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Medicaid expansion makes sense for Alaska's health and economy

  • Author: Jeff Cook
  • Updated: June 29, 2016
  • Published April 1, 2015

Under the Affordable Care Act -- Obamacare -- Alaska has the option of expanding Medicaid eligibility to working age adults with incomes up to 138 percent of the federal poverty level. The Alaska Department of Health and Social Services contracted Evergreen Economics to analyze the enrollment and spending impact of expanding this coverage in Alaska and found compelling reasons to increase access to health insurance for an estimated 41,910 low-income Alaskans:

• Over the next seven years expansion would mean $1.1 billion in new federal revenue for Alaska;
• 4,000 new jobs;
• $1.2 billion more in wages and salaries paid to Alaskans;
• $2.49 billion in increased economic activity throughout the state;
• $6.1 million general fund savings projected in 2016, and increasing in the following years; and
• A decrease of between $18 million and $27 million in uncompensated care at Alaska hospitals.

These economic benefits at this time in Alaska's history are simply too compelling to ignore.

Alaska's hospitals face considerable economic risk if we opt out of Medicaid expansion, and thousands of Alaskans remain without basic coverage. As president of the Greater Fairbanks Community Hospital Foundation, I support the expansion of coverage because it makes good economic sense and it is vital to Alaska hospitals' collective mission of improving their communities' health.

Patients without coverage often have no alternative but the emergency room for basic care. So Alaska's hospitals often treat complex, chronic conditions -- at great economic and social cost -- because the uninsured are often forced to delay what could have been inexpensive treatment.

Hospitals incur such losses as part of their service to the community. Yet, as a result, they are forced to reduce services and shift the burden of this cost to businesses and to the privately insured.

Shifting the cost of unreimbursed care to those with private insurance, and to employers who can still afford to offer health coverage, is not the optimal way to finance health care. But it is currently part of our complex system.

As a hospital trustee, I can affirm that hospitals continually struggle to provide the best possible care at the lowest cost. This is a constant and endless quest. But we must do more. We must advocate for the generous federal matching funds linked to expansion that will bring more than a billion dollars into our state. And we must champion efforts to level the playing field with other states that have embraced expansion and accepted this federal support.

At the moment, Alaska is subsidizing the cost of health care in other states by not claiming our fair share of federal support. We are effectively subsidizing Lower 48 states to lower health care costs at our expense, and creating a competitive advantage that other states can use against Alaska in economic development. This makes no sense.

We now have an opportunity to invest our own federal tax dollars to improve health, to provide needed services to our citizens and to support economic growth.

Simple economics convince me that Alaska should move forward and expand Medicaid coverage. But even more compelling, I believe expansion and reform is the right thing to do for thousands of uninsured Alaskans who are our friends and neighbors.

Jeff Cook was born and raised in Fairbanks and is currently president of the Greater Fairbanks Community Hospital Foundation Board of Trustees. The foundation owns Fairbanks Memorial Hospital, which is operated for the foundation by Banner Health Systems. Cook is a former board member for Providence Alaska and is a current board member of the Rasmuson Foundation.

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.

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