What others say: No excuse for Alaska’s ‘Medicaid gap’

  • Wednesday, June 25, 2014 4:38pm
  • Opinion

A study by the state Department of Health and Social Services released earlier this month gave insight into the segment of Alaska’s population that falls into the “Medicaid gap” — those who would have qualified for federally funded health care under an expansion of Medicaid rejected by Gov. Sean Parnell.

The expansion of Medicaid was a tenet of the federal Affordable Care Act, colloquially known as “Obamacare,” that became law in 2010. It was an attempt to provide health coverage for the poorest Americans — those people under age 65 earning less than $14,859 per year. Under the law, the group wouldn’t have qualified for subsidization of a private insurance plan, so an expansion of Medicaid would have provided them coverage instead.

But Gov. Parnell opted not to allow that expansion in Alaska. Calling the Medicaid expansion “a hot mess,” he said he believed it would saddle future generations with heavy debt. At the time of his rejection of the expansion in late 2013, the number of Alaskans estimated to fall within that gap was 40,000. The recently released DHSS study has revised that number downward, estimating that 10,000 to 12,000 Alaskans are truly without coverage after subtracting those who are covered through tribal organizations or other groups. While this figure is meant to clarify the number of Alaskans truly in need, and 10,000-12,000 citizens without meaningful health care coverage is a substantial reduction from earlier estimates, Gov. Parnell’s decision not to allow federal coverage despite a lack of a state solution for their care is difficult to justify.

The claim that the Medicaid expansion and Obamacare in general are overly expensive and a “hot mess” has yet to be determined. The nonpartisan Congressional Budget Office forecast sizable savings for the country from the act — $124 billion over the 10 years after it was enacted — and though delay and modification of some Obamacare provisions have had an impact on that figure, an estimation the CBO released this week forecasts the same or greater savings now that four of those 10 years have elapsed. Still, there are a great many moving pieces in the law, and it’s still feasible that its impact could swing in either direction. Given his opposition to many aspects of the act, Gov. Parnell’s skepticism about its savings are understandable.

But there’s little evidence to justify Gov. Parnell’s claim that the Medicaid expansion would be overly costly to the state. The federal government would fund 100 percent of costs for those newly covered by the expansion through 2016, after which the state would pick up 10 percent of costs with the federal government covering the other 90 percent. But even at 10 percent, the state would be paying a far smaller share of costs than it pays for current Medicaid enrollees (about 43 percent on average). And without any plan in place, the state is already picking up roughly a third of the tab for Alaskans who can’t pay for their care. It’s difficult to do the math in a way that would have the state spending more money under an expanded Medicaid system than it already spends due to emergency care for those falling in the Medicaid gap. As the non-partisan RAND Corporation states in a brief on Medicaid expansion costs, “We estimate that the increased coverage triggered by health reform would reduce state and local spending on uncompensated care by as much as $18.1 billion, annually, across all states. So it’s in the best economic interest of states to expand Medicaid. Their costs of expanding coverage will generally be lower than the expense they would face for uncompensated care.”

We’re already paying the federal taxes that fund the Medicaid expansion, but in the wake of Gov. Parnell’s denial of the expansion, we’re paying for the costs of other states without reaping any of the potential benefits. In the meantime, a group of Alaskans that could fill the Carlson Center to capacity more than twice over have no meaningful health coverage and no way to pay for their care. Continuing to deny coverage to those who are least able to afford it, even when non-partisan estimates show we’re already paying more to foot the bill for their care, just doesn’t make sense. We hope the governor — or, failing that, the state legislature — will reconsider and allow the expansion of Medicaid.

— Fairbanks Daily News-Miner,

June 22

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