Alaska is about to hop aboard the Obamacare expansion train even as it’s hurtling off the rails.
Alaska Gov. Bill Walker, an independent, has given 45 days’ notice to the Alaska Legislature that he will expand Medicaid under Obamacare with or without their support.
With Obamacare expansion enrollment far exceeding projections in other states, Alaska would be the 30th state to put working-age adults with no kids and no disabilities on Medicaid.
The program comes with a promise of new federal funding, but states will be on the hook for 5 percent of benefit costs by 2017 and 10 percent by 2020.
Obamacare expansion promotional materials from Walker’s administration emphasize the benefit of bringing new federal welfare dollars to the state.
A fact sheet from the Alaska Department of Health & Social Services asserts that expanding Medicaid “saves lives” and “will bring more than $1 billion in new federal money to Alaska over the first five years.”
The agency expects Obamacare expansion funds to create “4,000 new jobs” and serve as “a catalyst for reform” of the state’s entire Medicaid program.
In a statement provided to Watchdog.org, Alaska DHSS health care policy adviser Monique Martin said the state will be even better off if enrollment — 20,000 are expected to sign up in the first year — is higher than projected.
Walker’s administration is “confident in the estimates developed by our Medicaid economist,” but higher-than-expected enrollment “will result in increased states savings to some of those programs that are currently fully funded by the state,” Martin said.
How wrong have other states’ projections been? By the end of 2014, California and Kentucky had already surpassed projected all-time maximum enrollment; Washington, Nevada and other states are now in the same boat.
In Ohio, where Republican Gov. John Kasich expanded Medicaid over legislative disapproval and said 366,000 people would enroll from January 2014 to June 2015, enrollment is nearly 600,000 and the program is $1.5 billion over budget.
The potential Medicaid reforms Walker says could result from the Obamacare expansion will require approval from the U.S. Department of Health and Human Services. Martin said no waiver requests have been submitted yet.
President Obama’s administration has tried to pressure more governors and state legislatures into expanding Medicaid by threatening to end existing waivers in Florida and elsewhere.
Is that tactic a cause for concern in Alaska?
“Alaska does not have waivers similar to Florida and other states, so this has not been a topic of discussion,” Martin told Watchdog.org.
Even without taking the $18 trillion national debt and the likelihood of federal funding cuts into account, Alaska will have to start paying a portion of Obamacare expansion’s benefit costs in less than 18 months.
Medicaid expansion states are stuck with higher administrative bills, too, said Dave Morgan, co-founder of Alaskan Center for Sustainable Healthcare Spending & Policy.
Walker’s decision to implement the Obamacare expansion with or without legislative approval “is flawed on several levels,” Morgan told Watchdog.org via email.
The governor, Morgan said, “has never offered any hard data to back up his claims on economic impact.”
“I am a healthcare economist and have looked at the new total costs of the State of Alaska Medicaid Expansion program,” Morgan explained. By his calculation, Walker “was off by $135 million dollars for 2016 to 2021.”
Morgan said Alaska’s Medicaid program is a “train wreck” that should be fixed instead of expanded, but reforms are unlikely because of the Obama administration’s refusal to grant waiver requests.
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