Tim Bradner: Parnell's Medicaid decision affects 43,000 Alaskans

Tim Bradner | Alaska Journal of Commerce

Like many, I was dismayed at Gov. Sean Parnell's decision not to expand Medicaid to cover more lower-income Alaskans.

Medicaid is the state-administered health care program for poor Americans. It is available only to very low-income families; single individuals are excluded.

A key part of the Affordable Care Act is giving states the option to expand Medicaid to cover more people, including many who have jobs that don't provide benefits or affordable health coverage. The federal government will pick up 100 percent of the expansion costs for three years and then 90 percent thereafter.

Parnell has decided against expansion. His explanation, given at a Nov. 15 briefing when the decision was announced, was more of a rant against the president's Affordable Care Act, which critics call Obamacare, than a reasoned presentation of the issues involved.

It would be easy to write off Parnell as just another tea party-leaning politician who lets philosophy impede the well-being of constituents. I won't do that, because I know the governor has compassion -- his ardent sponsorship of efforts to quell domestic violence and abuse testify to that, and I admire him for it.

In this case, however, the decision really does affect the well-being of thousands of Alaskans and was obviously colored by the governor's partisan views, including his intense dislike of President Barack Obama's policies and particularly his loathing of the Affordable Care Act.

I was struck, however, by the governor's evident disconnect with the health care issues affecting Alaskans, or even how health care works. This is evident from some of his remarks.

Here's one example from the briefing: "Medicaid expansion does not necessarily address the poor's actual access to health care. It does, however, affect their eligibility to have it covered financially ... The real issue in Alaska is, and always has been, access, not insurance ..."

Huh? Insurance means access. Low-income Alaskans have difficulty accessing health care mainly because they can't pay for it. That's what health insurance does -- it assures access to care.

There's more: "Medicaid expansion covers some of the uncompensated care issues ("charity" care hospitals give to those who can't pay) ... but it only makes things tougher on more Alaskans, particularly those struggling to get by on a paycheck who are now losing their coverage or being faced to pay substantially more for coverage," Parnell said at the briefing.

I can't make sense of this statement. The effect of Medicaid expansion is really the opposite: it helps the working poor, those now just above the poverty threshold for Medicaid who can't afford rising insurance premiums.

Also, Medicaid expansion has nothing to do with Alaskans having their policies cancelled. That is occurring because of other effects of the Affordable Care Act. The two issues are not connected.

Also, Medicaid expansion would ease the charity care costs forced on hospitals by the uninsured who have to go to emergency rooms. This does help other Alaskans because the hospitals, many which are nonprofit or community-owned, have to tack on the costs of charity care to the bills the rest of us pay.

I was really floored, however, at the governor's apparent lack of understanding of Alaska Native health care issues and how his decision will affect rural Alaskans.

Both a state-funded study of Medicaid expansion, by the Lewin Group, and a similar study by the Alaska Native Tribal Health Consortium, came to the same conclusions that Medicaid expansion would benefit about 43,000 Alaskans. However, Parnell subtracted 17,500 Alaska Natives from the 43,000 because they are eligible for Indian Health Service care. "So Medicaid expansion would only directly benefit about 26,000 people," he said.

What the governor may not know, but should, is that the Indian Health Service is woefully underfunded and does not provide adequate care. It pays about 50 percent of the actual costs of care delivered by our Native tribal health organizations, mostly in rural Alaska.

These organizations, which have won national awards for innovation and excellence in health care, must scrounge money from wherever they can, including Medicaid, to pay the remaining costs.

Added to this is that the federal government is also cutting Indian Health Service funds. Sequestration, which does not apply to Medicaid and Medicare, does apply to the IHS budget, and has resulted in budgets being reduced about 9 percent this year in Alaska. In addition, there are rural health needs going unmet, travel for non-emergency treatments for example, that are not funded by the Indian Health Service.

Expanding Medicaid to cover more low-income rural Alaskans would solve these problems and also reinforce the finances of rural hospitals and clinics operated by the tribal organizations. These also serve non-Native Alaskans living in rural communities, by the way.

Here's the clincher, though. By law, the federal government reimburses the state 100 percent of all Medicaid-paid services to Alaska Natives. There will never be a cost to the state from Alaska Natives covered by an Medicaid expansion unless Congress changes the law, which isn't likely.

In all fairness, the governor said he would explore options to provide care to the 26,000 non-Native Alaskans affected by his decision, possibly through expansions of community health centers and presumably with state funds. He has tasked Health and Social Services Commissioner Bill Streur with exploring that idea and reporting back.

The governor also said he would appoint another health care task force to study the issue. How many of those have we had?

Parnell did leave a crack in the door, however, in that he might still allow the expansion if the president makes changes to the Affordable Care Act. Parnell did not spell these out. This seems unlikely, so I think we're just stuck.

Tim Bradner is an Anchorage business and economics writer.


Tim Bradner