HJR 52 - INCREASE IN FEDERAL MEDICAID FUNDING Number 309 REP. JIM NORDLUND, Prime Sponsor of HJR 52, addressed the resolution. He stated that the resolution deals with the issue of fairness regarding the state of Alaska. He said currently the federal Medicaid rates vary nationwide from 50% to 70% based on relative per capita income of the various states. He explained that Alaska's high cost of living is not taken into account when reimbursement is set. The purpose of the resolution is to amend the Social Security Act to take into account Alaska's high cost of living and to set the differential accordingly. He pointed out another disadvantage in the way Medicaid rates are set for the state. He said, "although, the cost of living is considered in terms of deciding who is eligible to receive Medicaid, therefore increasing the Medicaid pool, in turn we do not receive the difference... in receiving the greater amount of money... or that's not taking into consideration... the cost of living is not taken into consideration in setting the rate." He said that if the state had a 25% increase, which is approximately what the cost of living difference is for the state, it would mean an additional $31 million dollars to the state of Alaska. REP. NORDLUND indicated that the resolution also recognizes the work that Senator Stevens has been doing in Congress to make the necessary changes. Number 387 CHAIR BUNDE asked for testimony from Kim Busch. Number 390 KIM BUSCH, Director, Division of Medical Assistance, Department of Health and Social Services, testified in support of HJR 52. She stated that the Medicaid federal matching percentage is based on per capita income with a floor of 50%. She said if the floor did not exist, Alaska would receive an even lower match rate. She said the formula is also used for AFDC, the JOBS program, and other federally funded programs. She explained that the government uses a 25% cost of living differential to set the poverty level in Alaska. She said the result for FY 94 is $48.8 million that are not coming into Alaska. Medicaid would receive an extra $33 million and AFDC would receive $15.7 million. MS. BUSCH felt it was critical to insert the provisions in Title 19 of the Social Security act now, because all of the health care reform legislation that is before Congress is using the same formula and Alaska is seriously disadvantaged. Number 487 REP. TOOHEY asked when the resolution would take effect. Number 490 MS. BUSCH said it would take effect when the legislature adopts it. She said if Congress moves the resolution, it would take effect this fall. CHAIR BUNDE closed public testimony. Number 512 REP. BRICE made a motion to pass the CS for HJR 52 out of committee with individual recommendations. CHAIR BUNDE objected as to explain his no vote. He stated that the additional funds from the federal government would still be taken from the general public's pockets. He said it is not free money. He maintained that the Medicaid program is wildly out of control and he thought Alaska should lead by example and not ask for extra money. Number 538 REP. VEZEY asked what would happen if the cost of living in Anchorage turned out to be lower than Washington, D.C. MS. BUSCH stated if the cost of living changed dramatically and was no longer higher than most, the state would not need the differential. She asserted that the situation currently is grossly unfair. She also said that Congress must find savings in order to fund the increase, indicating that savings would be found within Title 19 to fund increase for Alaska. She said that many other congressmen have been able to act to get consideration for increases for their state. Number 606 REP. BRICE said, "Better to buy... have this money come to the state in the form of extra federal money for Medicaid, Medicare, whatever, than to be buying whatever on the East Coast for nonproductive use, which is another thing that our federal government is known for. Buicks or bombs, that's what I say." CHAIR BUNDE said, "It's federal, it's free." Number 623 REP. G. DAVIS agreed with Chair Bunde's point, but said the system is a match program that is mandated by the federal government. He said, "It's a mandate from the feds, and it's a match program. So it's costing state dollars. At the current rate the mandate from the feds is mandating that the state spend so many dollars. Under this resolution the mandate is that the state will not need to spend so much dollars. So, I can certainly agree with that." Number 641 REP. NICHOLIA stated that there is definitely a higher cost of living in the rural areas. She said it is very expensive for rural residents to go to Anchorage and Fairbanks for medical treatment, citing that many forgo medical treatment until the illness has gone past the point of medical care, resulting in people dying unnecessarily. She felt that Medicaid dollars could go far for those people. She also reminded the committee that a large percentage of people on Medicaid are children. She said a no vote would deny children better medical services. She further stated that in regards to the JOBS program there are a limited number of people who are allowed to go to job training, and she felt that number would increase as a result of the resolution. Number 685 CHAIR BUNDE asked if most Natives are covered under the Native Health Service. Number 688 REP. NICHOLIA indicated that federal funding is also limited for Indian Health Services. She said a lot of people are turning to Medicaid. She then pointed out that the interior has the highest cancer rate for the whole state of Alaska. Number 710 CHAIR BUNDE, hearing no further discussion, called for the vote. Representatives Toohey, Gary Davis, Kott, Olberg, Nicholia and Brice voted yea; and Representatives Bunde and Vezey voted nay. Chair Bunde indicated that the CS for HJR 52 was so moved. He then brought HB 356 to the table.