Report: Expanding Medicaid would save state millions

  • By Becky Bohrer
  • Saturday, February 7, 2015 9:36pm
  • News

JUNEAU — Expanding Medicaid coverage would save Alaska money, a new state health department report said.

The report, released Friday, says the state will be able to offset new costs associated with expansion by reducing or eliminating contributions to programs that provide health care to those who would be eligible for Medicaid. It cites a possible $6.1 million in savings next year — including $4.1 million associated with providing health care to inmates — should the state opt for expansion.

The issue is a priority for Gov. Bill Walker, who campaigned on it last year. But it’s also expected to be debated by lawmakers grappling with how to deal with budget deficits exacerbated by a crash in oil prices. Concerns have been raised about the cost, as well as whether the federal government will continue to uphold its end of the deal. The federal government is expected to pay 100 percent of costs through 2016, stepping down after that to a minimum level of 90 percent by 2020.

The Senate Finance Committee has hired former state health commissioner Bill Streur to review the impacts of expansion. Streur served under Walker’s predecessor, Gov. Sean Parnell, who resisted expansion despite broad-based support, citing cost concerns.

Health commissioner Valerie Davidson has said the state’s participation would be made contingent upon the federal match not falling below 90 percent. She said she sees Medicaid expansion as a catalyst for reform of a program that is a major component of the state’s operating budget.

During a news conference Friday in Anchorage, Walker trumpeted the potential for 41,000 Alaskans to benefit from expansion. Expanding health care coverage is the right thing to do, he said.

A separate analysis, released by the state Friday, found nearly 42,000 Alaskans would be eligible for coverage next year, but about 20,000 would be expected to enroll that first year. The number of newly eligible Alaskans expected to enroll is projected to rise each year, reaching just under 27,000 by 2021, the analysis by the Evergreen Economics research firm found.

Davidson said the Alaska Mental Health Trust Authority had agreed to cover the administrative cost of expansion for the first year. The authority’s chief communications officer, Carley Lawrence, said trustees have been supportive but have not yet voted on covering that cost.

The state report said expansion would increase health care access to adults ages 19 to 64 who earn at or below 138 percent of the federal poverty level. It said reforms aimed at ensuring Medicaid patients receive the right care at the right time, place and price will improve patient outcomes and free up capacity in the health care system.

Uncompensated care, provided to those who are unable to or do not pay their medical bills, is a driver of health care prices in Alaska, the report said. Based on the experience of other states that have expanded Medicaid, Alaska could see a reduction of 20 to 30 percent in uncompensated care, which would translate into lower hospital prices for private payers, the report said.

Online: Health department Medicaid expansion site: http://1.usa.gov/1LWytHI

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