Walker expands Medicaid without Legislature

Photo/Elwood Brehmer/AJOC

There were hugs and high-fives between Gov. Bill Walker and members of his administration as he announced the State of Alaska would accept funding to expand Medicaid via executive authority.

“Today, Alaska becomes the 30th state to accept the benefits of Medicaid expansion,” Walker said during a July 16 briefing at the Alaska Native Tribal Health Consortium office in Anchorage.

Accepting and spending money by the State of Alaska typically requires the Legislature’s approval. However, because the Medicaid funding is federal dollars and does not involve the general fund, it can be done administratively.

Walker sent a letter to Legislative Budget and Audit Committee chair Rep. Mike Hawker, R-Anchorage, July 16, stating he would begin the administrative process by submitting the requisite Legislative Revised Programs to expand Medicaid and accept $148.6 million for the state’s 2016 fiscal year that began July 1.

Growing the low-income health care program will make about 42,000 uninsured residents eligible for coverage; about 20,000 are expected to sign up in the first year.

Newly eligible for Medicaid under the program will be adults without dependents who make less than 138 percent of the federal poverty level; for single individuals that is $20,314 per year and for married couples it’s $27,490 annually.

The Legislative Budget and Audit Committee now has 45 days to vote on whether or not to accept the funds. If the governor’s recommendation is voted down, he must then evaluate the committee’s decision and send another letter notifying members of his final decision.

The administrative move has been used seven times prior in the state’s history, according to Walker, to accept settlement money resulting from the Exxon Valdez spill and other unusual agency funding.

Regardless of the committee’s vote, Walker said he expects the State of Alaska to accept additional Medicaid funding Sept. 1 at the latest — the end of the 45-day period.

Health and Social Services Commissioner Valerie Davidson said more Medicaid money would also save the state $6.6 million this year and over $100 million over the next six years by using federal funds to foot the bill for things the state is currently paying for.

Walker noted in his speech that 160 local governments, associations and nonprofit organizations in Alaska have formally supported expanding federal Medicaid funding, which was a cornerstone of his campaign last year. It was also major issue left unresolved by the Legislature this year after the regular session and a special session called by Walker that included Medicaid expansion and reform.

More than 60 percent of Alaskans support the move, according to the governor.

“This is not a partisan issue,” he said.

Democrats in the House and Senate commended Walker’s announcement.

“Gov. Walker is being forced to use his executive power to expand Medicaid because the Republican controlled leadership in the House and Senate refused to properly consider an expansion bill this past session,” Independent Democratic Coalition Leader Rep. Chris Tuck, D-Anchorage, said in a formal statement. “We have an opportunity to get health care for 40,000 Alaskans and receive nearly $400,000 a day (in) federal funding. It’s the right and moral thing to do and our coalition applauds the governor’s leadership on this issue.”

A $145 million line item for federal receipts to expand Medicaid included in Walker’s budget proposal was cut out by the Legislature during the budget process.

Walker introduced reform and expansion legislation, Senate Bill 78, in the middle of the session, which some legislators said did not give them enough time to review the complexities of overhauling a $1.5 billion program.

Sen. Pete Kelly, R-Fairbanks, one of the most vocal critics of expansion in the Legislature, introduced Senate Bill 74 focused on reform. Both pieces of legislation remain in committees.

“Regardless of federal funding, we cannot afford the Medicaid system we currently have now. In addition, our current system is broken. Adding tens of thousands of people to a broken system will do nothing to improve the quality of care, access, or efficiency,” Kelly said in a formal statement after the governor’s announcement.

Walker said he wanted expansion to happen through the legislative process, but he was left with no choice.

 “This is the final option for me; I’ve tried everything else. Alaska and Alaskans cannot wait any longer,” the governor said during the press conference.

A release from the Alaska Republican Party claims Walker agreed with legislative leadership to hire experts to determine the actual cost of the existing Medicaid program and help plan for reform.

“Prudence demands caution. I’m disappointed the governor has chosen to abandon the legislation he introduced,” House Speaker Mike Chenault said in a release. “I think his rush to judgment before even hearing from expert consultants is the wrong approach — with potentially serious negative consequences for Alaska.”

Walker spokeswoman Katie Marquette said the governor never made the agreement purported by the Alaska Republican Party.

Medicaid expansion is “a catalyst for reform” and DHSS has plans to implement reforms that could save $570 million over six years, Davidson said.

Those reforms focus on fraud control, overuse of emergency rooms, refinancing home and community-based services and encouraging Alaska Natives to use Indian Health Service Facilities, which is completely federally reimbursed, she said.

Greater Fairbanks Community Hospital Foundation President Jeff Cook said expanding Medicaid would ease costs on the rest of the health care system right away.

“Patients without coverage often have to resort to the emergency room for what should have been basic care, but often they wait so long it becomes chronic care. This is uncompensated care that could have been done more efficiently and effectively in a better setting which Medicaid expansion will allow,” Cook said.

The cost of the emergency room care Cook described is absorbed by providers, hospitals and the insured general public through higher premiums, he said.

Concerns about further stressing a once broken Medicaid billing and payment system have largely been alleviated, according to Davidson. The much-maligned Medicaid Management Information System is now making accurate and on-time payments at a better than 90 percent rate, she said.

The Walker administration also estimates expansion will generate about 4,000 new jobs in the health care industry, but also in construction of facilities and support services.

Labor Commissioner Heidi Drygas said her department is using a $3 million federal grant to accelerate registered apprenticeship programs in the health care field.

“The (Labor) Department is working to ensure that our vocational training programs in Alaska are designed to provide skilled health care workers to employers,” Drygas said. “Increased access to targeted training will likewise increase the quality of healthcare in Alaska.”

Walker said he’s not sure if the Legislature will refuse to fund expansion when it requires a 10 percent state match after several years. Currently, federal money covers the entire expansion. He likened the 90-10 federal-state funding of this portion of Medicaid to federal transportation funding, which the state accepts yearly and requires a 10 percent match.

Walker has said in the past the state would drop the program if the match exceeds 10 percent. He also noted in a later speech July 16 that funding changes to the system at the federal level are unlikely because they would require congressional approval that would be unpopular given a majority of states are in the program.

Elwood Brehmer can be reached at [email protected].

11/20/2016 - 3:33pm