR BUNDE, hearing no further discussion, called for the                   
  vote.  Representatives Toohey, Gary Davis, Kott, Olberg,                     
  Nicholia and Brice voted yea; and Representatives Bunde and                  
  Vezey voted nay.  Chair Bunde indicated that the CS for HJR
 was so moved.  He then brought HB 356 to the table.