HB 263-EXTEND SENIOR BENEFITS PAYMENT PROGRAM  3:06:44 PM CHAIR HIGGINS announced that the first order of business would be HOUSE BILL NO. 263, "An Act extending senior benefits." 3:07:11 PM REPRESENTATIVE MIKE HAWKER, Alaska State Legislature, as sponsor of HB 263, offered an overview of the bill. He explained that this proposed bill would extend the termination date of the Senior Benefits Payment Program from June 30, 2015 to June 30, 2021. He shared that the program had been established in 2007, in response to the recognition for the unsustainability of the original Longevity Bonus Program, which was not a needs based program. He reported that there was still a need and a desire to address the expenses of living in Alaska for low income seniors. He explained that this was a three tiered program for benefit payments of $125, $175, or $250 each month, based on household income relative to the federal poverty level index. He declared a desire to help Alaskan seniors with the proposed bill, which would extend the program for six years through 2021. 3:10:40 PM REPRESENTATIVE PRUITT asked for an explanation to the program extension being presented this year, as it would not expire until next year. REPRESENTATIVE HAWKER, in response, said that the program was a "life-safety security for these seniors." He explained that waiting until next session would create greater angst for seniors, while this proposed bill would let them know in advance that the program was being extended. He declared that the average age of the recipients was 75 years, and he said "quite frankly, those are folks I don't want to cause trauma and concern for over the course of the coming year." 3:12:17 PM REPRESENTATIVE SEATON expressed his agreement with bringing this issue forward early, although he stated concern for the six year length of the proposed extension. He pointed out that the current rate of deficit spending had reduced savings, which were projected to run out sometime in the not too distant future. He suggested amending the proposed bill to a three year extension, as this would not put fiscal constraints on a future legislature. 3:13:59 PM REPRESENTATIVE HAWKER offered his opinion that the values of the elected representatives to the State of Alaska should prioritize programs which benefited all low income seniors across the state. He asked to give low income seniors this additional surety that the program had endorsement from the legislature for more gravitas in the future. He allowed that the program would always have to compete in the budget process for adequate funding, although it should not have to "fight for its very existence in a subsequent reauthorization." He declared that this was the right thing to do, and the best thing to do, for our seniors, and that it was possible for this to be done right now. 3:16:22 PM CHAIR HIGGINS expressed agreement with Representative Hawker, although he stated his agreement with Representative Seaton for fiscal conservatism. He declared that elders and children were valuable resources in Alaska, and this value should not be questioned. He endorsed the proposed bill in its current form. REPRESENTATIVE HAWKER indicated AS 47.45.301(c), which stated that program funding could be reduced or eliminated in a fiscal year by the Department of Health and Social Services (DHSS) if it estimated that appropriations for the program were insufficient to meet the demands of the program. He declared that there was an expansion and contraction mechanism in the program, which would accomplish the same goal as intended by Representative Seaton, without prematurely terminating the program. 3:18:17 PM REPRESENTATIVE SEATON asked if the current statute allowed the department to shift payments to the most economically challenged, as opposed to a pro rata reduction. 3:19:08 PM REPRESENTATIVE HAWKER directed the question to DHSS for its interpretation of the statute and its intentions. He reported that low income seniors were not funded if in prison, in state nursing homes, in veterans or Pioneer homes, or in public or private institutions for mental disease. He declared that the state was "very prudent with our spending of the money for this program." 3:20:18 PM RON KREHER, Director, Director's Office, Division of Public Assistance, Department of Health and Social Services, said that generally a pro rata reduction to balance across the groups served would be followed, but ultimately DHSS desired to ensure that those at greatest risk with the lowest income would be ensured of the benefit. 3:21:14 PM REPRESENTATIVE SEATON asked if the statute would require a pro rata approach, or could the majority of payment be directed to the most economically challenged group. 3:21:39 PM MR. KREHER offered his belief that the statute allowed flexibility for either approach, as this specific program was not heavily regulated. 3:22:15 PM REPRESENTATIVE NAGEAK clarified the income limits for benefits. REPRESENTATIVE HAWKER pointed out an inconsistency regarding the income limits of the federal poverty level in the sponsor statement. Since it was written, there had been an adjustment of the federal poverty level and he said he would revise the sponsor statement. He stated that the smallest payment, $125 per person per month, applied to an individual senior with a personal annual income of less than $25,515, or a married senior couple with annual income less than $34,405. He said this was bench marked to 175 percent of the federal poverty level. He reported that the $250 per person per month payment went to individual seniors with a personal income of $10,935 or less, or married senior couples with an income of $14,745 or less, which was 75 percent of the federal poverty level. He emphasized the difficulty for these elders with the costs of living in Alaska. He reflected that a lot of time had been spent creating these tiers on the original bill, and that the program has proven its importance and its durability and workability for the state. He declared that DHSS had wide latitude to determine equitable funding for the program, if it could not be fully funded. 3:26:14 PM CHAIR HIGGINS closed public testimony. 3:26:31 PM REPRESENTATIVE KELLER moved to adopt Amendment 1, labeled 28- LS1256|A.1, Mischel, 1/31/14, which read: Page 1, line 1: Following "extending": Insert "the Alaska" Following "benefits": Insert "payment program" There being no objection, it was so ordered. REPRESENTATIVE HAWKER, as the sponsor of proposed HB 263, expressed his support for Amendment 1. The committee took a brief at-ease. 3:28:16 PM REPRESENTATIVE SEATON referenced his earlier concern for the six year extension in proposed HB 263. He moved to adopt conceptual Amendment 2, "which would be to change on line 6, page 1, 2021 to 2017." 3:29:11 PM REPRESENTATIVE KELLER objected for discussion. REPRESENTATIVE SEATON offered his belief that the department [DHSS] would pro rata everything down, and he offered examples to these payments. He opined that the legislature should determine the payments. He expressed his concern for extending a $25 million annual program for six years, when a budget deficit was projected in the near future. 3:30:45 PM REPRESENTATIVE PRUITT, referencing the proposed conceptual Amendment 2, asked if Representative Seaton had intended the proposed expiration date to be 2018, instead of 2017, as that would be three years after the current expiration. 3:31:17 PM REPRESENTATIVE SEATON asked to restate the expiration date in his proposed conceptual Amendment 2 to be 2018. 3:31:45 PM REPRESENTATIVE NAGEAK noted that the value of income levels was dependent upon the cost of living in various areas of the state. REPRESENTATIVE HIGGINS reminded committee members that discussion should be limited to proposed conceptual Amendment 2. REPRESENTATIVE KELLER expressed his support for the Senior Benefits program, as it was an Alaska program, and was not initiated through a federal matching program. He explained: It's one we saw the need, we see the need, and we're addressing it, and the reason that is significant to the amendment, is that I personally prefer to give the seniors a leg up on this one, because, if we get in, like we are all very concerned about, the legislature, if we get into this boat of looking for ways to cut, this is going to be low hanging fruit, because its dollar for dollar; in other words, they cut a dollar out of spending for senior programs, it's a dollar more in general funds; whereas a lot of the Medicaid stuff, you know, we have to cut twice as much in the spending in order to get the same savings. REPRESENTATIVE KELLER expressed his desire to pass the proposed legislation, and declared his opposition to proposed conceptual Amendment 2. 3:34:08 PM REPRESENTATIVE TARR expressed her opposition to proposed conceptual Amendment 2, stating that a longer term commitment promoted better planning and encouraged seniors to stay in Alaska. 3:35:11 PM REPRESENTATIVE SEATON withdrew proposed conceptual Amendment 2. He declared his support for the program, and suggested that the legislature, and not a department, should have the latitude to make any changes to the program. 3:35:37 PM The committee took a brief at-ease. 3:36:03 PM REPRESENTATIVE KELLER moved to report HB 263, as amended, out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, CSHB 263(HSS) was moved from the House Health and Social Services Standing Committee.