SENATE HEALTH, EDUCATION AND SOCIAL SERVICES COMMITTEE February 2, 1999 3:37 p.m. MEMBERS PRESENT Senator Mike Miller, Chairman Senator Pete Kelly, Vice-Chairman Senator Gary Wilken Senator Drue Pearce MEMBERS ABSENT Senator Kim Elton COMMITTEE CALENDAR Briefing on Long-Term Health Care PREVIOUS SENATE COMMITTEE ACTION None WITNESS REGISTER Representative Con Bunde Alaska State Capitol Juneau, Alaska 99801-1182 Senator Gary Wilken Alaska State Capitol Juneau, Alaska 99801-1182 ACTION NARRATIVE TAPE 99-02, SIDE A Number 001 CHAIRMAN MILLER called the Senate Health, Education and Social Services (HESS) Committee to order at 3:37 p.m. and announced that Representative Bunde would begin the presentation on long-term health care. REPRESENTATIVE BUNDE stated that he and Co-Chair Wilken appreciated the opportunity to present the findings and recommendations of the Task Force on Long-Term Health Care. The task force was established by SCR 11 and charged with developing an equitable plan for providing an actuarially sound and affordable long-term care option for seniors. Long-term care should be expanded to cover everyone in the disabled community and not just seniors. Between 1990 and 1996, Alaska experienced a 42% increase in the 65-and- older age group, exceeding all expectations. In 1996, the State provided long-term care at a cost of $73 million. By the year 2,015, long-term care would cost the State $372 million, and with the budget crisis we're currently facing, this is not a tenable situation. Our senior population will quadruple in the next 16 years. The number of wage earners are decreasing at the same time the number of retirees are increasing, adding to our challenge. Long-term care is very expensive, costing from $100 to $300 per day. For example, the down-payment for a colleague's mother to get in the door of a retirement home was %50,000. REPRESENTATIVE BUNDE asked who should pay for long-term health care: the federal government, the state government, private individuals, or a combination of these? Medicare doesn't pay for long-term care. Medicaid will pay 80% of long-term care but it requires people to impoverish themselves to qualify, disinherit their children and disenfranchise their spouse. This is not a viable option. There is public denial of long-term health care needs, and fewer than 50% of state retirees are buying the long- term care option on their medical insurance. The long-term option is easy and not very expensive if it's spread out over a large group of people, or if it begins early. New York Life has told us that if everyone in the state age 25 were involved in a long-term health care plan, it would probably cost only $25 a month per person. We don't want a system like social security where the youth are paying for the long-term care of the elderly, with no hope that when they become elderly there will be anyone there to pay for them. REPRESENTATIVE BUNDE stated the task force's recommendations will not solve the problem, but will slow its growth and its impact on the state's budget. That's why the task force is here briefing the committee and asking for its help with more extensive research and analysis to come up with a single funding plan or a group of funding alternatives to address this problem. The task force was created by resolution, and "is sunsetted out" of existence as of this moment. He concluded by recommending the creation of a legislative oversight committee to continue working on the issue, thanking the public members of the task force, and acknowledging the work of Senator Wilken, Ms. Sheila Peterson, and Ms. Joyanna Geisler, a task force member present at the briefing. SENATOR WILKEN expressed his commitment to continue working with the long-term health care issue because the discussions and report findings brought to light the tremendous problem this will be if Alaskans don't address the problem of aging for this generation and those that follow. He commended the report to the committee, and briefly discussed its format. The table of contents includes five different sections and 31 specific recommendations. The task force tried to bring forth the concept that we are responsible for our own actions, and we don't have a State "fix" for this. SENATOR WILKEN emphasized that one recommendation (Request No. 13) would provide for long-term care services for the elderly in the home and the community for as long as possible before it becomes necessary to institutionalize. REPRESENTATIVE BUNDE interjected that this would be the most humane, least expensive, and most productive way to deal with long-term health care. SENATOR WILKEN referred the committee to the purple tab on page 75 of the report that highlights three pages of requests. Numbers 3, 7, 13 and 21 all speak to legislation that he would like the HESS Committee to consider and introduce. Chairman Miller has a sponsor statement for each of the four pieces of legislation. These speak to the disclosure of licensing reports to the public, protecting vulnerable adults, certificate of need for nursing homes, and the establishment of community-based services. SENATOR WILKEN emphasized the need to implement Request No. 31, which would create a new task force to continue the review and monitoring of long-term care in Alaska. The task force would function as an oversight committee to ensure that these issues and others have been carried out. SENATOR WILKEN remarked, "This report shouldn't sit on the shelf, we need follow-through." REPRESENTATIVE BUNDE commented that he'd like the Division of Insurance to address the long-term health care insurance options that are currently available. Whatever is available to state retirees should be available to all citizens. We need the entire Legislature's help in creating an actuarially-sound plan, or combination of plans that encourage, allow or force participation. We may need to pay for it long before we need long-term health care. He mentioned the issue of the Pioneer Home public policy change from a retirement community to an intensive care unit for Alzheimer patients. REPRESENTATIVE BUNDE noted in Anchorage there's dissension as to whether the Pioneer Home residents are receiving adequate service. CHAIRMAN MILLER asked Representative Bunde to clarify the age 25, $25 per month insurance he mentioned earlier, asking if that refers to term insurance. REPRESENTATIVE BUNDE replied his understanding is that at age 65, you'd still be paying $25 per month. SENATOR WILKEN stated that he was surprised by the level of interest in the issue by the public, as well as nonprofits and the Department of Administration and the Alaska Commission on Aging. The interest gave Senator Sharp the original impetus to introduce the joint resolution. SENATOR WILKEN concluded by offering to continue with the effort, and to answer questions. SENATOR PEARCE asked if the task force will draft the requested legislation and ask the Rules Committee to put it in. SENATOR WILKEN replied that the legislation has been drafted and the sponsor statement is essentially done. He asked the HESS Committee to sponsor and introduce it. CHAIRMAN MILLER stated that the Assisted Living Homes study will be released soon. The issues for Assisted Living Homes, though different, can be dovetailed with the long-term health care issues and recommendations. He looks forward to working on both issues. CHAIRMAN MILLER stated he will be happy to introduce legislation on behalf of the long-term task force, through the HESS Committee. SENATOR WILKEN shared that he asked for a quote from his insurance agent for himself, a 53-year-old with relatively good health. A "Cadillac plan" of $200/day, inflation-proofed, would cost $2470 per year if he entered a retirement home tomorrow and remained for 30 years. As a frame of reference, SENATOR WILKEN stated that you can project what it might cost 20 years from now for an average Alaskan looking for long-term care. REPRESENTATIVE BUNDE brought up other concerns. Personal care attendants who provide essential services are paid low wages and have no career ladder. We need to continue to address the issue of the moratorium on nursing homes because of the cost problems, and decide if it is now time to authorize more nursing homes, and in what proportion to home-based care. CHAIRMAN MILLER thanked the members of the task force for their work. He stated that long-term health care is not always a pleasant situation but one that we have to address as a state, and an issue that affects everyone, including himself and his aging parent. With no further business to come before the committee, CHAIRMAN MILLER adjourned at 4:03 p.m.