Opinions

Medicaid expansion: Not right for Alaska now

If you, like most people, pay scant attention to the fine details of the state budget in Juneau, you'd probably be surprised to learn that Medicaid is Alaska's largest single budget expense. We spend more on Medicaid than we do on K-12 education or higher education or public assistance. Spending on Medicaid has nearly tripled since 2000, and by 2020 it is expected that the program will consume a whopping $2.5 billion.

In spite of these staggering numbers, Gove. Bill Walker announced Thursday he will unilaterally force Obamacare's Medicaid expansion plan onto Alaskans after failing to get the Alaska Legislature on board with his expansion plans in the last legislative session.

The governor no doubt believes that expanding Medicaid is in the best interests of the citizens of this state. But his analysis and projections for the program in the future are, at best, pie-in-the-sky. He claims that opting-in to the Medicaid expansion is "the right thing to do," but when you are offered a deal by Washington that's too good to be true, it usually is. Simply put, expanding Medicaid will be a budget disaster for Alaska; sidestepping the legislative process to single-handedly foist it onto Alaskans is not the right way to go.

Although Washington will pay for 100 percent of expansion costs until 2017, by 2020 they will ratchet this down to 90 percent. In a column in Alaska Dispatch News, Gov. Walker said he sees no problem with this, stating that we would be doing "backflips" if the federal government offered us the same 90 percent match rate on a transportation project. The key difference is that transportation projects eventually end, whereas Medicaid is perpetual and is already the biggest and fastest growing program in our state budget.

There is also no surefire guarantee that our federal health administration will maintain the 90 percent match rate. The Obama administration has adjusted the current Affordable Care Act over 500 times through regulations. The federal government is $18 trillion dollars in debt and on pace to grow that number to $27 trillion in the next decade. The Government Accountability Office has called this an "unsustainable long-term fiscal path," and House Budget Committee chairman Paul Ryan has said there is no way that Congress will keep up the 90 percent match rate in the future.

Gov. Walker has said that a cut in the federal reimbursement rate is a nonissue, citing a letter from "federal authorities" asserting that Alaska can choose to leave the program any time it chooses. Unlike Obamacare, however, this letter is not codified into law or regulation, which classifies the expansion group as "mandatory" once the state ops in. If later we decided to exit the expansion, the individuals enrolled in the expansion program will remain eligible for Medicaid. The state of Alaska would have to continue to pay for their care.

Even the 10 percent match rate from our end would put a serious strain on Alaska's budget, and having that rate tick up to just 15 percent would be dangerous to the long-term fiscal health of a state already looking at billions in deficit spending stretching years into the future. It would force cuts in funding to meet other needs, which means less money for schools, transportation, infrastructure and other social services.

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Gov. Walker already is pushing to impose new statewide taxes or tinker with Permanent Fund earnings to pay for government. To be truly transparent, what he should have done is ask Alaskans whether they want to pay new state taxes or suffer changes to the Permanent Fund to cover the state share of expanding Medicaid, because, in essence, that is precisely what he is suggesting should happen. Did he truly believe Alaskans would agree to pay state taxes to expand Medicaid?

What we need, instead, is to tighten our purse strings and come up with a sustainable spending plan for the state before we even consider taking on additional long-term financial commitments under Medicaid expansion. We should all understand that our fiscal problems are the first priority, and any discussion about Medicaid expansion comes later after we learn the true costs.

Unilateral action by Gov. Walker to expand Medicaid is as divisive as when President Obama does likewise in Washington, DC, with the Congress. Instead of dismissing the people's elected representatives, Gov. Walker should have abided by the good faith agreement he has to work with the Legislature on fixing the current Medicaid program so that it works more efficiently and effectively for patients and taxpayers both. This would be "the right thing to do."

Dave Morgan is a health care professional who has spent decades working for hospitals and tribal health organizations in Alaska. He is a founder of the Alaska Center for Sustainable Healthcare Spending and Policy.

The views expressed here are the writer's own and are not necessarily endorsed by Alaska Dispatch News, which welcomes a broad range of viewpoints. To submit a piece for consideration, email commentary(at)alaskadispatch.com.

Dave Morgan

Dave Morgan is a healthcare professional who has spent decades working for hospitals and tribal health organizations in Alaska. He is a founder of the Alaska Center for Sustainable Healthcare Spending and Policy.

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