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.