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Governor Announces Alaska to Become the 30th State to Expand Medicaid


July 19, 2015
Sunday PM

(SitNews) - Alaska Governor Bill Walker (I) sent a letter to the Legislative Budget and Audit Committee last Thursday, giving members the required 45-day notice of his intention to accept additional federal and Mental Health Trust Fund Authority money to expand Medicaid in Alaska.

Governors and legislatures in 29 states plus the District of Columbia have already made the decision to accept Medicaid expansion. Ten Republican governors have approved Medicaid expansion. Republican legislatures in five states have approved Medicaid expansion.

Legislative Budget and Audit Committee Chairman Rep. Mike Hawker acknowledged he received notice Thursday of Gov. Bill Walker’s intention to expand Medicaid in Alaska.

jpg Governor Announces Alaska to Become the 30th State to Expand Medicaid

Next Steps on Medicaid Expansion Announced by Governor Walker, seated behind the Governor is Alaska Department of Health and Social Services Commissioner Valerie Davidson
Photo Office of the Governor Video
Listen to the full Press Conference:

At this point, Hawker has not determined what, if any, action Legislative Budget and Audit Committee will take. The Committee’s role is strictly a formality, as the governor noted in his announcement. Approval is not required.

“The only thing LB&A can influence is how quickly the money is available,” Hawker (R-Anchorage) said. “Right now, there is a 45-day waiting period, no matter what the committee does. If we act sooner, the governor can accept the funds sooner. The governor has not requested expedited review, but I am open to that discussion.”

Hawker reiterated on Thursday that while the LB&A role is a formality, he isn’t ruling out any specific action at this point.

“The reality is that, with a unilateral decision accepting Medicaid, LB&A hearings on this issue may be the only available forum for legislators to further discuss the governor’s action,” Hawker said. “Personally, I support Medicaid expansion, but would have preferred a process that would have ensured expansion is sustainable, particularly in these challenging financial times.”

Governor Walker first included Medicaid expansion funds in his fiscal year 2016 operating budget, and later submitted his own Medicaid reform and expansion bill after the legislature removed the funding in his budget. Expanding Medicaid would bring $146 million to the state in its first year and provide health care to more than 20,000 working Alaskans.

Governor Walker’s Medicaid expansion bill was not taken to the floor for a vote during the regular legislative and two special sessions. Now, the Governor has provided notice to the Legislative Budget and Audit Committee, which has the authority to review requests to accept receipt of non-general fund money when the Legislature is not in session.

“Thousands of Alaskans and more than 150 organizations, including chambers of commerce, local hospitals, and local governments, have been waiting long enough for Medicaid expansion,” Governor Walker said. “It’s time to expand Medicaid so thousands of our friends, coworkers, neighbors, and family members don’t have to make the choice between health care or bankruptcy.”

Medicaid expansion would reduce state spending by $6.6 million in the first year, and save over $100 million in state general funds in the first six years.

“Every day that we fail to act, Alaska loses out on $400,000,” Governor Walker said. “With a nearly $3 billion budget deficit, it would be foolish for us to pass up that kind of boost to Alaska’s economy.”

Department of Health and Social Services Commissioner Valerie Davidson echoed the Governor’s sentiments, stressing the broad benefits of Medicaid expansion.

“This is about taking care of Alaskans,” said Commissioner Davidson. “Expanding Medicaid will save lives, improve the economy, save the state money, and serve as a catalyst for reform. The department is ready to make this happen and do what it takes to help Alaskans access health care.”

The Department of Health and Social Services has been working on reforms to improve the Medicaid program, Davidson said. “We have continued and enhanced existing reform initiatives, such as improvements to fraud and abuse controls, pharmacy reform initiatives and care management for ‘super utilizers’ of emergency room services. The department is also in the process of implementing additional reforms, and recently awarded a contract for technical assistance to help us identify even more opportunities for redesign of the program.”

“DHSS staff have been working diligently to prepare for Medicaid expansion,” Health and Social Services Commissioner Valerie Davidson said. “The new Medicaid claims payment system that had a rocky start two years ago is now working, and the new eligibility and enrollment system is being modified to automate and streamline the process for review and approval of applications.”

According to information provided by the Department of Health and Social Services, nearly 42,000 Alaskans will be eligible for expansion. Approximately 21,000 Alaskans are expected to enroll in the first year.

Beyond the improvement in health coverage and saved lives, Medicaid expansion will bring $146 million in new federal revenue to Alaska in the first year according to the Department of Health and Social Services. Alaska misses out on $400,000 each day the state doesn’t act on Medicaid expansion. If Alaska had expanded on Jan. 1, 2014, over $220 million in new federal money would have come to Alaska to date, providing a much-needed boost to our economy.

In response to Governor Walker’s request, the Legislative Budget and Audit Committee can do one of three things within the next 45 days:

  • recommend that the state accept the federal and Mental Health Trust Fund Authority money as outlined in the Governor’s letter;
  • recommend the state not accept that money;
  • or provide no response.

Additionally, during the 45-day period, the legislature could call itself into a special session to address Medicaid expansion.

Governor Bill Walker announced the expansion of Medicaid in Alaska without the support of the Alaska House and Senate Republican majorities. In November, Alaskans went to the polls and elected an independent candidate to become the governor of Alaska. As a candidate, Walker promised he would make Medicaid expansion his first priority. Alaska Senate and House Democrats commented in a newsrelease that the governor kept that promise to Alaskans, and their support and thanked him for the courage and resolve to resist partisan politics to do the right thing for Alaska.

Alaska Senate and House Democrats have strongly supported expanding this critical program because it will bring hundreds of millions of federal dollars to the state; it will create thousands of good jobs for Alaskans and, most importantly, it will provide thousands of Alaskans with access to quality health care. A healthy populace builds a thriving economy and provides large and small business owners with a reliable and productive work force.

This decision by Governor Walker is the right economic decision wrote the Alaska Senate and House Democrats in a news release. "It is the right decision for the business community, and it is the right moral decision. We stand in unity with and support of Governor Walker on this important decision."

The Governor's action is also supported by the Alaska Independent Democratic Coalition, which made Medicaid expansion a priority during the First Session of the 29th Alaska Legislature.

“Governor Walker is being forced to use his executive power to expand Medicaid because the Republican controlled leadership in the House and Senate refused to properly consider an expansion bill this past session,” said Coalition Leader Rep. Chris Tuck (D-Anchorage). “We have an opportunity to get healthcare for 40,000 Alaskans and receive nearly $400,000 a day federal funding. It’s the right and moral thing to do and our Coalition applauds the Governor’s leadership on this issue.”

The Alaska Independent Democratic Coalition stated in a news release that medicaid expansion comes with tremendous benefits including over a billion dollars in new federal revenue over the next six year, the creation of 4,000 jobs, and $1.2 billion in additional wages and salaries. Studies suggest Medicaid expansion would result in $2.49 billion in increased economic activity across Alaska.

“Multiple legal opinions show the Governor has the authority to expand Medicaid,” said Rep. Andy Josephson (D-Anchorage). “Medicaid expansion is supported by the public and, I believe, a majority of lawmakers but that did not sway the Majority leadership, which refused to allow an up or down vote on the matter. The Governor’s decision is justified based on the merits of the argument and the inaction of the Alaska Legislature.”

Currently, around 120,000 Alaskans receive healthcare through the Medicaid program. According to the Alaska Independent Democratic Coalition, the Governor’s action will expand the program to residents whose income is within 138 percent of the Federal Poverty Level. It’s estimated that an additional 42,000 Alaskans will be eligible for health coverage under Medicaid expansion with 20,000 residents expected to sign up the first year. The federal government will pay for 100 percent of the expansion costs in this fiscal year. The federal match will gradually decline to 90 percent beginning in FY 2020.

However, Alaska State Republican Senators expressed concern over Governor Walker’s announcement to expand Medicaid, a major component of President Barack Obama’s healthcare law, without legislative approval.

“Regardless of federal funding, we cannot afford the Medicaid system we have now,” said Senator 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.”

State Republican Senators wrote in a prepared released that the traditional Medicaid program covers people with disabilities, as well as low-income families and children, and pregnant women. Under the expanded program, Medicaid would cover those without dependent children, not pregnant or disabled, and who earn at or below 138% of the Federal Poverty Level for Alaska.

“The discussion over Medicaid expansion isn't just about adding 20,000 to 40,000 new people to a government program that is already in need of reform,” said Senate President Kevin Meyer (R-Anchorage). “It is about ensuring that the Medicaid we have can effectively provide healthcare to the most vulnerable Alaskans for years to come. With expansion, sustainability is at risk. That is what we need to discuss. That is why reform is essential.”

Members of the Senate Majority (Republicans) voiced concern over the future of healthcare funding after the governor’s dismissal of questions pertaining to how the state will continue to fund Medicaid if the federal government continue the generous matching rate.

“Today’s spending will be paid for by tomorrow’s taxpayers,” said Senator John Coghill (R-North Pole). “With the national debt at $18 trillion and rising, we have to answer the question of how we’re going to continue to pay for these programs when the federal government can no longer afford them.”

Members of the Senate Majority (Republicans) wrote that medicaid remains one of the state’s biggest cost drivers, with total spending exceeding $1.6 billion in FY 2015, and spending is expected to consume $2.8 billion of the budget by the year 2025, even without expansion. And, according to a non-partisan budget report published in February, Medicaid reform is essential to sustaining a program many Alaskans depend on for basic healthcare.

“Expansion of Medicaid without reform will only result in reduced services to the young and vulnerable adults already trying to navigate the overloaded system. Medicare patients will probably suffer the most,” said Senator Coghill (R-North Pole).

Coghill said, “In the end, many questions remain: Can Alaska afford expansion if the federal government doesn’t keep its word? What will the quality of care be for an already strained system? Does Alaska even have enough providers to handle the influx of ‘newly eligible’ people? What happens if enrollment goes beyond projections, like it has in Illinois, Kentucky, Michigan, and Washington?”

According to the Alaska Senate Majority (Republican), the legislature plans to continue the working toward Medicaid reform and will receive expert testimony from the Legislative Budget and Audit consultants when they are secured by the end of July. These consultants will provide the legislature with proven Medicaid reform and expansion options tested in other states, to ensure Alaska’s program provides the right care, for the right price, in the right place.

House Speaker Mike Chenaul (R-Nikiskit), House Majority Leader Charisse Millett, and Rules Chair Craig Johnson ( R-Anchorage) also expressed concern with Governor Walker’s decision on Thursday to unilaterally expand Medicaid without waiting for passage of legislation that addresses needed reforms to the existing Medicaid system.

“We take our duty as public servants seriously,” Chenault (R-Nikiski)said. “Prudence demands caution. I’m disappointed the governor has chosen to abandon the legislation he introduced. I think his rush to judgement before even hearing from expert consultants is the wrong approach – with potentially serious negative consequences for Alaska.”

Alaska’s current Medicaid program has 140,000 enrollees at an annual cost of $1.6 billion, according to the Alaska House Majority. It’s projected that Medicaid expansion would add at least an additional 20,000-40,000 people to the program, although most states that have expanded Medicaid have experienced far greater enrollment and costs than they expected.

“This is a major policy shift with unknown fiscal implications for Alaska and current Medicaid recipients, especially our seniors and those with disabilities,” Millett (R-Anchorage) said. “Alaskans deserve a sustainable and affordable health care system, so this redirection from reform and expansion to simply expansion is worrisome.”

“I’m very concerned about the potential financial risk to Alaska moving forward,” Johnson (R-Anchorage) said. “We need to look before we leap, because states that have expanded Medicaid have found the costs and enrollment have vastly exceeded expectations. Expansion creates a serious risk that Alaska’s seniors, veterans and existing Medicaid patients could suffer and be squeezed out of the health care market.”

Americans for Prosperity Alaska also was concerned with the Governor's decision. Americans for Prosperity Alaska is the state's foremost group of grassroots activists advocating for limited government.

"Medicaid in Alaska is broken and unsustainable, but [Thursday] Governor Walker chose to invest more taxpayer dollars into it," stated AFP Alaska State Director Jeremy Price.

"In the last few weeks, Gov. Walker has given pay increases to public unions and created uncertainty in the marketplace by delaying payments to private companies. Now he’s expanding Obamacare to over 40,000 able-bodied, working age, childless adults to a program that is already devouring the state budget. All while the state is running a $4 billion deficit. Growing government at the expense of the private sector will never lead to economic prosperity," said Price.

The Governor Walker’s notice to the Legislative Budget and Audit Committee was accompanied by a Revised Program Legislative, or RPL. Typically, these are submitted to the Legislative Budget and Audit Committee when additional money becomes available for items the legislature has already approved spending on, and do not include a significant policy change.

Submission of an Revised Program Legislative (RPL) starts a 45-day clock. During this time the Committee can make a recommendation to approve or deny. However, Governor Walker can spend the money at the earliest of either a Committee recommendation or the end of the 45 days.

Historically, the Legislative Budget and Audit Committee recommends accepting some requests but not all; departments generally hold onto disapproved requests until the next budget cycle and make a new request. This process is in place as a way to accept federal funds outside of the normal budget cycle. Because the power of appropriation is held by the whole legislature, the Legislative Budget and Audit Committee can only issue a recommendation when the out-of-session requests are made.




Sources of News:

Office of Alaska Gov. Bill Walker

Legislative Budget and Audit Committee Chairman Rep. Mike Hawker (R)

Department of Health and Social Services

Americans for Prosperity Alaska

Alaska Senate Majority

Alaska House Majority


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