Legislature(1997 - 1998)
04/15/1998 09:07 AM Senate 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 459 - MEDICAID FOR LOW-INCOME DISABLED
REPRESENTATIVE CON BUNDE, sponsor of HB 459, stated he introduced
the measure in an effort to resolve a "catch-22" situation. HB 459
pertains to people with disabilities who want to go to work for
various reasons, but cannot because the jobs for which they are
skilled do not pay enough money in the first year or two of
reemployment to cover the costs of their medication nor do they
offer affordable health insurance. The only way the disabled
worker can get assistance to pay for medication is to quite working
to get public assistance and medicaid. HB 459 simply allows people
who want to transition back to work to buy into medicaid on a
sliding scale so that they have health care coverage until they
progress in their careers to a point to where they make enough
money to pay for their medications.
CHAIRMAN WILKEN asked Robert Briggs of the Disability Law Center to
join the committee members at the table. He noted the committee
previously heard SB 253, which is similar to HB 459. During that
hearing, Senator Leman brought up the issue of a sliding fee scale.
Tab number one, in committee packets, is a response to that issue.
and tab number two is a response to Senator Green's questions
regarding the definition of the word "disability."
Number 570
ROBERT BRIGGS, Disability Law Center attorney, stated four issues
were raised by committee members during the last hearing on the
working draft adopted in lieu of SB 253. The first was in regard
to whether a transition provision should be adopted. He urged
committee members to leave the language in the bill as is, because
the one year transition period will involve insignificant costs.
He believes DHSS should be given the discretion to establish a
transition provision by written policy; a policy that does not have
to go through the notice and comment rule making, but something
that DHSS will be required to adhere to. If the committee wants
DHSS to charge a premium during the transition period while DHSS is
adopting formal regulations, he prepared an amendment. He believed
the amendment is fair and will adequately address the committee's
concern that DHSS not provide a benefit without some contribution
from those who take advantage of it.
MR. BRIGGS said turning to the issue of the definition of
"disability," he believes it is adequately defined in the context
of the present bill which specifically makes this benefit available
only to those eligible for supplemental security benefits under 42
USC 1381-1383(c). "Disability" is further defined in two letters
from the Health Care Financing Administration, the agency
instrumental in the adoption of Section 4733 of the Balanced Budget
Act of 1997. That Act initially provided this Medicaid option to
the state. The two letters clearly define that a person, to be
eligible for this benefit, must meet the disability criteria to be
eligible for supplemental security income under present regulations
and statutes. The criteria require the person to have a physical
or mental impairment severe enough to meet a listing, or a
combination of impairments of equivalent severity under Appendix 1
of Subpart (p) of 20 CFR, Part 404, or he/she must have medical
limitations that prevent conduct of past relevant work under what
is familiarly known as the "grids" located at Appendix 2 of Subpart
(p) of 20 CFR, Part 404. Not only do they have to meet that
initial eligibility criterion, but their medical condition must
have a continuing limitation on their abilities over time. He
explained that the eligibility definition for benefits under the
supplemental security standard is different from, and more
restrictive than, the definition of "disability" under the
Americans with Disabilities Act.
TAPE 98-34, SIDE B
Number 561
SENATOR GREEN noted Mr. Briggs gave her an enlightening explanation
of the definition of "disability" prior to the meeting so she will
not be offering an amendment.
MR. BRIGGS explained the third issue raised by the committee was
the definition of personal care attendant services. The current
language accomplishes the goal of streamlining medicaid costs in
permitting PCA services delivered in the work place and other
settings that will expand the population of disabled people who are
able to return to work. The House considered this matter and urges
the Senate to maintain this provision.
MR. BRIGGS stated the fourth issue pertained to the adequacy of the
representation of program expenses in the fiscal note. In his
April 3 letter, he explained that the fiscal notes show cumulative
projected savings, but not cumulative projected expenses. He
believes the projections are based on appropriate assumptions but
felt DHSS should address the assumptions. He agreed with
Representative Bunde that a common refrain within the disability
community is that access to health care is one of the biggest
obstacles to reemployment, and that when people enter the
workforce, they often enter a track that eventually leads to a
better job with health care benefits. It is hoped that HB 459 will
provide a bridge for people with disabilities, people who want to
become self reliant.
SENATOR GREEN asked if the "crowd out" scenario, discussed in
relation to SB 266, might apply to HB 459.
MR. BRIGGS asked Senator Green what she meant by the phrase "crowd
out."
SENATOR GREEN stated a "crowd out" would occur if an employer stops
offering health care coverage to an employee because that employee
receives health care coverage under Medicaid.
MR. BRIGGS maintained he does not think HB 459 will provide a
disincentive because this bill applies to a population of people
who find it very difficult to get insurance through the private
sector.
Number 528
MS. RONNIE ROSENBURG, representing the Arctic Alliance for People,
a non-profit consortium of 45 non-profit agencies and individuals
who serve low-income people and people with disabilities, gave the
following testimony via teleconference from Fairbanks. The Arctic
Alliance submitted a resolution to interior delegation legislators
in support of HB 459. Because the committee substitute is similar
to the original bill she felt sure the Alliance membership would
support it. She urged the committee to retain the supplemental
security income definition of "disability" because a considerable
body of law and understanding exists among people in the field as
to what SSI disability is. Changing the definition will only cause
confusion and appeals. As the case management director of the
Fairbanks Resource Agency for over two years, she had to inform
many high functioning clients with development disabilities that
they would lose their Medicaid benefits if they became employed and
she had to advise them to decline the job offer. Some clients were
able to get full-time jobs with health benefits, but many clients
are not medically able to work a 40 hour work week. HB 459 will
enable those people to work to their maximum potential. The same
dilemma occurred for welfare recipients: if they went to work, they
often lost the only health care coverage available to them through
Medicaid. Ms. Rosenburg emphasized the need for this bill and
urged committee members to support HB 459.
CHAIRMAN WILKEN thanked Ms. Rosenburg for her work with Arctic
Alliance. He commented Arctic Alliance is a wonderful organization
that should be mirrored around the state. CHAIRMAN WILKEN noted
Mr. Sherwood and Mr. Kreher from DHSS were present and available to
answer any questions committee members may have.
Number 490
MARGO WARING, representing the Alaska Mental Health Board, stated
the Board strongly supports HB 459. Many people with mental
illnesses have discussed with the Board their desire to work and be
self-reliant, but their inability to do so because of a lack of
insurance options. A whole new generation of psychotropic
medications is available that enable people to function on much
higher levels than previously, however those medications are
extremely expensive. Many people find themselves capable of taking
on work, but are unable to do so because they will be unable to
afford the medications that enable them to work if they no longer
receive Medicaid. In addition, some people are working at jobs
that do not provide insurance so that when they become ill, they
are forced to quit to become eligible for Medicaid to get
medication. People who want to work and make a contribution should
be able to do so. HB 459 will allow that to happen.
CHAIRMAN WILKEN thanked Mr. Briggs for his letter and help on the
bill. He noted Senator Leman prepared a proposed amendment
regarding the sliding fee scale.
SENATOR LEMAN moved to adopt the proposed amendment and then
objected for the purpose of making a statement.
SENATOR LEMAN explained the amendment will provide for a small co-
payment to keep costs down. He stated he likes the formula, but
suggested DHSS might want to review and adjust the numbers,
especially at the upper income end, for the long term. He felt the
formula is a big step in the right direction for use during the
transition period. He thanked Mr. Briggs for working on the
concept. Senator Leman then removed his objection to the motion.
SENATOR ELLIS asked if the formula pertains to a sliding scale co-
pay.
SENATOR LEMAN said yes, and explained that the maximum co-pay
amount is ten percent. He noted he wanted the co-pay amount to be
small enough so as not to discourage the program from functioning,
but large enough to act as a deterrent to unnecessary services.
MR. BRIGGS clarified the initial idea was to use a sliding scale
based on a percentage of income. The maximum premium cost would be
ten percent of income at the maximum eligibility level of 250
percent of the poverty line, and the minimum premium would be zero
when a person's income is at 100 percent of the family line. The
premium only buys coverage for the disabled person so a disabled
person in a family of four will not pay significantly more than a
disabled person living alone. This formula is a function of family
size and family income however the premium should not encourage
people to expand their definition of family to get the benefit at
a lower cost. Mr. Briggs felt his best effort at achieving that
goal in the formula is incomplete, and that DHSS's final
regulations should address Senator Leman's concerns more
thoroughly. He stated he appreciates the generosity of the
committee in accepting the formula in its imperfection, and he
believes most people do want to contribute and that this co-pay
formula will cost buyers a lot less than paying their own medical
expenses.
Number 411
SENATOR LEMAN said he thinks the formula is a good first shot, but
at the upper end the premium starts going the other way which is
something that should be looked at later. He noted it is unlikely
that many families of seven or eight members will be affected.
SENATOR ELLIS questioned the ramifications of adopting into statute
this first shot at the formula. He stated he supports the concept
but asked if the language is specific to the mathematical formula
and not more general language to allow DHSS to take a second shot
at the formula.
SENATOR LEMAN replied that DHSS will work on the formula and that
this amendment only applies to the transition period.
SENATOR ELLIS asked for clarification.
SENATOR LEMAN clarified the formula will apply until regulations
are adopted by DHSS, which should occur within one to two years.
Without the amendment, the co-payment would be zero.
SENATOR ELLIS asked where that specific language is contained in
the bill.
SENATOR LEMAN answered on page 4, lines 14-18.
Number 387
SENATOR ELLIS asked if this mathematical formula for sliding scale
co-pays would be in use for a few years only.
SENATOR LEMAN clarified it would be used temporarily.
SENATOR ELLIS asked how serious the effect would be on disabled
people in larger family groups.
MR. BRIGGS referred to his April 3 letter and clarified that the
initial proposal was to have a sliding fee scale with a single line
which did not take into consideration family size. That meant any
individual eligible for this benefit would pay a fixed percentage
depending on his/her income. Paying ten percent of the income of
a person in a family of four would be a lot more difficult for that
family than it would be for a single person paying ten percent of
his/her income.
SENATOR ELLIS asked Mr. Briggs about his comment that the formula
does not completely adjust for family size.
MR. BRIGGS stated the defect in the formula is that the lines are
parallel on the graph. Ideally, the lines should all converge on
a single point at 100, which is something DHSS can work out if it
adopts this formula as a permanent approach. DHSS has a July 1,
1999 deadline to establish regulations. Mr. Briggs said if this
temporary formula does not work in practice because it is too
restrictive or does not provide enough income to the program, DHSS
will have the discretion to adjust the sliding fee scale
appropriately. He noted he is advocating this formula if it is the
will of the committee to adopt some sliding fee scale for the
transition period. He indicated he does not think the formula is
as generous as having no sliding fee scale at all during the
transition period, which is how the bill reads now.
SENATOR ELLIS asked Mr. Briggs if the proposed amendment accurately
reflects his proposal.
MR. BRIGGS indicated he drafted an amendment that he included with
his letter of April 3. He stated he has not read the amendment
proposed by Senator Leman, but if it is the same as the one he
submitted on April 3, he supports it. His amendment basically
required that the premium be calculated as a percentage of net
income of the person's family according to the mathematical
formula.
CHAIRMAN WILKEN noted the proposed amendment is a verbatim copy of
Mr. Briggs' suggested language.
SENATOR ELLIS maintained he agrees with the concept of the proposed
amendment but plans to vote against it because it is too
speculative at this time.
The motion to adopt the proposed amendment carried with Senators
Leman, Green, and Wilken voting for its adoption, and Senator Ellis
voting against it.
SENATOR LEMAN moved SCSHB 459(HES) to its next committee of
referral with individual recommendations and accompanying fiscal
notes. There being no objection, the motion carried.
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