Legislature(2023 - 2024)SENATE FINANCE 532
02/27/2023 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Confirmation of Governor's Appointee: Adam Crum, Commissioner-designee, Department of Revenue | |
| Medicaid Enrollment and Spending Forecast (fy 23 - Fy 43) | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE FINANCE COMMITTEE
February 27, 2023
9:01 a.m.
9:01:57 AM
CALL TO ORDER
Co-Chair Stedman called the Senate Finance Committee
meeting to order at 9:01 a.m.
MEMBERS PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Donny Olson, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Click Bishop
Senator Jesse Kiehl
Senator Kelly Merrick
Senator David Wilson
MEMBERS ABSENT
None
ALSO PRESENT
Adam Crum, Commissioner, Department of Revenue; Ted
Helvoigt, Vice President, Evergreen Economics
SUMMARY
CONFIRMATION OF GOVERNOR'S APPOINTEE
ADAM CRUM, COMMISSIONER-DESIGNEE, DEPARTMENT OF
REVENUE
MEDICAID ENROLLMENT AND SPENDING FORECAST (FY 23 - FY 43)
^CONFIRMATION OF GOVERNOR'S APPOINTEE: ADAM CRUM,
COMMISSIONER-DESIGNEE, DEPARTMENT OF REVENUE
9:03:20 AM
ADAM CRUM, COMMISSIONER, DEPARTMENT OF REVENUE, discussed
his work and education history.
Co-Chair Olson felt that there was a major difference in
the commissioner of the Department of Health and Social
Services (DHSS) and the Department of Revenue (DOR). He
wondered why he would be the best person for the position
of DOR commissioner.
Commissioner Crum replied that he wanted Alaska to be in
the best position to succeed over time.
Co-Chair Olson queried the five-year vision for the
Permanent Fund.
Commissioner Crum stressed that the focus was on the health
of the fund over time.
Co-Chair Olson wondered whether Commissioner Crum was in
favor of the constitutionalizing of the Permanent Fund
Dividend (PFD).
Commissioner Crum replied in the affirmative.
9:15:15 AM
Senator Kiehl wondered whether the goals for the investment
funds could be considered appropriate.
Commissioner Crum replied that a process had been
memorialized about the asset allocations and fund sources.
Senator Kiehl wondered whether Commissioner Crum had a
position on changing the risk profile.
Commissioner Crum replied that he did not want to change
the current risk profile.
Co-Chair Hoffman remarked that the proposal to monetize
carbon would not be enacted until after the fiscal year. He
noted that there was nearly $500 million in deficits. He
wondered how the state could move forward while maintaining
services to Alaska.
Commissioner Crum replied that there were different
concerns for different regions for the state. He remarked
that there was a discussion around an appropriate fiscal
plan for stability and credit rating.
9:20:35 AM
Co-Chair Hoffman believed that the access to CBR could not
happen in the current legislature. He asked about
additional funding.
Commissioner Crum agreed about the CBR. He understood that
it was a complex question because any program may not cover
the revenue to cover the debt.
Co-Chair Hoffman wondered whether there was support for
additional revenue measures to balance the budget.
Commissioner Crum replied that it was part of a long-term
fiscal plan.
Senator Bishop wondered about the top ideas to grow the
economy.
Commissioner Crum replied that there needed to be economic
opportunity and affordable housing. He noted that childcare
and education needed stability.
9:25:29 AM
Senator Kiehl asked why he was qualified for the position.
Commissioner Crum replied that he had history in immediate
and urgent matters.
Co-Chair Stedman queried the opinion on the state's cash
balance to ensure its ability to function and meet payroll.
Commissioner Crum replied that the cash balance was
extremely important to DOR.
9:31:49 AM
Co-Chair Olson FORWARDED the appointment of Adam Crum for
consideration in accordance with Alaska Statute. He relayed
that this did not reflect an intent by any member of the
Senate Finance Committee to vote for or against the
confirmation of the individuals during any further
sessions. There being NO OBJECTION, it was so ordered.
^MEDICAID ENROLLMENT AND SPENDING FORECAST (FY 23 - FY 43)
9:33:23 AM
TED HELVOIGT, VICE PRESIDENT, EVERGREEN ECONOMICS,
discussed the presentation, " Long-Term Forecast of
Medicaid Enrollment and Spending in Alaska, Prepared for
Senate Finance, February 27, 2023" (copy on file). He
looked at slide 2, "Long-Term Medicaid Forecast ('MESA'):
• Requested by the Alaska Legislature in 2005
First forecast completed in 2006
• 20-year projection updated annually
• Assumes current Medicaid structure remains in place
• Provides a baseline for analysis of proposed
initiatives
• Provides a benchmark for DOH efforts to "bend the
Medicaid cost curve"
• Provides insights into trends in Medicaid
enrollment, utilization, and spending
Mr. Helvoigt addressed slide 3, "Medicaid Enrollment and
Spending in Alaska":
Bending the Medicaid cost curve
Recent trends and events
FY2023-FY2043 projection
Chronic conditions and Medicaid
Healthy Alaskans 2030
9:36:36 AM
Mr. Helvoigt pointed to slide 4, "Bending the Cost Curve":
• Cost containment efforts have worked
• Spending has been much lower than was projected in
2006
• Projected spending growth is lower than earlier
forecasts
Mr. Helvoigt looked at slide 5, "Many More Alaskans
Receiving Medicaid Services":
• Actual recipient counts closely tracked the 2006
projection until Medicaid expansion in FY2016
• Recipient counts likely also impacted by Alaska
recession
Mr. Helvoigt addressed slide 6, "Spending Per Recipient Has
Grown Slowly":
• Spending per recipient is much lower today than
projected in 2006.
• Cost containment initiative by DOH will likely
continue to suppress growth in spending.
9:40:14 AM
Mr. Helvoigt pointed to slide 8, "Impact of Continuous
Enrollment Requirement":
Medicaid enrollment will likely revert to trend over
the next couple of years with the unwinding of the
Federal health emergency and the end of the continuous
enrollment requirement
Mr. Helvoigt discussed slide 9, "Spending is Back to
Trend":
Spending on Medicaid services is growing faster than
the preCOVID trend, but will likely moderate in the
next few years
Mr. Helvoigt looked at slide 10, "Comparative Impact of
COVID-19":
• In comparison to peer states,* Alaska experienced
• 28 percent fewer (3,329) hospitalizations than
peer states
• 22 percent fewer (393) deaths
• Alaska's success in protecting vulnerable persons
has resulted in savings to the Medicaid program of
$30.7 million ($5.6 million GF)
• Through January 2023, the Medicaid program has spent
$4.6 million ($841,000 GF) treating 1,549
beneficiaries diagnosed with post-COVID conditions
9:45:23 AM
Mr. Helvoigt displayed slide 11, "Medicaid Enrollment,
Recipients, and Spending":
Spending growth driven by enhanced federal
participation
• Enrollment growth due to expansion, recession, and
continuous enrollment
• Enrollment and recipient counts have diverged
Senator Wilson wondered whether they were normal dollars or
adjusted for inflation.
Mr. Helvoigt replied that they were nominal dollars.
Senator Kiehl queried the reason for the divergence between
enrollees and recipients.
Mr. Helvoigt replied that the Division of Public Assistance
could address that question.
9:50:05 AM
Co-Chair Stedman asked about the percentage of the
population that were enrolled as participants.
Mr. Helvoigt replied there was churn in the program, but 37
percent of Alaskans were enrolled in Medicaid some time in
in FY 22.
Senator Wilson commented that the lack of access could
point to the divergence in the number.
Mr. Helvoigt pointed to slide 13, "Alaska's Population Is
Aging":
• Population growth has slowed precipitously and will
continue to slow
• Number of children in Alaska is expected to decrease
• Growth in the adult 20 64 population will be
modest
• Growth in the senior population will be relatively
robust
Co-Chair Stedman wondered whether the growth was about 0.8
percent per year.
Mr. Helvoigt replied in the affirmative.
Mr. Helvoigt discussed slide 14, "Medicaid Reimbursement
Rates Have Mostly Trailed Medical Price Inflation":
• Between FY2016 and FY2020, medical price inflation
in Alaska outpaced
Medicaid reimbursement rates by about 3.6 percentage
points per year
• Between FY2020 and FY2022, Medicaid Reimbursement
rates slightly outpaced medical price inflation
9:56:33 AM
Senator Wilson asked how the other peer states had seen
growth.
Mr. Helvoigt did not know, and agreed to provide that
information.
Senator Wilson wondered whether there was a comparison with
other states about the cost of care.
Mr. Helvoigt stated that the cost of care in Alaska was
much more expensive.
Senator Wilson wondered how medical tourism would be
affected in the inflation and reimbursement rates.
Mr. Helvoigt replied that it was embedded into the cost of
the Medicaid reimbursement rate.
10:00:22 AM
Mr. Helvoigt pointed to slide 15, "Growth in Medicaid
Reimbursement Rates":
Medicaid reimbursement rates will continue to grow at
a slower rate than overall healthcare price inflation
Mr. Helvoigt looked at slide 16, "GF Spending Will Grow
Faster than Federal":
• Difference in growth rates is due to unwinding of
enhanced FFP
• Impact will affect FY2023 and FY2024
• All states will be impacted by the unwinding of
enhanced FFP
• Assumes no other future changes to FFPs beyond
unwinding of federal health emergency response to the
COVID-19 pandemic.
Senator Wilson wondered why the states would put COVID
money into their base funding.
Mr. Helvoigt replied that the states assumed it would be
considered a funding source.
Senator Kiehl queried the point of few providers as the
costs increase.
Mr. Helvoigt replied that he had not examined that issue,
but agreed that it would be worthwhile to contribute to
that examination.
Mr. Helvoigt pointed to slide 17, "Growth in Reimbursement
Rates Will Drive Spending Growthbut at a relatively slow
pace":
Growth in population, enrollment, utilization, and
intensity of use will have relatively modest impacts
on spending growth.
10:07:56 AM
Mr. Helvoigt looked at slide 19, "Acute Vs. Chronic
Conditions":
• An acute condition develops or occurs suddenly and
lasts a short time
• Chronic conditions typically occur gradually and
persist for many months or years, factors that
directly or indirectly lead to chronic conditions,
include
• Lifestyle, e.g., drug and alcohol abuse, obesity,
tobacco use
• Environmental, e.g., certain cancers, asthma
• Congenital disorders, e.g., cystic fibrosis, Down
syndrome
• Risk factors affecting chronic conditions can be
categorized as modifiable and nonmodifiable
Mr. Helvoigt addressed slide 20, "Chronic Conditions and
Age, FY2022":
• Most Medicaid recipients do not have a diagnosed
chronic condition
• Prevalence of a diagnosed chronic condition
increases with age
• Higher Medicaid spending for seniors is due to
chronic conditions
Mr. Helvoigt looked at slide 21, "Age and Chronic
Conditions":
• Prevalence of chronic condition is positively
related to age
• Many Medicaid recipients have multiple chronic
conditions
10:13:30 AM
Senator Wilson wondered whether the assumption that it was
new beneficiaries.
Mr. Helvoigt replied that it was exactly the number of
individuals at the time.
Senator Wilson wondered whether there were services that
could be reduced in the system with the age 24 and older
group.
Mr. Helvoigt replied that he would address that in the
later part of the presentation.
10:17:01 AM
Senator Wilson wondered whether there had been an
examination of peer states with managed care organizations
with Medicaid.
Mr. Helvoigt replied that other states did not examine the
data well.
Mr. Helvoigt addressed slide 22, "Incremental Cost of
Chronic Conditions":
Diagnosis of one or more chronic conditions is a
bigger driver of Medicaid spending than is age
10:20:40 AM
Mr. Helvoigt looked at slide 23, "Chronic Conditions Drive
Medicaid Spending":
Today 77 percent of Medicaid spending is on
beneficiaries diagnosed with one or more chronic
conditions; this will grow to 82 percent by 2043
Mr. Helvoigt pointed to slide 25, "Healthy Alaskans 2030":
Alaska's state health improvement plan, Healthy
Alaskans 2030, provides an approach for how the state
can improve on the most significant health issues that
Alaskans face.
Among the 30 health objectives contained in the HA2030
plan are ones directly related to chronic conditions:
Objective 1 Reduce cancer mortality
Objective 9 Increase percentage of children who
meet health weight criteria
Objective 14 Reduce number of days adults
report being mentally unhealthy
Objectives 22 and 23 Reduce alcohol-induced and
drug-induced mortality
Objectives 26 and 27 Reduce tobacco use among
adolescents and adults
Senator Wilson remarked that the national trends showed
that fees had increased, and wondered why there was a
display of an decrease.
Mr. Helvoigt stressed that it was not the trend, but rather
the objective.
Mr. Helvoigt discussed slide 26, "Healthy Alaskans 2030":
Evergreen Economics estimated potential savings to the
Medicaid program under the assumption that the
prevalence of the following five chronic conditions
decrease at the same rate as targeted by the seven
Healthy Alaskans 2030 objectives shown on the previous
slide.
1. Cancer [prevalence decreases by 0.88 percent
per year]
2. Obesity [prevalence decreases by 0.44 percent
per year]
3. Mental health conditions [prevalence
decreasing by 0.46 percent per year]
4. Drug and alcohol dependency [prevalence
decreases by 0.90 percent per year]
5. Tobacco use [prevalence decreasing by 0.68
percent per year]
Mr. Helvoigt highlighted slide 27, "Potential Savings to
Medicaid":
Reducing the prevalence of certain chronic conditions
directly related to seven of the Healthy Alaskans 2030
goals could lead to substantial savings to the
Medicaid program.
10:27:00 AM
Senator Wilson remarked that the state had pushed the idea
of healthy Alaskans, but wondered whether the state would
fund the initiatives.
Co-Chair Stedman felt that it would be a policy call about
adding to the increasing deficit.
Senator Kiehl queried whether the savings were put across
categories, or whether there was an extrapolation of
specific needs within the categories.
Mr. Helvoigt replied that he focused only on those that
would be considered a chronic condition.
Senator Kiehl wondered whether the spending reductions were
the result of fewer people with chronic conditions, or
lower acuity.
Mr. Helvoigt replied that it would be through reductions in
the prevalence of the number of individuals diagnosed with
a chronic condition.
10:31:18 AM
Senator Wilson stressed that regulations still were not
written years after the passage of bills.
Co-Chair Stedman discussed the following day's schedule.
ADJOURNMENT
10:32:55 AM
The meeting was adjourned at 10:32 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 022723 Adam Crum - DOR Resume Feburary 2023 v2_Redacted.pdf |
SFIN 2/27/2023 9:00:00 AM |
|
| 022723 MESA Presentation 2.27.23.pdf |
SFIN 2/27/2023 9:00:00 AM |