[Congressional Record Volume 146, Number 70 (Thursday, June 8, 2000)]
[Senate]
[Pages S4820-S4821]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. MURKOWSKI (for himself and Mr. Stevens):
  S. 2693. A bill to amend title XIX of the Social Security Act to 
provide a more equitable Federal medical assistance percentage for 
Alaska; to the Committee on Finance.


                 the alaska medicaid equity act of 2000

 Mr. MURKOWSKI. Mr. President, for more than 30 years, the 
State of Alaska was subjected to an economic inequity in the 
administration of the national Medicaid program.

  With a poverty level 25 percent above the national average, and over 
one-sixth of the state's population Medicaid-eligible, Alaska delivers 
health care to many needy children, pregnant women, disabled and 
elderly poor Americans. These people deserve quality medical care, and 
Alaska delivers.
  But three years ago, Congress recognized that the federal government 
was not paying its fair share of Alaska's Medicaid program. The one-
size-fits-all formula that is used to calculate the federal Medicaid 
match is based upon the per capita income of individual states as it 
relates to the national per capita income. Simply put, states with 
higher per capita income pay a higher percentage of Medicaid costs. 
This formula works well for states that are near national norms for 
most economic indicators. But it certainly doesn't work in the State of 
Alaska, where most economic measurements are atypical compared with 
national averages.
  The reason is fairly simple. It just costs more to live and do 
business in Alaska. Per capita income isn't a fair indicator unless it 
takes into account the cost of delivering care in that area. Somehow, 
however, the Medicaid formula forgot this.
  In 1997, when Congress recognized this issue, it adopted legislation 
that reflected the state's higher costs and increased the federal 
Medicaid match. Instead of receiving a 50-50 match rate, as the formula 
would dictate, a 59.8-40.2 percent match rate was established.
  Unfortunately, this legislation was a short term fix. It only allowed 
the formula change to remain in effect for

[[Page S4821]]

three years. As a result, unless we change the law, the formula will 
revert to the same inequitable standard that was used previously. And 
unless we extend the formula change, vital health care services to 
Alaska's neediest patients will be compromised.
  For this reason, I am introducing legislation that will extend the 
federal government's commitment to the health and well-being of 
Alaska's Medicaid beneficiaries. The ``Alaska Medicaid Equity Act of 
2000,'' which is co-sponsored by Senator Stevens, simply continues the 
spirit and intent of Congress by adjusting federal medical assistance 
percentage calculations to account for Alaska's unusually high delivery 
costs.
  Three years after we first passed this legislation, the reasons and 
justifications for the adjustment still exist. The formula is still 
fundamentally unfair to Alaska.
  Let me explain why. Alaska's per capita income is $28,523, the 17th 
highest in the country. In fact, it's right near the national average, 
which is $28,518. Although Alaska's per capita income suggests it is 
one of the richer states, it fails to take into account the high cost 
of living and the high cost of delivering health care.
  Some studies show that it costs 71 percent more to deliver health 
care in Alaska. But let's look at some real numbers. From coast to 
coast, the U.S. dollar buys more goods and services than it does in 
Alaska.
  In Portland, Oregon, it costs $66.00 to feed a family of four for one 
week. In Anchorage it costs $84.15. In Kodiak, that number jumps to 
$105.88. And out in Dillingham, that number rises to $144.57! We're 
comparing apples and oranges when we compare Alaska's per capita income 
to another state's average.
  And how about electricity? In Portland, 1000 kilowatt hours costs 
$60.88. Anchorage residents are paying $92.83. Out in Bethel, Alaska, 
residents are paying $202.68.
  When focusing solely on the delivery of health care services, the 
differences stand out even more. In Florida, a hospital room for one 
day costs, on average, $361. This is in line with lower 48 costs, which 
run between $350 and $450. In Alaska, that same room costs $748--more 
than twice as much! A physician office visit is $53 in Florida. That 
visit costs $80 in Alaska--an increase of 66%!
  You can look at virtually any good or service and see a comparable 
difference. A dollar simply doesn't buy the same thing in Alaska that 
it does in the lower 48. The numbers prove this. The federal government 
has admitted this. Federal government employees receive a salary 
adjustment in Alaska--a 25% cost of living adjustment. Military 
personnel receive a similar increase. Medicare pays higher as well. 
Even the Federal Poverty Level is adjusted to reflect the unique costs 
in Alaska. So why doesn't Medicaid?
  Our bill merely continues the commitment Congress made to Alaska's 
Medicaid population three years ago. It's fair, and it makes sense. I 
ask my colleagues to assist me in rectifying this clear inequity for 
the state of Alaska; I ask my colleagues to support this bill.
  I ask unanimous consent that the text of the bill be included in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2693

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Alaska Medicaid Equity Act 
     of 2000''.

     SEC. 2. AMENDMENT TO THE SOCIAL SECURITY ACT.

       (a) In General.--The first sentence of section 1905(b) of 
     the Social Security Act (42 U.S.C. 1396d(b)) is amended--
       (1) by striking ``and (3)'' and inserting ``(3)''; and
       (2) by striking the period and inserting ``, and (4) for 
     purposes of this title and title XXI, with respect to Alaska, 
     the State percentage used to determine the Federal medical 
     assistance percentage shall be that percentage which bears 
     the same ratio to 45 percent as the square of the adjusted 
     per capita income of Alaska (determined by dividing the 
     State's 3-year average per capita income by 1.25) bears to 
     the square of the per capita income of the 50 States.''.
       (b) Effective Date.--The amendments made by subsection (a) 
     take effect October 1, 2000.
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