Alaska’s Medicaid expansion could be in real trouble under the Senate health care bill

Opponents to Alaska’s Medicaid expansion argued that one day the additional federal funding could disappear. What would happen then, they asked, and would the state step in and pay for coverage? Supporters said cutting an entitlement program would be politically impossible. But here we are. It’s 2017, Donald Trump is president and the GOP is dead set on gutting Medicaid expansion.

The Senate bill unveiled last week would bring a number of changes to the program, both to funding and policy.

The impacts could be particularly devastating for Alaska where the relentless budget crisis and simmering political feuds put the future of the program into doubt under the Senate bill. According to the latest numbers from Alaska, more than 33,000 Alaskans have obtained coverage thanks to the Medicaid expansion.

The budget problem

The state’s perilous finances could make Medicaid expansion unaffordable when the federal match begins to ramp down in 2021. The Senate health care bill calls for a more gradual phase out of the extra funding for Medicaid expansion than the House bill.

The state receives about $92 million a year for the Medicaid expansion population under Obamacare. Through the 2016 calendar year that was all money from the feds. The federal reimbursement will ramp down to 90 percent, leaving the state with a $9.2 million tab. Things are much different under the Senate bill.

If the Senate bill goes into law, the federal reimbursement rate would continue to ramp down, reaching just 50 percent reimbursement in 2024. The cost for the state to cover that population would grow to more than $45 million people if all else holds constant. Unless there’s a significant change in the state’s finances by then, it’ll be hard for the Legislature to justify such extra spending.

Even Gov. Bill Walker hasn’t held firm on the state’s ability to cover people when that day comes. He’s said under the changes people could very likely be kicked off the plan as the state reconsiders Medicaid eligibility. It’s pretty grim, especially considering how central expansion played into Walker’s 2014 campaign.

His promise to expand Medicaid was the key tent pole issue that brought Democrats onboard to the former-Republican’s campaign. Gov. Sean Parnell and Republican legislators stiffly rejected expansion. Even though Parnell was gone, the Republican Legislature put up a stiff fight.

The political problem

But setting the budget problems aside there’s another big problem for Alaska’s Medicaid expansion.

Judith Solomon, the vice president of health policy ant the Center on Budget and Policy Priorities, writes Alaska’s Medicaid expansion could be doomed well before the funding changes go into play.

Remember how the Legislature’s Republicans sued Walker over his decision to expand Medicaid without their say so?

Part of the reasoning the lawsuit was thrown out is because Alaska law says the state must cover all mandatory coverage groups. Obamacare effectively expanded mandatory coverage to poor Alaskans without children, and under the Senate bill that group would become optional in 2020. Solomon explained its impacts:

That would put Alaska’s expansion at grave risk of being overturned if, for example, any member of the Alaska legislature were to again bring suit to challenge the Governor’s authority to expand. Under Alaska law, the legislature must authorize the addition of an optional Medicaid coverage group, which would be unlikely, especially in the face of declining federal funding for the expansion. Thus, while the Senate bill threatens coverage for all 11 million people who have gained Medicaid coverage under expansion, it poses an especially immediate and grave risk to Alaskans.

Alaska as an example

The 49th state has emerged as the leading example of how dramatic the Senate health care’s impacts will be. The state has high health care costs, a small population and a moderate senator in Sen. Lisa Murkowski.

Murkowski needs more information. Last week, Murkowski said she’ll have to crunch the numbers on the bill before supporting it. The Medicaid problem described above should be a red flag on its own. The bill also defunds Planned Parenthood for one year, a position Murkowski opposes. Still, she needs some more time.

• The newly released budget score from the Congressional Budget Office estimates that 22 million more people will be without health insurance under the plan by 2026. In the first year alone, about 15 million more people would be without coverage because the bill eliminates the individual mandate.

64,500 Alaskans could be without coverage, according to an early analysis of the CBO score by the Center for American Progress, a progressive policy group.

Unless you’re young, wealthy and healthy expect to pay more for individual insurance. There are a couple different factors at play here. First, the Senate and House bills both allow insurers to charge its oldest enrollees five times more than its youngest enrollees. Secondly, it rewrites the subsidy levels and also cuts off subsidies at 350 percent of the federal poverty level.

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