Earlier this week (July 14), I sent a letter to the Legislative Budget & Audit (LB&A) Committee, giving members the required 45-day notice of my intention to accept additional federal and Mental Health Trust Fund Authority funds to expand Medicaid. Before signing the letter, I met with the LB&A chair to explain my intentions.
Alaska statute provides that the governor give 45 days’ notice to this committee before accepting money that has not been budgeted if the fund source is not state general funds. Procedurally, the governor notifies the LB&A committee of the funding opportunity. After 45 days, the governor may accept the money, regardless of LB&A action.
Governors and legislatures in 29 states plus the District of Columbia have already made the common-sense decision to accept Medicaid expansion. Ten Republican governors have approved Medicaid expansion. Republican legislatures in five states have approved Medicaid expansion.
Why? Because it helps their residents, their economies, and their budgets.
A recent report by the Robert Wood Johnson Foundation on eight Medicaid expansion states — Arkansas, Colorado, Kentucky, Michigan, New Mexico, Oregon, Washington and West Virginia — concluded those states will save a total of $1.8 billion by the end of 2015 as a result of accepting Medicaid expansion.
I want to bring those same benefits to Alaska. If Alaska had accepted Medicaid expansion on Jan. 1, 2014, we would already have received an estimated $220 million in additional federal revenue. If we act now, we can expect to bring in $1 billion in new federal health care dollars over the next six years, and save more than $100 million in state general funds. Medicaid expansion also means up to 4,000 new jobs.
In the first year that we expand Medicaid, the state will save $6.6 million. This will provide a much-needed boost to our economy and relief to our budget. We can’t afford not to expand Medicaid.
This is an opportunity to help our friends and neighbors who may be forced to choose between life-saving medical treatment and bankruptcy. This is a chance to do something for those who cannot work because they’re sick — and can’t afford to see a doctor because they can’t work. By helping people escape these terrible binds, this is an opportunity to strengthen the fabric of our communities.
Some argue that taking federal money is somehow wrong. Alaska businesses and families pay federal taxes to support many federal programs. These are Alaskans’ tax dollars, and I’m determined to bring it back to Alaska for the good of our people and our economy.
Alaska hospitals absorb more than $100 million in uncompensated care each year. Those costs get spread to the rest of us — and threaten the viability of our community hospitals. Based on the experience in states that have expanded Medicaid, Alaska hospitals anticipate a reduction of $20 to $30 million in unpaid bills.
Unfortunately, inaccurate information has been circulating about Medicaid expansion. Let’s correct the record.
Medicaid is working. In the first three months of this year, Medicaid helped 4,065 Alaskans manage their diabetes; 284 Alaskans received life-saving dialysis services; 628 women had mammograms for early detection of breast cancer, and nearly 4,000 Alaskans received health services at home, keeping them out of more expensive institutions. These services improve lives and save money.
The payment system is working. When the new service went live under the previous administration, in October 2013, there were widespread problems. Very few claims were paid correctly. However, the system has improved tremendously since December 2014. Today, over 90 percent of the new claims processed are being paid accurately and on time.
Reform is under way. Changes to the personal care attendant program, for example, are saving about $20 million annually. Through a care management program, we are reducing the number of Medicaid recipients over-using costly emergency room services. We anticipate $240 million in savings over the next six years as a result of initiatives to improve and streamline the program, and my administration is working with a consultant to identify further opportunities.
It’s necessary for Alaskans. Some people have said low-income Alaskans can get health care at community health centers and similar facilities. That’s just not practical. These facilities offer only limited services — because without Medicaid, they lack reliable funding. Moreover, these facilities can’t provide specialized care such as cancer treatment or cardiology services.
During the legislative session, we provided testimony in more than 30 hearings. We addressed every concern and answered every question.
Alaskans across the state have cheered when I said I would accept the federal funds to expand Medicaid. Many approached me personally to share their struggle to access medical care. Over the past several months, I have received hundreds of emails of support; many with poignant personal stories of a loved one unable to receive care.
We have received more than 150 resolutions of support for Medicaid expansion — from Petersburg to Barrow, chambers of commerce, church organizations, local governments, health care providers and the list goes on. A majority of Alaskans understand that Medicaid expansion makes sense for Alaska.
I agree. It’s time.