Citing costs, Parnell rejects Medicaid expansion

JUNEAU, Alaska — Gov. Sean Parnell on Friday rejected calls to expand Medicaid in Alaska, citing cost concerns.


The Republican governor has faced mounting pressure from health, advocacy and business organizations urging him to expand Medicaid under the federal health care law. Some of the support was more conditional than others. For example, the Alaska Chamber voted to support Medicaid expansion provided the federal match was maintained or an alternative pilot program was implemented. Support from others, including the largest statewide Native organization in Alaska, was full-throated.

Democratic state lawmakers, as well as Democratic U.S. Sen. Mark Begich, also have urged expansion.

Parnell told reporters during a news conference in Anchorage that he believed a “costly Medicaid expansion, on top of the broken ‘Obamacare’ system, is a hot mess.” The term is sometimes used to refer to the federal health care law, President Barack Obama’s signature program that Parnell has criticized.

“We simply cannot bail out this failed experiment by expanding Medicaid” — at least at this point, the governor said.

If Alaska opted for expansion, the federal law on Jan. 1 would increase Medicaid eligibility to those making up to 138 percent of the federal poverty line, which in Alaska would be about $19,800 for an individual. For the states that expand the program, the federal government is expected to cover the cost for the first three years, through 2016, and the bulk of the cost indefinitely, with the states contributing.

Expansion would provide coverage for more than 40,000 uninsured Alaskans in 2014, according to studies commissioned by the Alaska Native Tribal Health Consortium, which has supported expansion.

One of the concerns Parnell raised earlier this year in opposing expansion was whether the federal government would provide its promised level of funding for any expansion. Parnell had said he would continue to study the issue, with the next decision coming near the end of the year.

Parnell said in an interview Friday that the situation in Washington hasn’t gotten any better and that question of continued support remained.

“I think given the cascading failures of ‘Obamacare,’ and right now, as we are witnessing the destruction of the private insurance market as a choice for people, I think it became more clear that this is not the path to take,” he said.

Parnell said access to care is a concern in Alaska and challenges surrounding that need to be better understood.

Parnell is proposing creation of an advisory group to make recommendations for reform within the state’s Medicaid system, where he said costs continue to rise. He said he also wants his health commissioner to develop a report describing the safety net for non-Medicaid-eligible Alaskans up to 100 percent of the federal poverty level.

He said in an interview that he wants Alaskans, legislators and providers to work together to meet the needs for improved health care access “rather than layering a big, financially unsustainable Medicaid expansion on top of it, ostensibly as a solution to that problem. I don’t think it is.”

He said he would be open to revisiting his decision on expansion if circumstances change.

Alaska was one of the states that challenged the constitutionality of provisions of the law. In 2012, the U.S. Supreme Court upheld most of the law, and it’s from that decision that the choice of expanding Medicaid arose. The court held that states can’t lose existing Medicaid funding if they don’t expand their Medicaid coverage levels.

Parnell also refused to have the state set up its own online marketplace to allow individuals to shop for private insurance to meet requirements of the law, opting to let the federal government handle it. He said at the time that “federally mandated programs should be paid for by federal dollars.”



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