SSTA - 3/28/95 SB 120 STATE VETERANS' HOME FACILITIES SENATOR SHARP brings up SB 120 as the next order of business before the Senate State Affairs Committee and calls the first witness. Number 451 SENATOR TORGERSON relays information contained in the sponsor statement for SB 120 to the committee. Senator Torgerson expresses surprise at the amount of the fiscal note, and asserts SB 120 will have no fiscal impact on the State of Alaska. Number 423 CHAIRMAN SHARP asks Senator Torgerson to confirm that SB 120 will simply modify existing law to state veteran's facilities would not just be housing facilities, but would also have nursing care. SENATOR TORGERSON responds that is the intent. CHAIRMAN SHARP asks if he is correct in his belief that there are currently no veteran's homes in the state, and that SB 120 does nothing but set up enabling legislation. SENATOR TORGERSON replies that is his understanding. Number 408 JEFF MORRISON, Legislative Liaison, Department of Military & Veterans' Affairs, states one of the department's duties is to advise the legislature what we believe veterans would want. He thinks it would be safe to say veterans would support SB 120. Number 392 JIM KOHN, Deputy Director, Division of Senior Services, Department of Administration, states the change made by SB 120 would not be just a technical amendment to an existing law, which makes the existing law operational. The state law will remain, even with passage of SB 120, incompatible with the federal veterans' program requirements. The present statute requires that the veterans' homes be operated without state subsidy. Nothing in SB 120 changes that. The Veterans' Administration (VA) requires that a state receiving a construction grant for construction of a state veterans' home provide assurance that the state will be responsible for the operating costs of that facility. When the VA contributes 65% of the construction costs, and the state contributes 35%, the agreement up front is that the state will provide assurance they will foot the future operating costs, as well as maintaining the building. MR. KOHN states that replacing the term "domiciliary care" with the term "nursing care" has only one effect: it increases the daily rate paid by the VA from approximately $10.83 to $25.35 for eligible veterans. Since the cost of a nursing home bed in Alaska is approximately $250 per day, a resident without state subsidy would be responsible for the difference. On a yearly basis, the VA would pay approximately $10,000 of these costs, while the resident would be required to pay approximately $80,000. Understandably, few residents would be able to pay the costs involved. Yet it would be required by the agreement with the VA that 75% of all residents in a nursing home be eligible veterans, which means that their income would have to be lower than the appropriate maximum allowed. That puts them in the position of being unable to pay for their care. MR. KOHN reminds the committee that in Alaska there is a VA community nursing home program right now. Under this program, the federal government is obligated to pay the total costs of the care of veterans placed in community nursing homes by the VA. We need to realize, that if a veterans' home is opened, the state will be exchanging federal money for state obligations. In addition, though he understands that veterans' organizations would like to see a veterans' home, he is not sure that individual veterans would be favorably impressed when faced with the bill. At present, veterans can enter nursing care homes in their own communities, and continue to have their families nearby. If a centralized veterans' home is created, people will have to move to that central location to get any subsidy. Number 310 MR. KOHN explains that the large fiscal note is to make disclosure of costs, rather than following the actual law. The fiscal note does not follow the law, because under the law, it is not possible to even construct the home, or make the deal with the VA. The fiscal note is based on the costs associated with building a home similar to the Juneau Pioneer Home, with staff similar to the Juneau Pioneer Home. Number 332 CHAIRMAN SHARP asks Mr. Kohn if the veterans' homes in the rest of the country all operate with only $25 a day from the federal government. MR. KOHN replies that is correct. CHAIRMAN SHARP asks if that has always been the case. He thought the federal government paid nearly all the costs associated with veterans' homes. MR. KOHN responds that since there is no veterans' home in Alaska, the VA does pay the full cost of the care of eligible veterans placed in a community nursing home. Eligibility is based upon total income and assets. The VA also requires that 75% of the residents in a veterans' home be of that eligible income status. There is therefore the possibility that the costs to other veterans ineligible for subsidy residing in the home will be increased, in order to offset the loss caused by those unable to pay. Number 298 DAVE WILLIAMS, Director, Division of Medical Assistance, Department of Health & Social Services, states the division has followed the development of home care for many years, and SB 120 seems to take things in the opposite direction. The division is also aware that many nursing home beds are pending construction. A home care system is being set up in this state, and money will all come from the same direction. If money is put into facilities, it will be harder to develop a home care system. Also, when an eligible veteran comes out of a hospital and placed in a nursing home, that veteran will have 90 days of benefits in the nursing home. If care goes beyond that, and a veteran is eligible for medicaid, then medicaid pays the bill. In a state veterans' home, the home would be eligible as a medicaid provider. The Department of Health & Social Services has no position on SB 120, but the state will be liable for 50% of the cost of care, under the medicaid program. Number 268 SENATOR LEMAN asks Mr. Williams to explain his statement that the money will come from the same direction. MR. WILLIAMS responds there is a limited amount of money available for long-term care. If that money is spent on nursing home care, he assumes it will be more difficult to fund a home-care system. Number 235 SENATOR TORGERSON reasserts that SB 120 does not build any facilities or appropriate any money. It will give veterans in the state the opportunity to build a nursing home. Number 220 SENATOR RANDY PHILLIPS makes a motion to discharge SB 120 from the Senate State Affairs Committee with individual recommendations. CHAIRMAN SHARP, hearing no objection, orders SB 120 released from committee with individual recommendations.