HOUSE HEALTH, EDUCATION AND SOCIAL SERVICES STANDING COMMITTEE February 8, 2000 3:38 MEMBERS PRESENT Representative Fred Dyson, Chairman Representative Jim Whitaker Representative Joe Green Representative Carl Morgan Representative Tom Brice Representative Allen Kemplen Representative John Coghill MEMBERS ABSENT All members present OTHER HOUSE MEMBERS PRESENT Representative Con Bunde Representative Gary Davis COMMITTEE CALENDAR HOUSE BILL NO. 224 "An Act requiring a public employee labor organization representing employees of a school district, regional educational attendance area, or a state boarding school to give notice before striking." - HEARD AND HELD HOUSE BILL NO. 260 "An Act relating to coverage of children and pregnant women under the medical assistance program; and providing for an effective date." - HEARD AND HELD PREVIOUS ACTION BILL: HB 224 SHORT TITLE: PERA: NOTICE BEFORE STRIKE Jrn-Date Jrn-Page Action 5/05/99 1180 (H) READ THE FIRST TIME - REFERRAL(S) 5/05/99 1180 (H) HES, L&C 5/06/99 1214 (H) COSPONSOR(S): OGAN 5/07/99 1247 (H) COSPONSOR(S): DYSON 1/25/00 (H) HES AT 3:00 PM CAPITOL 106 1/25/00 (H) -- Meeting Canceled -- 2/03/00 (H) HES AT 4:00 PM CAPITOL 106 2/03/00 (H) -- Meeting Canceled -- 2/08/00 (H) HES AT 3:00 PM CAPITOL 106 BILL: HB 260 SHORT TITLE: MEDICAL ASSISTANCE PROGRAM COVERAGE Jrn-Date Jrn-Page Action 1/10/00 1887 (H) PREFILE RELEASED 12/30/99 1/10/00 1887 (H) READ THE FIRST TIME - REFERRALS 1/10/00 1887 (H) HES, FIN 1/10/00 1887 (H) REFERRED TO HES 1/27/00 (H) HES AT 3:00 PM CAPITOL 106 1/27/00 (H) 2/08/00 (H) HES AT 3:00 PM CAPITOL 106 WITNESS REGISTER RANDY LORENZ, Researcher for Representative Vic Kohring Alaska State Legislature Capitol Building, Room 421 Juneau, Alaska 99801 POSITION STATEMENT: Presented sponsor statement for HB 224. KAREN PERDUE, Commissioner Department of Health & Social Services P.O. Box 110601 Juneau, Alaska 99811 POSITION STATEMENT: Answered questions and asked the committee to give the Denali KidCare a chance. PAMELA GUY P.O. Box 20337 Juneau, Alaska 99802 POSITION STATEMENT: Testified against HB 260 and in support of the Denali KidCare Program. RENA SIMS 8311 Aspen Avenue Juneau, Alaska 99801 POSITION STATEMENT: Testified in support of the Denali KidCare Program. DOROTHY ARENSMAN, Superintendent Southeast Island School District P.O. Box 19569 Thorne Bay, Alaska 99919 POSITION STATEMENT: Testified against HB 260. NICKI SHELTON P.O. Box 101 Hoonah, Alaska 99829 POSITION STATEMENT: Testified against HB 260. JAMES CULLEY, Chief Executive Officer and Administrator Valdez Community Hospital P.O. Box 550 Valdez, Alaska 99686 POSITION STATEMENT: Testified against HB 260. KELLIE TALBOT P.O. Box 828 Bethel, Alaska 99559 POSITION STATEMENT: Testified on HB 260. MARY ANARUK, Vice President Community Services Yukon-Kuskokwim Health Corporation P.O. Box 1541 Bethel, Alaska 99559 POSITION STATEMENT: Testified on HB 260. LAURA BAEZ P.O. Box 3587 Bethel, Alaska 99559 POSITION STATEMENT: Testified on HB 260. MARY MESSNER, Public Health Nurse Children with Special Needs Program North Slope Borough P.O. Box 1069 Barrow, Alaska 99723 POSITION STATEMENT: Testified against HB 260. KIMBERLY MACK North Slope Borough Counseling Services P.O. Box 247 Barrow, Alaska 99723 POSITION STATEMENT: Testified on HB 260. ROBIN LUNETTA, Education Coordinator Cordova Family Resource Center P.O. Box 863 Cordova, Alaska 99574 POSITION STATEMENT: Testified on HB 260. PATRICIA BOILY 4135 Clover Lane Homer, Alaska 99603 POSITION STATEMENT: Testified against HB 260. SCOTT WHEAT P.O. Box 22353 Homer, Alaska 99603 POSITION STATEMENT: Testified against HB 260. GEORGE MARTIN P.O. Box 2920 Soldotna, Alaska 99669 POSITION STATEMENT: Testified in support of HB 260. TOMMY THOMPSON 111 Paula Street Kenai, Alaska 99611 POSITION STATEMENT: Testified in support of HB 260. SUSAN GIBSON P.O. Box 2325 Kenai, Alaska 99611 POSITION STATEMENT: Testified in support of HB 260. MARGARET WRIGHT P.O. Box 170 Kotzebue, Alaska 99752 POSITION STATEMENT: Testified against HB 260. MARCI SCHMIDT 2040 Wasilla Fishhook Road Wasilla, Alaska 99654 POSITION STATEMENT: Testified against HB 260. KELLI MAHONEY 925 Lone Cub Drive Wasilla, Alaska 99654 POSITION STATEMENT: Testified on HB 260. JERI LANIER 620 Fifth Avenue Fairbanks, Alaska 99701 POSITION STATEMENT: Testified on HB 260. ELAINE LANDON, Health Operations Administrator Tanana Chiefs Conference, Inc. 122 First Avenue Fairbanks, Alaska 99701 POSITION STATEMENT: Testified against HB 260. CHERYL KILGORE 311 Hawk Fairbanks, Alaska 99709 POSITION STATEMENT: Testified on HB 260. ERIN CASTLE 123 West Twelfth Avenue, Number A Anchorage, Alaska 99501 POSITION STATEMENT: Testified against HB 260. VIANA STAM 4938 East 34 Avenue, Apartment B5 Anchorage, Alaska 99508 POSITION STATEMENT: Testified against HB 260. JENNIFER DEFORD 3641 Chiniak Bay Drive Anchorage, Alaska 99503 POSITION STATEMENT: Testified against HB 260. NORMA PERKINS, Director of Business Services SEARHC 222 Tongass drive Sitka, Alaska 00835 POSITION STATEMENT: Testified on HB 260. PATRICIA MACPIKE, Children's Coordinator Sitka Mental Health Clinic 409 Monastery Street #3 Sitka, Alaska 99835 POSITION STATEMENT: Testified in support of Denali KidCare program. JEAN FRANK 623 DeGroff Street Sitka, Alaska 99835 POSITION STATEMENT: Testified on HB 260. PAT AAMODT Arctic Slope Native Association Member, Barrow Tribal Council P.O. Box 68 Barrow, Alaska 9973 POSITION STATEMENT: Testified in support of Denali KidCare program as it now stands. DOROTHY BUNTI REED Families and Parents Anonymous 3725 Portage Boulevard Juneau, Alaska 99801 POSITION STATEMENT: Testified against HB 260. LARAINE DERR, Executive Director Alaska Hospital and Nursing Home Association 426 Main Street Juneau, Alaska 99801 POSITION STATEMENT: Testified against HB 260. JEROME SELBY Providence Health System in Alaska P.O. Box 1962 Kodiak, Alaska 99615 POSITION STATEMENT: Testified against HB 260. LINCOLN BEAN Alaska Native Health Board P.O. Box 318 Kake, Alaska 99830 POSITION STATEMENT: Testified against HB 260. MORISSA WILLIAMS 329 Fifth Street, Apartment 2 Juneau, Alaska 99801 POSITION STATEMENT: Testified against HB 260. WILSON JUSTIN, Health Director Mount Sanford Tribal Consortium Member, Alaska Native Health Board SR 1355 Slana, Alaska 99586 POSITION STATEMENT: Testified against HB 260. SHERRY OLSON, Clinical Social Worker P.O. Box 21008 Juneau, Alaska 99802 POSITION STATEMENT: Testified against HB 260. MS. LARE' 1805 Bunker Anchorage, Alaska 99503 POSITION STATEMENT: Offered thanks for the Denali KidCare program. WALTER MAJOROS, Executive Director Alaska Mental Health Board 431 North Franklin Street, Suite 201 Juneau, Alaska 99801 POSITION STATEMENT: Testified against HB 260. ACTION NARRATIVE TAPE 00-9, SIDE A Number 0001 [The minutes for the Alaska State Health Care Access Committee Resolution Proposal can be found in the 3:04 p.m. minutes of the same date.] CHAIRMAN FRED DYSON reconvened the House Health, Education and Social Services Standing Committee at 3:38 p.m. Members present were Representatives Dyson, Whitaker, Green, Morgan, Brice, Kemplen and Coghill. HB 224 - PERA: NOTICE BEFORE STRIKE CHAIRMAN DYSON announced the first order of business as House Bill No. 224, "An Act requiring a public employee labor organization representing employees of a school district, regional educational attendance area, or a state boarding school to give notice before striking." Number 0022 RANDY LORENZ, Researcher for Representative Vic Kohring, Alaska State Legislature, came forward to present the sponsor statement for HB 224. He stated that this bill was requested by the Anchorage School District. The bill amends the Public Employees Relation Act (PERA) to require the school district to receive a minimum of three work days advance notice before a strike can be called by the union representing the district. Prior notice was provided in two of the three strikes that have been called in the past few years. In January 1999 the Totem Association representing the support personnel called a strike after 10 p.m. on Thursday. The strike began the following morning, and the district had no time to provide sufficient notification to the parents. This bill does not prevent the union the ability from striking; it protects the children. It is a public safety issue, and he requested consideration of the bill. Number 0118 CHAIRMAN DYSON announced the committee would suspend the hearing on HB 224 to take testimony on HB 260. Number 0154 HB 260 - MEDICAL ASSISTANCE PROGRAM COVERAGE CHAIRMAN DYSON announced the next order of business as House Bill No. 260, "An Act relating to coverage of children and pregnant women under the medical assistance program; and providing for an effective date." Number 0165 REPRESENTATIVE COGHILL, sponsor, stated that his intention on HB 260 is purely to bring up the debate about how far the state wants to go on government health care. The people who run the Denali KidCare (DKC) program have done a wonderful job of implementing it. His argument is not with the Denali KidCare program. He has received a fair amount of phone calls, fax and e-mails. In amending AS 47.07.020, HB 260 takes care of some housekeeping items in the language. The main portion of the bill is on page 4, lines 5, 9 and 13 where he suggests the poverty level be reduced from 200 percent to 100 percent. Number 0375 REPRESENTATIVE COGHILL made a motion to adopt Amendment 1 which would change the poverty level to 133 percent on page 4, lines 5, 9 and 13. Number 0409 REPRESENTATIVE BRICE objected for purposes of debate. REPRESENTATIVE BRICE stated that he was pleased to see Representative Coghill willing to bring the number up to 133 percent given the fact that is the federal minimum. The state really has no ability to go below the federal minimum without once again flying in the face of the Medicaid program. He clarified that the 100 percent level would not be acceptable to the federal government and simply returning it back to the 133 percent level, which is where it was before, brings it back into compliance with the basic Medicaid rate. He asked for a response on that from the Department of Health and Social Services. Number 0498 KAREN PERDUE, Commissioner, Department of Health & Social Services, came forward to respond. She said Representative Brice was correct in the point he raised. She indicated that the bill was confusing the way it was drafted because to participate in the $400 million federal Medicaid program, they would have to provide care to pregnant women and certain children up to 133 percent so the amendment simply clarifies that it is in compliance with the federal Medicaid program, therefore making sure the state doesn't lose $400 million. However, the department already thought the bill said that. The affect of the amendment is simply clarification. REPRESENTATIVE BRICE withdrew his objection. Number 0565 CHAIRMAN DYSON asked if there was any further objection. There being none, Amendment 1 was adopted. REPRESENTATIVE COGHILL reiterated that his reason for introducing this is to raise the debate on how far the state wants to go in health care. He understands there was going to be a major cost to go under 133 percent. That is a good place to stop and say "Do we want to go any further." There is a demonstrated savings, but that is really not his argument as trying to find more money. He is not trying to fly in the face of many people in Alaska who have now signed up for this health care. It is true that it is an expansion, and he was not involved in the debate two years ago. He felt strongly when it came up, and he doesn't believe the state wants to go in this direction. He knows there are a lot of people who will testify that they have legitimate needs and the DKC program has supplied some of that need. He will not argue the fact that it has supplied the need. He will argue the philosophy on whether the state should even supply the need. One alternative was presented earlier today [The Alaska State Health Care Access Committee Resolution Proposal], and it is worthy of some consideration. "Instead of going into a dependency on government we need to start paying our way. There just has to be a better way." Number 0739 REPRESENTATIVE BRICE appreciates the fact that Representative Coghill supports the concept of the socialized medicine access to health care that was presented earlier. If that were the case in this state and every person had access to health care, then this bill would be okay. In terms of the philosophy, he asked if it is too far to provide people who are difficult to insure access to a health care pool or too far by providing state employees with health care. The state is self-insured, and it is a socialized program. He asked if they are going too far providing the legislature access to health care. Number 0843 PAMELA GUY came forward to testify. She is deaf and a single parent. She expressed concern because she is enrolled in the program and if it is eliminated, she will be sunk. She worries about possibly losing her home if she had to pay for insurance. She works 50 to 60 hours a week, and she has health insurance from her employer, but her two boys do not. She would like to keep Denali KidCare for her two boys because she doesn't know how she could afford other insurance for them. RENA SIMS came forward to orally interpret for Ms. Guy and added that she is a foster mom for six children. She has children from ages 19 to 22 who have four babies with severe problems like half a brain, blind, deaf or paralyzed, and they need the Denali KidCare program. The young parents work, go to school and are covered by Medicaid, but the babies are not covered in some instances. It would be a hardship for these young adults. There has to be a way to bridge over so they can make it. Number 1073 DOROTHY ARENSMAN, Superintendent, Southeast Island School District, testified from Thorne Bay via teleconference. She asked why anyone would deny children who needed health care. As a school superintendent with more than 30 years of dedicated service, she was excited for the children who are needy when Denali KidCare became available last spring. Southeast Island School District volunteered to distribute information and assist parents in completing the necessary paperwork. Since that time more than 175 children from Prince of Wales and surrounding islands have applied for Denali KidCare. With the State of Alaska paying only 28 cents for each dollar that is going to fund the health insurance for children and the other 72 cents that is spent is federal funds, she asked why they are reducing health care for children. The elimination of Denali KidCare would result in a great loss of federal funds for health care for Alaskan children. MS. ARENSMAN noted healthy Alaskan children result in savings. As a long-term special educator, she has helped parents seek funding for their disabled children. Too often the expense of educating special needs children could have been reduced if health care coverage had allowed them the services of well-baby, well-child care, adequate immunizations and early identification of care and problems through early detection. Many disabilities can be reduced through prenatal care of pregnant women. To reduce Denali KidCare is to increase special education dollars necessary to educate the special needs children and to increase the dollars for supporting them throughout their lives. It is her hope that Denali KidCare continues with its current success. Number 1168 NICKI SHELTON, Parents and Teachers of Hoonah, testified via teleconference from Hoonah. The Parent and Teachers of Hoonah are the Denali KidCare grantee that provides services in enrolling and assisting eligible families in Hoonah. She strongly urged the committee not to pass HB 260. Alaskan children's health depends upon their health insurance coverage. Denali KidCare has often been the primary factor that determines if children receive health care in Hoonah. There are many families in Hoonah either under-employed with seasonal or part-time jobs and neither carry health benefits. There are also some families being helped trying to move off Medicaid, but their children's health care is still a prime concern, and it is a consideration in making the change. Before Denali KidCare in March 1999, those families without insurance could simply not get health care even though they were working. It is not affordable from Hoonah. MS. SHELTON said her group has helped pregnant women apply for Denali KidCare and three of those mothers had no previous prenatal care before they enrolled in Denali KidCare. The $472 per year of state funds that Denali KidCare paid to cover each of those babies is money well spent to ensure that those babies will be healthy at birth. She speculated that without Denali KidCare, the cost and inconvenience of going to Juneau for prenatal care, it is very likely those babies would have been born without any health care at all. Losing Denali KidCare and the federal dollars that will go with it is not cost effective when compared to the increased costs for children who are ill or developmentally delayed due to the absence of health care. MS. SHELTON summarized that they need to have Denali KidCare so that working parents who do not have health benefits and are on modest incomes can support and afford health care for their kids. Alaska does not want to become the only state without a state child insurance program or it'll be funding remediation in the future years. She thanked the committee for supporting healthy Alaskan children. Number 1297 JAMES CULLEY, Chief Executive Officer and Administrator, Valdez Community Hospital, testified via teleconference from Valdez. He expressed opposition to the amended version of HB 260. The hospital very aggressively marketed Denali KidCare in Valdez. They made people aware at the hospital, the school system, at public health, Valdez Counseling Center and the medical clinic so eligible individuals were able to utilize this program. They were so successful that much of his knowledge on the success of Denali KidCare program is anecdotal rather than first hand. MR. CULLEY indicated there aren't as many sick children being seen in the emergency room as in the past. For many individuals who can't afford health care, the emergency room serves as their medical clinic. But now these children are being seen at the dentist office, the medical clinic and the optometrist. This translates into increased school attendance and better course work for children who were previously at risk. Valdez Community Hospital sponsors a visiting optometrist to Valdez, and he has noticed an increase of the number of young children that are being seen and getting glasses. The optometrist has indicated to Mr. Culley that many of these children are in the Denali KidCare program and among this group, he has found several that were probably unable to read the blackboard and a number who undoubtedly had difficulty. Unfortunately it is difficult, if not impossible, to determine the ultimate cost benefits of these students over the course of their academic career and beyond. MR. CULLEY also mentioned two pregnant women who were considered high risk for obtaining prenatal care and eventually had uneventful births and healthy babies that otherwise would have been extremely expensive. These expenses are not avoided, but they would have been borne by the hospital. The good thing about Denali KidCare is there is not another option for these monies other than health care. They are not seeing Denali KidCare being used for catastrophic events, rather it is being used for wellness. He cautioned it is much easier to show direct monies cut from a budget than it is to show the costs that were avoided by the expenditure of these same monies. Denali KidCare is an investment in the future and the future of children in Alaska. Number 1520 KELLIE TALBOT testified via teleconference from Bethel. She stated: "We all know or have children who are near and dear to our hearts. I would make the assumption that most of them are safely insured, and we can go to bed every evening and not have to worry about that. What is the difference between your children and our children here in the Delta. If you cut Denali KidCare you deny health services to our children. Health care is a right not a privilege. If Denali KidCare is cut, programs that are attempting to provide for better services will no longer exist. Thank you." Number 1573 MARY ANARUK, Vice President, Community Services, Yukon-Kuskokwim Health Corporation (YKHC), testified via teleconference from Bethel. She is in charge of the village based programs such as health aides, substance abuse counselors, home-care workers and so forth. A few years ago YKHC began to focus on a well-child program because access to health care is a major problem for most of the village residents. The health aides, which are the primary providers in the village, receive special training which enable them to do all the examinations and immunizations needed for children. One of the problems has always been enrollment and getting pregnant women to enroll on Medicaid in order to receive appropriate care. She admitted many of the village residents qualify for Medicaid, but there are also many residents who have low paying jobs with their respective village corporations, school districts or councils who do not qualify for Medicaid, and the Denali KidCare program has facilitated increased enrollment. MS. ANARUK mentioned another positive aspect has been the outreach benefit derived from this program. There has been an increased enrollment of 4 to 5 percent under Denali KidCare this past year and those are not the final figures. One of the more serious concerns in the region is a lack of adequate prenatal care. She agreed that prenatal care is the single, most cost-effective health care expenditure, ensures the best birth outcomes of the baby and is the best method of assuring a healthy start for the newborn. The people in the Yukon-Kuskokwim region have long wanted to bring health care as close to where the people live, and Denali KidCare has helped to reach more children and provide the preventative care that is needed. Considering the high statistics of domestic violence, suicide, child abuse and substance abuse in the region, decreasing any program reaching out to the entire state and to the children seems totally inappropriate. Number 1675 LAURA BAEZ, Mental Health Clinician, Yukon-Kuskokwim Health Corporation, testified via teleconference from Bethel. She stated that many of the children in the villages would be without health care if it wasn't for Denali KidCare. This service is needed and people are afraid it will increase the problems of high suicide rates and other mental health problems in the village if it is no longer available. Number 1768 MARY MESSNER, Public Health Nurse, Children with Special Needs Program, North Slope Borough, testified via teleconference from Barrow. She agrees with previous testimony on prenatal care and prevention. There are many children with neuro-disorders and have great needs. If the needs of these children are met early, they can grow up to be productive people. Some of these children need highly specialized services which cost a lot. It would be devastating to Barrow to cut the support for Denali KidCare in half. This is a terrible idea. Number 1837 KIMBERLY MACK, North Slope Borough Counseling Services, testified via teleconference from Barrow. She has been without health insurance during times in her life but she was lucky that nothing happened during that interim. She hoped that luck wasn't the only thing to rely on. Number 1882 ROBIN LUNETTA, Education Coordinator, Cordova Family Resource Center, testified via teleconference from Cordova. She testified to the importance of Denali KidCare in Cordova. Cordova is comprised mostly of fishing families with little or no insurance coverage, and this leaves many children and pregnant women without means to pay for essential health, dental and prenatal care. She has assisted several families in applying for Denali KidCare that were in desperate situations with nowhere else to turn. These families either had past medical expenses with no means to pay them or had upcoming unavoidable expenses due to pregnancy or ongoing treatment. Denali KidCare has also provided the families of Cordova with a consistent financial means to maintain good health by staying current on vaccinations and checkups. She is frustrated that such an important and needed program has fallen victim to the political arena. This is not a republican or democratic issue; it is a program greatly needed by Alaskans and its existence should not be determined by what political party is in office. If the Legislature is truly seeking to help Alaskans, it will vote to keep this program, not eliminate it. Please make the right decision for Alaskans not for political affiliation. Number 1953 PATRICIA BOILY testified via teleconference from Homer. She objected to Representative Coghill's proposed changes to Denali KidCare. In spite of what he claims, she finds him extremely mean spirited. In a state with 4.7 percent unemployment, she finds it significant that over 27 percent of those who are employed are city, borough, state or federal government workers, virtually all of whom have the best benefit packages imaginable. She believes the Legislators are included in the state benefits. There is at least another 19 percent of workers who are nonresidents. Most of those don't have their families in Alaska so that leaves about 49 percent of people employed in the private sector, many of whom have either no insurance at all or inadequate insurance because it is really hard for small businesses to find affordable health plans. MS. BOILY pointed out that Denali KidCare program meets the needs of middle income families that are struggling to make it. There is nothing like unforeseen medical bills to blow apart a budget and send someone entirely into debt. Without adequate health insurance coverage, working families put off going to family doctors for preventive health care and/or less serious illnesses. This puts them at risk of ending up in the emergency room or hospital with huge medical bills that can take months or years to pay. This affects the doctors and the hospitals to render services they either don't get paid for at all, or they extend credit for so long that it costs more to send out the bills than just to write off the balances. This is cost shifting of the most expensive kind. MS. BOILY noted that intervention can prevent more serious medical conditions from developing. The proposal to reduce the income qualifications to even 133 percent of the poverty level will eliminate a significant number of children and pregnant women from the Denali KidCare program. Representative Coghill claims it will save the state Medicaid office up to $19 million eventually, but she wondered how much of that savings will be shifted to the family practitioners and the hospitals in Alaska who will absorb the unpaid outpatient and inpatient costs. She found Representative Coghill's insert of the Wall Street Journal referring to a Heritage Foundation study to be offensive. She hates to see him maintain his conservative credentials on the back of those in the health care industry by victimizing the least powerful residents of the state. She believes it is the government's prime directive to supply the solution for people's health care needs, health, education and the well being of its citizens. With the federal government contributing 72 percent of the cost, it is a bargain for the State of Alaska to protect the health and welfare of its youngest citizens. They deserve to be treated like the assets they are. SCOTT WHEAT testified via teleconference from Homer. He referred to comments made by Representative Coghill and wondered if people think that the poor are held in poverty by their own fault or by their own choice and to what purpose. It seems like most folks want a hand up and not a hand out. The article from the Wall Street Journal talks about defining poverty and ownership of appliances seem to be some measurement of economic viability, and he feels that is a specious argument. He owns quite a few appliances that have come from garage sales, second, third and fourth hand, and some were free; that is not a good measurement. The ownership of a car in most of Alaska is not an option but a requirement to get to any sort of appointments. MR. WHEAT agreed that preventative health care proves to be cost effective. Prenatal and non-emergency room services and keeping people out of jail and API [Alaska Psychiatric Institute] proves to be cost effective. He wondered what the private sector provides to prime the pump of economic viability of our children and families. At this point he doesn't believe that the private sector does very much. He acknowledges some donated dental and some pro bono work by the doctors and lawyers, but he believes it is the government's function to coordinate that sort of improvement in people's lives. Denali KidCare is cost effective, and it would be a big mistake to cut the program. Number 2156 GEORGE MARTIN testified via teleconference from Kenai and expressed his support for HB 260. He stated it is time to make the decision in Alaska whether to continue down the road to socialism or to encourage independence while allowing for those with real needs. He pointed out the misconception in much of the testimony that HB 260 is about doing away with the Denali KidCare program, and that is not the case. It is talking about how rich someone needs to be before not qualifying for the program. He admitted he qualifies for this program but chooses to stand on his own feet and provide for his family's need. He could lower his pride and say it is owed to him. He doesn't choose to do that. In September 1999 the people of Alaska spoke loudly and clearly that they wanted to see a smaller, leaner government. They don't want to lose their permanent fund dividends (PFD), but they'd like to see government cut the cost. MR. MARTIN suggested this is a good example of one of the places cutting can be done. He believes those people in remote areas who testified strongly against HB 260 voted a loud no to protect that permanent fund dividend. He commented that people could take that PFD and spend it on health care. That $1700 would have gone a long way towards providing money for health insurance. The Denali KidCare at 200 percent covers a lot of people that really are doing quite well in their businesses and so forth. He urged the passage of HB 260. Number 2248 TOMMY THOMPSON testified via teleconference from Kenai. He spoke in support of HB 260. He commented many of the people who testified have a vested interest in being part of the program. He reminded people that no one is wanting to cut off medical care to the poor, but presently this covers families well into the middle class. A family of four is eligible if they have an income of $43,000 which not a bad income. This creates a dependency in people's minds on governmental handouts; not for folks who are really poverty stricken but for folks who spend their money someplace else. According to an article in The Anchorage Daily News yesterday, one third of this money is going to psychiatric care. If that figure is correct, it is a worrisome figure of what is going on out there where this much of this money is going to psychiatric care when there are physical cares that need to be met. Number 2325 SUSAN GIBSON testified via teleconference from Kenai. She expressed support for HB 260 because the number of expanded taxpayer funded entitlement programs is literally breaking the back of taxpayers. Whether an entitlement program is funded either by federal or state dollars, the result is the same. The burgeoning financial burden is borne on the backs of taxpayers. She has never heard any word of concern for the taxpayer who continually is turned to for a few more dollars out of every paycheck to support the entitlement programs that only serve to promote a mind set on the part of the entitlement recipients that it is someone else's duty to carry their load. She is someone else, and she has carried the financial responsibility of raising two children as a single parent on far less than $20,000 a year. She was well below the poverty level rate during the whole time she raised her children, but they did have excellent care. She didn't avail herself of any government entitlement, and therefore she raised two children who are adults now and have an instilled sense of self responsibility. That is a concept that certainly is not being fostered in people anymore. If this were a bill to eliminate Denali KidCare, she would not be in favor of that. She has heard from a lot of people who have a vested interest in job security by virtue of this entitlement program. She pointed out the other side because the taxpayers are just about at their breaking point. Number 2247 MARGARET WRIGHT, Public Health Nurse, testified via teleconference from Kotzebue. She reiterated that Denali KidCare is a program that takes advantage of incentives from the federal government to leverage state funds to help a large number of working poor families in the state. Denali KidCare offers poor working families health care for their children when they are not insured through their workplace. The children of the state are the most important resources and a worthy investment. Healthy children today are more likely to be healthy, productive adults who will contribute to the state in meaningful ways over the decades of their lives. MS. WRIGHT sees children daily who receive well-child care and immunizations, as well as children with special needs who receive treatment through Denali KidCare program. Since the implementation of Denali KidCare program, the list of eligible children has grown significantly. That means children who previously weren't getting well-child care were putting off sick care and were not going to the clinic for care just like other children who are insured. MS. WRIGHT noted many people believe that all Bush children are covered by IHS [Indian Health Services] so there is not a real need for an insurance program for these people out in the Bush. She agreed some children are IHS eligible but certainly not all of them. In many parts of the state no child is IHS eligible. Rural children need this program as much or maybe more than their urban cousins. This is the only insurance available for Bush families. When a child has a recurring ear infection or health care condition like a cleft lip and palate, and the child is uninsured, often the needed care is delayed or not received. The care is not just a car trip away for rural children. The needed health care services are a plane flight and hotel stay away at the very least. Certainly well-child checkups and immunization rates decline when children are not insured. If those same services can prevent much larger problems in the future, then Denali KidCare is a long-term investment. Certainly the children and working families deserve more investment than a few months at a low cost insurance program. Number 2123 MARCI SCHMIDT testified via teleconference from the Matanuska-Susitna (Mat-Su) Legislative Information Office (LIO). She thanked Representative Coghill for his work on child protection issues but disagreed with him on HB 260. She will be losing her health insurance soon because she can't afford $3500 per year for her children, and the Denali KidCare program has been an avenue of recourse in order to make sure her children are provided with adequate medical care. She urged the committee to look elsewhere for budget cuts. Number 2079 KELLI MAHONEY testified via teleconference from the Mat-Su LIO. She is a student at an adolescent drug treatment program, runs a program for pregnant teens and is a parent of five children who are not insured. It would have cost her $4,800 a year to insure her children with both parents were working. At the Turnaround Treatment Center, she sees many clients in treatment now because Denali KidCare provides for them. Some of the therapy they receive which ensures their successful completion of treatment is part of what is paid for, about two-thirds of those kids receive that money. They need to be in treatment at least three months or more in her opinion for significant treatment outcomes to occur. She has up to 70 pregnant teens per year in her program. Roughly four-fifths of those parents have to rely on Denali KidCare. MS. MAHONEY said she was never able to afford health care for her children. They turn to the state for solutions which is just why Representative Coghill thinks the citizens of Alaska are looking to the government for health care reform. The difference between their points of view is in outcome. If the desired outcome is to keep government out of health care provision and save money, then it is cut; if the desired outcome is to keep kids and pregnant women healthy and prevent further problems, then it is funded. If there is concern about Alaskans becoming dependent on Denali KidCare changes should be made in the insurance industry and that will be a tough battle for government to undertake. She urged the committee not to limit the poverty level unless it goes to 150 or 185 percent and requires a small co-pay. She asked how much hidden cost is there in ignoring health care for a young child over time and who will supply this need. She doesn't want to live in a state that doesn't want to provide health care for its working poor. Number 1994 JERI LANIER, Family Centered Services of Alaska, testified via teleconference from Fairbanks. One of the things that got her attention was a quote in the newspaper that Representative Dyson was concerned with the number of dollars being spent on mental health care through Denali KidCare. She pointed out in private health insurance there is usually little or no mental health coverage unless the Legislature wants to take up HB 149. The needs are being identified at younger ages which would account for a lot of it. Early detection of SED [seriously emotionally disturbed] kids or mentally ill children allows for intervention with a much higher treatment success rate. There is a difference between enabling a system and providing necessary services to children. Nobody is looking for a way to enable the state to save more and more on taxpayers' backs or rake in the big bucks. Health care doesn't get paid to the parents, it gets paid to the providers. Number 1919 ELAINE LANDON, Health Operations Administrator, Tanana Chiefs Conference Inc., testified via teleconference from Fairbanks. The Tanana Chiefs Conference is the primary health care provider for Alaska Natives in the Interior, and they take strong opposition to HB 260. Eliminating Denali KidCare jeopardizes gains made in public health by reducing access to preventative services for the working poor. A few years ago there was a measles outbreak in Anchorage which was attributed to low immunization rates. When budget cuts are to be made whether at the state or family level, prevention efforts are often sacrificed for more immediate needs. If you have to chose between fixing the car and immunizations for the kids, most people fix the car so they can continue to work. Unfunded federal mandates are often burdensome on states. However, Denali KidCare provides two ways for Alaskans to benefit. The tremendous return on the state's matching share of CHIP [Children's Health Insurance Plan] funds is a good investment in itself. Additionally a cost savings is realized when Indian Health Service beneficiaries are seen at tribal facilities. In these cases, the state pays nothing because the cost of care is reimbursed 100 percent by the federal government. Moreover, Denali KidCare revenue is often used to enhance programs funded primarily by the Indian Health Service and with token state funds. Mental health services are a good example. In parts of the Interior, Indian Health Service pays for approximately 75 percent of mental health services while the state only pays about 25 percent. Services are minimal yet the state is not meeting its obligation to provide services equitably statewide. These programs serve all Alaskans and just not tribal members. Number 1842 CHERYL KILGORE, Interior Neighborhood Health Clinic, testified via teleconference from Fairbanks. She said the clinic is virtually the sole agency in the Fairbanks North Star Borough that delivers primary health care services to eligible patients on a schedule of discount. Schedule of discount is based on household incomes and size. The number of patients they saw in 1998-1999 was 3,242, and 47 percent were living at or below 200 percent of federal poverty guidelines. Thirteen percent didn't have health insurance and the overwhelming majority of those individuals were working. Seventeen percent of those individuals have Medicaid. With Denali KidCare, they have seen an increase to about 21 percent. In terms of total numbers, it doesn't represent a huge increase for the budget, but it does represent a very important investment in the health care for children and pregnant women. Health care costs money, but the investment and the money provided with Denali KidCare also saves money. It saves money by providing prevention services and screening services to children and pregnant women. As a society, however it is defined, government, local state or national ends up picking up the cost of health care and the lack of health care access. If people do not have access to health care, they are going to wait until they have a complication and then receive emergency care which will be more expensive and will be borne by the individual with insurance. Denali KidCare is a cost effective prevention. ERIN CASTLE testified via teleconference from Anchorage. Six years ago her daughter was ill and almost died. She was encouraged not to admit her daughter to the hospital because the family didn't have health insurance. She was working full time at the time, and her company did not provide insurance. With the help and kindness of others, her family had people come into their home and take care of the daughter, and the doctor provided his services free of charge. Over the years she has become in debt by paying for her health care. Denali KidCare program has given her the ability to give her daughter good health care and allowed her to pay on some of her debts which will take a long time to pay off. She does not agree with this bill. People who are receiving services under AFDC [Aid to Families with Dependent Children] that do get off the program, get off because Denali KidCare is provided. If this bill goes through, she believes people will go back on AFDC. More money will be spent providing for them on a full-time basis than letting them get out into the real world and work and have the health care that they are given. Number 1652 VIANA STAM testified via teleconference from Anchorage. She is a college graduate and works full-time in Alaska as does her husband, but they have no insurance. They have two children, one has a disability, and she is pregnant with their third. They have always had medical insurance, but her husband recently left military service, and they have none nor can they afford it. Health insurance would cost them $1000 per month, so using the permanent fund dividend wouldn't go far. The Denali KidCare helps the working class children and pregnant women with affordable health care. Before she was on the prenatal program, she had to seek medical care, and the expenses were outrageous. She was misdiagnosed, and private physicians were skeptical or refused to see her because she had no medical insurance. If these children are phased out, this is what they are going to be going through. Pregnant women will not be receiving prenatal care, and the infant and mother mortality rate in Alaska will rise. Many families use the Denali KidCare program on a temporary basis until they can find employment with health insurance or some other means of accessing health insurance. Please do not take away this preventive care program away from the children of working class families. JENNIFER DEFORD testified via teleconference from Anchorage. She urged the committee to vote down HB 260. Do not place the burden of balancing the state's budget on the shoulders of the children. Denali KidCare is a highly efficient and effective program. The federal government pays for over 70 percent of the program. The remainder of the program should be funded by the federal government's increased Medicaid reimbursement to the state by a lower welfare roll and by the tobacco settlement. Of the $25 million per year that the state is receiving from the tobacco settlement, only $1.4 million is designated for tobacco awareness and cessation programs. The entire amount should be used for health programs. This was the reason the state received the money in the first place. MS. DEFORD said while she and her husband have always worked but never been on public assistance, they have lived without health insurance. One of the times they were without health insurance was when they started their own company. They couldn't afford medical insurance for themselves much less their ten employees. It was a very scary situation. Each time when one of the children got sick, they wondered how much the doctor's bill would cut into their tight budget. They gave up their business in part because of the lack of medical insurance. Therefore, she believes that eliminating Denali KidCare will hurt economic development. The elimination of Denali KidCare will also hurt welfare reform. A person who now sits home and receives a variety of state-supported benefits will have no incentive to go to work. A single parent in this situation may have to spend $800 per month on child care and another $800 a month for family health insurance. MS. DEFORD asked where the benefit of working is. Many of the jobs people hold are low paying and lack fringe benefits. Alaska is the only state economy where growth in state product has dropped in the past five years. Per capita personal income dropped from the highest in the country to below average. Alaska's economy is not great. Denali KidCare families are taxpayers. She believes that 200 percent is a good level because health care is extremely expensive, and health care may be the only thing one of these families cannot afford. If they have a pre-existing condition, no health insurance company is going to pick them up. She believes health insurance is an important issue. Number 1388 NORMA PERKINS, Director of Business Services, SEARHC [Southeast Alaska Regional Health Consortium] Sitka, came forward to testify. She noted that SEARHC is made up of 20 tribal communities throughout southeast Alaska. She said SEARHC does compact with the federal government to provide Indian Health Services in southeast Alaska. In 1999 SEARHC saw Denali KidCare as an opportunity to increase enrollment for children and pregnant women who had financial barriers in accessing health care delivery systems especially in the rural and hard to reach areas. A quick comparative analysis from March to September of 1998 shows there were 393 visits in the pediatric/ambulatory unit. In that same time frame in 1999, there was an increase of 2,223 visits. This is a tremendous impact. She reiterated that tribal beneficiaries who are enrolled under Denali KidCare and are seen at the tribal facility, the federal Medicaid program reimburses the facilities at 100 percent. It literally costs the State of Alaska nothing when the tribal members are seen. She expressed shock and surprise to hear that the legislature wants to eliminate a very vital program for children and pregnant women. Number 1231 PATRICIA MACPIKE, Children's Coordinator, Sitka Mental Health Clinic, testified via teleconference from Sitka. She expressed dismay that the committee is discussing discontinuing vitally needed medical insurance and assistance for the children of Alaska. In funding Denali KidCare, the state is investing in prevention. She works with 14 severely emotionally disturbed children who would not be able to receive therapeutic services and interventions without the Denali KidCare program. Without these services, many of these children would be required to be institutionalized at some point in their young lives. These are children who at nine years old have violent outbursts in their schools, home and community. She asked if the committee wants to see how these children will act at the age of 15 without any intervention. Research from many fields shows the earlier the intervention, the higher the success rate for children. Children who carry weapons to school and shoot their peers are emotionally disturbed. She urged the committee to support the Denali KidCare program. By supporting the program, they are not only investing in the children, but all Alaskans. Please maintain a fair level of funding. Number 1152 JEAN FRANK testified via teleconference from Sitka. She stated no dentist in Sitka serves Denali KidCare kids. She wondered how the passage of this bill will serve the needs of those kids. Number 1120 COMMISSIONER PERDUE spoke both as Commissioner of Health & Social Services and as a person who has devoted her career to trying to figure out health care financing in Alaska and how to improve it. Whether a child has health insurance in this state almost entirely revolves around the profession the parent has chosen. That is the inequity the committee is hearing. If people are self-employed, or if they work in the resource economy as fishers, loggers, seasonally, part-time, they have difficulty accessing the private health care insurance market. If the parents work for a large company or large public entity, such as the state of Alaska, they can access health insurance. Just because someone is working in a profession where it is not efficient or easy for them to access the health care market, she does not believe that means their children are not entitled to some kind of access to health insurance. COMMISSIONER PERDUE has served on four health care task forces in her professional career in Alaska trying to solve this problem. No one has solved it. No private sector solution has come forward. No other kind of governmental solution has been acceptable to the issue of disparity. It would be a mistake to think that solution is easy. The state is not willing to mandate that private employers offer this kind of coverage, nor willing to turn over the health care dollars to a foundation or a single payer. Most employers are not willing to do that. A lot of smart people in Alaska and across the nation have looked at this issue over a long period of time. Congress finally decided to fill some of these holes two years ago when they enacted the CHIP program. It was a bipartisan reform; it was an incremental reform. It did not solve all the health care financing problems of this nation, but it did say that children and pregnant women should have some kind of targeted access to health care coverage no matter where their parents worked. That is where they are trying to straighten out the inequity in the market. COMMISSIONER PERDUE noted that Medicaid was called socialistic when it began in the 1960s. Denali KidCare will have its first birthday March 1. People don't like the fact that government changes its mind. This program needs to be given a chance to settle out. Some 6,000 private doctors and hospitals as well as the people using the program need to see some assurance there. The Legislature enacted this law two years ago, and she believes it needs time to make it work. REPRESENTATIVE BRICE said Denali KidCare was a reinvestment of dollars saved by changes in the federal Medicaid matching program. The change was predicated on the fact that those dollars would be invested into children's health care services. This is the year the congressional delegation will have that debate again. If the Administration and Congress find that Alaska is backing off on its commitment to reinvesting those dollars, he asked what is the likelihood of getting that matching rate taken away and what would the cost be to the state for that. COMMISSIONER PERDUE replied a lot has been said about the instability of the program from the federal government funding it. In actual fact, the federal government authorized their portion of the money for ten years. Alaska paid for its match through the savings from the Medicaid match rate change which is $30 million. The state invested a small portion of that in this program. Senator Murkowski addressed the Legislature recently and indicated that he wanted a full accounting of what the state was doing with the match rate savings because he is having to back to the Senate Finance Committee and get that reauthorized this year. The State of Alaska would lose $30 million if the match rate were not reauthorized, a small portion of which has been put into Denali KidCare. Number 0713 PAT AAMODT, Arctic Slope Native Association, Member, Barrow Tribal Council, came forward to testify. She urged the committee to continue the Denali KidCare as it is. This is one investment that the state has made where for $2 million per year from the general fund, the state gets about $7 million, and that is quite a bit of money. She urged the committee to consider that and the employment opportunities it provides for people who are professionals, but mostly consider it on behalf of the children in her region as well as the whole state of Alaska. The people in the Barrow region, in addition to the statewide organizations such as ANTHC [Alaska Native Tribal Health Consortium] and ANHB [Alaska Native Health Board], fully support this because it benefits all children who are in need. The cost of living is high, and the 200 percent above the poverty level fits well for the state. She encouraged the committee to reconsider and know that this affects a lot of families in her region where unemployment is high, and there are pockets of unemployment statewide. Number 0575 DOROTHY BUNTI REED came forward to testify. She spoke against HB 260 for many of the same reasons already heard. She read this portion of the sponsor statement: "First, it brings the definition of poverty back to the basic assumption that a family is poor if they do not have the resources to provide for essential needs such as food, clothing and shelter." She said that the $19,000 that a family of four is defined at 133 percent of the poverty level would not provide those things in this state. She read another portion of the sponsor statement: "Second, it tell the federal government that we disapprove of its move to instill socialized medicine as status quo..." She suggested that this tells the federal government that Alaska doesn't care about its children. She believes that the logic of the argument in the last paragraph on that page is also flawed. MS. REED said she comes from a family of two working parents, both of whom had health insurance. They were visited by a very catastrophic medical condition that "maxed out" their insurance. It is easy to "max" it out when a life flight to Seattle costs $30,000; her family has had three such life flights. It is easy to "max" it out when one parent has to stay home to care for a disabled child as a result of an accident. Her family was fortunate, or not, that her son's disability was such that he was able to access disabled Medicaid funds. Her other children didn't have that luxury. When she found herself owing over a half-million dollars in medical fees, she doesn't believe she could have found someone to give her a loan to make payments for the rest of her life. Her family sold their home to try to make those payments. In her family the parents worked opposing schedules to try to make those payments. Her family declared bankruptcy; had Denali KidCare been there at that time, it might have been an option to prevent that. She and her husband still work; neither of them quit. She and her husband still have health insurance albeit with new employers who had them wait for coverage for their son for a certain waiting period. Her other son did get Denali KidCare for a time but when she was made eligible for insurance and could purchase it at a reasonable rate, she purchased the insurance, thus making her ineligible unless her level of income goes below poverty level. Please consider that a loan program is not realistic given real people and real medical needs and consider that when making your decision. Number 0328 LARAINE DERR, Executive Director, Alaska State Hospital and Nursing Home Association (ASHNHA), came forward to testify. She noted that Mr. Culley from the hospital in Valdez virtually testified from the hospital standpoint. She indicated that ASHNHA opposes HB 260. Number 0275 JEROME SELBY, Providence Health System in Alaska, came forward to testify. He urged the committee to keep the income level eligibility guidelines for Denali KidCare at the 200 percent of poverty level. It is his understanding that dropping from 200 to 100 percent would cause about 7,000 children and about 800 pregnant women currently enrolled to lose their benefits. It would also mean Alaska is the only state not offering health insurance to more children, and that is not a good idea. Research has clearly shown that children with health insurance see the doctor for regular well-baby checkups, they receive immunizations, and they are more likely to have health problems discovered early, thus saving millions of dollars in total health care. Denali KidCare does exactly that by providing health insurance to more lower income working families who for whatever reason are uninsured. According to recent data reported by the Anchorage Access to Health Care Coalition, about 38,000 people in Anchorage have no health insurance and more than two-thirds of those work. In Alaska the estimated number of children without insurance was about 12,000. That was a three-year enrollment goal for the Denali KidCare program. However, the need is apparently greater since more than 12,000 children were enrolled in less than one year. MR. SELBY stated that since Denali KidCare started, parents don't use the emergency room as frequently for primary care, and fewer children are seen for more costly treatment resulting from delays in seeing a doctor. This is cost-effective health care delivery under this program. One way to ensure a healthy birth is to provide pregnant women with prenatal care. This too is the very best cost-effective health care expenditure made. He submits the fact that everyone is going to help pay for this publicly whether admitted or not. The difference is, through the Denali KidCare program, it is known how much is spent, who the recipient is and a program is defined. When the uninsured people move over into uncompensated care, the cost won't go away. These people still aren't going to be able to pay, but everyone else is going to pay indirectly. When paying indirectly, there is no idea what it costs and there is no way of trying to control or be involved in determining that expense. It will cost more because these people won't come in for care until much later in the development of a disease. Society will pay more if this program is dropped. He urged the committee to consider that. It is far wiser to go with this defined program, get early intervention and take better care of people. If the program is kept at the 200 percent of poverty level, there will be healthier children and therefore healthier Alaskans. TAPE 00-10, SIDE A Number 0029 LINCOLN BEAN, Alaska Native Health Board, came forward to testify and greeted the committee in Tlingit and then he said, "Honorable leaders, respectful friends, ladies and gentlemen, it is an honor to be here to testify on behalf of the Denali KidCare." He raised this issue with Representative Coghill to preserve this service that is so vital and important to communities that may have 80 percent unemployment. "How could we be talking about taking a service for a small child. This isn't for everyone. It's for those who are in need, and that's how we look at it. I support the Denali KidCare and I oppose HB 260. Thank you." Number 0145 MORISSA WILLIAMS came forward to testify. She introduced her son Noah who is a Denali KidCare kid. She said they are incredibly grateful for the program. She mentioned that she had spoken to Representative Coghill and believes he is sincere in his regard to children, they just differ on what they each believe the children need in the long term. The Denali KidCare program is vital and urged the committee to keep it. She left her written testimony with committee members. Number 0248 WILSON JUSTIN, Health Director, Mount Sanford Tribal Consortium, Member, Alaska Native Health Board, came forward to testify. He is sympathetic to what he has heard about not ever using medical facilities by people who are self-sufficient. His family was raised isolated and in a small business environment, and they fortunately never had to worry about medical bills. He regards that as a blessing, and that does not give him the right to judge the level of need of those who are less fortunate. He read the following testimony: Mr. Chairman, members of the Committee. My name is Wilson Justin. I am the Health Director for the Mount Sanford Tribal Consortium and a member of the Alaska Native Health Board. The Alaska Native Health Board appreciates the opportunity to provide testimony regarding HB 260. We urge that you do not move this measure. The bill will result in 6,696 children and 780 pregnant women losing access to Medicaid. If Medicaid is lost, most of these children will receive health care only after they are sick, and, all too often, only when the child is brought to a hospital emergency room. such care is most expensive in dollars and loss of quality of life. Follow-up is lost; prevention does not occur. School days are missed and parents miss work to care for their sick children. I know that some of you are wondering why the Alaska Native Health Board cares about this issue since our member health providers receive funding from IHS [Indian Health Services.] First, as health providers we cannot sit quietly by while any child loses access to health care. It is not good for our communities or our state. Secondly, the assumption that Native children and families are unaffected is simply wrong. The IHS direct appropriations, based on recent federal studies, provide only about 25 percent of needed funds to provide care for Alaska Natives and American Indians. Congress relies on the Medicaid program to supplement the IHS direct appropriations. It authorizes the state to recover 100 percent of its Medicaid payments to IHS and tribal health providers. However, payment is only made for services to eligible children. If this bill is enacted into law, no reimbursement will be available for the services we provide to approximately 2,200 Alaska Native children whose family income is between 100 percent and 200 percent of poverty. This means that our very limited direct funding is stretched even more thinly. Village visits by health professions will diminish, more children will become ill unnecessarily, and resources will be diverted from prevention to acute care. This is the poorest use of limited resources. We know that state resources are limited, however this is not where cuts should occur. This cut will make Alaska the only state in the United States that is not implementing the federal Children's Health Insurance Program. It will reduce federal spending in Alaska by more than $7 million in the first year and $12 million in the second year. It will lead to increased uncompensated emergency room costs. Most important, it will lead to increased preventable health problems and inevitably to some preventable deaths. We urge each of you to cast your vote in support of Alaska's most valuable natural resource, our children; vote "do not pass" on HB 260. Number 0573 SHERRY OLSON, Clinical Social Worker, came forward to testify. She testified against HB 260. Denali KidCare benefits Alaska children. She understands the worry of this program fostering dependency, but this is not an issue of dependency. Parents who qualify for Denali KidCare are working now, and they will continue to work. The issue is whether or not their children can get appropriate and needed health care, including mental health care. She cited two examples of children with complex mental health needs through this program. One boy was an aggressive kindergartner last year who needed daily intervention to ensure his safety and other students' safety. He would stab children with pencils, strike out at teachers, throw furniture, scream inconsolably and so on. With comprehensive services, his behavior has turned around in one year. He has had one aggressive incident in the last 90 days, as opposed to daily aggressive incidents, and his services are being decreased. Both of his parents work, but they cannot afford health care. He is succeeding as a first grader and is doing well. MS. OLSON told of another boy, who at the age of 11, was setting fires, burglarizing and doing drugs and alcohol. He was on his way to McLaughlin Youth Center where the cost of treatment is expensive. Comprehensive services have again turned him around. He is succeeding in high school and has had no legal involvement for over a year. His mother is a professional single mom who is raising five children. Denali KidCare has benefited these two children mentioned and many others. Please do not damage this resource to this state. Early intervention is cheaper each time it is used. Number 0715 MS. LARE' came forward to testify. She is a grandparent from Anchorage and a long time advocate for young children and their families. She told the committee about a family who had problems during a pregnancy. The family sold their house to pay for the care of the expectant mother. Every month it got worse, but the child now is very healthy, as are the mom and dad. She thanked the committee for Denali KidCare on behalf of one family. WALTER MAJOROS, Executive Director, Alaska Mental Health Board (AMHB), came forward to testify. He expressed strong opposition to HB 260 on behalf of the AMHB. The AMHB remains strong advocates for Denali KidCare. He pointed out that the program is critical to children's mental health in preventing more serious mental health conditions from developing later on and for serving children who have more serious emotional disorders. The program helps children and families live more successfully and independently in the community. It helps parents from losing custody of their children. The AMHB board has heard testimony from parents who had to give up custody of their children in order to enroll them in the Medicaid program. It helps prevent involvement with the juvenile justice system; it helps prevent institutionalization and higher cost services. A significant amount of the expenditures go to mental health services, and this is necessary and appropriate. MR. MAJOROS noted Denali KidCare is seen as an issue of a basic support program. About 120 organizations across the state have gotten together since last session when HB 161 was being considered to oppose to that bill. Those organizations believe that basic support programs such as Medicaid, the adult public assistance, and the Alaska temporary assistance program provide needy Alaskans with consistent means to meet their fundamental living expenses such as food, shelter, medical care and transportation. Denali KidCare is a critical part of the safety net for vulnerable Alaskans. He urged the committee to vote no on HB 260. CHAIRMAN DYSON announced the committee would continue hearing HB 260 next Tuesday, February 15. [HB 260 was heard and held.] ADJOURNMENT Number 0940 There being no further business before the committee, the House Health, Education and Social Services Committee meeting was adjourned at 5:28 p.m.