Medicaid shift will impact Mat-Su

WASILLA — Expanding Medicaid could give health insurance to about 5,000 additional customers in the Mat-Su Valley, according to the Mat-Su Health Foundation.

That figure (less than five percent of the Valley’s total population) might not seem very high. However, officials say the most important aspect might be which five percent gain coverage, rather than the total percent.

First, some health care background:

Promises made by the Walker-Mallott campaign include the acceptance of federal funds to expand full Medicaid eligibility to 138 percent of the federal poverty level, a provision of the Affordable Care Act, known colloquially as Obamacare. Alaska presently remains among the 20 states that haven’t accepted those funds since the law’s signing in 2010.

Alaska’s poverty level — Alaska and Hawaii maintain higher poverty levels than the 48 other states — was $14,580 in 2014 for one person and $29,820 for a family of four, according to the Department of Health and Social Services website. People who earn that much on an annual basis or less qualify for full Medicaid coverage (other specific programs, like Denali KidCare, or parts of Medicare, set the bar as high as 200 percent of the federal poverty level).

An expansion would move the bar for full coverage up to $20,120 for individuals and $41,151 for a family of four.

The number of new people covered in the Valley would likely be somewhere around 4,920, according to figures released Friday by the Mat-Su Health Foundation. Because that figure is income-based, it may include some people already covered under health insurance provided by Alaska Native corporations, said foundation executive director Elizabeth Ripley.

“We’re guessing up to almost 5,000 would fall below 138 percent of the federal poverty level,” she said.

The 2010 decision by the Parnell administration not to accept federal funds essentially created what health care workers call “the gap,” Ripley said. The gap is about 41,000 Alaskans under the age of 65 with annual incomes less than 100 percent of the federal poverty level who make too much money for coverage under Medicaid, but who can’t apply for policies offered in the federally managed healthcare exchange even with heavy subsidies, according to Ripley. As many as 1,440 of the new coverage enrollees fall into this category, Ripley said.

Because officials can’t precisely model the expansion of Medicaid, they’re using the expansion of Denali KidCare under the Tony Knowles administration as a model, according to Ripley, who served on the steering committee for that expansion.

“When we started enrolling kids in the Mat-Su Borough, we tracked what services they were using,” she said. “Sure enough, people had been holding off getting care for their children.”

Dentists saw a huge spike in demand, followed a short time later by a massive increase in demand for mental health services, Ripley said. A 2013 community needs assessment — essentially a complicated survey of providers and patients — confirmed the demand for mental health services in the Valley. The top four health issues in the Valley were all related to mental health or substance abuse, according to the survey.

The lack of insurance to cover non-emergency medical health care creates a cycle, where some patients suffering from behavioral health conditions go as long as they can until they face a crisis, receive crisis treatment, and then are released, Ripley said.

Foundation figures show 2,391 patients visited the emergency room at Mat-Su Regional Medical Center in 2013, causing an estimated $23 million worth of cost, some of which is then transmitted to other patients. The cycle cost an additional $1.6 million in law enforcement, 911 dispatch and transports, according to the foundation figures.

That cost is concentrated around a startlingly small minority of patients. According to foundation figures, 305 patients used the emergency room five or more times for behavioral health issues. Nineteen “ultra-utilizers” — those who visit the emergency room 15 or more times with a behavioral health diagnosis — accounted for 477 emergency room visits, according to the foundation figures.

Of the people who generated these costs, 27 percent lacked any type of insurance or the ability to self-pay, and could be helped by the expansion, Ripley said.

“We have the data to show that we can do this better,” she said. “One thing we have to do is pay for people to get more care. What we found is the No. 1 provider of behavioral care in the Valley is the Mat-Su Regional Medical Center emergency room, and that’s not something we want to see.”

However, state officials should also take the time to review past Medicaid practices and reform the system, she said. Putting more money into a broken system wasn’t likely to fix anything, Ripley said.

“Alaska’s Medicaid cost growth is unsustainable,” she said. “The cost of our Medicaid program is expected to grow sharply unless Alaska’s Medicaid program is restructured. It’s a real problem.”

For example, officials are worried that the funds used to expand the program won’t be enough to cover all of the costs that come with the influx of new patients into Medicaid. A 2013 study by the consultants The Lewin Group found that an expansion of the program could cost as much as $240 million over six years, versus $11 million if the program were not expanded. The difference is based in part on massive enrollment changes predicted as a result of the expansion.

Restructuring programs to create cost savings could make the expansion sustainable, Ripley said.

“There is a cost to the state, unless we figure out how to do it in a cost-neutral way,” she said.

“There are a lot of players that are willing to step up and help figure this out,” Ripley added. “There are concerns about expanding the entitlement programs’ problems as well as the benefits. We have to do this really thoughtfully.”

Contact Brian O’Connor at 352-2269 or brian.oconnor@frontiersman.com.

Note: An earlier version of this story incorrectly stated the percentage of people potentially affected by the Medicaid expansion. A number given as the income eligibility number for the Medicaid expansion was ascribed to the wrong subset. A mental health crisis and a suicide attempt were incorrectly conflated, and that conflation was attributed incorrectly. Some of the costs are absorbed by the hospital and not passed on to patients. The ability of some individuals to purchase health care was overstated.