02/22/2005 09:00 AM Senate FINANCE

                                                                                                                                
     SENATE JOINT RESOLUTION NO. 6                                                                                              
     Relating to a reduction in the Federal Medical Assistance                                                                  
     Percentage for Alaskans, and urging the United States Congress                                                             
     to take action to prevent the reduction.                                                                                   
                                                                                                                                
                                                                                                                                
This was the second hearing for this bill in the Senate Finance                                                                 
Committee.                                                                                                                      
                                                                                                                                
Co-Chair Green noted that this bill had been held in Committee in                                                               
order to receive updated fiscal note information.                                                                               
                                                                                                                                
Co-Chair Wilken  informed the Committee that four  new Department of                                                            
Health  and Social  Services fiscal  notes have  been provided  that                                                            
more  accurately depict  the impact  to the  State were  the FFY  06                                                            
Federal  Medical  Assistance Payment  (FMAP)  to decrease  from  the                                                            
current 57.58 percent level  to the proposed 50.16 percent level. He                                                            
specified that  these new fiscal notes, rather than  the Legislative                                                            
Affairs Agency's  zero fiscal note  dated February 16, 2005,  should                                                            
advance with the  bill. The analysis located on page  two of each of                                                            
the four  new  fiscal notes  provides the  detailed  effect on  each                                                            
component.                                                                                                                      
                                                                                                                                
Co-Chair Wilken  mentioned that the Department of  Health and Social                                                            
Services' handout  titled "Impact of FMAP Reduction  on State Match"                                                            
[copy  on  file]  would   provide  Members  additional  information                                                             
regarding the  impact of the federal  percentage match changes  over                                                            
time.                                                                                                                           
                                                                                                                                
Senator Hoffman voiced  that while he supports the Joint Resolution,                                                            
he is  concerned about  how the  projected financial  impact  to the                                                            
State  would   be  addressed  in   the  FY  06  budgetary   process;                                                            
specifically  whether Governor Frank  Murkowski or this Committee's                                                             
Department of  Health and Social Services (H&SS) subcommittee  would                                                            
be providing direction in its regard.                                                                                           
                                                                                                                                
Co-Chair Wilken  commented that the projected $52  million impact to                                                            
the State is not  included in Governor's FY 06 budget.  The decision                                                            
regarding whether  to include this  issue in this year's  budget has                                                            
not, of yet, been finalized.  The situation could be easily resolved                                                            
"structurally" but not easily resolved "financially".                                                                           
                                                                                                                                
Co-Chair Green  noted that the federal government  might not address                                                            
this issue by the time  that the Alaska Legislature finalizes its FY                                                            
06 budget. Either  zero or $52 million could be required.  She asked                                                            
Senator Hoffman  whether he had any  suggestions as to how  the H&SS                                                            
subcommittee could address this situation in the budget.                                                                        
                                                                                                                                
Senator Hoffman replied that, "we are a very rich State."                                                                       
                                                                                                                                
Co-Chair  Wilken   moved  to  report  SJR  6  from  Committee   with                                                            
individual recommendations and four new fiscal notes.                                                                           
                                                                                                                                
There being  no objections, SJR 6  was REPORTED from Committee  with                                                            
four  new zero  fiscal  notes, dated  February  18,  2005, from  the                                                            
Division of  Behavioral Health, The  Office of Children's  Services,                                                            
the Division of  Senior and Disabilities Medicaid  Services, and the                                                            
Division of  Health Care Services,  Department of Health  and Social                                                            
Services.