03/10/2011 02:00 PM Senate LABOR & COMMERCE

2:31:36 PM                                                                                                                    
            SB  87-GRANTS FOR SENIORS' MEDICAL CARE                                                                         
                                                                                                                                
CHAIR EGAN announced SB 87 to be up for consideration.                                                                          
                                                                                                                                
2:31:40 PM                                                                                                                    
SENATOR  FRENCH,  sponsor   of  SB  87,  said   he  would  answer                                                               
questions.                                                                                                                      
                                                                                                                                
CHAIR EGAN noted that some people had signed up to testify.                                                                     
                                                                                                                                
2:32:28 PM                                                                                                                    
BOB DOLL,  President, Retired Public Employees  of Alaska (RPEA),                                                               
said they supported SB 87.                                                                                                      
                                                                                                                                
2:32:50 PM                                                                                                                    
SENATOR PASKVAN joined the committee.                                                                                           
                                                                                                                                
MR. DOLL  said at some  point he  would present some  survey data                                                               
and  offer  a  financial  solution to  the  dilemma  of  unfunded                                                               
obligations left for this legislature.  Buy, today his message is                                                               
simple and  straight forward  - an appeal  for simple  equity. He                                                               
explained that  decades ago  the State of  Alaska opted  to shift                                                               
its  retiree health  care  burden to  Medicare  when the  retiree                                                               
reached 65.  Retirees didn't  object then  and don't  object now.                                                               
But the  federal government has  resisted the establishment  of a                                                               
variable  rate  for  various   states  envisioning,  probably,  a                                                               
quagmire  of  appeals  and   rulings  as  economic  circumstances                                                               
changed in each state. The result  here has been that health care                                                               
providers, particularly  in Anchorage and Fairbanks,  have turned                                                               
away Medicare patients citing inadequate  reimbursement rates - a                                                               
tragedy  for all  Medicare  eligibles  including public  employee                                                               
retirees.  From the  viewpoint of  pure economics,  the situation                                                               
exists now where a state or  municipal retiree may not be able to                                                               
find medical care in two of Alaska's major population centers.                                                                  
                                                                                                                                
For  any retiree  who  requires medical  attention  on a  regular                                                               
basis the predictable reaction for  the over-65 person is to move                                                               
out of  the state  and to  one where the  doctors will  serve his                                                               
medical  needs. If  he or  she chooses  to do  so, the  state and                                                               
municipalities lose all of the  economic benefit that should flow                                                               
from having that person as a resident.                                                                                          
                                                                                                                                
He  mentioned   that  members  are   familiar  with   the  Alaska                                                               
Commission  on Aging  and  ISER reports  that  indicate what  the                                                               
value  of having  those  retirees in-state  can  be. The  retiree                                                               
continues to  receive a retirement  check, but they can  spend it                                                               
elsewhere. That  is not a  logical objective for Alaska  and this                                                               
bill gives  them a  chance to correct  it. He  said approximately                                                               
one-third  of RPEA  members live  out-of-state and  that's not  a                                                               
number they are anxious to increase.                                                                                            
                                                                                                                                
2:35:50 PM                                                                                                                    
MR. DOLL asked  them to imagine that they had  completed 30 years                                                               
of public service  in Alaska and paid into  their retirement fund                                                               
every month  and made a deal  and kept their end  of the bargain.                                                               
But  on your  65th  birthday, you  find  that overnight,  primary                                                               
medical  care is  no longer  available  - for  reasons that  have                                                               
nothing to  do with any of  the participants of the  state or the                                                               
individual.  It  seems  like  a deception  to  members  who  have                                                               
enjoyed medical  insurance coverage  since they retired  but when                                                               
they  reach 65  suddenly find  it's no  longer available  and the                                                               
state severs  its connection with  them for this purpose  with no                                                               
apparent further  concern. No  one has planned  it that  way, but                                                               
the sense of deception persists.                                                                                                
                                                                                                                                
He said  there is  a solution;  the congressional  delegation has                                                               
done its part in convincing the  Congress to make an exception to                                                               
the normal  Medicare rules.  The state  may legally  overcome the                                                               
reimbursement rate  gap and SB  87 is  a vehicle to  both fulfill                                                               
Medicare  eligible  expectations  and  to keep  retirees  in  the                                                               
state. He urged its passage.                                                                                                    
                                                                                                                                
SENATOR DAVIS asked  if once you are 65 you  are automatically no                                                               
longer covered by  the state and have to use  Medicare. You can't                                                               
go back and use the retirement plan  at all. But up to age 65 you                                                               
can.                                                                                                                            
                                                                                                                                
MR. DOLL replied that is correct.                                                                                               
                                                                                                                                
MARIE DARLIN, AARP  Capital City Task Force,  said they supported                                                               
SB 87.  She said they have  all the same issues  Mr. Doll stated.                                                               
Even with state  health insurance, when you hit  age 65, Medicare                                                               
becomes first provider  and unless you have that, the  rest of it                                                               
isn't worth anything. From a  federal retiree viewpoint, the same                                                               
thing applies. The  problem is when you have  Medicare as primary                                                               
provider and some doctors won't accept Medicare patients.                                                                       
                                                                                                                                
2:39:07 PM                                                                                                                    
CHAIR EGAN closed public testimony.                                                                                             
                                                                                                                                
SENATOR  PASKVAN  moved  to  report SB  87  from  committee  with                                                               
individual recommendations  and attached fiscal note.  There were                                                               
no objections and it was so ordered.                                                                                            
                                                                                                                                
2:39:51 PM                                                                                                                    
At ease from 2:39 to 2:41 p.m.                                                                                                  
                                                                                                                                
2:41:47 PM                                                                                                                    
Finding no further business, Chair  Egan adjourned the meeting at                                                               
2:41 p.m.