Voices of Alaska: Medicaid expansion would help Alaska’s economy

  • By Rep. Les Gara
  • Tuesday, July 7, 2015 1:20pm
  • Opinion

According to a recent study, Alaska is either in a recession or on the brink of one. It’s time for non-partisan solutions, not time to play Russian Roulette with the economy. Alaska will lose 4,000 jobs across the economy by September. Blocking a vote on a Medicaid Expansion bill that’s passed in Democratic and Republican states, that would create 4,000 Alaska jobs, isn’t smart politics. The public supports it across party lines. But Republican legislative leaders decided to block this bill from House and Senate floor votes during 140 days of legislative session and special sessions.

I’d ask opponents to rethink their position to protect our economy. This bill is a no cost way to help us get 4,000 new jobs, and $145 million in federal funds that will ripple through and help an economy sitting on a recessionary cliff.

The Governor’s bill would also create roughly $330 million in state budget savings over the next six years, to help with state deficits. How? Medicaid Expansion and Reform requires the federal government to pay all, or in some cases a higher percentage of Medicaid costs than the state currently covers. This savings estimate comes from Evergreen Economics, the consulting group most familiar with Alaska’s Medicaid system. It’s consistent with major budget savings in Republican and Democratic Medicaid Expansion states, according to studies by the Robert Wood Johnson and Kaiser Family Foundations.

Why didn’t this bill pass? It was supported by every Democratic and Independent legislator. It was supported by a Governor who’d been a Republican before running as an Independent. And it is supported by just enough Republicans that we have the votes to pass it. But GOP leaders said they won’t allow a floor vote unless a majority of their own caucus members agree to support the bill. So, a non-partisan bill stalled even though it had enough votes to pass.

No one disputes the jobs Medicaid Expansion will bring. In the first year Alaska will receive $145 million in additional federal funds that will bolster the economy, rising to roughly $200 million/yr. by 2020. According to Northern Economics, their midline estimate says Medicaid Expansion will initially create roughly 1,500 jobs, and 4,000 by 2020. That was before Alaska Regional Hospital announced they’d build a new clinic under Medicaid Expansion because a clinic can treat insured people more cheaply than treating uninsured people in an emergency room. Other hospitals will likely follow suit. More jobs will follow.

Why do some legislators oppose this bill?

Some doubt the state and national studies showing budget savings. But in over 30 legislative hearings this year the Walker Administration made its case.

Opponents also point to a flawed claims payment system Xerox sold the Parnell Administration. Under the Parnell Administration the system paid out claims poorly, harming many medical providers. When the Walker Administration came in, they continued prior repair work, at a furious pace, to fix the Xerox system. It now pays at over 90% accuracy during the first billing submission. Opponents say that’s less than 100%. But they fail to note that for claims the Xerox system doesn’t pay accurately, a phone call from a provider results in 100% of claims being paid by the next or following month. The state is still successfully forcing Xerox to improve this system through litigation. Alaska hasn’t retroactively made right for all Parnell-era claims mangled by Xerox. It’s working to do that. But the system can now pay new claims under Medicaid Expansion.

Finally, some argue the Administration just hired its own consultant, and must not have yet analyzed whether to accept Medicaid Expansion. That consultant is being hired, not to analyze whether accepting Medicaid Expansion and Reform is desirable, but to help implement Medicaid Expansion rules that will work best here.

Legislators should tell the Governor they’ll pass this bill during a quick special session. That’s smarter than telling him to accept the cost and delay of litigation that will come if he implements it without legislative approval. Improving the economy by getting people medical care is the right thing to do.

Rep. Les Gara is a Democratic Member of the House Finance Committee.

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