State senators slam additional Medicaid costs

The rising cost of Medicaid to the state of Alaska has been the target of criticism during the first two days of state Senate Finance Committee hearings.

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The state added $100 million in additional Medicaid expense for this year, after the Legislature passed the budget.

Eagle River Republican Sen. Anna MacKinnon criticized the extra Medicaid spending. This money was part of more than $170 million in supplemental spending added to the budget.

“It’s just unacceptable and it’s out of control,” she said. “I think everyone in the Legislature wants to make sure that families in need have access to medical care and that we can support them where we can, but we do not have 170 million in extra money.”

State budget director Pat Pitney said the costs were due to unexpectedly high Medicaid enrollment. Some was from the Medicaid expansion enacted by Gov. Bill Walker.

Pat Pitney, Director, OMB, in Senate Finance, Feb, 3, 2016. (Photo by Skip Gray/360 North)

Pitney added that the federal government is covering 90 percent of the cost of the expansion.

She said this spending helps make health care one of the only industries that’s growing in the state.

“Our state budget on Medicaid today is the same as it was in fiscal year ’15 and we’re serving over 75,000 more people (who) have had access to health care,” she said.

Soldotna Republican Sen. Peter Micciche said the administration needs to stay within the budget.

“When Medicaid was expanded, it was expanded with a set of assumptions that were simply incorrect,” he said. “There has to be a point where we have a bottom line of understanding what the end result is going to be. I mean, it is literally an open checkbook.”

Pitney said 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.

Pitney noted Alaska has the highest health care costs in a country that has the highest health care costs in the world.

She said the state doesn’t have any choice but to try to keep costs down.

Andrew Kitchenman is the state government and politics reporter for Alaska Public Media and KTOO in Juneau. Reach him at

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