Move will add more Alaskans to health care rolls

ANCHORAGE — Alaska Gov. Bill Walker pledged the state would become the 30th to accept federal funds to expand Medicaid at a Thursday morning press conference.

The process begins with a letter submitted to the Legislative Budget and Audit Committee, which has 45 days to either reject or accept it, Walker said.

He moving ahead with the expansion, he cited what he said was overwhelming public support for the expansion, including endorsements by roughly 160 organizations — ranging from the Bank of Alaska to the Mat-Su Borough Assembly to the Alaska Baptist Family Services organization — and polls showing roughly 60 percent of Alaskans desired Medicaid expansion. He also outlined legislative steps taken since the start of his administration last year, in which efforts to include the expansion in budget deliberations and in separate bills were stymied.

“This is the final option for me,” he said. “I’ve tried everything else. One thing people need to learn about me: I won’t give up and I never give up.”

At the press conference, Department of Health and Social Services commissioner Val Davidson said 562 days had passed since Alaska first became eligible to accept funds. The expansion is one component of the federal Affordable Care Act designed to reduce the impact of uninsured hospital visits by increasing income limits to allow more people to qualify for the Medicaid.

Supporters of the move say it will transfer $100 million from the state to the federal government, and create about 4,000 jobs in the process. Opponents say increased enrollment by able-bodied, though impoverished, applicants could crowd out the program’s original intended beneficiaries, and that the federal government could defund the expansion in the future, leaving Alaskans to bear the cost.

“We knew it was the right thing to do, and boy did we feel it was the right thing to do,” Walker said.

The percentage of costs covered over time from the federal expansion eventually decreases to 90 percent. Past language under discussion had focused on continued acceptance of 100 percent of the federal funding, a caveat that Walker appeared willing to reconsider Wednesday.

“We’ll play that hand when it’s dealt to us, when we get to that point,” he said. “That’s over a tremendous period of time that it works its way down to 90 percent.”

The 90-10 split was similar to other federal funding arrangements, including highway funding and Alaska Marine Highway ferry structure.

“I can’t deny benefits to Alaskans today because we’re not sure on that 10 percent,” Walker said. “Right now, we’re paying 100 percent.”

The decision to accept federal funds — known as federal receipt powers — has been used seven times in the past, Walker said, including twice during the Exxon-Valdez oil spill in Prince William Sound. In the event that the budget committee voted against the expansion, Walker said he would pursue it anyway. The power to accept the money ultimately resided with the governor, Walker said.

“An option they have is to vote down or vote against what I have proposed to do,” he said. “At that point, I need to sort of reassess, send them a letter, explain why I’m going to take the action I’m going to take, and then take the action. So there’s a couple of steps along the way, none that would completely eliminate my ability to do this in any way.”

The decision to pursue expansion without agreement from the Legislature drew criticism and warnings from Republicans. Several legislators repeated assertions made by advocacy groups — such as Americans for Prosperity — that a change in administrations could bring a change in legislative priorities, leaving Alaska without the financial means to deal with the increased enrollment the expansion would bring.

At a Mat-Su Business Alliance forum on Medicaid in Wasilla Wednesday ahead of the governor’s announcement, a representative from the organization repeatedly called Alaska Medicaid a “broken system,” citing widespread and acknowledged failures concerning the implementation of the state’s Xerox-designed payment system.

Alaska Senate Majority used similar language in statement issued in response to Walker’s decision Thursday.

“Regardless of federal funding, we cannot afford the Medicaid system we have now,” said Sen. Pete Kelly (R-Fairbanks). “In addition, our current system is broken. Adding tens of thousands of people to a broken system will do nothing to improve quality of care, access, or efficiency.”

The decision also potentially threatened the future of Medicaid, said Sen. Kevin Meyer (R-Anchorage).

“With expansion, sustainability is at risk,” he said. “That is what we need to discuss. That is why reform is essential.”

Rep. Lynn Gattis (R-Wasilla) said she is examining what the changes would mean. The budget committee contains only a single Valley legislator as an alternate, Rep. Mark Neuman (R-Big Lake).

“I know that we have contacted, and have out for facilitation, an expert on Medicaid expansion,” Gattis said. “I know that the governor has his out. I had hoped they would align at the same time and we would work together.”

She pointed to expansions undertaken in the last year in Montana and Indiana. In Montana, legislators have sought to add additional requirements to the bill, though a final decision has not been reached. In Indiana, Republican Gov. Mike Pence has successfully obtained a waiver to move the funds to expand private insurance to cover the uninsured.

Rep. Bill Stoltze (R-Chugiak), who opposed the expansion during his 2014 campaign, called the expansion “unfortunate.” Legislators had committed to an up-or-down vote on the issue within a year, he said.

“It’s probably cathartic for him (Walker) and the Democrats to be able to say, ‘Hey, we told you so, we can do it, we don’t need the Legislature,’” Stoltze said. “But I think it’s bad process, because there is a solid commitment to have that up or down vote, and he may have the votes in the Legislature. There is no small amount of Republicans, both in the House and Senate that support him on this. I’m not one of them for fiscal reasons.”

Rep. Shelley Hughes (R-Palmer) said the expansion could ultimately pit user groups against each other, which could mean truly disadvantaged people could be negatively affected.

“When push comes to shove, and the state’s short on money, who gets the shaft? It’s the truly vulnerable,” she said.

Local supporters for the measure include the Mat-Su Health Foundation, which estimates more than 4,000 Valley residents will receive medical benefits who aren’t presently covered. Foundation executive director Elizabeth Ripley portrayed the issue as a moral choice to the Mat-Su Business Alliance Wednesday, saying Medicaid expansion would save lives.

At the same time, efforts at reform need to continue, and should include business groups, Ripley said.

“If I go to the grocery store and I buy a tomato, I can see what the cost of the tomato is,” she said. “That isn’t the case with health care.”