Congress is contemplating huge cuts to Medicaid, the government-funded health insurance program that covers nearly 40% of Alaskans. If federal funding is substantially reduced, many Alaskans could lose their insurance and the strain would be felt throughout the health care system, potentially reducing services and raising costs for Alaskans with other types of insurance, too.
What is Medicaid?
It’s an insurance program for low-income Americans and those with disabilities. The costs are split between the federal government and the state, 50-50 for the regular medicaid program. A few programs, like for pregnant women, have a higher federal match.
As part of the Affordable Care Act, Congress expanded Medicaid to serve people whose income is slightly higher. Alaska adopted the program in 2015. Medicaid expansion now covers 76,000 Alaskans. It has the highest federal match of all Medicaid programs in the state at 90%.
The Childrens’ Health Insurance Program, CHIP, is Medicaid for kids, and in Alaska it’s called Denali KidCare.
How many Alaskans have health insurance through Medicaid?
About 38% of Alaskans, 279,000 people, were on Medicaid in 2024, according to the state’s Department of Health. That includes 57% of Alaska children, 35% of Alaska adults and 15% of Alaska seniors.
Alaska is heavily dependent on the program. Last year, only New Mexico had a greater percentage of its population on Medicaid, and Alaska was a close second.
More than 1 in 3 births in Alaska were covered by Medicaid in 2024, according to the state vital statistics report. That’s partly because of increased eligibility for pregnant and postpartum women.
Most beneficiaries (64%) live in Anchorage, the Mat-Su Borough and in the Interior combined. 36% live outside of those most-populated areas.
“It would be catastrophic, not only for the health care system, [but] for Alaskans across our entire state,” Jared Kosin said.
How much money does Medicaid in Alaska cost the federal government?
Medicaid spending is a substantial pillar of Alaska’s health care funding. Total spending was $2.7 billion for health care services in Alaska last year, and the state paid just 24% of that, or $634 million. Medicaid costs in the state are also projected to increase over the next two decades.
Jared Kosin, president and CEO of the Alaska Hospital & Healthcare Association, said if Congress makes substantial cuts to Medicaid, the impact on people who use Medicaid in Alaska, as well as the hospitals and providers that serve them, would be enormous.
“It would be catastrophic, not only for the health care system, [but] for Alaskans across our entire state,” Kosin said recently on KFSK in Petersburg.
Almost every corner of the health care system in the state relies heavily on Medicaid. That includes hospitals, clinics and private practice offices, and the tribal health care system.
If Medicaid is cut, what happens to the Alaska beneficiaries?
Depending on how the cuts are rolled out, the state could disenroll categories of people, leaving them without coverage. Or the state could make up the funding difference, but that would be an enormous hit to the state budget, which is already strained. There is no simple way to cut the state’s Medicaid budget without increasing health care costs for the state down the line.
One way to cut the funding that’s been floated is that the expansion program could change from a 90% federal match to a 50% match, the same as regular Medicaid.
Kosin said just that one cut would cost the state millions.
“So if the Feds say, ‘Hey, we're going to roll this back, and we're going to only cover half of Medicaid expansion. You cover the rest,’ that means we'd have to come up with $330 million,” Kosin said.
The latest numbers show the expansion program covers 76,000 Alaskans, over a quarter of the Medicaid population in the state. The expansion population includes a wider swath of Alaskans, including single people and those with incomes slightly above cutoffs for regular Medicaid. Since Alaska introduced the program in 2015, the state has seen unpaid hospital bills decline by almost half.
With major federal cuts, the expansion population could lose coverage entirely. But Kosin said leaving more Alaskans uninsured would be more costly long term. Kosin said all Alaskans would feel the result of those uninsured residents. Wealthier Alaskans may still have a choice of care, but for the uninsured who can’t afford to pay out-of-pocket, their only choice will be ER care.
“Hospital emergency rooms will always serve you,” Kosin said. “We're required by law to do so.”
He said the ER is the most expensive place to receive medical care. Average emergency room bills run in the thousands of dollars, compared to hundreds of dollars for most urgent care or doctors’ visits. And if people can’t afford to pay those bills, they just won’t, driving up the cost of care for all Alaskans, even those with private insurance.
What else might be cut?
The state could cut so-called “optional” Medicaid services, like dental care, vision care or in-home care.
Monique Martin, vice president of intergovernmental affairs for the Alaska Native Tribal Health Consortium, said the services aren’t really optional and cutting them won’t save the state money in the long run.
“Most ‘optional services’ are offered in lieu of a much more expensive mandatory service,” she said.
In-home care, for instance, allows more rural Alaskans to stay in their home towns or villages, instead of having to move to urban areas for live-in care.
“If we want people to be productive, we should provide health coverage,” Valerie Davidson said.
Lawmakers have also talked about adding work requirements to Medicaid, which would be a default way to force some people out of the program. But if people aren’t well enough to work and they can’t get health care to get well, it could keep them out of the workforce indefinitely, or, again, keep them from getting care until it’s an emergency.
“If we want people to be productive, we should provide health coverage,” said Valerie Davidson, a former state health commissioner who championed Medicaid expansion under former Gov. Bill Walker. “Because if people can't work, they can't hunt, they can't fish, and they can't learn if they're not healthy enough to do so. Being healthy is a prerequisite to being able to be productive.”
The Trump administration has also discussed incentivizing states to switch to using “block grants” as a way to cap Medicaid spending by state. Davidson said that won’t work well for Alaska because the state doesn’t have a robust and well-established health care infrastructure. And she said rationing care through block grants would cause all the same issues as the other possible cuts, making health care more expensive for all Alaskans in the long term.
Why is Congress considering cutting the program, and what exactly would lawmakers cut?
The U.S. House passed a budget blueprint that calls for cutting a lot of money — $880 billion — from a section of the budget that includes Medicaid. Budget experts say there’s no way to slice that much out of spending without cutting into Medicaid. But we don’t know exactly where the cuts will come from.
It’s worth noting that President Trump and other Republicans have said they won’t cut Medicaid, but that seems to conflict with the House-passed budget resolution.
Is it true that Republicans in Congress are trying to cut Medicaid so that wealthier people can get a tax break?
That’s one way to frame it. The Republicans are trying to enact many of President Trump’s priorities. Among them is the continuation of the 2017 tax cuts, which are about to expire. Extending them increases the deficit by $4.5 trillion. Republicans are looking to make cuts elsewhere to partially offset the cost. The House budget, as written, would still increase the deficit by about $2.5 trillion.
"It is going to be devastating to the Alaska economy,” Valerie Davidson said.
How might major Medicaid cuts impact the whole health care system in Alaska?
The entire health care system in Alaska is dependent on Medicaid funding. For Providence Alaska, it’s 25% of the revenue. At Anchorage Neighborhood Health Clinic, it’s 34%, and the Alaska Native Tribal Health Consortium gets about 40% of its income from Medicaid.
Medicaid is hugely important for the tribal health care system.
The Indian Health Service provides less than 15% of ANTHC’s funding, Monique Martin said. Medicaid and Medicare together provide about 70% of payments.
So, in the long term, while experts say big Medicaid cuts likely wouldn’t shut down tribal health care, it would be a huge financial blow.
And if hospitals with emergency rooms have to treat a lot more uninsured patients, they also may not be able to survive.
What are the larger economic ramifications of major Medicaid cuts?
Medicaid covers travel expenses for in-state, and occasionally out-of-state care. Losing that would ripple through the economy.
“It impacts airlines. It impacts transportation. It impacts every aspect of hospitality, hotels, restaurants, etc. And it is going to be devastating to the Alaska economy,” Valerie Davidson said.
Small businesses and seasonal businesses that don’t offer health insurance might also find it harder to hire. Some of their employees can only afford to work there because of the Medicaid expansion. If Congress does away with the expansion, those employees might have to choose jobs at larger companies with health care benefits.
So, how could Alaska cut Medicaid spending in an economically-healthy way?
The state has been working to reduce Medicaid spending overall, and it’s made some progress, keeping spending below estimates. Monique Martin said it’s important to lean on the state's research to identify ways to safely reduce spending. She says cutting spending in a sustainable way takes time.
Hannah Flor of KFSK contributed reporting to this story.
