Alaska governor rejects Medicaid expansion

JUNEAU, Alaska (AP) — Gov. Sean Parnell on Friday rejected calls to expand Medicaid in Alaska, citing continued cost concerns and prompting an immediate backlash from critics who say the decision will leave thousands of Alaskans without affordable care.

Parnell told reporters during a news conference in Anchorage that he believed a “costly Medicaid expansion, especially on top of the broken ‘Obamacare’ system, is a hot mess.” Obamacare is sometimes used to refer to the federal health care law, President Barack Obama’s signature program that Parnell has criticized.

“We simply cannot bail out this failed experiment by expanding Medicaid” — at least not now, Parnell said.

The Republican governor faced mounting pressure from health, advocacy and business organizations to expand Medicaid under the federal health care law.

Minority Democratic state lawmakers, as well as Democratic U.S. Sen. Mark Begich, also urged expansion. State Democratic Party chairman Mike Wenstrup accused Parnell, who faces re-election next year, of ignoring “the very clear economic benefits of expanding Medicaid in favor of playing more politics with Alaskans’ lives.”

Women associated with the faith-based organization AFACT, Anchorage Faith and Action Congregations Together, held a vigil Friday. One of the group’s members, the Rev. Julia Seymour, said Parnell’s decision leaves the poor, underinsured and uninsured “out in the cold; and in Alaska, that’s the way people die.”

For states expanding the program, the federal law on Jan. 1 will increase Medicaid eligibility to those making up to 138 percent of the federal poverty line, which in Alaska would be about $19,800 for an individual. In those states, the federal government is expected to cover the cost for the first three years, through 2016, and the bulk of the cost indefinitely, with the states contributing.

Studies have suggested a range in the number of uninsured Alaskans who would have been covered by expansion at between 26,000 and roughly 40,000. A state-commissioned study by The Lewin Group estimated expansion would have cost the state between $240 million and $305 million from 2014 to 2020, depending on participation, but also provide between $2.9 billion and $3.7 billion in additional federal revenue.

One of the concerns Parnell raised earlier this year was whether the federal government would provide its promised level of funding.

In an interview Friday, he said the situation in Washington hasn’t gotten any better and that there was still a question of continued federal support.

However, Parnell said he is concerned with access to care in Alaska, something he said Medicaid expansion doesn’t necessarily address. There are gaps in access to services for poor, uninsured Alaskans, he said, but the existing Medicaid program is not sustainable.

Parnell proposed creating an advisory group to make recommendations to reform the state’s Medicaid system, where he said costs continue to rise. He said he also wants his health commissioner to develop a report describing the safety net for non-Medicaid-eligible Alaskans who earn up to 100 percent of the federal poverty level.

He said in an interview that he wants Alaskans, legislators and providers to work together to improve health care access “rather than layering a big, financially unsustainable Medicaid expansion on top of it, ostensibly as a solution to that problem. I don’t think it is.”

He said he would be open to revisiting his decision on expansion if circumstances change. Because the Legislature is controlled by Republicans, it is unlikely Parnell’s position would be overruled during the upcoming session, which begins in January.

Senate Majority Leader John Coghill said in a statement that Parnell was “wise” to refuse expansion at this time, given what Coghill called the failure of the health care law.

Alaska was one of the states that challenged the constitutionality of provisions of the law. In 2012, the U.S. Supreme Court upheld most of the law. The court held that states can’t lose existing Medicaid funding if they don’t expand their Medicaid coverage levels.

Parnell also refused to have the state set up its own online marketplace to allow individuals to shop for private insurance to meet requirements of the law, opting to let the federal government handle it. He said at the time that “federally mandated programs should be paid for by federal dollars.”

Glitches marred the rollout of the federally run site, which launched Oct. 1, though some states that managed their own sites have had more success in early enrollments. Parnell defended his decision Friday, saying the U.S. Department of Health and Human Services did not provide clear guidance upfront about what it would require for an online exchange.


Associated Press writer Mark Thiessen contributed to this report from Anchorage, Alaska.

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