HOUSE BILL NO. 96 "An Act establishing the Home Care Employment Standards Advisory Board; relating to payment for personal care services; and providing for an effective date." 6:44:25 PM REPRESENTATIVE MIKE PRAX, SPONSOR, introduced the bill. He stated that Alaska faced an increasing number of senior citizens and other citizens needing home care and services, and that the need was outpacing the supply of available providers. He explained that the increase was one of the drivers behind the legislation. The bill was also being driven by a proposed change in federal Medicare regulations that would require an advisory board to assist in the rebasing of the rates. He stated that Mr. Tony Newman, Director of Senior and Disabilities Services, was present to assist with questions, in addition to other individuals available on the line to answer detailed questions. He summarized that the bill created an advisory board, described the terms of office for board members, the board's composition, and its powers. He added that the bill required the board to provide a biannual report. 6:46:48 PM Co-Chair Foster relayed that the committee would hear invited testimony. 6:47:16 PM ALEXIS RODICH, RESEARCH AND POLICY DIRECTOR, SERVICE EMPLOYEES INTERNATIONAL UNION 775, TACOMA, WA (via teleconference), stated that she was the director of the Service Employees International Union (SEIU) 775, which was referred to as the Alaska Caregivers' Union. She explained that the union represented more than 55,000 direct care workers in Washington, Montana, and Alaska. She stated that the union was deeply committed to a strong and sustainable system of long-term services and supports in Alaska and it supported HB 96. She relayed that Alaska had been experiencing a major demographic shift that was increasing demand for care, particularly for higher-skilled care. Over the past decade, the state had one of the fastest-growing senior populations per capita in the nation and the trend was expected to continue. She noted that older Alaskans and Alaskans with disabilities were living longer, which was a positive development. Ms. Rodich remarked that with age came higher acuity and more complex care needs. She stated that many caregivers working with the union had children with developmental disabilities who were living longer than expected. The caregivers were concerned about what would happen when they were no longer available to provide care to patients. She added that Alzheimer's disease and other forms of dementia were also becoming more common, which created additional demand for care services. Given the demographic changes, it was unsurprising that DLWD had predicted that home care would be one of the fastest-growing and most in-demand occupations in Alaska. However, the number of potential caregivers had declined from a ratio of 15 to 1 in 2018 to a projected 7 to 1 ratio by 2030. She noted that the shortage was even more acute in rural and remote areas of the state. Ms. Rodich stated that a higher concentration of older Alaskans lived in Southeast Alaska and on the Kenai Peninsula than in other parts of the state. She emphasized that older individuals had built lives and families and did not want to move to Anchorage or out of state to access the care they needed as they aged. The union did not want individuals to be forced into institutional or congregate care settings, which could cost the state hundreds of thousands of dollars more per year per person. She warned that the workforce crisis would continue to worsen and would become significantly more costly unless the state took steps to build a strong, well-trained, professional direct care workforce. She stated that HB 96 helped the state build its workforce in two ways. Ms. Rodich stated that the bill ensured the state would maximize the Medicaid personal care rate by establishing a labor rate for personal care services. She explained that a percentage of the Medicaid rate that agencies received for personal care assistant services must go directly towards pay and benefits for direct care workers. She noted that in Alaska, nearly all personal care services were provided through a consumer-directed "agency with choice" model, in which agencies had far fewer responsibilities than under a traditional agency model. Ms. Rodich stated that under the agency with choice model, the consumer was responsible for recruitment, scheduling, training, and hiring, rather than the agency. She asserted that it was reasonable that a 70 percent share of the Medicaid rate should go towards paying for services rather than towards agency overhead. She added that the bill also created greater transparency in how the Medicaid personal care rate was being used. Ms. Rodich relayed that in recent years, many caregivers had traveled to Juneau, met with legislators, and provided public testimony to describe how the Medicaid rate suppressed their wages. The low rate made it impossible for caregivers to make ends meet without taking on extra jobs, juggling bills, or going into debt. 6:51:47 PM Ms. Rodich stated that the legislature responded by enacting multiple rate increases, including two that included legislative intent for part of the increase to go toward caregiver pay and benefits. She shared that some caregivers received wage increases of $2 to $4 per hour, which provided significant relief for workers previously earning $16 per hour. However, many other caregivers did not receive such increases. Ms. Rodich continued that no one had a clear understanding of how agencies allocated the rates and increases because there did not appear to be consistent data collection or analysis. She explained that the second way the bill would strengthen the long-term care workforce was by creating the Workforce Standards Advisory Board (WSAB). The proposed board was modeled after similar entities in Nevada and Washington. She explained that the board would bring together stakeholders most impacted by the home care system, including providers, caregivers, clients, and DOH to identify and plan for long-term workforce needs and asses whether the rates were adequate to meet the needs. She explained that the board would create a mechanism for each group of stakeholders to work together to determine priorities, recommend solutions, and evaluate whether the state was adequately resourced and prepared for the future. Ms. Rodich emphasized that demographic changes had already begun and the caregiver shortage was already apparent. The committee had heard painful testimony from caregivers who had been required to move loved ones to Anchorage to access adequate care, or had left their jobs to provide unpaid care in order to qualify for paid services. She asserted that HB 96 represented an opportunity for Alaska to take action to ensure that Alaskans in need of care both now and in the future received less costly care. 6:53:46 PM Representative Jimmie asked for more information about congregate care settings being more costly to the state every year. Ms. Rodich responded that a 2019 study conducted by DOH found that care provided in the home cost 59 percent less than services delivered through intermediate care facilities for individuals with intellectual or developmental disabilities. The same study found that home care services could cost 45 to 90 percent less than nursing home care for seniors and people with disabilities. In FY 24, the average cost per individual for in-home personal care services under the state plan was $13,265, compared to $143,000 for care in nursing homes. Ms. Rodich emphasized that the difference in cost was significant and investing in home care not only resulted in substantial savings for the state but also positively impacted the economy. There was a well-known study by LeadingAge which found that each additional dollar paid to a direct care worker had a multiplier effect in the community ranging from 1.6 to 2.1. Investment in home care could have a considerable economic benefit across various communities due to the demand for care workers throughout the state. 6:55:50 PM Representative Jimmie noted that she had a question for Mr. Tony Newman. She asked what options existed for individuals in rural Alaska who needed care, and if the needs were currently being met. TONY NEWMAN, DIRECTOR, DIVISION OF SENIOR AND DISABILITY SERVICES, DEPARTMENT OF HEALTH, confirmed that there was a greater need for home care services in rural Alaska, including personal care and residential habilitative services such as group homes. He stated that he did not have specific figures available at the moment but the department was currently pursuing several initiatives. During the previous legislative session, a bill had passed establishing a new service known as adult host home care [SB 57, passed in 2023], which allowed for the development of settings that were less intensive than assisted living homes and made it easier for smaller home-based settings to achieve licensure. He offered reassurance that there were ongoing efforts to develop the services that were necessary to allow individuals to stay in their rural communities as they aged. Mr. Newman stated that regulations for the bill passed in 2023 had been under development. He explained that the department had created an allowance for legally responsible individuals to be paid to provide certain kinds of care, primarily personal care. He clarified that a legally responsible individual who normally would not be permitted to receive payment for providing care, such as a parent or spouse, would be allowed to do so under the bill. He added the provision was introduced during the COVID-19 pandemic and the department had continued the payment allowance beyond the conclusion of the public health emergency. The department was in the process of developing regulations to make it a permanent feature of Alaska's health care system. He reiterated that the provision would enable individuals to access services in their home communities without needing to move to a larger city. He noted that the department was taking a number of steps to better reach rural Alaska. Representative Jimmie commented that she hoped the policy would become permanent. She relayed that it was difficult for elders in rural communities to leave their villages and familiar surroundings and culture, including traditional foods and interactions with family. She described the experience of her aunt, Bessie, who had participated in the program, and noted that before learning its official name, she had referred to it as "Auntie Bessie Care." She expressed her support for the continuation of the program in Alaska. 6:59:35 PM Co-Chair Foster asked for a review of the fiscal note. BRODIE ANDERSON, STAFF, REPRESENTATIVE NEAL FOSTER, reviewed the fiscal impact note from DOH, OMB component 2663, control code poXlb. He stated that the fiscal note included FY 26 appropriations as follows: personal services at $132,300, travel at $2,000, services at $24,000, and commodities at $5,000, for a total operating cost of $163,300. He explained that the amount would be funded through $81,600 in federal receipt authority and $81,700 in general fund match. Mr. Anderson continued that in FY 26, the department planned to add one support position and in FY 27, a second position would be added, which would increase personal services to $270,200. He stated that travel would remain at $2,000, while services would increase to $48,000 and commodities would increase to $7,000. He reported that the total operating cost in FY 27 would be $327,200, with corresponding increases to both general fund and UGF match. The fiscal note also required regulation changes by the department. He stated that one full-time health program manager would be hired in FY 26 and a second would be hired in FY 27. He explained that services and commodities costs would increase accordingly, and that there would be one- time commodity costs of $3,000 in each year the positions came on board. 7:02:19 PM Representative Johnson explained that she had known an elder in her community who had since passed away, along the elder's husband. Both individuals were retired teachers and had carried some type of private insurance through employment. Although the individuals had received home health services, the services were not Medicaid-funded but were provided through a separate program. She relayed that the elder had expressed concerns over the years about the lack of training received by the attendants. She noted that even though the elder had been in her 80s, she had been afraid to leave her husband alone with an attendant, as the attendants had not been trained in tasks such as helping her husband get up or walk with a gait belt. She asked whether the bill would apply to privately funded services or if it was limited to Medicaid-funded care. Representative Prax responded that the bill applied only to Medicaid-funded services. However, he thought it was reasonable to expect that clearly defined Medicaid standards might extend to other types of care, including private services. He reiterated that the bill specifically applied to Medicaid-funded care. Representative Johnson noted that she had looked into the matter years ago and found the lack of standards for privately funded care to be a challenge. She noted that there had been no clear route to implementing standards because the program had not been state-funded. She asked whether a department representative might be able to clarify further. Representative Prax responded that the bill would likely lead to more standardized care due to the clearer definitions provided for Medicaid services. He noted that some individuals accessed services through long-term care insurance, which was often unaffordable. He stated that many people were ineligible for Medicaid and lacked long- term care insurance. The bill did not directly address the gap but might eventually benefit individuals who were ineligible for Medicaid. Representative Johnson thought that the issue deserved further examination. She stated that regardless of whether care was funded by Medicaid or long-term care insurance, the system lacked adequate review of how to ensure that in- home care worked effectively. She emphasized the importance of trained individuals being available to provide care, but she acknowledged the need to start small before progressing to broader reforms. 7:07:03 PM Representative Bynum thought that the bill addressed a genuine need and that the investment would result in a return. He expressed confidence that Representative Prax had thoroughly researched the issue. He asked what would happen if the bill passed but the positions outlined in the fiscal note were not filled. He asked how it would affect the state's ability to implement the bill. Representative Prax responded that if the bill were not funded in the current fiscal year, it would delay the development of regulations. He added that the impact would depend on the timing and content of forthcoming federal regulations. He stated that the delay could hinder efforts to comply with expected federal requirements. Representative Bynum asked if DOH could shift its priorities to implement the bill in the event of a budget shortfall. He thought the bill should be a high priority. He acknowledged the state's tight budget and remarked that departments often reprioritized when presenting fiscal notes. Representative Prax suggested that Mr. Newman respond to the question. Mr. Newman responded that a new federal rule called the Medicaid Ensuring Access Rule required the state to establish an advisory board similar to the one proposed in the bill. The rule also mandated that by 2030, personal care workers and other home health care workers receive 80 percent of the Medicaid rate paid to agencies providing the services. He noted that the advisory board would need to be established by July of 2026. If the bill did not pass and the department could not hire the necessary staff, the department would still try to establish the board in time to meet the federal requirement. He relayed that additional guidance from the federal government on how to implement the various provisions of the rule was anticipated to be forthcoming. He added that immediate efforts would focus on establishing the advisory board and that the 80 percent reimbursement rule would be phased in by 2030. Representative Galvin noted that the bill proposed a 70 percent reimbursement but the federal requirement was 80 percent. She asked if the intent was to move gradually toward the federal standard. Mr. Newman responded that the bill included a phased approach, with a 70 percent benchmark by 2026 and an 80 percent benchmark by 2036. He noted that the federal government currently required 80 percent by 2030, but the bill allowed for a longer implementation period. 7:12:18 PM Co-Chair Foster invited Representative Prax to make closing comments. Representative Prax reiterated that the bill represented a worthwhile effort, and he thought there would be financial benefits to the state. He acknowledged that it was difficult to make definitive predictions but there appeared to be significant space between the level of service offered by personal care services and that of skilled nursing facilities. He asserted that if the bill succeeded in increasing the supply of personal care services, there would be a net savings to the state due to a reduced reliance on more expensive skilled nursing care. Representative Prax clarified that the bill aimed to support appropriately skilled workers. He relayed that the bill did not require personal care workers to be licensed practical nurses or have comparable qualifications. He emphasized that the goal was to deliver effective and appropriate services. The bill would improve service delivery, especially in rural areas, and generate long-term cost savings. Co-Chair Foster announced that the amendment deadline for HB 96 was Saturday, May 17, 2025, at 5:00 p.m. He noted that there could be some flexibility with the deadline. HB 96 was HEARD and HELD in committee for further consideration. Co-Chair Foster reviewed the meeting agenda for the following day.