Alaska News

Without Medicaid expansion, least-fortunate Alaskans face double jeopardy

To expand Medicaid, or not? That is the question Alaska Gov. Sean Parnell faces in the months ahead, when he will decide whether tens of thousands of Alaskans get health care coverage as Congress envisioned when it passed the Patient Protection and Affordable Care Act, a.k.a. Obamacare.

But the decision comes with a twist: rejecting Medicaid will leave some of the poorest Alaskans uninsured and unable to afford health insurance on the exchanges, which is subsidized with tax credits from Congress. Here's why:

The mandate takes effect Jan. 1 and will require most U.S. citizens to carry health insurance by March 31. For people without employer-sponsored health insurance or various other federal programs like Medicare or Native/Indian care, that means shopping for plans in the exchange. Obamacare offers those people tax credits that are based on the federal poverty level. Subsidies go to households earning 100 to 400 percent of the federal poverty level. In Alaska (since our federal poverty level is higher than most states) that's between $14,350 and $57,400 per individual. The less you earn, the less you pay for health care.

The Affordable Care Act originally required states to expand Medicaid to a whole new group of beneficiaries: adults without children. Under current laws, Medicaid covers only parents and guardians with dependent children, young adults up to age 21, the disabled and elderly, and children 19 and under who are living independently.

Under the new law, single adults that earn too little to qualify for subsidized insurance would still be eligible for Medicaid. Individuals making up to 138 percent of the federal poverty level ($19,803) would be eligible for the program.

But then the U.S. Supreme Court made a decision that changed the implementation of the ACA: The court decided that Congress didn't have the power to coerce states to expand Medicaid involuntarily, leaving the decision instead up to individual states.

That creates a potential problem for some of the lowest-income households eligible for neither Medicaid under current law, nor the upcoming subsidy. "It's a structural flaw," said Josh Applebee, deputy director of Health and Social Services said. "And yet Congress has done nothing to solve this problem."

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Without the expansion, single adults making less than $14,350 are neither eligible for subsidies nor Medicaid. These folks wouldn't be taxed for not having health care because their income is too low, but they still won't have any.

Exactly how many people will be left out in the cold is unclear. The closest estimate so far is that 41,500 uninsured Alaska residents would become eligible for Medicaid under the expansion. Of those, 15,700 are Alaska Natives and American Indians, who also have access to health care through Indian Health Services.

By these estimates, 25,800 residents without health coverage would gain access to Medicaid. Some of these folks (those making between 100 and 138 percent of the federal poverty level, $14,350 - $19,803) would be eligible for the federal subsidy -- but not all of them.

Josh Applebee is tasked with figuring out exactly how many people would be left without health care should the state choose not to expand. While he is certain that some people will be left out, in the next few weeks he will try to calculate exactly how many before his department makes a recommendation to Parnell.

Twenty-nine states are moving forward with the Medicaid expansion. Whether Alaska will join them remains to be seen; Gov. Parnell says he will announce his decision in December. While he has commissioned a report laying out the pros and cons of the decision, he has denied requests to release the report publicly.

Gov. Parnell is aware that some Alaska households will not have health care if the state does not expand its program, spokesperson Sharon Leighow wrote via email on Thursday. "It is important to note that health-care services are available to these people through clinics across the state such as the Anchorage Neighborhood Health Center," she wrote.

If Alaska chooses to expand, the federal government says it will pay for 100 percent of the expansion up to 2020. After that, the federal government will pay for 90 percent of the expansion. That would amount to $1.1 billion in federal spending in Alaska between 2014 and 2020, according to a report by the Urban Institute issued in February. The state is estimated to spend $78 million during the same time frame, the report states, with $25 million of that in 2020.

Yet there's still a lot of number crunching ahead for the Department of Health and Social Services, which will make a recommendation to Parnell in October regarding the "incredibly important decision" at hand, Applebee said.

Contact Laurel Andrews at laurel(at)alaskadispatch.com. Follow her on Twitter @Laurel_Andrews

Laurel Andrews

Laurel Andrews was a reporter for the Anchorage Daily News, Alaska Dispatch News and Alaska Dispatch. She left the ADN in October 2018.

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