Alaska Legislature

Alaska will begin rationing Medicaid funding

JUNEAU — On Monday, the state of Alaska will begin running out of money to pay doctors, hospitals and clinics who treat Medicaid patients.

The shortfall is a consequence of last year’s budget cuts and the failure of the Alaska Legislature this year to approve the state’s $360 million supplemental budget.

House Republicans blocked funding for the supplemental budget because they disagreed with a provision that would have reduced their negotiating power on other pieces of legislation.

The House could provide partial funding if it sends the supplemental budget to the governor as-is, or it could revote on the entire funding proposal, but it has adjourned until Monday, making action impossible before a deadline determined by the Alaska Department of Health and Social Services.

The effects of the shortfall on health care will vary from place to place and could not be precisely determined.

Under Medicaid, health care providers bill the state for the cost of treatment provided to eligible Americans. Most of the cost of the program is paid by the federal government, with states providing smaller shares.

Medicaid is an entitlement program, meaning states must pay for treatment. Last year, Gov. Mike Dunleavy and the Alaska Legislature cut nearly $170 million from the Medicaid budget, planning to save that much through a series of program changes.


Those changes either failed to save sufficient money or could not be implemented as intended.

The governor has proposed to reverse most of the cuts in the supplemental budget, but in the meantime, the state’s Medicaid accounts have run dry.

Speaking March 17, the woman in charge of the state’s health care budget said the federal government can still cover its share of treatment.

“We need a supplemental, and we need it soon, but yes, we have the ability to make the federal portion of payments,” said Sana Efird, the administrative service director in charge of the budget for the Department of Health and Social Services.

When it comes to the state’s share of treatment, officials will “ration” funding, focusing on smaller hospitals and clinics that may not have sufficient savings to help them make payroll and cover expenses until the problem is fixed.

“Unfortunately, we’ve got some experience doing this in prior years,” Efird said.

This is the fourth time since 2016 that Alaska’s Medicaid program has either run out of funding or has come close to doing so.

James Brooks

James Brooks was a Juneau-based reporter for the ADN from 2018 to May 2022.