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Dunleavy administration proposes to put Medicaid expansion recipients on subsidized insurance instead

JUNEAU — Gov. Mike Dunleavy is proposing to shift thousands of Alaskans covered by Medicaid expansion to subsidized private insurance plans.

The legislation, filed Monday in the House and Senate, would use Medicaid to pay for private insurance under the principle that it would then be easier for Alaskans to shift off Medicaid if their financial circumstances improve, said Donna Steward, deputy commissioner for Medicaid and health care policy in a Monday interview with reporters.

Steward said the new plan is “absolutely not" an elimination of Medicaid expansion.

“If anything, this enhances Medicaid expansion,” she said.

Enacted in September 2015 under an executive order by then-Gov. Bill Walker, Medicaid expansion provides health care benefits to Alaskans who earn more than the normal cutoff for Medicaid benefits but less than 138 percent of the federal poverty line.

According to figures posted at the start of the month by the Alaska Department of Health and Social Services, just over 49,000 Alaskans are covered by Medicaid expansion.

As Steward explained, the idea behind the new legislation is that people who are near the cutoff for Medicaid expansion would be able to switch more easily to ordinary health insurance if they make more money and surpass the cutoff. By passing the cutoff, they would no longer be eligible for Medicaid, but they would be able to keep their existing insurance.

Steward said the legislation introduced this week is the second phase of the governor’s plan to significantly reduce Medicaid spending in Alaska, but when questioned how much money it would save, she was unable to answer.

“I’m not prepared to share that information today,” she said.

Though the new program is intended to benefit people whose incomes are rising, “it is possible that children may be some of those who could be transitioning,” Steward said.

She added that the criteria for those who remain in traditional Medicaid and those who would be covered under the new program are still being worked out. Blind and disabled Alaskans would be able to remain under traditional Medicaid, she said.

Other sections of the legislation would allow the administration to implement the first phase of its Medicaid cost savings plan with emergency regulations that bypass the public comment process.

Steward said, “It’s not necessary, but it would be helpful for us if that component moved forward.”

Rep. Ivy Spohnholz, D-Anchorage and chairwoman of the House Health and Social Services Committee, said Monday that given the time remaining in the legislative session this year, she doubts the Legislature can consider and pass the governor’s legislation this year.

“It’s a big thing, and dropping it on Day 91 … there’s no way we’ll be able to get this done in time" for fiscal year 2020, she said.

The state’s new fiscal year starts July 1.

She also has concerns about the idea of using emergency regulations to bypass public comment on savings and efficiency proposals.

“Skipping that step or speeding up that process wouldn’t be looked upon favorably,” she said.

Sen. David Wilson, R-Wasilla and chairman of the Senate Health and Social Services Committee, said Wednesday that lawmakers will be meeting with the administration to better understand the new concept.

“We are going to be looking at that tomorrow. We are meeting with various members of our body and the department to get a better understanding of that,” he said.

Wilson said his primary concern is making sure Alaskans’ health services are “similar or the same” under the new proposal as the existing plan.

“That’s pretty much what I want to make sure of,” he said.

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