Medicaid Reform Bill Introduced In Alaska Senate

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A Medicaid reform bill has been filed in the Alaska Senate. Many Republican legislators have said reform of the state’s low-income health care program must happen before they accept federal dollars to expand it.

APRN’s Alexandra Gutierrez joins us to talk about what’s in the bill and what it means for the program’s future.

Talk of a Medicaid reform bill coming out of the Senate picked up earlier this month. Today, Sen. Pete Kelly, a Fairbanks Republican, finally introduced it. What are his goals with the bill?

An a meeting with reporters this afternoon, Kelly said his objective was to rein in waste that exists with the state’s Medicaid program. He sees unnecessary spending happening in four areas:

KELLY: Travel, ER, prescription drugs, self-referral to more expensive specialists.

The bill he introduced Friday addresses those areas generally. There’s a section on emergency services, setting up a program tracking frequent ER visits. There’s language that setting up a prescription monitoring program and requires guidelines for prescribing narcotics to Medicaid patients. There’s also a section directing the Department of Health and Social Services to look into the pros and cons of privatizing services at the Alaska Psychiatric Institute and the state’s pioneer homes for senior citizens.

But it is not Kelly’s goal to expand Medicaid. He’s been firm about that, saying he does not want to add more people to a “broken system.” There is no language accepting $145 million in federal money to bring people near the poverty line into the program, and he’s not in favor of such language being added.

Right now, the state’s Medicaid program mostly covers low-income children and pregnant women. With expansion, adults who make up to 138 percent of the poverty level could get government health care — that’s about $20,000 a year for a single person. What does this bill do for people who don’t receive Medicaid now, but would through expansion?

This bill really does not apply to them. There’s a section that sets up a managed care pilot program of sorts, and it only applies to those already enrolled in the state’s Medicaid program. There’s also a section establishing a health savings account by taking 10 percent of a recipient’s Permanent Fund dividend that’s voluntary, but again, that only applies to people who are eligible for state Medicaid now.

Now, as it goes through the committee process, there are changes that could be made that could affect them. The legislation is just seven pages, and it’s written in pretty broad strokes. Health care policy is complicated and wonky, and by comparison, the Affordable Care Act was more than 1,000 pages.

You mentioned the creation of a Health Savings Account through people’s PFD. Tell us more about that.

The idea is that if you’re eligible for Medicaid because you’re a child or a pregnant woman near the poverty line, a chunk of your PFD could be diverted for medical expenses. Traditionally, the big benefit of health savings accounts is that money can go into them tax-free. However, most people who are eligible for Medicaid don’t really have a big tax bill anyway.

Kelly stressed that enrollment in the health savings account is voluntary — nobody in this category is going to see their PFD automatically used for their medical bills. But he also said he’s not yet sure how the health savings account is going to work.

KELLY: I can’t tell you why people would choose it. We’ll figure that out. But we’re going to get it started.

At any rate, he said there are other parts of the bill — like the push to a managed care system — that were more important for reform.

KELLY: It’s very possible that this portion of this bill will not have a lot of teeth in it, will not have a lot of impact in the short term.

There’s one other interesting — if kind of inside baseball — thing to note about the PFD section. Because of it, the beginning of the bill title is “An act relating to Permanent Fund Dividends.” Bill titles basically dictate what changes and additions you can make to a bill. So, a bill with phrasing that vague leaves an opening for other policies dealing with the Permanent Fund to be added in. Because that could be such a Pandora’s box, Kelly’s office says they’re planning to tighten that up.

What’s the financial impact of this bill?

It’s unclear. Kelly says there could be savings in the long term, but there would also be start-up costs to some of the programs established by this bill. The Legislature will have a better sense of the price tag after a fiscal note is drafted.

So, what does this bill mean for Medicaid expansion, if anything?

It’s hard to say. Kelly says he has been working with Gov. Bill Walker and his administration on Medicaid reform, and that things have been nothing but cordial between them. But Medicaid expansion has been such a priority for the Walker administration, that this bill isn’t guaranteed to get the governor’s support.

While the bill does not currently expand Medicaid, legislators could add expansion language in, if they so choose, as the bill goes through the committee process. For passage, the bill will have to go through the Senate, and then go over to the House for review. It is expected to be referred to the House Health and Social Services Committee, which is chaired by Rep. Paul Seaton, a Homer Republican who has been open to the idea of Medicaid expansion. It would also likely go to the House Finance Committee, where there are also a few friendly members.

But even if expansion language does get added to this bill, the legislation would still have to go back to the Senate for approval and potentially for a conference committee. Kelly is not optimistic about that going over well in his body.

KELLY: If I were to look into a crystal ball, I would say that would die in the Senate.

For their part, officials at the Department of Health and Social Services, who have been pushing for expansion, say they have not had time to review the bill.

It’s Day 53 at the Capitol. We’re more than halfway done with the 90-day session. Can all this happen in time for adjournment?

If it does, it would have to be on a tight schedule. It’s a pretty complicated subject to jump into so late in the game. But then again, and some people might throttle me for saying this: There’s always the option of a special session.