HB 96-PIONEERS' HOME AND VETERANS' HOME RATES  3:23:54 PM CO-CHAIR ZULKOSKY announced the next order of business would be HOUSE BILL NO. 96, "An Act relating to Alaska Pioneers' Home and Alaska Veterans' Home rates and services." [Before the committee was CSHB 96(STA), labeled 31-LS0646\U.] 3:24:21 PM REPRESENTATIVE ZACK FIELDS, Alaska State Legislature, speaking as the sponsor of HB 96, offered to answer questions about CSHB 96 (STA). 3:24:35 PM CO-CHAIR ZULKOSKY [opened] public testimony on HB 96. 3:25:08 PM LAURA BONNER said she is a 47-year Alaska resident and voter. She said she is a retired construction worker living in Anchorage and expressed her strong support for HB 96, which would keep rates at the Pioneer Homes and the Alaska Veterans' Home affordable. She cautioned raising rates is an example of cost shifting. Further, the bill would show Alaskans value their veterans and seniors, as they have since 1913. Residents of the homes need predictability of rates and she said she may need [said] predictability in the future. Ms. Bonner urged for the legislature to find other ways to raise revenue. 3:26:36 PM VERNA ESPENSHADE said she is 88 years old and has lived at the Anchorage Pioneer Home for nine years. She used to be very happy at the Pioneer Home, but in the past years, the food and the atmosphere are "not all the way it used to be." Ms. Espenshade spoke in opposition to raising her rent. She said she can afford her Level 1 rent of $2,588 but if the rent is raised, she would have to go on Medicaid, which the state would have to pay. She questioned how this could be the right thing to do, when she can afford to pay her rent at the present rate but could not afford to pay over $3,000. She complained that the home has changed, and she is not happy with the rent situation. 3:28:21 PM AVES THOMPSON said his wife lives at the Anchorage Pioneer Home and has been diagnosed with Alzheimer's disease. She resides in the Memory Care Unit and the current monthly cost of her residence and assistance is $6,795 per month. The Division of Alaska Pioneer Homes [Department of Health and Social Services (DHSS)] is promulgating regulations that would increase [his wife's] rate to $13,333 per month - which is an annual increase of $78,456 - and is not a budget reduction but is only a change in funding sources. In fact, the governor's amended budget for the division is only $4,200 less than the current budget. Mr. Thompson said he is a private payer and receives no subsidies from state or federal government; his long-term care insurance will lapse in approximately 13 months and the remainder of his wife's care is funded by retirement income and personal savings. The rate increase would force his wife out of the Pioneer Home and the final result would be that most or all of the Pioneer Homes' residents will be subsidized by public dollars. Mr. Thompson said this fails to benefit the citizens of Alaska. Although HB 96 would limit the fees, a 30 percent increase is excessive as the rate of inflation in Alaska has been relatively low. He suggested an increase of 10 percent to 20 percent may be appropriate. Mr. Thompson advised [the increase in rates] is not consistent with statements made by Representative Neal Foster, co-chair of the House Finance Committee. Mr. Thompson said without action to reduce the rate increase, the division will implement the higher fees, which will be disruptive and destructive. 3:32:16 PM The committee took a brief at-ease. 3:32:48 PM CHARLES MCKEE provided comments not on topic with the published agenda. 3:37:04 PM CO-CHAIR ZULKOSKY, after ascertaining no one else wished to testify, closed public testimony on HB 96. 3:37:17 PM REPRESENTATIVE TARR moved to report CSHB 96(STA), labeled 31- LS0646\U, out of committee with individual recommendations and the accompanying fiscal note. 3:37:36 PM REPRESENTATIVE PRUITT objected. He observed the bill was not referred to the House Finance Committee - although the bill affects state finances - and urged the committee to request the Speaker of the House to add a referral prior to moving the bill. 3:38:24 PM The committee took an at-ease from 3:38 p.m. to 3:40 p.m. REPRESENTATIVE PRUITT further explained because the financial nature of the bill would affect individuals and the state, the bill should be referred to the House Finance Committee. He remarked: ... there's kind of a delicate balance between the usurping of, kind of, our authority of controlling things, and giving that to the regulators as well as the times that we put things in statute because of the, the great challenge there is to change statute. ... You don't really want to give it all over to the regulators to make those decisions, at the same time, as we've seen this year, anytime that you're looking to make a change ... it becomes very difficult if we find later that we need to make an adjustment that doesn't fit with the statutory guidelines that we've given ... I'll maintain the objection. 3:41:49 PM CO-CHAIR SPOHNHOLZ recalled testimony by DHSS presenting "valid concerns" that rates at the Alaska Pioneer Homes have not been raised; however, she urged for "some reason and rational" to the process of raising rates. She disagreed that the methodology using the Consumer Price Index (CPI) restricts the ability of the department to raise rates and keep up with the cost of providing care. One of the problems has been that DHSS does not have a structure in place to allow for reasonable rate increases. Co-Chair Spohnholz agreed if the division tried to proceed with a dramatic increase that did not comport with the language in HB 96, it would have to return to the legislature for a policy decision, which would be appropriate if a [department/division] makes very extreme changes. She expressed her support for the bill. 3:43:49 PM A roll call vote was taken. Representatives Zulkosky, Spohnholz, Drummond, and Tarr voted in favor of reporting CSHB 96(STA) out of committee. Representatives Pruitt and Jackson voted against it. Therefore, CSHB 96(STA) was reported out of the House Health and Social Services Standing Committee by a vote of 4-2.