Alaska News

State Chamber of Commerce bucks Parnell, backs Medicaid expansion

The Alaska State Chamber of Commerce says Alaska should expand its Medicaid program under the U.S. Affordable Care Act, bucking Gov. Sean Parnell, who so far has refused to take advantage of federal funds to increase health coverage for poor Alaskans.

In a series of resolutions made public this week, the Alaska Chamber listed Medicaid expansion as one of its top five state priorities for 2014. Medicaid joined more typical fare for the business group, such as maintaining oil-tax cuts approved by the Legislature last spring and increasing natural resource development through easier permitting.

Medicaid made No. 3 on the priority list at the Alaska Chamber's Legislative Policy Forum, held Oct. 16 in Fairbanks. Chamber president Rachael Petro said about 150 of the organization's 700 members attended the forum. A supporter of the resolution, Karen Perdue, chief executive of the Alaska State Hospital and Nursing Home Association, said the vote favoring Medicaid expansion was overwhelming.

"Our members took a very pragmatic approach," Petro said. "They understand that the Affordable Care Act, whether they like it or not, is the law of the land."

If Alaska doesn't expand its Medicaid program, she said, the effect will be that Alaska businesses and individuals with health-care policies will be paying for its expansion in other states through federal taxes and other revenue sources built into the law.

The Affordable Care Act -- Obamacare -- originally required states to expand their Medicaid program to include adults who earn from 100 percent to 138 percent of the federal poverty guideline, and to allow adults without children to participate.

In Alaska, the poverty line is an annual income of $14,350 for an individual and $29,440 for a family of four. Studies say that up to 40,000 of the 139,500 uninsured Alaskans would be eligible for Medicaid if the program was expanded.


But when the U.S. Supreme Court allowed the Affordable Care Act to be implemented, it said that states couldn't be compelled to expand Medicaid. About half the states have refused, including Alaska, though Parnell said he might change his mind with the budget he submits to the Legislature in December.

"He is analyzing the costs the state currently incurs for all health care services and the actual number of Alaskans who have no access to health-care services," his spokeswoman, Sharon Leighow, said in an email.

Parnell has said he's concerned that the pledge of the federal government to pay 100 percent of the cost of expansion for three years, and 90 percent afterward, can't be trusted and that the burden would eventually fall on Alaska.

At the same time, conservative Republicans, including tea party activists, who lost their effort to cripple Obamacare in the government shutdown have been turning to the states to block parts of the law, such as Medicaid expansion.

Alaska Chamber members weren't necessarily happy with the law but they wanted to work with it, Petro said. Business leaders at the Fairbanks meeting were also concerned that Alaskans would be "taxed twice" if Medicaid wasn't expanded, she said. To help pay for the increased cost of Medicaid, Congress decided to reduce Medicare payments to health-care providers like hospitals, she said. When that happens in Alaska and the lost payments are not offset by Medicaid increases, the state loses, she said.

The Alaska Chamber members also saw benefits to the overall state economy of millions of dollars of new federal money, she said.

Perdue, an Alaska Chamber member who served as Democrat Tony Knowles' Health and Social Services commissioner and Republican U.S. Sen. Ted Stevens' press secretary, said Medicaid expansion "is not only the right thing to do, but it should prevent some of the 'cost shifting' that goes on now."

Cost shifting is when a low-income patient gets treated at a hospital, then can't pay the bill. That happens in Alaska to the tune of about $200 million a year, Perdue said, and the loss is reflected in higher costs to the insured. Medicaid expansion would mean hospitals would collect $30 million to $60 million more in paid bills, she said. That's money that won't have to be shifted to others, she said.

But Medicaid expansion would also result in lower overall costs, she said, because more Alaskans would be able to visit a primary care doctor instead of the emergency room. And they'd have greater opportunities for wellness visits to improve their health, she said

"If you're using the E.R. (emergency room) as your prevention center, that's a pretty costly way to go," Perdue said.

Reach Richard Mauer at or 257-4345.


Richard Mauer

Richard Mauer was a longtime reporter and editor for the Anchorage Daily News and Alaska Dispatch News. He left the ADN in 2017.