SENATE BILL NO. 13 "An Act relating to eligibility requirements for medical assistance for certain children and pregnant women; and providing for an effective date." SENATOR BETTYE DAVIS, SPONSOR, noted that there had not been opposition to this particular bill. She stated that the bill had received support in the form of telephone calls, letters, and e-mails with the goal of raising the eligibility level for Denali Kid Care (DKC) from 150 percent to 200 percent of the federal poverty level (FPL). She requested that the committee refrain from amending the bill. DON BURRELL, STAFF, SENATOR DAVIS, explained that SB 13 increases and restores the qualifying income eligibility standard for the Denali Kid Care Program to 200% of the Federal Poverty Line (FPL) to its original levels 12 years ago. As you know, Alaska is one of the nation's wealthiest states yet Alaska is only one of five states that still fund our SCHIP program below 200% FPL. SB 13 makes health insurance accessible to approximately 1,277 uninsured children and 225 pregnant women in Alaska. Denali Kid Care is an "enhanced" reimbursement program with Alaska currently receives about 66% under the federal government's State Children's Health Insurance Program (SCHIP), created in 1997. Congress reauthorized the SCHIP program and President Obama signed into law on February 4, 2009. This reauthorization expanded the coverage to 4 million additional children and is re-authorized through 2013. Consider the following information from the Kaiser Commission on Medicaid and the Uninsured, January, 2009: · 45 states, including D.C., cover children in families with incomes at 200% FPL or higher. · 33 states cover children in families with income between 200% and 250% FPL. · 19 states including D.C., cover children in families with income at 250% or higher. 10 of these states cover children in families with income at 300% FPL or higher. · 35 states allow premiums or enrollment fees, and 24 states have co-payments for selected services in SCHIP programs on a sliding scale of FPL. · 46 states do not require asset tests. Denali Kid Care serves an estimated 7,900 Alaska children and remains one of the least costly medical assistance programs in the state at about $1,700 per child with full coverage, including dental, which is about 20% of the cost of adult senior coverage. It is estimated that uninsured children with a medical need are five times as likely not to have a regular doctor as insured children and four times more likely to use emergency rooms at a much higher cost. Early intervention and preventative care under SB 13 will greatly increase Alaska children's health and yield substantial savings to the state, public and private sector hospitals, emergency rooms which are required to admit indigent and uninsured patients for non- emergency treatment. There are still an estimated 18,000 uninsured children in Alaska. This is about 9% of the children age 18 and under. Private health care coverage for children has declined over 30% in the last ten years, and the deepening recession is pulling more children and families into the uninsured ranks. Alaska should do its share and take advantage of available federal matching funds by insuring its low income children and pregnant women up to and including 200% FPL under SB 13. 9:45:36 AM Co-Chair Stedman asked for additional questions. He noted three fiscal notes from the Department of Health and Social Services (DHSS) showing an $886 thousand increase in the general fund spending for FY10. Senator Bettye Davis asked if the committee received the updated fiscal notes. 9:46:32 AM AT EASE 9:46:42 AM RECONVENED Co-Chair Stedman stated that the committee did not have the updated fiscal notes. Co-Chair Hoffman noted that approximately 7,900 children are served today by Denali Kid Care (DKC) and 18,000 remain uninsured. The proposed legislation would allow approximately 1300 additional children into the program, increasing the number served to 9,200. The change would drop the number of uninsured children to 16,700. Senator Davis agreed that Senator Hoffman's estimates were correct. 9:48:07 AM CARLETTA MACK, DIRECTOR, COVENANT HOUSE ALASKA (testified via teleconference). She spoke in support of SB 13. She maintained that Covenant House seeks health care outside of the emergency room for cost benefit purposes. Expanding the number of youth eligible for health care coverage would lead to greater health and decreased use of the emergency room for medical care and long-term costs. DAHNA GRAHAM, ANCHORAGE FAITH AND ACTION CONGREGATIONS TOGETHER (AFACT), ANCHORAGE (testified via teleconference). She spoke in support of SB 13. She opined that this legislation was a bargain for the state, in light of the federal contribution. She stated that a visit to the emergency room fee would equal that of DKC's annual fee. 9:51:45 AM ROD BETIT, PRESIDENT, ALASKA HOSPITAL ASSOCIATION (ASHNHA), noted that his membership strongly supports SB13. He believed that the legislation was the next logical step considering the available economic stimulus funds. The members of ASHNHA do not believe that the legislation would preempt recommendations of the Health Care Commission. Senator Huggins asked about elements of the task force. Mr. Betit answered that there were many recommendations, but he could not report on the outcome. He believed that DHSS would have the information regarding recommendations. 9:53:38 AM JORDEN NIGRO, PRESIDENT OF THE ALASKA ASSOCIATION OF HOMES FOR CHILDREN, approved of preventative care and supported the bill in its entirety. She explained that raising the DKC eligibility rate to 200 percent of the FPL would have a drastic affect on behavioral health services, as it is the primary funding source. Many children are unable to access services because they are on the cusp of eligibility. MARIE DARLIN, COORDINATOR, AARP CAPITOL CITY TASK FORCE, spoke in favor of SB 13. She noted that AARP is one of the nation's largest organizations of grandparents. Many grandparents are responsible for raising children, while dependent on Medicare themselves. She expressed support of SB 13. 9:57:35 AM LORIE MORRIS, EXECUTIVE DIRECTOR FOR AK BAPTIST FAMILY SERVICES (testified via teleconference), She noted support for SB 13. JON SHERWOOD, DIRECTOR, OFFICE OF PROGRAM REVIEW, DEPARTMENT OF HEALTH AND SOCIAL SERVICES, (DHSS) spoke in support of increasing the eligibility limits to 200 percent of the FPL, and expressed the administration's interest in cost sharing provisions. Senator Elton asked what the administration meant by cost sharing. Mr. Sherwood answered that cost sharing can include premiums or co-payments. He noted that there are federal limits to cost sharing of 5 percent of a family's income. The department prefers premiums because they are easier to track, although there are also advantages to co-payments. Senator Elton asked if support for the bill depends on additional cost sharing provisions. Mr. Sherwood answered that the department does not oppose an expansion to 200 percent of the FPL. 10:01:22 AM Senator Huggins referred to a memorandum to Senator Bettye Davis from Jennifer Saunders (Copy on File). He noted that the second paragraph stated that under provisions of the Deficit Reduction Act, states generally could not impose cost sharing on children in families with an income below 150 percent of the federal poverty guidelines, except in certain circumstances. He asked about the increase to 200 percent of the FPL given this information. Mr. Sherwood answered that the department looked at imposing cost sharing on income groups above 175 percent of the FPL. Below 150 percent of the FPL, limitations on cost sharing are cumbersome. A limited ability to cost share exists due to the exclusion of children. Senator Huggins agreed that all children deserve affordable health insurance. He asked for an explanation of the hesitation he noticed during Mr. Sherwood's testimony. Mr. Sherwood expressed that his hesitation was due largely to the fact that the department had proposed federal regulations on cost sharing. The new administration withdrew the regulations, and the department expects to see new ones. He stated that he was reluctant to disclose specifics due to the possibility that federal regulations may change. He thought that above 150 percent of the FPL, co-payments for emergency services, care for the terminally ill, and preventative care remained acceptable. Above 150 percent of the FPL, the rules are straightforward, yet are limited to charging less than 5 percent of the family's income. Tracking co-pays can prove cumbersome, but he believed that there were reasonable methods available. 10:05:10 AM Co-Chair Stedman asked if the cost and burden placed on the department to track the co-pays above 150 percent of the FPL equated to a net benefit for the state. Mr. Sherwood answered that the administration does support some kind of cost sharing. Premiums are easier to track against the five percent cap. Co-Chair Hoffman noted that the sponsor statement illustrates that Alaska currently receives 66 percent federal funds under this program, and will receive a 70 percent match. He asked if the 70 percent match was contingent upon the passage of this legislation. Mr. Sherwood believed that the 70 percent is the combination of children served for which the current match rate is 66 percent. Services provided through tribal health providers are included and claimed at 100 percent. The State Children's Health Insurance Program (SCHIP) match rate is currently under 66 percent and will move down to 65 percent in the next few years. Co-pays or premiums may offset expenditures. Senator Olson asked if Mr. Sherwood referred to 5 percent per family or 5 percent per child. Mr. Sherwood understood that the 5 percent limit exists for the individual versus the whole family, and pregnant women are not subject to cost sharing provisions. 10:08:43 AM Senator Thomas asked when the administration would be able to present information regarding cost sharing within the federal regulations. Mr. Sherwood answered that he was hesitant to set a target date. He planned to address the subject later. He hoped to revisit the committee in a reasonable amount of time. Senator Thomas opined that the payment of premiums would encourage individuals to seek lesser plans that may or may not include preventative care. 10:11:05 AM Mr. Sherwood stated that the department intended to offer all enrolled recipients of Medicaid full benefits, which includes preventative care. Federal law does not allow a program to offer health care to children that does not include preventative care. Senator Davis wrapped up by repeating her initial statement. She stated that she had an opportunity to address cost sharing, and had consulted with the National Conference of State Legislatures (NCSL), and she understood that the administration's intention was to cost share. She stated that she had not found evidence of administrative action regarding cost sharing. She recommended against waiting for the administration to create a plan including federal regulations. She understood that the money is present in the current budget to cover the increase. She asked that the bill pass out in a timely manner. There is not opposition to this bill. She maintained that her goal was to bring eligibility requirements for DKC up to 200 percent of the FPL. Co-Chair Stedman appreciated the volume of Senator Davis' voice as it made it easy to understand her position. SB 13 was HEARD and HELD in Committee for further consideration. 10:15:14 AM