With Medicaid Language Stripped From Budget, Path To Expansion Uncertain

A House subcommittee has stripped Medicaid expansion language from the state’s operating budget. The move is a setback for the Walker administration, which has made Medicaid expansion a top priority. But as APRN’s Alexandra Gutierrez reports, the fight may not be over yet.

Download Audio

The House Finance committee room was so crowded and stuffy that the ceiling fans were actually needed. Walker administration officials, lobbyists, staffers, and reporters all packed in to see what the Health and Social Services subcommittee would do with Medicaid expansion.

Rep. Dan Saddler, an Anchorage Republican, didn’t mince words.

“We denied all requests related to Medicaid expansion,” Saddler today the room.

The subcommittee proposal slashed nearly $150 million in federal money that would have gone toward expanding the state’s Medicaid program. Right now, Alaska’s Medicaid primarily covers low-income families, pregnant women, and persons with disabilities. Expansion would cover people who make up to 138 percent of the poverty level — or about $20,000 for a single adult. In its first years, the federal government would pay for the expansion in full, and then ratchet that amount down to 90 percent.

When it came to a vote, the subcommittee broke on caucus lines, with eight members of the Republican majority backing the removal.

Rep. Les Gara, of Anchorage, was one of three Democrats who tried to keep the money in.

“When the federal government offers 90 percent funding of roads, we grab that money without even thinking about it,” said Gara. “Here they’re offering 100 percent funding that tapers down to 90 percent funding, and we’re saying, ‘Gosh, I don’t know about the 4,000 jobs that will bring to the state. I disagree with that. I think we should accept it, and we have the information, and we’ve been given the information.”

In response, some members of the finance subcommittee expressed concern that accepting the federal money could put the state on the hook for Medicaid costs in the future. But most of the reasons given for removing the Medicaid money had less to do with the proposal than the process itself.

Rep. Mark Neuman, a Big Lake Republican who oversees the drafting of the operating budget, says Medicaid is too big of an issue to deal with as a simple line item.

“That’s about a $145 million question that we’ve been trying to get answers on,” said Neuman. “The co-chair and I spoke to the governor and asked him to introduce some legislation so we could put that in front of the public.”

He and his fellow House Finance co-chair, Steve Thompson of Fairbanks, asked for a standalone Medicaid bill in a meeting in mid-February, and again through a formal letter sent on Thursday.

Some Democrats on the subcommittee pushed back against that request. Rep. Scott Kawasaki of Fairbanks noted that members of his caucus have unsuccessfully tried to advance a standalone Medicaid bill since 2012.

“We have gotten a cold shoulder,” said Kawasaki. “So when people say we want to see a bill, it bothers me that we have a bill that has been blocked in a committee for the past three years.”

The bill the Republican majority would like to see would reform the Medicaid delivery system to lower costs, in addition to expanding the program. Juneau Republican Cathy Muñoz noted there was precedent for a case like this during the Parnell administration, where a policy that could have been implemented through the budget got its own standalone bill.

“Last session, we were in a very similar situation with the retirement issues,” said Muñoz, referring to an action that shifted $3 billion from the state’s reserves to its pension obligation account. “There was legislation that had been filed by an individual member to deal with the retirement issues, but we all felt that it was important for the governor to lead on the issue. This is a very similar situation.”

There are some procedural reasons that Medicaid expansion could get more traction as a bill than as a budget item. According to the majority caucus rules, all members are required to vote in favor of the budget, requiring some level of consensus on the issue. A bill would allow hard-line conservatives who oppose the Affordable Care Act wholesale to come out against expansion, while more moderate members of the caucus could support it.

For his part, Gov. Bill Walker is not planning to file a Medicaid expansion bill.

“There’s no need for us to file our own. There’s already legislation there,” Walker said at a press conference held in the Governor’s Mansion.

Walker did leave an opening to move forward on Medicaid, however. He said he is willing to work with the House Finance co-chairs on their questions about expansion and reform.

“We’ll sit down with them, and certainly we’ll meet with them to try to find out why they can’t use the bill that’s currently there,” said Walker.

It’s not clear what happens if compromise is not possible. The governor does have the authority to veto the budget if it does not include expansion and to call the Legislature into special session to deal with Medicaid, but Walker said it was too early to say if he would exercise those powers.