Legislature(1999 - 2000)

02/15/2000 03:56 PM House HES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HB 260 - MEDICAL ASSISTANCE PROGRAM COVERAGE                                                                                  
Number 0280                                                                                                                     
CHAIRMAN DYSON announced the next  order of business as House Bill                                                              
No. 260,  "An Act relating  to coverage  of children  and pregnant                                                              
women under the  medical assistance program; and  providing for an                                                              
effective date."                                                                                                                
Number 0262                                                                                                                     
KAREN  PERDUE,   Commissioner,  Department  of  Health   &  Social                                                              
Services, came  forward to testify in  opposition to HB  260.  She                                                              
informed the committee  the Denali KidCare program  will reach its                                                              
first  birthday March  1.   The  legislature  enacted the  program                                                              
about two years  ago, and it has only operated for  one full year;                                                              
that is  a pretty short  time to talk  about changing it.   Denali                                                              
KidCare  offers  more children  in  working families  health  care                                                              
coverage, it  covers pregnant women,  and it is a  streamlined way                                                              
of  government doing  business in  signing  up children.   If  the                                                              
coverage went away  today, approximately 7,000 children  and about                                                              
800 pregnant  women would  lose their coverage.   The  program has                                                              
turned out to be cheaper than the  department thought.  It roughly                                                              
costs the  state around  $472 in general  funds a year,  about $40                                                              
per month.                                                                                                                      
COMMISSIONER PERDUE informed the  committee the federal government                                                              
is  paying 72  cents  on the  dollar for  this  service, and  this                                                              
program is  authorized for ten  years.  The  state is only  in the                                                              
second year of  the program, and the state part  of Denali KidCare                                                              
is  financed  through  savings in  changing  the  Medicaid  match.                                                              
Money was freed  up for use toward more health care  coverage.  If                                                              
HB 260 were to pass, Alaska would  be the only state in the nation                                                              
without  a child  health  insurance program.    She discovered  in                                                              
talking to private  insurers and business people, there  is a hole                                                              
in the market.                                                                                                                  
TAPE 00-15, SIDE A                                                                                                              
Number 0011                                                                                                                     
COMMISSIONER PERDUE explained the  national Child Health Insurance                                                              
Program was  launched to provide  health insurance access  for the                                                              
person  working in  small business  or part-time  who didn't  have                                                              
coverage.  Alaska  has a more extensive problem  because many more                                                              
people are either  self-employed or are in very  small businesses.                                                              
She has  not heard of  a private sector  solution that  would meet                                                              
this  need  for  insurance.    She  concluded  by  expressing  her                                                              
opposition to HB 260.                                                                                                           
CHAIRMAN DYSON  asked how reducing  the qualifying level  from 200                                                              
percent down to  133 percent makes Alaska a state  without a child                                                              
health insurance program.                                                                                                       
Number 0154                                                                                                                     
NANCY  WELLER,  Medical  Assistance   Administrator,  Division  of                                                              
Medical Assistance,  Department of Health & Social  Services, came                                                              
forward to explain.  Under federal  law, children up to the age of                                                              
six  are required  to be  covered at  133 percent  of the  federal                                                              
poverty level.   Children over the age of six up to  the age of 18                                                              
are being  phased in  one year  at a  time to  100 percent  of the                                                              
federal  poverty level  which  is the  mandatory  level for  those                                                              
children 6-18.   The 16 year old children are now  being phased in                                                              
this year  and in two years  mandatory coverage at 100  percent of                                                              
the  federal poverty  level  for children  up  to age  18 will  be                                                              
complete.   Therefore  the child  health  insurance program  would                                                              
only include  children ages  6-18 at the  133 percent  level under                                                              
the  proposed committee  substitute.   The new  fiscal note  shows                                                              
only  2,738 children  would retain  coverage on  the Child  Health                                                              
Insurance  Program  of  the  7,000  expansion  children  that  are                                                              
currently covered under Denali KidCare.                                                                                         
Number 0257                                                                                                                     
CHAIRMAN DYSON asked  if it was accurate to say if  this bill were                                                              
to pass in its  present amended form, there would  be an insurance                                                              
program in  Alaska that  continued at the  level that  the federal                                                              
government  had before,  so there  is  still a  program going  on,                                                              
there just isn't the supplementary  coverage provided by the state                                                              
in Denali KidCare.                                                                                                              
COMMISSIONER PERDUE replied that  she didn't know if that would be                                                              
accurate.  She said Alaska's state  health insurance program would                                                              
be the  puniest in the  nation, and all  the pregnant  women would                                                              
lose their coverage.                                                                                                            
REPRESENTATIVE GREEN  asked Commissioner Perdue if  that would put                                                              
many unborn babies at risk if they were no longer covered.                                                                      
Number 0374                                                                                                                     
COMMISSIONER  PERDUE replied absolutely.   At  any one  time about                                                              
1000 pregnancies were covered, and  many of the pregnant women now                                                              
covered  were  foregoing  prenatal   care  until  later  in  their                                                              
pregnancies.    She  believes  prenatal  care is  the  most  cost-                                                              
effective health care investment anyone can make.                                                                               
REPRESENTATIVE  GREEN  asked Commissioner  Perdue  if she  thought                                                              
some of  those pregnant  women might resort  to abortions  if they                                                              
were not covered.                                                                                                               
COMMISSIONER  PERDUE remarked  that  she can't  say what  people's                                                              
personal decisions would be, but  lack of coverage gives them less                                                              
options.     She  reminded  the   committee  that  the   year  the                                                              
legislature enacted  this law for  pregnancy coverage,  the public                                                              
funding  for  abortion was  eliminated.    That  was part  of  the                                                              
discussion  at the  time.   This  bill would  certainly  foreclose                                                              
every option.                                                                                                                   
REPRESENTATIVE KEMPLEN  mention that the Center  for Families made                                                              
a  presentation   in  the  Children's   Caucus  today,   and  they                                                              
emphasized it  is important to  implement prevention  services for                                                              
children  because  those  services  are  the  most  cost-effective                                                              
techniques available.    He wanted to confirm that  is what Denali                                                              
KidCare does.                                                                                                                   
Number 0550                                                                                                                     
COMMISSIONER PERDUE answered it does  that, and it also helps with                                                              
catastrophic events.   If people don't have insurance  or are only                                                              
covered for  catastrophic coverage, it  is often a choice  for the                                                              
family between  going for  the checkup and  getting the  last week                                                              
out  of the  paycheck.   More children  show up  at the  emergency                                                              
room,  which is  the most  expensive care,  because the  emergency                                                              
room takes a credit card; usually  people have to write a check at                                                              
the doctor's office.   She emphasized that it is  not that parents                                                              
are irresponsible;  it is that they don't necessarily  always have                                                              
the money when the illness arises.                                                                                              
COMMISSIONER  PERDUE noted the  other issue is  if people  were to                                                              
try to buy the preventive coverage,  the people whose children are                                                              
very sick  would be  attracted to  the pool  because those  people                                                              
really  need the  coverage.   The  premiums  go  up because  those                                                              
people  are  attracted  to  the   product.    That  has  been  the                                                              
difficulty  of  having  small  pools  of  people  in  the  private                                                              
insurance  settings.   Therefore  only the  catastrophic  coverage                                                              
gets offered.                                                                                                                   
CHAIRMAN DYSON said  it was reported to him that  a family of four                                                              
would qualify  at the  present 200 percent  level if  their income                                                              
was  under $41,000.    With permanent  fund  dividends (PFD,)  the                                                              
income  would  be up  to  $48,000-$49,000.   He  asked  if it  was                                                              
correct that the PFDs were not counted in the income to qualify.                                                                
Number 0674                                                                                                                     
MS. WELLER answered  that it would depend on when  people applied.                                                              
Coverage  is  based  on  the  monthly  income  unless  people  are                                                              
seasonally employed in which case the income is annualized.                                                                     
CHAIRMAN DYSON asked  if it is the Administration's  position that                                                              
a family  with a  $48,000 annualized  income is  the working  poor                                                              
that can't afford health insurance for their children.                                                                          
COMMISSIONER  PERDUE answered generally,  yes.  Those  individuals                                                              
are  not thought  to  be destitute,  but  the goal  is  to try  to                                                              
provide  access for  parents  to get  health  insurance for  their                                                              
children and/or pregnancy  and to act responsibly.   Sometimes the                                                              
choice is quitting a job and going  back on welfare.  In some ways                                                              
that is  the most  responsible thing  to do  if the children  need                                                              
health  coverage.    The problem  is  responsible  parents  cannot                                                              
access  the coverage,  and  the goal  is  to try  to  get as  many                                                              
children as possible covered.                                                                                                   
CHAIRMAN DYSON  asked Commissioner  Perdue if  it is her  position                                                              
that 200 percent is exactly the right number.                                                                                   
COMMISSIONER  PERDUE answered  it is  unfair to  count the  PFD as                                                              
extra income because it is not counted  for a lot of other things.                                                              
The decision  has been made  in this state  that the PFD  does not                                                              
disqualify people for things.  She  believes that 200 percent is a                                                              
good level.  It is a medium level  compared to other states.  Many                                                              
states are way above  200 percent in this program.   It is not out                                                              
of line for what is going on in the nation.                                                                                     
Number 0873                                                                                                                     
REPRESENTATIVE  COGHILL disagreed  that the  200 percent  level is                                                              
where people really become needy.                                                                                               
Number 0949                                                                                                                     
COMMISSIONER PERDUE  summarized by saying she does  understand the                                                              
philosophical  issue;  it  was  debated  two years  ago  when  the                                                              
legislature  passed this  bill.   She deeply  resents the  concept                                                              
that these parents are somehow not  responsible.  She believes the                                                              
parents  are  doing responsible  things.    She does  not  believe                                                              
someone could take  a PFD and turn it into health  insurance for a                                                              
child; it  would only buy a  couple of month's worth  of coverage.                                                              
The message should not be sent out  that these parents are somehow                                                              
not doing right by their children  by getting this health coverage                                                              
or that  pregnant women  are not  somehow doing  right by  getting                                                              
this coverage.                                                                                                                  
CHAIRMAN DYSON said  if he implied that, it certainly  was not his                                                              
REPRESENTATIVE COGHILL stated that was not his intention.                                                                       
Number 1006                                                                                                                     
COMMISSIONER PERDUE emphasized that  this is not welfare.  This is                                                              
health coverage for children whose  families are working, and they                                                              
cannot access it easily in the private market.                                                                                  
REPRESENTATIVE GREEN  asked if the threshold is  one where someone                                                              
either is or is not covered, or is it a sliding scale.                                                                          
COMMISSIONER PERDUE answered that it is not a sliding scale.                                                                    
Number 1061                                                                                                                     
JANICE  TOWER,   Alaska  Chapter   of  the  American   Academy  of                                                              
Pediatrics,  testified  via teleconference  from  Anchorage.   She                                                              
dittoed Commissioner  Perdue's remarks about why  this bill should                                                              
not pass.  She testified  on behalf of  the Alaska Chapter  of the                                                              
American  Academy of  Pediatrics which  is an  organization of  63                                                              
pediatricians  and  pediatric  sub-specialists   from  across  the                                                              
state.  In 1998,  the legislature passed HB 369 by  26-8 and 14-5;                                                              
that  authorized  the Denali  KidCare  program.    Representatives                                                              
Green, Kemplen  and Brice each voted  in favor of this  bill.  The                                                              
legislature is  to be congratulated  for having passed one  of the                                                              
best bills ever devised for children and expectant moms.                                                                        
MS. TOWER stated that HB 260 is a  step backwards to the twentieth                                                              
century.  Since Denali KidCare was  launched last March, there has                                                              
been a  27.6 percent  increase in  the number  of children  in the                                                              
Fairbanks  North  Star  Borough  who  now  have  health  insurance                                                              
through this program.  Similarly,  the Kenai Peninsula Borough can                                                              
be proud that  there's been an increase of 55.3  percent in health                                                              
insurance enrollments through this  program.  She pointed this out                                                              
because  she  understands  that  at the  last  hearing  there  was                                                              
testimony from  Kenai opposing this  program.  It  is unfathomable                                                              
that something  so successful can  be looked upon  as undesirable.                                                              
She sincerely  hopes this  will be  the last  that is heard  about                                                              
rescinding  this   valuable  program  and  that   more  monumental                                                              
decisions that  benefit children  and families  will be  made this                                                              
Number 1182                                                                                                                     
LEILA WISE testified via teleconference  from Anchorage.  She said                                                              
it sounds  like Representative  Coghill and  other members  of the                                                              
committee  believe that  Denali KidCare  represents  some kind  of                                                              
socialized medical program;  she doesn't see it that  way.  One of                                                              
the ways  she looks  at it is  as a subsidy  to business  to allow                                                              
businesses,  whether big or  small, to  pay their employees  small                                                              
amounts of money and fail to provide  health insurance.  She urged                                                              
the committee to  look at the bill in other ways.   It is not just                                                              
the 28  cents on  the dollar  that the  state provides for  health                                                              
insurance for low income children and pregnant women.                                                                           
MS.  WISE stated  that  anytime pregnant  women  are covered  with                                                            
health care or  deafness in children can be avoided  because their                                                              
ear infections  were treated is important.   She is  interested in                                                              
preventing  incidences  of  fetal   alcohol  syndrome  or  cocaine                                                              
babies, and  she is also  interested in  mental health care.   The                                                              
dollar investment in preventing and  treating mental health issues                                                              
will prevent greater costs later.   The small amount of money paid                                                              
for this program now is well worth it.                                                                                          
Number 1341                                                                                                                     
GEORGE  HIERONYMOUS, Executive  Director,  Beans'  Cafe and  Kids'                                                              
Kitchen, testified  via teleconference from Anchorage.   The Kids'                                                              
Kitchen program  feeds underprivileged children in  Mountain View,                                                              
Fairview and  the Muldoon  area.  A number  of those  children are                                                              
now covered  with this  program that would  not have  had coverage                                                              
before because  their parents  made over the  100 or  133 percent.                                                              
By the time a single mother with  three children pays for clothes,                                                              
school  costs and everything  else,  she can't  afford to pay  for                                                              
insurance for her children.  Bean's  Cafe offers insurance for the                                                              
employees,  but if  one  of the  employees  want  to insure  their                                                              
children, it  costs $400  a month,  not the $40  a month  that the                                                              
state pays.   Not  many people making  $25,000-$35,000  can afford                                                              
another $400 a month.                                                                                                           
MR. HIERONYMOUS noted that preventive  care is very important.  He                                                              
sees what happens without the preventive  care every day at Bean's                                                              
Cafe.   He can't  serve corn on  the cob because  a number  of the                                                              
people did  not have dental  care when  they were young,  nor have                                                              
dental care now.   The children need to have  their dental, health                                                              
and mental problems taken care of early.  He opposed HB 260.                                                                    
Number 1423                                                                                                                     
MICHELLE SCHUMACHER testified via  teleconference from Homer.  She                                                              
told  the committee  that her  son was  born with  a tumor in  his                                                              
head.   Had he  not been covered  by Denali  KidCare, she  and her                                                              
husband might have  waited to have his head examined.   After many                                                              
tests,  it  was discovered  that  the  tumor was  rapidly  growing                                                              
further into his  brain.  She is happy to report  that her son had                                                              
surgery and now  has a clean bill of health.   She and her husband                                                              
are so  thankful for the Denali  KidCare program and  can't stress                                                              
that enough.   If it weren't for Denali KidCare,  her family would                                                              
presently  be seriously in  debt.   Now she  and her husband  have                                                              
health  insurance through  their  jobs.   She  once again  thanked                                                              
Denali  KidCare  for  the  health  of  her son.    She  urged  the                                                              
committee to help the children by not passing this bill.                                                                        
Number 1486                                                                                                                     
LAUREN CARLTON  testified via teleconference  from Homer.   She is                                                              
pregnant,  is  on Denali  KidCare  now  and  is grateful  for  the                                                              
program.    She  feels strongly  that  Representative  Coghill  is                                                              
missing the  whole point of this  program.  It's not just  for the                                                              
lower income  people.   This program  was to fill  a gap  that the                                                              
private sector  has not  filled even though  there has  been great                                                              
economic growth  in the  country.  Yet  the private sector  hasn't                                                              
found a way to make insurance available  to everyone that needs it                                                              
other than catastrophic insurance.                                                                                              
MS.  CARLTON   read  in  the   newspaper  on  February   7,  where                                                              
Representative   Coghill  states   that  he   doesn't  think   the                                                              
government should  be the  supplier.  She  would like to  know why                                                              
people  pay federal  income  tax,  sales tax  or  property tax  if                                                              
people don't  get something  out of  it that  would really  make a                                                              
difference.    The  Denali  KidCare   program  is  making  a  huge                                                              
difference to a lot  of people.  It is not a handout;  it is a way                                                              
for  people to  get insurance.   An  income of  $40,000 (prior  to                                                              
taxes taken out  and social security) for a single  parent who has                                                              
two or three children is not a lot  of money these days in Alaska.                                                              
She also  noted that  the federal  government has guaranteed  this                                                              
program for  ten years.  She  feels frustrated that all  this time                                                              
and energy  is being spent  on removing  something that is  a good                                                              
Number 1639                                                                                                                     
RUTHE KNIGHT  testified via teleconference  from Valdez.   She has                                                              
listened  to all  the previous  testimony, and  one thought  going                                                              
through  her head is  the possibility  that many  of the  children                                                              
that  will need  more  time on  task  in school  [as  a result  of                                                              
failing  the  benchmarks  or  high  school  graduation  qualifying                                                              
exam],  wouldn't need  more  time  on task  if  they had  adequate                                                              
prenatal care.                                                                                                                  
MS. KNIGHT has seen the Denali KidCare  program help many families                                                              
throughout the  state of Alaska.  It  is one of the few  pieces of                                                              
legislation that  has really helped  the people in Alaska.   There                                                              
are many resource  industry families that have never  been able to                                                              
have  health insurance  for  their children,  and  this last  year                                                              
those families  got that.   More  children are getting  preventive                                                              
care so  they don't have  to have the  treatments they  would have                                                              
had if the  prevention hadn't been there.   It is way  too soon to                                                              
do  anything with  the  original legislation  that  was passed  in                                                              
1998.  It needs to run for at least  ten years.  She believes cost                                                              
savings  will be  seen  in many  difference  places that  probably                                                              
haven't  even been  looked at.   She  urged the  committee not  to                                                              
touch the original legislation, and she opposed HB 260.                                                                         
Number 1752                                                                                                                     
PATRICIA  MACPIKE testified  via teleconference  from Sitka.   She                                                              
works  with  emotionally  disturbed  children  and  her  child  is                                                              
covered by Denali  KidCare.  It dismays her to  be considered part                                                              
of the working  poor because she works very hard  with emotionally                                                              
disturbed children.   Some of the  people in that field  cannot be                                                              
paid  enough.     She  challenged  the  committee   to  work  with                                                              
emotionally disturbed children one day.                                                                                         
MS.  MACPIKE pointed  out that  parents who  work seasonally  have                                                              
difficulty  finding  health insurance  for  their  children.   Her                                                              
husband  works seasonally  for  the Alaska  Department  of Fish  &                                                              
Game; his  position has  been downsized due  to funding cuts.   It                                                              
costs $586 a  month for continued coverage of  the state insurance                                                              
during  the off  season  for her  husband and  daughter.   If  the                                                              
deductibles  are  included, it  is  quite  costly and  almost  not                                                              
effective.   They just hope  no one in the  family gets ill.   She                                                              
wondered if the legislators are covered  by state health insurance                                                              
when they are not  in session.  She noted that  the cost of living                                                              
and the  cost of health  care are  continually increasing.   Along                                                              
side that comes  the cost of education.  She and  her husband both                                                              
have  degrees, and  it did  not come cheap.   They  only have  one                                                              
child by choice because between the  costs of education and health                                                              
care, they  can only afford one child.   She opposes HB  260.  [HB
260 was heard and held.]                                                                                                        

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