Legislature(1997 - 1998)
04/07/1998 03:05 PM House HES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 369 - MEDICAID COVER/HEALTHY FAMILIES AK PROGRAM Number 1570 CHAIRMAN BUNDE announced the next item on the agenda was HB 369, "An Act relating to Medicaid coverage for certain eligible children and pregnant women; relating to primary care case management and managed care services as optional services and to premiums and cost-sharing contributions under the Medicaid program; establishing the Healthy Families Alaska program; and providing for an effective date." He noted the committee had a proposed committee substitute to adopt. Number 1585 REPRESENTATIVE BRIAN PORTER made a motion to adopt proposed committee substitute 0-GH2008\E, Lauterbach, 3/26/98, as the working draft. There being no objection, that version was before the committee. CHAIRMAN BUNDE explained the proposed committee substitute scales down the scope of the bill to focus on helping those people who are within 200 percent of poverty by allowing them to have access to health care. CHAIRMAN BUNDE recessed the meeting at 3:32 p.m. to allow individuals an opportunity to review the current draft. CHAIRMAN BUNDE reconvened the committee meeting at 3:39 p.m. He asked Jay Livey to present his comments. Number 1662 JAY LIVEY, Deputy Commissioner, Department of Health & Social Services, explained that last fall Congress passed the Kennedy-Hatch bill which program which makes federal money available to states to expand health care coverage for children. Alaska's allotment in the first year will be $5.6 million and the state's required match is $2.2 million. Current estimates indicate about 23,000 children are uninsured and of that group, approximately 11,500 are under 200 percent of poverty. He pointed out the background materials previously distributed didn't include a table that converts poverty level to both annual salary and wages, but 200 percent of poverty for a family of three is about $33,000 or $16 per hour. Like all federal laws, there's a combination of prescriptions in this legislation that must be accompanied by a child health expansion as well as several options provided to the states. MR. LIVEY wanted to address those because it has an impact on how the department implements this legislation. He said first, federal law requires any child health program must meet certain standards. There are standards laid out in federal law as to what constitutes a child health insurance package; primarily, those restrictions have to do with the program being comprehensive in terms of preventative services for kids - healthy child exams, immunizations and such. Second, children applying for coverage under a child health insurance program must be screened for Medicaid eligibility. Additionally, the law requires any child also eligible for the Indian Health Service has to be served under the child health program. In other words, just because a child is eligible for Indian Health Service doesn't mean they can be excluded from coverage under this program. Finally, any health insurance provided under a child health program can only be provided to kids who don't have any other source of insurance, so there is no attempt to supplant private coverage or existing governmental coverage. MR. LIVEY said those are fairly specific restrictions, but the law allows the state quite a bit of flexibility in two very important areas - the first being the state has the ability to decide the eligibility level in terms of providing this new coverage and secondly, the state has a choice in which delivery system to use to apply this coverage. Federal law allows states to use Medicaid as a delivery system, private insurance sector or some combination of the two. Taking all these issues into account within the framework of HB 369, the department's proposal which corresponds to the committee substitute is to raise the poverty level to 200 percent. He explained that currently under the state's Medicaid program, the department is at the state minimum and the poverty level for which a person is eligible depends on the age of the person, but being at the state minimum would allow the department to go to 200 percent. Secondly, through CSHB 369, the department has chosen to deliver the child health insurance through the Medicaid Program. He said that choice was made for a couple of reasons. Generally, the state gets a lot more "bang" for the general fund dollar expended which is largely due to the treatment of Indian Health Service children who are treated in the Medicaid Program as 100 percent funding from the federal government. Secondly, the Medicaid program is an existing administrative program so the start up costs are minimal. The department can use the existing Medicaid payment system to pay claims, the current claims system, current enrollment and current benefit package. There is a certain economy of scale in just plugging into a program that's already covering 50,000 kids. Number 1904 MR. LIVEY wanted to talk about the link between child health expansion and welfare reform. Under welfare reform, the department is in the process of putting families to work; many into low wage jobs that do not have health coverage. He explained that an individual coming off welfare is eligible for transitional Medicaid the first year. So the individual is eligible for the regular Medicaid Program for 12 months, after which the individual is on their own. Individuals who haven't either gotten a better job or moved into a job with health care coverage will be without health care coverage and the department doesn't want to give them an incentive to come back onto cash assistance if their children get sick. Therefore, expanding the child health coverage under the proposed program helps protect some of the individuals from coming back onto the cash assistance program. Secondly, the department sees a connection between child health and the federal matching assistance percentage (FMAP) change made last year. He pointed out that last year the Medicaid matching rate was changed by Congress which essentially allowed the Medicaid Program to free up about $32 million of general funds. He said, "The FMAP change that Congress made is a three year deal essentially, and we believe Congress made that change on the FMAP because they believed that health care costs in Alaska were high compared to other states and that was the reason why Alaska was not expanding its health care programs. And we think that doing this to child health care gives us an additional benefit of being able, after three years, to go back to Congress and say to Congress, 'You gave us this FMAP change - you increased our federal allocation of money and with that money we went out and we served more kids' and we think three years from now that will be a useful argument to have as the FMAP comes up for reauthorization." Number 2035 MR. LIVEY said one difference between the proposed committee substitute and the original bill is the proposed committee substitute does not include coverage for pregnant women. The original bill covered pregnant women up to 200 percent of poverty because better birth outcomes are expected when women have prenatal care and if the child is going to be covered once its born, it only makes sense to do the preventative care up-front to reduce the possibility of bad outcomes which are very expensive later on. This federal law requires the approval of a state plan by September 30, but the federal government has indicated that any state plan submitted by July 1 is guaranteed to be acted upon prior to September 30. He reminded the committee that Alaska's plan must be submitted by July 1 or the state loses its first year allocation of money or $5.6 million. He asked Bob Labbe to discuss some of the specific provisions of the proposed committee substitute. Number 2060 BOB LABBE, Director, Division of Medical Assistance, Department of Health & Social Services, said the proposed committee substitute basically parallels the original bill with the exception of some deletions. He said currently Alaska's Medicaid coverage for children is at the minimum level required under federal law so those kids that are required to be covered as opposed to the state electing to cover them as an expansion. The proposed committee substitute for HB 369 proposes as an option to go higher or up to 200 percent of the poverty level. Currently, children under the age of 6 are covered to 133 percent of the poverty level; kids 6-14 years of age are covered if the family income is below 100 percent of the poverty level; and kids over 14 years old are covered if their family receives cash assistance which is about 70 percent of the poverty level. While the current system has somewhat of a stair step, CSHB 369 proposes a uniform line across the eligibility which will allow more children to have coverage and simplify to some extent, the administration of a fairly complicated program. He said most states are doing better than Alaska on their coverage level, which he believed spoke to the FMAP change that Alaska hasn't been able to move up as much as other states. Forty-one states were identified prior to this new block grant as having coverage above the federal minimum required level. He noted that approximately 21 states have submitted their state plan to move ahead with these expansions and he assumed Alaska will be further down than the 41 if we don't act. He said, "We believe it's important that we make an effort to improve and I think with the funding that Senator Murkowski was able to secure the (indisc.) change we have an opportunity here that's sort of like the federal is paying both sides, although it's freed up general fund but it's kind of a no cost expansion compared to other states who are having to struggle to find the matching funds to even do these expansions." Number 2205 MR. LABBE pointed out another part of the block grant legislation is that it will allow states under their Medicaid Program to provide guaranteed eligibility for children for up to a year. He explained currently when an individual is on Medicaid, it's sort of month to month which makes continuity of care problematic and creates a lot of administrative confusion as to who is on and who isn't. The idea is to provide some longer period of guaranteed eligibility; the department is proposing 6 months rather than 12 months as a reasonable start. So a child eligible the month coming into the program would be covered for the next 6 months, without regard to changes that may be going on, and would then be reviewed to see if they qualify for another 6 months. That's what is referred to as continuous eligibility and it would apply not only to the expansion group but to the current 50,000 kids. One thing that's tied up with the Title 21 block grant program that hasn't been mentioned is an outreach effort. He said, "Because I think of welfare reform activities around the country, there is concern that children are losing some benefits because the families are not pursuing like health care coverage, we've changed the tone of the welfare model to be a temporary assistance and although you're still eligible for health care benefits, they may not perceive it that way so what we're looking at also as other states are, is more outreach - simplify the process, make it more customer friendly, maybe different access points and really focus on it's important to have coverage for your kids and if you're unable to afford it, we have this program and not get it too tied up in all the other bureaucracy." MR. LABBE said that Section 4 of the proposed committee substitute contains provisions that parallel some things that happened with the block grant which permit some cost sharing for families between 150 percent and 200 percent of the federal poverty guidelines. He explained that when the legislation was developed last fall, the department had anticipated having some flexibility under Medicaid to do this, but at this point in time the federal government is indicating it can't be done even above the 150 percent level. A number of states have expressed concern about this and cost sharing between the 150 percent and 200 percent level could probably be done if the state elected not to go through the Medicaid Program, although there is a certain amount of prescription about what a state can do and in looking at size of population and costs involved, it's probably not all that effective at this level. He added, "But it's still in here with the idea that it was our feeling that it was reasonable to expect some contribution about some income level in terms of purchasing coverage and that is in fact some change is made at some point at the federal level, then we would have that ability." TAPE 98-45, SIDE B Number 0001 MR. LABBE said sections that were dropped out of the proposed committee substitute, such as the coverage of pregnant women are very important to the department. Typically, the department prefers to keep the eligibility level comparable and coverage for a pregnant woman is generally viewed as coverage for the child. He pointed out it is not something that is fundable out of this block grant - the block grant was only for kids, not for pregnant women which the department thought was a bit of an oversight at the federal level. He added, "And again, since we're at the minimum level for coverage - we do cover pregnant women to 133 along with the kids under 6 - we would like to bring them up at the same time to whatever level we ultimately get ...." REPRESENTATIVE BRICE asked if there was a correlation between the amount of service a pregnant woman gets and the cost savings that can be expected after giving birth. MR. LABBE recalled a study on the issue of cost effectiveness of prenatal care he thought indicated $1 spent saved $3 in terms of future expenditures. He added, "I know that delayed - for women that are uninsured, and this was the case here and I've talked to some of the emergency room folks about this awhile back when I was down in Soldotna, they were saying before we did the expansions to 133 they were seeing a lot more women presenting for delivery that had no prenatal care and the outcomes are not real great frequently and of course, that drives a lot of our costs. In fact, national data will show about 10 percent of the health care costs are neonatal costs - a very expensive proposition. So we believe we should make that investment as well and I would urge you to consider that." REPRESENTATIVE KEMPLEN inquired if someone from the department could talk about the Health Families Program contained in the original bill. PAM MUTH, Chief, Maternal Child & Family Health Section, Division of Public Health, Department of Health & Social Services, stated the Healthy Families Program is a proven prevention program to prevent child abuse and neglect. The original version of HB 369 was giving the Healthy Families Program official status which by being in statute would allow the department to set standards for training, promulgate regulations which would open the program up to more public process and so forth. At this point, the department is running the Healthy Families Program under general statute. The statutes are a way to assure the public about the kinds of services being offered, the standards and how the services will become available. She encouraged the committee to either draft a new version that includes the Healthy Families Program or to add it to the proposed committee substitute. CHAIRMAN BUNDE understood the program was not funded by this specific federal program so in his mind, it would require a new bill as a stand alone issue. REPRESENTATIVE KEMPLEN inquired if the department had funding allocated in its current budget for the Healthy Families Program. MS. MUTH responded affirmatively; the program was funded at the status quo for FY 98 which means for programs there will be no new growth. For the eight programs that are funded in the department's budget, there won't be any availability for adding new clients, no availability to expand beyond the eight programs. The bottom line is that children and families currently enrolled will continue to receive services and newborns will be put on a wait list which means those newborns probably will never receive services. She explained that children stay on this program for three to five years, so in order for new children to come into the program, it would take either some children dropping out of the program, some children leaving the service area, or graduating out of the program at five years of age. REPRESENTATIVE KEMPLEN understood the Healthy Families Programs language in the original bill allowed the department to improve the delivery of its services by addressing standards and regulations and to increase the overall effectiveness of operating the eight Healthy Families Programs. MS. MUTH said the department believes so, yes. REPRESENTATIVE PORTER asked how long the program had been in existence. MS. MUTH explained it's been phased in; several programs have been in existence for about three years. One program in Kenai, funded through a federal grant, has been in existence for longer than three years and there were several programs added just last year. REPRESENTATIVE PORTER asked if the eligibility was birth to five years of age or five years in the program. MS. MUTH said the program requires that a child enter the program in the first three months of life. Children outside that three-month window wo why the wait list is such a concern to us because if we need to shut down the enrollment right now, that means that in let's say two years - if we're able to grow a little bit in two years - we won't ever be able to touch those children that are between four months of age and two years of age." REPRESENTATIVE PORTER inquired if there was a residency requirement. MS. MUTH responded the parents need to reside in the geographic areas for the program. REPRESENTATIVE PORTER surmised then that if someone moved into an area and qualified within 30 days or whatever it takes, but their children were over four months of age, they too would not be eligible. MS. MUTH confirmed that. CHAIRMAN BUNDE thanked Ms. Muth for her comments and asked Walter Majoros to present his testimony at this time. WALTER MAJOROS, Executive Director, Alaska Mental Health Board, Department of Health & Social Services, testified in support of the proposed committee substitute for HB 369, but somewhat less enthusiastically than the original version. He said the Alaska Mental Health Board does support the expansion of children's health insurance as well as the services for pregnant women and the Healthy Families codification. The board has noted the incredible importance of prevention in early intervention services with regard to mental health and all three of these expansions would assist in early intervention and prevention activities. He said one of the things being seen is earlier and earlier onset of emotional and mental health problems with youth. This is especially true for children coming from families experiencing multiple forms of abuse and neglect. They are at an incredibly high risk for developing emotional and mental health problems and the longer it goes without intervention, the more serious the problems become. It's now becoming apparent that kids who have endured these problems are now requiring various intensive mental health services under the Medicaid mental health program. He said the expanded Medicaid offers a tool to have an array of mental health services available to children as well as to pregnant women and to help low income families make the move from welfare to work. It appears this could be done in a very cost effective way through the Medicaid Program. He said it's unfortunate the proposed committee substitute dropped pregnant women from the eligible population because the Alaska Mental Health Board contends that access to early intervention with kids begins with prenatal care. With respect to the Health Families Program, he said the board has come out with an incredible endorsement of this program and has heard nothing but praise about the services offered through the Healthy Families Program throughout the state. Again, it's so important to identify high risk families as early as possible and provide the needed services. The Healthy Families Program is having a lot of success in reducing and preventing abuse and neglect; it's a service that's important to offer as early as possible and can reduce or prevent long term mental health problems. He could understand the committee's rationale for wanting it in a separate piece of legislation, but codifying the program could give validity to a very important prevention approach, allow for some standardization in the program and some statewide consistency in the services provided. He thanked the committee for putting forth the committee substitute to expand the children's health insurance but he requested the committee reconsider the expansion provisions for pregnant women as well as the codification of the Healthy Families Program. CHAIRMAN BUNDE asked the wish of the committee. REPRESENTATIVE KEMPLEN made a motion to amend the proposed committee substitute on page 1, line 2, following ";" insert "establishing the Healthy Families Program" and page 2, line 23, insert language from the original version of HB 369 beginning at page 4, line 18, which is the Healthy Families Alaska Program component. REPRESENTATIVE PORTER objected. CHAIRMAN BUNDE said he could understand both the testimony and Representative Kemplen's point of view; however, that portion is not funded from the particular money being discussed. He viewed it as the glass being half full rather than half empty and therefore, opposes the amendment. REPRESENTATIVE KEMPLEN stated the program is already funded from general funds and is proposed to be funded at the status quo in FY 99. There is an anticipated expansion of the program as soon as the department initiates a control group to measure the results of this initiative, so it appears that funding is not really an issue for the Healthy Families Program. Based on the testimony, having the program codified would result in the department being able to produce better results and increase the effectiveness of the program. There has been testimony in support of the Healthy Families Program and it is producing good results, but that it could do even better with the reinsertion of this language into the proposed committee substitute. He is of the opinion the legislature should take advantage of any opportunity to do things better. CHAIRMAN BUNDE reiterated that he doesn't view the Healthy Families Program as a bad program, but he believes the chances of this specific piece of legislation passing are increased without expanding it at this point. CHAIRMAN BUNDE asked for a roll call vote. Representatives Brice and Kemplen voted in support of the amendment. Representatives Porter and Bunde voted against it. Therefore, the amendment failed on a 2-2 vote. REPRESENTATIVE BRICE made a motion to amend the proposed committee substitute to include coverage at the 200 percent of federal poverty level for pregnant women. CHAIRMAN BUNDE objected. He said from the same point of view, it's not covered under this pot of money, although it's an applaudable goal. REPRESENTATIVE BRICE disagreed and said the fiscal notes are directly related; both are Medicaid programs and both programs decrease the costs to state government as the level of service for pregnant women increases. He added, "I think by expanding to 200 percent for pregnant women, not only are we fulfilling the intent of the federal mandates with the changes in FMAP, but also the letter of the negotiated terms by which the FMAP changes were vetoed - I mean, if it's hand in glove, absolutely, between prenatal and postnatal care. I think if you want to address the question such as fetal alcohol syndrome (FAS), fetal alcohol effects (FAE), you want to address the questions such as developmental delays, you've got to address them in the prenatal level essentially otherwise you are throwing good money after bad unfortunately. When we're talking about prevention, you're talking about getting to these women - in a sense, the earlier the better. It is precisely the same type of program in which we expanded to 200 percent for children - it is precisely the same argument for pregnant women as it is for the children and you want to talk about saving state dollars in the future, that's a serious place where we should be looking at." CHAIRMAN BUNDE agreed the programs are similar, but there had been testimony that the children's federal program does not cover the pregnant woman. REPRESENTATIVE PORTER said, "I don't disagree that there's logic in providing that to pregnant women, I guess it begs the question if the statistics are true and it sounds like there's pretty well documented information on it, one would think there could be a resultant reduction in the state impact from the program one to one, let alone three to one as I understood the difference was, I would entertain it if there was that kind of reduction in the cost of the other part of the program from birth to five, but I don't see that reflected." CHAIRMAN BUNDE called for a roll call vote. Representatives Brice and Kemplen voted in favor of the amendment. Representatives Porter and Bunde voted against it so the amendment failed on a 2-2 vote. REPRESENTATIVE BRICE made a motion to move proposed committee substitute for HB 369 with revised fiscal notes. There being no objection, CSHB 369(HES) moved from the House Health, Education and Social Services Standing Committee.
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