[Congressional Record Volume 149, Number 20 (Tuesday, February 4, 2003)]
[Senate]
[Page S1900]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. MURKOWSKI:
  S. 294. A bill to eliminate the sunset for the determination of the 
Federal medical assistance percentage for Alaska under the Medicare, 
Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000; to 
the Committee on Finance.
  Ms. MURKOWSKI. Mr. President, I speak today on behalf of Alaska's 
most vulnerable individuals, our children, the disabled, and the 
elderly poor. Since its enactment in 1965, the Medicaid program has 
helped States provide low-income and disabled individuals with access 
to vital health care services. In 1997, Congress allowed States to take 
on certain health-related responsibilities for children. The Denali Kid 
Care program, a Medicaid expansion, has been very successful in 
providing health services for Alaskan children. Unfortunately, under 
current law many Alaskans who rely on this program could lose some or 
all of their Medicaid coverage. This is because Alaska's Federal 
Medical Assistance percentage, FMAP, adjustment, a correction to the 
Medicaid formula due to the high cost of health care in Alaska, will 
expire within the next 2 fiscal years. An FMAP correction is necessary 
for Alaska because this ``one-size-fits-all'' formula does not account 
for variations in cost-of-living, and does not consider Alaska's higher 
federally mandated poverty level.
  First of all, the FMAP formula was developed in 1946, 13 years before 
Alaska was admitted to the Union. This archaic formula is used to 
calculate the Federal share of Medicaid costs for each State. The 
calculations are based on the per capita income of individual States 
relative to the national per capita income. In this way, States with 
higher per capita incomes end up paying a higher percentage of their 
Medicaid costs. This formula appears to work well for States near the 
national norms for most economic indicators. It most certainly does not 
work in the State of Alaska, however, where these economic indicators 
appear more frequently as statistical exceptions and outlyers.
  The problem is fairly simple: it just costs more to do business in 
Alaska, and this includes health care. A national per capita income 
threshold is not a fair indicator unless it takes into account the cost 
of living in that area. The cost-of-living adjustment for Federal 
employees in Alaska suggests that it costs 25 percent more to live in 
Alaska than in the lower 48, and Federal employee salaries are adjusted 
accordingly. A dollar simply does not buy the same thing in Alaska that 
it does in the lower 48.
  This is especially true for health care costs. Estimates suggest 
that, on average, it costs up to 71 percent more to deliver health care 
services in Alaska. American Hospital Association data shows that 
Alaska has the highest average expense per hospital admission of any 
State in the Nation. But let's talk real numbers again. If you were to 
be admitted to a hospital in Oregon, on average the cost would be 
$6,649.00; in Alaska the same average hospital stay costs almost 
double, $10,859.00. There are also higher costs associated with limited 
road access and necessary air ambulance service for rural and isolated 
communities, but the Medicaid FMAP formula does not consider any of 
these additional costs.

  In addition to the higher cost of services in Alaska, the Federal 
Government sets the poverty level 20 percent higher in Alaska than in 
any of the lower 48 States. This means 1 out of every 5 Alaskans is 
eligible for Medicaid. The problem is that this is essentially an 
unfunded Federal mandate because the FMAP formula, again, does not 
change to reflect this additional requirement. The higher demand for 
services that results from the higher poverty level dilutes our 
resources. The Medicaid FMAP formula was developed before Alaska became 
a State and does NOT provide the funds to cover all of those who are 
eligible.
  However, in 1997 and again in 2000, Congress recognized that the 
Medicaid FMAP formula was unfair for Alaska and enacted an adjustment 
to the formula. Due in part to this more equitable funding and a 
careful re-allocation of resources, Alaska now: has the lowest age-
adjusted death rate for breast cancer in the Nation; has one of the 
lowest infant mortality rates in the Nation; and has one of the lowest 
percentages of low birth weight babies in the Nation.
  These are encouraging statistics, but more can and must be done to 
improve access to quality health care. All disabled and low-income 
Americans, including Alaskans, have been assured access to quality 
medical care. Alaska has proven it can deliver this quality care, but 
only with the necessary adjustment to the FMAP formula that recognizes 
the reality of Alaska's needs.
  This issue is timely because the Congress has the opportunity to 
allow the State of Alaska to plan for the future. Planning is the 
essence of good management, and when it comes to health care, we must 
allow States to plan for future needs. In short, the Federal Government 
must remember its commitment to Alaskans, and allow my State a benefit 
that all other states have, assurance that money for vital Medicaid 
services will not just dry up and disappear.
  Alaskans do not seek charity, we seek equity. The Congress has 
supported this request twice before, and I ask for an additional 
extension to honor Federal commitments to my state. The legislation 
that I am introducing today will permanently adjust the Medicaid 
formula for Alaska. I sincerely hope that my colleagues will support 
this vital legislation that will preserve my State's ability to provide 
health insurance to the most vulnerable Alaskans.
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