Alaska at risk of losing millions in federal money

Posted: Wednesday, September 27, 2000

WASHINGTON (AP) -- Sen. Frank Murkowski says Alaska could lose millions in extra federal money to help with Medicaid costs if a bill he introduced isn't passed soon.

Murkowski introduced the bill in June to maintain the extra federal funds, which he said help make up for Alaska's higher medical care costs, allowing the state to spend less. The state has received an extra $100 million in federal money the past three years.

Murkowski's bill, however, has not moved out of committee.

''We're cautiously optimistic that something is going to move on that,'' said John Taber, who handles social service issues for Gov. Tony Knowles' office in Washington, D.C.

Through 1997, the federal government and the state split the cost of providing health insurance to low-income Alaskans through the federal Health Care Financing Administration. That year, Murkowski obtained a temporary change in the formula that boosted the federal share to about 60 percent of the total cost. The boost expires at the end of this federal fiscal year, which is Oct. 1.

Even if it expires, Alaska won't see as large a loss as it would have three years ago. That's because the federal government pays extra to insure people in states whose per capita incomes are lower, relative to other states, and Alaskans' relative incomes have fallen in recent years.

Per-capita income was driven up in the 1970s and early 1980s with a large number of single workers earning high wages with the construction of the trans-Alaska oil pipeline and the building boom. Now, Alaska's population includes more children and retirees, driving down per-capita income.

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