Alaska News

Republican lawmakers challenge governor on Medicaid expansion

JUNEAU -- The Republican-controlled House is poised to strip funding to expand the Medicaid health insurance program from Gov. Bill Walker's budget, the first shot in what's expected to be a contentious debate over one of Walker's central campaign planks.

The Walker administration says expanding Medicaid would give more than 40,000 low-income, uninsured Alaskans access to health coverage, bring to the state more than $1 billion in federal spending over the next six years, and reduce annual state spending by millions of dollars -- even in a few years from now, when the federal government's contribution to the expanded program scales back to 90 percent from full coverage.

In a news conference Thursday morning, Republican legislators said they want Walker to introduce a standalone Medicaid bill as a substitute for his current proposal, which would expand the program through changes to the state operating budget. Rep. Mike Hawker, R-Anchorage, dismissed the projected savings by the Walker administration as "gratuitous assertions."

"I'm very concerned that those claims can be substantiated," Hawker said.

Those comments come in advance of a Friday morning committee meeting in which Republican leaders are expected to strip money tied to Medicaid expansion from the health department budget submitted by the governor.

Walker is a longtime Republican who dropped his party registration and merged his campaign with that of Democrat Byron Mallott, now the lieutenant governor, before the two were elected in November.

At Thursday morning's news conference, Republicans said they want Walker to submit a standalone Medicaid bill so it would get a more thorough review -- though they've yet to act on a Democratic expansion bill submitted two months ago.


In a phone interview afterward, Rep. Cathy Munoz, R-Juneau, stressed that the Republicans' demands weren't politically motivated. She cited legislators' request last year that Republican Gov. Sean Parnell submit a standalone bill to enact a measure related to the state pension system that he'd originally proposed in his budget.

"This is one of the governor's priorities, one of the key things he campaigned on," Munoz said. "And I think asking the governor to lead on a piece of legislation is very important."

Walker's legislative director, Darwin Peterson, said in an interview this week that the governor has no intention of doing so.

"The operating budget is the appropriate vehicle for Medicaid expansion funding to be accepted by the Legislature," he said. "They're free to have as many hearings on the topic of Medicaid expansion that they want, in any of their committees."

A spokeswoman for Walker suggested that Republicans could act on the standalone bill filed in the House by Rep. Andy Josephson, D-Anchorage, and Rep. Sam Kito, D-Juneau, in late January. It has not yet been scheduled for a hearing by Rep. Paul Seaton, R-Homer, chairman of the House Health and Social Services Committee.

"If they want a separate Medicaid expansion bill, why can't they just use the one that's already been introduced?" the spokeswoman, Grace Jang, wrote in an email Thursday.

If the House strips Walker's Medicaid expansion funding from the health department budget in its committee hearing Friday, the administration could seek to have the proposal restored when the Senate takes up the budget later in the Legislature's 90-day session.

Josephson said in an interview Thursday that he thought some of the Republicans' skepticism of Medicaid expansion stems from rational fears of expanding government and spending more public money. But he added that some of the objections were political, since the initiative is tied to Walker and to the Affordable Care Act, which was promoted by President Barack Obama, a Democrat.

"They fear, I think needlessly, the extra costs associated with Medicaid," Josephson said. "They also don't want it because the governor wants it."

He added: "If they think that it can't be done through the budget and they want a bill, give my bill a hearing as soon as possible."

In other states, legislatures have used both budget bills and standalone measures to enact Medicaid expansion under the Affordable Care Act, said Laura Snyder, a senior policy analyst with the Kaiser Family Foundation.

There are "legislatures all over the country that have debated many of the same issues that are under discussion in Alaska," Snyder said in a phone interview.

New Mexico and New York expanded Medicaid through their budgets, Snyder said, while Minnesota and Maryland used separate bills.

In Alaska, Walker has included projected new savings and spending related to Medicaid in state agency budgets like the corrections and health departments. But Republicans in both the House and Senate oppose that approach to expansion, with Senate President Kevin Meyer, R-Anchorage, saying in a news conference Monday: "Instead of hiding it or stuffing it in the operating budget, let's do a separate bill."

In an interview afterward, Meyer maintained that Republicans want more information about expansion. They're not demanding a standalone bill from Walker so they can simply reject it, he added.

"We want to have better discussion," Meyer said. "I've heard it can actually save us money, but I don't know how that happens."

The Walker administration says there would be no extra state costs related to expansion for the first year -- though the Alaska Mental Health Trust Authority will cover $1.3 million for its administration.


Meanwhile, the Walker administration expects to save some $6.6 million in state spending that's replaced by new federal Medicaid funding, though Republicans have said they're skeptical of those numbers.

In a phone interview late Thursday, Valerie Davidson, the health commissioner, disputed Hawker's characterization of the projected savings as "gratuitous assertions." She described how the state arrived at its numbers.

"We've put our information out there, made it available to the public," Davidson said. "If folks out there believe that they want to counter that with another number, they probably should make those numbers available."

The projected savings, she said, include some $4 million in the Corrections Department budget that the state currently spends on health care for inmates who need care at hospitals or other medical institutions outside a prison.

The Corrections Department analyzed individual billing records for the last three years and pegged the state's current costs for those inmates -- there were 170 in the last fiscal year -- at $8.5 million.

The state estimates 80 to 90 percent of those inmates would have their bills newly covered by the federal government if Medicaid is expanded. But Davidson said their projected savings were "very, very conservative," in part to allow time for a transition.

Nonetheless, a House budget subcommittee led by Rep. Bryce Edgmon, D-Dillingham -- a member of the Republican majority -- took out the $4 million in projected savings in a meeting late Thursday, saying the Walker administration couldn't count on it because Medicaid hadn't been expanded yet.

The rest of the state's projected savings from Medicaid expansion come from two other programs.


One currently relies on state funding to cover health care for poor people with serious medical conditions. All but a few of the 1,000 participants in that program, Chronic and Acute Medical Assistance, would be newly eligible for Medicaid coverage, Davidson said, saving about $1 million in the next fiscal year.

The rest of the savings, $1.5 million in the next fiscal year, stem from reductions to grants the state gives to mental health providers that could be scaled back by replacing the money with new federal Medicaid funding.

Health department officials said those numbers were also very conservative, though Davidson couldn't immediately provide documentation or a study to corroborate them.

The Walker administration projects additional savings in future years as more state costs are shifted to the federal government. Alaska will save $8.1 million in 2017, falling to $3.3 million in 2021 as the federal government scales back its coverage of expanded Medicaid to 90 percent.

Republicans have also said they want to see Walker submit a more comprehensive proposal to reform Medicaid before they agree to expand it.

The program costs the state more than $600 million annually to cover health care for the poor and disabled. Walker identified $20 million in cuts as part of his budget proposal this month, but one Republican leader, Fairbanks Sen. Pete Kelly, has said he wants much larger savings.

Kelly, the co-chairman of the Senate Finance Committee, said in an interview this week that he plans to introduce a Medicaid reform bill in the next few weeks on a much greater scale. "We're looking at hundreds of millions," he said.

Nathaniel Herz

Anchorage-based independent journalist Nathaniel Herz has been a reporter in Alaska for nearly a decade, with stints at the Anchorage Daily News and Alaska Public Media. Read his newsletter, Northern Journal, at