Parnell Says Medicaid Won’t Expand In Alaska

Friday, Governor Parnell announced he won’t expand Medicaid in Alaska.

Medicaid expansion is a key provision of President Obama’s Affordable Care Act. It would offer health coverage to an estimated 40,000 low income Alaskans.

Parnell says he doesn’t want to attach Alaskans health care or finances to a “failing Obamacare system.”

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Alaska Governor Sean Parnell announces the state will not be expanding its Medicaid program. Photo by Annie Feidt, APRN - Anchorage.
Alaska Governor Sean Parnell announces the state will not be expanding its Medicaid program. Photo by Annie Feidt, APRN – Anchorage.

A small group of women stood outside the Governor’s office building in downtown Anchorage singing and praying Parnell would decide to expand Medicaid.

Their prayers were not answered.

“I believe a costly Medicaid expansion, especially on top of the broken Obamacare system is a hot mess,” Parnell said.

With the announcement, Parnell released an analysis of Medicaid expansion in Alaska prepared by The Lewin Group, a health care consulting agency.

It was completed in April. APRN filed a freedom of information request for the report in June, but the state decided to keep it secret until now. It shows Medicaid expansion would bring $3 billion into Alaska through 2020 and cost the state just $240 million. That’s because the government would pay for 100 percent of the program in the first three years and then gradually reduce the matching rate to 90 percent. Parnell says that math was appealing.

“All of those federal dollars are really enticing. They are, but they’re not free. And in fact they’re paid for by debt and printing more money,” Parnell said. “They’re paid for by our kids and grand kids. And they also come at a price of dependence on the federal government to a greater extent than we are today.”

Medicaid is already one of the largest spending items in the state budget. And Parnell cited that as another reason to refuse federal money to expand the program.

Parnell is establishing an advisory group to reform Medicaid to help control costs of the program.

Since the health care law was designed to included Medicaid expansion, Parnell’s decision will leave 20,000 low income Alaskans with no reasonable option for getting health insurance. He says he wants to find a way to get those Alaskans “better access” to healthcare.

“I have committed to Alaskans and to these providers that we would work to address these gaps in access,” Parnell said.

Several organizations have come out in support of Medicaid expansion including the Anchorage and Alaska Chambers of Commerce, the Alaska State Hospital and Nursing Home Association and AARP Alaska.

Ken Ostercamp is state director for AARP. He is incredulous that the Governor could ignore such a wide range of Alaskans.

“I don’t know who he’s listening to,” Ostercamp said. “I don’t know what organizations have come out opposing Medicaid expansion.”

“It’s really an unprecedented spectrum of support and yet the Governor chose to make the decision and make it in secret, not to do what everybody seems to want.”

Governor Parnell hasn’t completely closed the door on Medicaid expansion. He says he is willing to consider a model that is tailored to the “specific needs of Alaskans.”

Susan Johnson is the regional director with the federal Department of Health and Human Services. She says Parnell has not actively pursued an alternative.

“I know the secretary has talked to him with a welcome sign open for bring to us your ideas and let us begin a conversation as Arkansas did, as Idaho has done, as other states have done, but there was no engagement from the Governor with us,” Johnson said.

Parnell indicated he would want to limit the expansion to only 100 percent of the federal poverty level, instead of 133 percent.

The federal government has said states that do that won’t be eligible for the same generous matching rates.

Still, Johnson is hopeful Parnell will reconsider and says he can change his mind anytime and opt Alaska in to the program.