Gov. Bill Walker, like other Republican and Democratic governors who have hopped on board, is right that accepting Medicaid expansion will save Alaska money and cut our budget deficit. Turning away an opportunity to get ill people medical care, and cut the budget at the same time would be a wasted opportunity.
Here's a reality check as we look at budget cutting options. Given the fall in oil prices, the budget deficit is so large that you could fire every state employee, and still have a roughly $1.5 billion deficit. Cutting government waste alone won't fix the budget gap, and we need to also take advantage of smart opportunities like this.
I agree with the governor that we can't afford to turn our noses at $28 million in budget savings over the next four years. Accepting Medicaid expansion will provide treatment to people who are ill and can't afford treatment, and bring over $130 million a year in federal funds to Alaska that will ripple through our economy. Turning away the 4,000 new Alaska jobs that would be created, when Alaska is facing a potentially serious economic hardship, makes little sense if you are looking to protect the economy.
How does Medicaid expansion save Alaska money?
First, until 2017 the federal government pays 100 percent of the cost of expansion, and after 2020 it becomes a permanent 90 percent federal match to cover these costs. That's all instead of the normal, much smaller 50 percent federal Medicaid match. Even at 90 percent federal funding it will continue to cut our budget gap.
It would be a classic political bungle to delay, and miss the early years of 100 percent federal Medicaid coverage.
How will this cut Alaska's budget deficit? Accepting Medicaid expansion will bring in federal funding to cover medical care the state now pays 100 percent to cover. For example, current Medicaid generally doesn't cover you unless you are pregnant or have children. Expansion brings coverage to adults with no children. This will reduce alcohol and substance abuse treatment costs the state currently pays with state dollars, prisoner medical costs we currently pay with state dollars, and other costs the state fully foots to cover adults without children.
And Medicaid expansion requires mental health coverage parity -- so we will receive needed alcohol, drug and mental health treatment funds the state now covers. That saves us money, saves families agony, puts fewer children into expensive, potentially damaging foster care, and makes our streets and homes safer.
When Alaska receives federal road funding with a 90 percent federal match all legislators jump at it because road maintenance, and the infusion of federal funds, creates jobs and provides better roads. Turning away 90- to 100-percent federal funding to get people medical care, create jobs, and qualify more people for federally funded private insurance subsidies just doesn't makes sense.
And there's a cost-saving bonus for people with private insurance. Alaskans with private insurance will benefit when hospitals no longer have to pass the high costs of uninsured patients to the rest of us.
Let's be smart. As a Democrat I'm happy to work across party lines with the governor. I hope some of the undecided or recalcitrant members of the governor's own party will also agree, so we can work together and do the right thing for Alaska and our budget woes.
Rep. Les Gara, D-Anchorage, is a member of the House Finance Committee.
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