Will Alaska be Swallowed by Health Care Costs?

Fiscal Policy, Health Care, Medicare/Medicaid, Recent News — By on January 19, 2018 at 8:57 AM

Some good questions were asked this week by state legislators about Alaska’s ballooning health care budget.

On Wednesday, January 19 in the Senate Finance Committee meeting, Governor Walker’s Director of the Office of Management and Budget Pat Pitney presented the FY2019 Budget Overview. The budget proposes to fund Alaska’s Medicaid program at $705 million. But previous budgets have provided for less than was actually spent, requiring a “supplemental budget” to be added. For example, the state had to come up with an extra $100 million for Medicaid last year. Medicaid enrollment in Alaska is up 60% since January 2014 and spending continues on a sharp upward trajectory.

In the meeting, Senator Peter Micciche correctly pointed out that “roughly a third of our [state] spend is on health care,” and noted Alaska’s “inability to control the increasing health care costs in the state.”

Senator Anna MacKinnon pushed Pitney on the proposed Medicaid budget and asked if there was going to be another supplemental Medicaid budget request from the administration this year. She questioned if the amount now being proposed for Medicaid spending was achievable and reasonable, or if the amount had been understated again.

Senator Micciche went further and asked for a solution to the spiraling costs. “What do you see as an end game for getting in front of this? . . . There has to be a cap at some point or we will be swallowed by the cost of health care. . . What level of priority do you put on that?”

Capping or freezing Medicaid enrollment is indeed one policy solution that should be considered. Some of Alaska’s most needy and vulnerable are currently being shut out of care as Medicaid is expanding to able-bodied non-working adults. Several states have successfully frozen enrollment, including Arizona, Maine, Tennessee and North Carolina. Studies show that private insurance participation goes up when Medicaid enrollment is capped.

Alaska is indeed in danger of being swallowed by health care costs, and our leaders must be looking at these types of solutions now, before it is too late.

Watch the full committee meeting here:  http://www.360north.org/gavel/video/?clientID=2147483647&eventID=2018011008

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