04/08/1998 09:08 AM Senate HES

                                                                               
      SB 266 - MEDICAID COVER/HEALTHY FAMILIES AK PROGRAM                      
                                                                               
JAY LIVEY, Deputy Commissioner of DHSS, gave the following overview            
of SB 266 with Bob Labbe of the Medicaid Division and Pam Muth from            
the Division of Public Health.  The Kennedy Hatch bill passed                  
Congress last fall.  That legislation made federal money available             
to states to expand health care coverage for children.  Alaska's               
allotment from that bill is about $5.6 million.  A state match is              
required which will amount to $2.2 million. DHSS has estimated that            
23,000 children in Alaska are uninsured, of which about 11,500 are             
under the 200 percent poverty level.  The 200 percent poverty level            
in Alaska amounts to $33,000 for a family of three.  The federal               
requirements for implementation are as follows.  The benefit                   
package that is provided to children through this program must meet            
certain standards.  It must contain a certain amount of prevention             
coverage for children and well-child care.  Second, each child                 
served must be screened for medicaid eligibility; Congress does not            
want medicaid eligible children to be on the child health program              
because of its higher federal match.  Third, the federal law                   
requires that any Indian Health Service (IHS) eligible children,               
who are also eligible for the new child health program, must be                
served by the child health program.                                            
                                                                               
Number 148                                                                     
                                                                               
SENATOR GREEN asked if families with IHS coverage cannot be                    
encouraged to use that coverage instead.                                       
                                                                               
MR. LIVEY replied DHSS could discuss the options available for                 
health care with those families but the federal law requires that              
if an individual, who is eligible for IHS, wants to sign up for the            
child health program, that individual could not be refused based on            
the IHS eligibility.                                                           
                                                                               
MR. LIVEY continued the overview.  The state did get considerable              
flexibility in designing the new program.  DHSS can decide the                 
level of eligibility for the coverage and the delivery mechanism               
for the program itself.  The state has the option of impementing               
the child health program through a medicaid expansion, a private               
coverage expansion, or a combination of the two.  The Governor's               
bill uses a medicaid expansion and increases the level of                      
eligibility to 200 percent of the poverty level for children and               
pregnant women.  Currently, the Alaska medicaid program is at the              
federal minimum levels of coverage.  DHSS chose to implement this              
program through the medicaid program for two reasons.  First, the              
state will get a lot more bang for each general fund dollar spent,             
and second, an administration has already been established for the             
medicaid program that is serving 50,000 children.                              
                                                                               
MR. LIVEY discussed a few other related points.  The first is the              
relationship between child health expansion and welfare reform.                
The welfare reform program has helped people get off of public                 
assistance and into jobs but many of those jobs do not provide                 
health care coverage.  The child health program will allow many of             
those families to continue their health care coverage while                    
improving their job skills and prospects.  DHSS does not want                  
people to quit their jobs just to go back on public assistance to              
get health care coverage.  Second, DHSS thinks the child health                
program is associated with the federal matching assistance                     
percentage change.  Last year, Congress changed Alaska's federal               
matching assistance percentage rate for medicaid which allows the              
state to collect more federal dollars for the medicaid program.                
That action freed up a lot of general fund monies in the budget.               
The federal matching assistance percentage rate change will be                 
reviewed by Congress in three years.  One of the cases made when               
Senator Murkowski got the bill through was that Alaska would use               
some of that money to expand health care coverage.  DHSS was                   
previously unable to do because of the expense.  When the rate                 
change comes up for reauthorization in three years, DHSS believes              
having health care expansion on the books will help the                        
reauthorization effort.  Third, DHSS chose to expand coverage for              
pregnant women in SB 272 at up to 200 percent of the poverty level             
for a couple of reasons.  First, research has shown that prenatal              
care results in better birth outcomes.  Second, it makes sense to              
insure the children before birth if coverage is going to continue              
afterward so that the children are healthy starting out.  A state              
plan must be approved by the federal government by September 30 to             
guarantee the state's allotment of $5.6 million for this year.  The            
federal government told DHSS the state plan must be submitted by               
July 1 so that it can be reviewed and enacted on by September 30,              
therefore legislation needs to pass during this session to give                
DHSS adequate time to prepare the plan.                                        
                                                                               
Number 029                                                                     
                                                                               
MR. LABBE gave the following explanation of the sections of the                
bill, and action taken by the House HESS committee.  The same bill             
was introduced in both bodies.  Section 1 expands coverage under               
the medicaid program for children under age 19, and pregnant women,            
at up to 200 percent of the federal poverty level.  Currently the              
state is providing coverage mandated under the federal program for             
pregnant women and children up to age 6, whose income is up to 133             
percent of the poverty level, to children ages 6 to 14 living at up            
to 100 percent of the poverty level, and to children over 14 if                
their family receives cash assistance, which is at about 70 percent            
of the poverty level.                                                          
                                                                               
TAPE 98-33, SIDE A                                                             
                                                                               
MR. LABBE continued.  DHSS had a choice of going with the private              
model or the medicaid model.  If DHSS used the private model, it               
would have screened children first for medicaid eligibility.  If               
eligible, those children would be placed on the medicaid program.              
DHSS's reason for choosing the medicaid model was largely                      
influenced by the fact that more children could be served.  Under              
the medicaid program and new child health block grant, American                
Indians and Alaska Natives can be eligible for medicaid, and                   
medicaid will be the primary payer rather than IHS.  SB 272 will               
allow IHS providers to bill the medicaid program for services to               
clients who are eligible for medicaid.  The federal government will            
reimburse the state for 100 percent of those medicaid costs, so no             
general fund money will be involved.  DHSS estimates that anywhere             
from 25 to 40 percent of the children who will be covered in this              
expansion will be Alaska Natives.  If DHSS chose the private                   
option, it would not get the 100 percent reimbursement, so state               
funds would have to be used.  DHSS also looked at the fact that the            
child health program will serve a relatively small group and Alaska            
already has a large medicaid population so there will be some                  
efficiency in pooling.  Other provisions were added to the child               
health program to allow for continuous health care coverage for                
children for up to 12 months a year.  Currently, medicaid                      
eligibility is on a month to month basis which causes a certain                
amount of administrative confusion and interrupts treatment.  DHSS             
has proposed up to six months of continuous eligibility so that if             
a child qualifies at the month of application, he/she would be                 
covered for six months.  That provision applies not only to the new            
group but to the entire child medicaid population.                             
                                                                               
MR. LABBE stated the third section of the bill contains language to            
allow the state to cover, as a medicaid service, targeted case                 
management, a service for pregnant women and children under age 5,             
in an effort to support the Healthy Families Program.  DHSS does               
not plan to provide that service in the short run but it wants to              
have the authority to reimburse the Healthy Families Program for               
medicaid eligible children that it serves.  A number of states have            
used a similar provision as a refinancing vehicle.  DHSS also added            
a section for comprehensive pregnancy related services in an effort            
to help cover services of direct entry midwives which has been                 
taken care of in another bill.  Section 4 amends the current                   
statute to allow DHSS to do managed care without getting a federal             
waiver.  DHSS has had authority to do a managed care model since               
the Balanced Budget Act passed Congress last year, but it has not              
implemented anything yet.   Section 5 contains a technical change.             
Section 6 is tied to the child health program.  Under the block                
grant, states are able to charge premiums for pregnant women and               
children between the 150 and 200 percent poverty level.  DHSS has              
been advised, however, that if it does a medicaid expansion, it                
cannot charge premiums.  DHSS felt  cost sharing on a sliding fee              
basis was reasonable so it is included in the bill in case Congress            
revisits this issue.                                                           
                                                                               
CHAIRMAN WILKEN asked Mr. Labbe to return on Wednesday morning at              
9:00 a.m. to finish the sectional analysis.  MR. LABBE agreed.