Sticker stock for Legislature at $100M Medicaid request

Jan. 24--A request for another $100 million to fund Medicaid claims raised questions on the Senate Finance Committee in the first days of the legislative session, but the answers will have to wait.

Senate Finance Committee co-chair Anna MacKinnon, R-Eagle River, appeared caught off guard by the announcement of the need for an additional injection of supplemental funding when the topic came up in hearings Jan. 18.

The $100 million unrestricted General Fund, or UGF, supplemental spending request for the Medicaid program in the governor's budget is for the current state fiscal year 2018 that ends June 30. The request is for the additional 42,500 people added to Medicaid under the expansion Gov. Bill Walker accepted in 2015, according to Office of Management and Budget analyst Neil Steininger.

Alaska's total Medicaid program covers 196,762 people as of December, Steininger said.

The total increase between fiscal years 2015 and 2019 is 75,000 people.

"(That's) inclusive of both expansion and non-expansion enrollees," Steininger said. "Of that approximately 42,500 are expansion enrollees, the remaining 32,500 are enrolled in the regular Medicaid program."

That's stretching Alaska's already thin budget all the tighter, MacKinnon said.

Sen. Peter Micciche, R-Soldotna, also had concerns. He said Medicaid is currently operated as if it can be paid on "an open checkbook." Both he and MacKinnon are scheduling meetings later this month to better understand the issues around the state's rising Medicaid costs.

The current UGF in the budget for 2018 Medicaid is $564.2 million. With federal and other fund sources the total Medicaid budget passed last summer is $1.7 billion, Steininger said. Of that, the federal government pays nearly 67 percent.

Alaska Budget Director Pat Pitney told Senate Finance members the administration is in the middle of making changes to Medicaid that it expects will save money. The state also is considering a new health care authority that would aim to lower the health care costs of state workers and retirees.

Alaska has some of the highest health care costs in a country that has some of the highest health care costs in the world, she said.

Part of what allowed the expansion of Medicaid rolls was increasing the income allowance to 138 percent of the federal poverty level, a change that was made under the Affordable Care Act.

At the latest count of nearly 200,000 enrollees, this means about one out of every four Alaskans is now covered by Medicaid.

State not considering work requirements

Just after the first of the year, Alaska, like other states, was sent a letter from federal Medicaid officials outlining steps to take toward mandating that certain Medicaid recipients work as a requirement to qualify for benefits.

But Alaska is not interested in pursing this option, according to the Alaska Department of Health and Human Services, said spokesman Clinton Bennett in a statement issued Jan. 16.

There will not be any pending action on the State of Alaska's part to enforce work requirements for those who receive Medicaid, Bennett said. Sixty percent of those on Medicaid in Alaska already work.

"The Department of Health and Social Services is not considering such changes to Alaska's Medicaid program at this time. A majority of Alaskans enrolled in Medicaid are children, retirees, disabled individuals, or are living in working households," Bennett said.

The Alaska Legislature intends to follow the agency's lead, according to the Senate and House Health and Social Services Committee chairs Sen. David Wilson, R-Wasilla, and Rep. Ivy Spohnholz, D-Anchorage.

The Centers for Medicare and Medicaid Services, or CMS, officials emphasized that the work requirements would only apply to "able-bodied" adults. Exemptions include children, the elderly, pregnant women and people with disabilities.

States must obtain federal approval before enacting any such requirements, but the Trump administration has indicated a willingness to enforce the new work requirements, according to a news release from the CMS.

Kentucky became the experimental ground for work requirements when CMS granted a permission waiver to the state. Kentucky Gov. Matt Bevin has said it will impact only the new enrollees who received Medicaid under the state's expansion of the program.

Other states that applied for the waiver include Arizona, Arkansas, Indiana, Maine, New Hampshire, North Carolina Utah and Wisconsin.

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Naomi Klouda can be reached at naomi.klouda@alaskajournal.com.

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