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Committee spares Medicaid funds

House finance group nixes nearly $90 million cut to health care program

Posted: Wednesday, March 31, 2004

JUNEAU The House Finance Com-mittee restored money previously cut by a subcommittee in the proposed state budget for Medicaid, a program that provides health care to low-income Alaskans.

The panel also adopted language prohibiting the Alaska Permanent Fund Corp. from spending money to advocate for a proposed constitutional amendment dealing with the fund.

A Finance Committee subcommittee in February had proposed cutting almost $90 million in state and federal Medicaid money from the state operating budget for fiscal year 2005, which starts July 1.

Janet Clarke of the Department of Health and Social Services had said a cut of that magnitude could result in the state no longer paying for eyeglasses, hearing aides and emergency dental care for low-income adults.

On Tuesday, the full Finance Committee restored all but about $4 million of the Medicaid money.

The committee did so in a way that boosts Medicaid spending by $7 million for senior citizens and disabled Alaskans. The committee directed the money be used to help provide services for some of the 1,400 people with developmental disabilities who are on a waiting list.

But the budget still leaves an $11 million hole in the department's proposed Medicaid spending plan for nonelderly and nondisabled Alaskans, Clarke said.

House Finance Co-Chair John Harris, R-Valdez, said the committee tried to put a priority on providing help to those least able to help themselves.

"There's certainly no shortage of areas you could put money in the (department's) budget," Harris said.

The Finance Committee also added language to the permanent fund corporation's budget for the coming year prohibiting it from spending money to advocate passage of a constitutional amendment.

The proposed amendment, which has not yet passed the Legislature, would change the way distributions from the fund are calculated.

Under the so-called percent of market value proposal, 5 percent of the fund's total value over a five-year period would be available for distribution.

Advocates say that would protect the fund against inflation and would even out ups and downs in how much is available for dividends or other government functions each year.

Harris said the language adopted by the Finance Committee would not let the corporation push for passage of the change.

"If they want to educate, that's a different story, but to advocate for it, that's not going to be allowed," Harris said.

Eddie Burke, chair of Alaskans, Just Say No, a group that opposes the proposed change in the constitution, said the Finance Committee language is simply "political coverage." He believes money will still be spent pushing the change under the guise of educating the public.

But Bob Bartholomew, chief operating officer for the corporation, said the language will tie the corporation's hands, making it difficult for staff to explain what led the board to recommend the change.

The corporation had proposed spending up to $1.4 million promoting the change, including an advertising campaign.

All but $400,000 of that money is in separate legislation that has not yet passed the Legislature. The corporation had estimated it could find $400,000 for the campaign in its regular budgets for this fiscal year and next fiscal year.

Bartholomew said the permanent fund would need far less than $1.4 million if all it can do is provide education, not advocacy.

The Finance Committee approved the proposed $2.26 million operating budget with no arguments from minority Democrats.

Rep. Eric Croft, D-Anchorage, said Democrats are trying to work more cooperatively with the majority Republicans this year to get changes they want incorporated in the budget.

Subcommittees of the Senate Finance Committee are still working on their version of the state operating budget. Differences between the two spending plans will be worked out later in a conference committee.



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