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Parnell rejects Medicaid expansion in Alaska

By Matthew F. Smith 1:06 AM November 15, 2013

Decision opts out of billions in federal aid that state report says would have covered 43,000 uninsured Alaskans

ANCHORAGE – Governor Sean Parnell on Friday rejected an expansion of Medicaid in Alaska, forgoing billions of dollars in federal aid through 2020 that would have insured more than 43,000 Alaskans.

Calling the existing Medicaid program “unsustainable,” Parnell pointed to a state-commissioned report by the Lewin Group that looked at the state’s costs through 2020 under two scenarios: one that expanded Medicaid, and one that didn’t.

Both scenarios took into account changes to health laws that will come as part of the Affordable Care Act, known as Obamacare.

“I believe a costly Medicaid expansion, especially on top of the broken Obamacare system, is a hot mess,” Parnell said.

The expansion of the program would cost the state between $198.2 and $305.7 million through 2020; federal funds would have contributed between $2.1 and $3.7 billion within that same period.

“Baseline” estimates in the report suggest 43,316 Alaskans would be covered by expansion; assuming full enrollment by eligible Alaskans, that number would jump to 56,364.

“All those federal dollars are really enticing. They really are,” Parnell said. “But they’re not free. They’re paid for by debt and printing more money. They’re paid for by our kids and grandkids. And they also come with the price of being more financially dependent on the federal government than we are today.”

“It is not my intention to create an economy here that revolves around federal dependence,” he added.

Not expanding the program, the report found, would cost Alaska about $39.9 million through 2020, insuring an estimated 779 uninsured Alaskans. The report noted that, should the state not expand Medicaid, “about 19,900 individuals will remain uninsured who would have otherwise gained coverage under Medicaid expansion.”

Rather than expand, Parnell said the solution is reform. To that end, he’s creating a task force to examine the state’s current system and bring its costs under control. The Medicaid Reform Advisory Group—to be made up of senators, house representatives, three appointees and a chairman to be named by the governor—will deliver their report within the year.

Several groups, including the Anchorage Chamber of Commerce and the Alaska Native Tribal Health Consortium, had supported the expansion. The governor’s announcement left many unhappy.

“This is not a good time to be a low-income, low-wage worker in Alaska,” said Dahna Graham with Anchorage Faith & Action Congregations Together, a faith-based group of 15 congregations in the city that had supported broadening Medicaid in the state.

She and other AFACT members sang and prayed over lit candles outside the Atwood building in downtown Anchorage as the governor made his announcement today. Saying they were “shocked” and “heartbroken” by the governor’s decision, she said it would ultimately hurt those who can’t afford insurance the most.

“They have nowhere to go, no insurance to buy,” Graham said. “They’ll just have to pray they don’t get sick. We’re sure praying for them.”

Graham said she was most upset about the lack of public process on the decision.

“We haven’t been able to have any public meetings on this,” she said. “We’ve had no access to [the state’s report].” The report is dated April 12, but Parnell said during his announcement that he first saw the report two weeks ago.

Also unhappy about the governor’s decision: Alaska’s democratic lawmakers. Senator Bill Wielechowski said he had been trying to obtain a copy of the state’s report for months, to no avail. He said he’s disappointed that Alaskans won’t be able to take advantage of the federal aid.

“Our tax dollars are going back to D.C., and in exchange we would be getting 43,300 Alaskans insured,” he said. “We are now turning those tax dollars over, and letting them be used so people in California, people in New York, people in Kentucky, other states around the country, to insure their residents.”

Wielechowski said he and other state lawmakers plan to push legislation in the upcoming legislative session in Juneau that would ensure Medicaid’s expansion in Alaska, provided the federal government pays its promised 90 percent of the program’s cost.

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