Compass: Medicaid expansion is good for Alaskans

By LAWRENCE D. WEISSFebruary 16, 2013 

You walk into the bank one day and the teller says "We have a special today. You give us $1,000 and we'll give you $28,000 in exchange."

In fact that won't happen when you walk into your bank, but the federal government has made a state-sized offer like that to Gov. Sean Parnell and every other governor in the nation.

As part of the the new Affordable Care Act ("Obamacare") every state has the opportunity to expand Medicaid -- health insurance traditionally limited to low-income families with children and pregnant women -- to include single adults up to 133 percent of federal poverty level. This Medicaid expansion begins in 2014 and extends indefinitely. For the first three years the federal government will cover 100 percent of the costs of medical care for new enrollees, 95 percent to 93 percent for the next three years, and 90 percent in subsequent years. The benefits to Alaskans are enormous. Just looking at the next seven years:

• Basic health care for 40,000 Alaskans who are currently uninsured

• $1.1 billion in new federal revenue for Alaska

• 4,000 new jobs

• $1.2 billion in additional wages and salaries paid to Alaskans

• $2.49 billion in increased economic activity throughout Alaska

What would Alaska pay for this extraordinary Medicaid extension program? Less than $4 million a year -- maybe much less. According to a recent study commissioned by the Alaska Native Tribal Health Consortium (ANTHC), by 2020 Alaska will receive $28 million in additional economic activity for every $1 million invested in Medicaid expansion.

Like many Republican governors across the country, Gov. Parnell joined a lawsuit to stop the Affordable Care Act, but the Supreme Court ruled the ACA is legal and is the law of the land. The decision now facing the governor is will he block the Medicare expansion in Alaska, or embrace it as a growing number of Republican governors have?

In an interview in early January North Dakota Governor Jack Dalrymple said "We try to leave the politics out in the hallway when we make these decisions. In the end, it comes down to are you going to allow your people to have additional Medicaid money that comes at no cost to us, or aren't you?" he said. "We're thinking, yes, we should."

A few days later Arizona Republican Governor Jan Brewer noted that Arizona would be worse off rejecting the federal dollars that will come with the Medicaid expansion. "Try as we might, the law was upheld by the United States Supreme Court," Brewer said. "The Affordable Care Act is not going anywhere, at least not for the time being." The governor noted that the federal funding would provide some protection for the state's rural hospitals. Brewer's plan includes what she described as a "circuit breaker," which would automatically shrink the state's Medicaid program in the event that the federal government were to decrease funding.

Republican Governor Jon Kasich of Ohio announced Feb. 4 that he supports the Medicaid expansion for his state. He noted during his announcement that many uninsured Ohioans get the bulk of their health-care treatments in emergency rooms which is not efficient, and which passes costs along to everyone else. "We all pay for them," he said. "I don't think that is a sustainable way to do business." He added that If the federal government fails to live up to its side of the deal, his administration would reverse its position on the expansion.

On Feb. 6 Republican Governor Rick Snyder of Michigan made his announcement to accept the Medicaid expansion. "This makes sense for the physical and fiscal health of Michigan," Snyder said. He said the move will cut the number of Michigan uninsured almost in half. Snyder was joined at the announcement by business, consumer and human service groups, including the Michigan Health & Hospital Association and the state's Small Business Association.

Medicaid expansion -- good for the economy and good for the health of the people. Your call, Gov. Parnell.

Lawrence D. Weiss is a health policy educator and consultant in Anchorage.

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