Legislature(2007 - 2008)Anch LIO Conf Rm
07/27/2007 10:00 AM House HEALTH, EDUCATION & SOCIAL SERVICES
| Audio | Topic |
|---|---|
| Start | |
| Presentations on Alaska's Unininsured | |
| HB140 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 140-MEDICAL ASSISTANCE ELIGIBILITY 1:34:18 PM CHAIR WILSON announced that the final order of business would be HOUSE BILL NO. 140 "An Act expanding medical assistance coverage for eligible children and pregnant women; relating to cost sharing for certain recipients of medical assistance; and providing for an effective date." [Although not formally scheduled/noticed, the committee discussed HB 140.] 1:35:12 PM REPRESENTATIVE LES GARA, Alaska State Legislature, as a sponsor of the bill, presented HB 140. He informed the committee that universal health coverage for everybody is a difficult, complex, and costly issue for debate. However, the sponsors of HB 140 realized that, in the meantime, universal health care could be provided for kids for very little money. The fiscal notes for HB 140 indicate that, depending on how much families are charged to buy into children's health care, the income qualification level, and the costs through Denali Kid Care, the cost will be between $2 million and $5 million. Representative Gara noted that this is a simple bill, complicated only by the fact that Congress is debating the reauthorization of the federal State Children's Health Insurance Program (SCHIP) that pays for 70 percent of Denali Kid Care (DKC). He expressed his belief that the federal program will be continued. 1:37:46 PM REPRESENTATIVE GARA explained that DKC insures parents who do not work and working families who earn up to 174 percent of the federal poverty level (FPL). Thus, HB 140 is only about working families who do not get health insurance at work and who can not afford private insurance. For example, a single parent with one child who earns about $28,000 per year, does not qualify for DKC. He acknowledged that the number of uninsured children could be as high as 22,000, but 8,000 of those children may have some coverage through IHC; therefore, the sponsors assume that approximately 12,000 to 15,000 children of working families remain uninsured. Representative Gara pointed out that approximately 50 percent of Alaska employers do not offer health insurance; in fact, most businesses with less than 25 employees do not offer coverage. REPRESENTATIVE ROSES asked whether the calculations for the bill's fiscal notes are based on 22,000, or 12,000, uninsured children. REPRESENTATIVE GARA answered that these numbers will not be used for any calculations in this presentation and clarified that 12,000 children are known to be uninsured. He continued to explain that studies have shown that uninsured children receive less preventive care and fewer physicals and are treated for more acute care, later in illness. In addition, uninsured children are more likely to develop serious dental problems, asthma, diabetes, and are four times more likely to use the emergency room. In fact, uninsured kids are 25 percent more likely to miss school. Hospitals in Anchorage estimated that they provided $89 million in uncompensated care in 2004; this cost was passed along to co-payers. Representative Gara recalled that there was an appropriation to reimburse Alaska hospitals for some of their losses. 1:42:59 PM REPRESENTATIVE GARA called the committee's attention to solutions from other states. Eight other states leverage federal money from SCHIP and cover children of families that earn up to 300 percent of the FPL. Forty states provide health insurance to families earning up to 200 percent of the FPL. He pointed out that Virginia, New York, and Washington provide free coverage up to a certain income level, and then let families above that level buy coverage. This plan keeps the state's cost very low. 1:44:40 PM REPRESENTATIVE GARDNER asked whether there is a federal limit to a family's income level. REPRESENTATIVE GARA answered that there is not. Right now, Congress appropriates a certain amount of money to each state; some states put caps on the qualifying income level to prevent overspending their allotment. Congress is debating whether to cap the family income level on the basis that states should not provide health care to families who can afford to purchase private insurance. According to the U. S. Department of Health and Human Services, the federal government pays roughly 70 percent of the cost of DKC insurance; the state share per child is $420 per year. HB 140 proposes that families buy in on a sliding scale with the income limits set by policy. In addition, Representative Gara explained, the bill proposes a sliding scale that could go up to the state's full cost for families with higher incomes. 1:48:24 PM REPRESENTATIVE GARA informed the committee that HB 140 gives DHSS the flexibility to charge families an acceptable amount that also maintains federal eligibility. The federal law is unclear on the acceptable co-pay and the bill allows DHSS to negotiate with the federal government to protect the federal SCHIP contribution of 70 percent of the cost. He warned that, if SCHIP rules are violated, or the state program is non- qualifying, the state will only receive a 50 percent match. Currently the cost per policy averages $1,387 and $420 of that is the state match. However, if higher income families are allowed to buy in, DHSS assumes that children with higher needs will be covered and the cost of each policy will double. 1:50:54 PM REPRESENTATIVE GARDNER asked whether the inclusion of higher income families will result in the loss of the federal match. REPRESENTATIVE GARA responded that the federal allocation is based upon the expansiveness of the state's plan and that other states have been approved for universal health care. However, the federal regulations will change in September, 2007. In response to a question from Chair Wilson, Representative Gara said that the state can wait until the new regulations are known to finalize its plan. 1:52:25 PM REPRESENTATIVE ROSES relayed that he attended a health care conference in Chicago in April; presenters there warned states not to expand SCHIP until after the new regulations are issued. REPRESENTATIVE GARA expressed his understanding that expansion referred to the federal program and not to state's programs. REPRESENTATIVE ROSES explained that speakers at the conference indicated that the expansion of state's programs would be disapproved. REPRESENTATIVE GARA disagreed. REPRESENTATIVE ROSES said, "They were using those states as examples when they talked about what they meant by expanding the program." CHAIR WILSON asked whether an estimate of those who might drop private insurance is factored in. REPRESENTATIVE GARA replied that the sponsors have prepared a CS that includes a qualification to require families to use their employer based insurance, if available. This will keep the costs down and prevent this problem. REPRESENTATIVE ROSES asked whether there has been a legal opinion on this qualification. REPRESENTATIVE GARA said no. He noted that the federal government would have to define this restriction and approve its purpose. He gave several examples of restrictions that could be included in the bill. 1:58:04 PM REPRESENTATIVE GARA stated that there is a provision by some states that requires an applicant to certify that they have not had insurance at work within the last six or nine months. This will prevent families from dropping employer based coverage. He continued to say that DHSS can negotiate regulations for coverage and that a portion of Sec. 3 of the bill will cover that intention. 1:59:26 PM REPRESENTATIVE GARA stated that it is the committee's responsibility to set the level at which families can buy coverage. He suggested that Senator Wielechowski's version of the bill, that sets a limit of family income at 175 percent of the FPL, is appropriate. In addition, the committee will need to set policy to allow, or disallow, families with higher income levels to purchase coverage and at what premium. HB 140 proposes a cap of 300 percent of the FPL: a middle class income. Research indicates that private insurance can cost around $3,000 per child, and $7,000 for a family of three. In response to a question from Chair Wilson, Representative Gara said that Premera Blue Cross offers a plan that will just insure the children in a family. Representative Gara gave an example of the federal poverty line scale: for a single parent with one child, 175 percent of the FPL is $35,000 per year; for a single parent with one child, 300 percent of the FPL is $50,000 per year. He pointed out that families at the poverty level do not pay income taxes; however, families with higher incomes do. Representative Gara concluded by saying that the fiscal notes on HB 140 are between $2 million and $5 million, depending on the expansion of coverage. He opined that this is the first step to universal health care and is a worthwhile investment that will assist a substantial portion of the population that can not afford insurance in Alaska. This expense is more important than some other funding requests and he urged that it be funded. 2:04:19 PM REPRESENTATIVE GARA reviewed the policy decisions needed for the bill: the qualification of families that can get insurance at work, the qualification income levels, and the amount of premiums charged to families that wish to purchase coverage. He encouraged the committee to also look at the senate version of the bill, and concluded that this legislation is an easy solution. CHAIR WILSON announced that HB 140 was held over for further discussion.
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