The Alaska Department of Health said Wednesday it is still assessing how President Trump’s so-called One Big Beautiful Bill Act will affect the state’s Medicaid program. State officials say they do not have reliable estimates of how many Alaskans could lose coverage or how much the new law will reduce federal health care spending.
On Monday, the Department of Health shared a document with the Anchorage Daily News saying the bill could reduce Medicaid spending in Alaska by $300 million to $500 million per year. But the Department of Health retracted the estimate Wednesday, with a spokesperson saying the document overestimated the impact and that the figures were “not correct at all.”
"Unfortunately, some of the information it contained was based on national models that had not yet been updated and did not account for the final version of the bill passed by the Senate," Communications Director Shirley Sakaye said.
Emily Ricci, the deputy health commissioner in charge of Alaska’s Medicaid program, said in an interview that the department’s earlier projections didn't account for exemptions that will apply to many Alaskans that the state’s congressional delegation inserted into the bill in the final days before it passed.
"There's a lot of research that we have to do on our end to really think about how these exemptions that are in the bill, how they align with our Medicaid population, and what our projections are," Ricci said.
The bill creates what it calls “community engagement requirements” that require able-bodied Medicaid recipients ages 18 to 64 to work, volunteer or study 80 hours per month. Advocates say those will likely push some recipients off the program, in part because they make applying for benefits more complicated.
But Ricci said the state plans to apply for waivers that would move the effective date of the work requirements to 2029. The department plans to launch an "integrated eligibility enrollment system" in 2028 that should simplify benefits applications, Health Commissioner Heidi Hedberg said.
In addition, many Alaskans are likely to qualify for exemptions even once the work requirements take effect, Ricci said.
There’s a long list of people who would be eligible. According to a webpage the Department of Health published Wednesday, they include:
- Alaska Native people
- People with disabilities
- Children
- People under 26 who were enrolled in foster care
- People enrolled in Medicare
- Parents with kids 13 or younger
- Pregnant and postpartum women
- People with serious mental illnesses, including substance abuse
- People who have another serious or complex medical condition
Residents of boroughs and census areas with high unemployment will also be exempt. Fifteen Alaska regions currently qualify for that exemption, though that could change by the time the work requirements take effect. There are additional flexibilities for seasonal workers, like fishermen, construction workers or people who work in tourism.
Alaska is insulated from some other Medicaid cuts included in the bill because it’s the only state that does not finance its program using so-called provider taxes or state-directed payments, Ricci said.
Hospitals and medical providers raised concerns in the leadup to the bill’s passage, saying Medicaid cuts could force some hospitals in rural areas to close or cut back services.
But Hedberg, the health commissioner, said in an interview that the last-minute addition of a $50 billion fund for rural health should blunt the impact on Alaska’s medical system. Over the next five years, half will be distributed equally to all 50 states, and Hedberg said the other half will be distributed at the discretion of the Centers for Medicare and Medicaid Services.
"We are one of the most rural states, and the healthcare delivery system is very different in Alaska compared to the Lower 48 so I think that we are well-positioned with this funding," Hedberg said.
Rural health groups say they still have questions about how the money will be distributed.
One in three Alaskans is enrolled in Medicaid. The Kaiser Family Foundation estimates that the final version of the bill will reduce federal Medicaid spending in Alaska by 11%, or $1.5 billion to $2.5 billion over the next decade.
Hedberg said the state is working with a contractor to get a more accurate estimate.
