Longevity Bonus, SeniorCare may not make it past legislators

Alaka Legislature

Posted: Tuesday, February 27, 2007

Gov. Sarah Palin’s campaign promise to reinstate the Longevity Bonus Program and her proposal to extend the SeniorCare Program another five years could face opposition in the Legislature, especially considering she also wants to cut at least $150 million from the state budget, Kenai Peninsula state lawmakers said this week.

A big budget question, said Sen. Tom Wagoner, R-Kenai, is exactly how many ultimately could become eligible should the bonus program be refunded? There might not be a simple answer, he said.

In 1993, rising costs led to a law phasing out bonus payments, and by 1997, new seniors were no longer being added to the program. Payments continued to a shrinking number of seniors until Gov. Frank Murkowski’s decision to end funding altogether. In its final payout in August 2003, the program issued $250 checks to about 17,560 seniors.

This year, two new bills would renew funding for the program, though they currently name no specific amount. Another pair of bills would require the state to create application forms to be used by seniors who were eligible in 2003.

Therein lies a potential legal problem, according to Wagoner. There could be arguments for broadening eligibility beyond the 2003 recipients.

“I don’t think she (Palin) will be able to re-establish the Longevity Bonus without expanding it to a much larger base than were receiving it (under Murkowski),” Wagoner said, adding that if eligibility were targeted by a lawsuit, “I don’t think it would stand up in court.”

How many potentially? According to Alaska Permanent Fund dividend data, there were 44,123 Alaskans over the age of 65 in 2006.

Meanwhile, through House Bill 148 and its companion Senate Bill 90, Palin seeks a five-year extension to the SeniorCare Program, which since 2003 has made $120 monthly cash payments to about 7,000 low-income seniors, roughly 16 percent of Alaska senior population.

These bills also would eliminate a senior prescription drug assistance benefit within SeniorCare primarily because so few people have chosen to sign up — 4,000 or so were expected to take advantage, but only about 140 have. A Department of Health and Social Services’ survey of seniors showed many were unaware of the state’s drug assistance program, or were confused by the concurrent startup of the Medicare Part D Program.

More seniors would be eligible for the SeniorCare payments under Palin’s revisions. She has proposed raising the income eligibility line to 135 percent of the annual federal poverty guidelines for Alaska for 2007, instead of 2005 where the line is frozen.

Currently, single seniors with income exceeding $16,133 a year and couples with income over $21,641 a year are ineligible. According to DHSS, simple cost-of-living adjustments in retirement and pension plans, like Social Security, have actually driven some low-income seniors beyond the 2005 eligibility limit.

Adopting 2007 levels would mean single seniors with incomes up to $17,240 a year, or for couples up to $23,112, would be eligible for the monthly payments. Under Palin’s bills income limits would rise each year with annual increases in the federal poverty guidelines for Alaska. Liquid asset levels would remain at $6,000 for an individual and $9,000 for couples.

Seniors would have to make a choice whether to enroll in the SeniorCare or Longevity Bonus program, if the latter is funded by the Legislature. Palin’s bills do not allow participation in both programs. Technically, under the current law, seniors are eligible for both, but since the bonus program is not funded, there are no payments.

The department estimates 5,000 seniors would remain with the SeniorCare Program. The rest would likely move to the Longevity Bonus Program.

Rep. Mike Chenault said he personally likes the SeniorCare Program because it is based on need and focuses aid at those facing real financial hardships. He indicated that extending it five more years, as Palin wishes, would be acceptable.

“She may be on the right road,” Chenault said, adding that the drug benefit portion probably should be eliminated.

Bringing back the Longevity Bonus is another matter. Like Wagoner, Chenault worries it could prove too costly. But an alternative exists, Chenault said.

“There is some talk about taking some of that money and instead of funding the Longevity Bonus, it would go into the SeniorCare Program,” he commented.

Rep. Kurt Olson, R-Soldotna, said he wants more information about the Longevity Bonus proposal before deciding how to vote. A lot will depend on Gov. Palin’s revised budget, due out early next month, in which she is expected to seek significant spending cuts — $168 million, Olson said, according to the latest estimates he’s seen.

“The budget committees haven’t seen anything adding up to $168 million,” he said.

Where those cuts are made could influence his vote on SeniorCare and Longevity Bonus, Olson said.

Rep. Paul Seaton, R-Homer, was similarly concerned about cost. A reinstated bonus program would be far more costly than the current SeniorCare Program. It’s simply a matter of numbers.

“You’re talking about a large expansion of the program to people who don’t now meet the SeniorCare criteria,” he said.

As for cutting the drug benefit, Seaton said the program was “a good try,” but cutting it makes sense.

While lawmakers get set to wrangle over these issues, back home many seniors worry that the benefit landscape may be changing.

“I’m concerned about that loss of $120 per month to seniors,” said Judy Warren, director of the Sterling Senior Citizens Center. “By taking that away, I’m not sure you are doing them a service.”

Warren said many seniors are in nursing homes or receive in-home care, programs they might not be able to afford without the SeniorCare payments. Seniors in Sterling are in “a wait-and-see mode,” she said. “It’s a scary world for them right now.”

Jan Fena, director of the Soldotna Senior Citizens Center, said reintroducing the Longevity Bonus Program would be of real benefit to seniors who saw it taken away.

Regarding the SeniorCare Program and Palin’s proposals, Fena applauded the intent to serve seniors, calling it excellent and “a good vision.” She would retain the drug benefit program, however. Of the few who apparently use it, some are in the Soldotna area, she said.

“Folks on that program really rely on it,” she said.

Fena also called the choice seniors would be required to make between the two programs “fair and equitable.”

Fred Lau, director of Homer Senior Citizens Inc., said that based on the position of Homer seniors in the past, he expects many would favor reinstating the Longevity Bonus Program.

“When the bonus program went away, there was a real uproar,” he said. “There were seniors here who suffered. The new program (SeniorCare) did not cover the same amount.”

Hal Spence can be reached at harold.spence@peninsulaclarion.com.

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