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Alaska’s Medicaid Miasma

When we think about the usual gang of states that have serious fiscal problems with their Medicaid program, states like Florida, Illinois and New York immediately spring to mind.

But having just read an article in the Anchorage Daily News  we’ve come to the realization that the northernmost state faces an iceberg worth of expenses in order to pay Medicaid now and in years to come.

Medicaid covers almost one out of three Alaskans. “It’s going to eat us alive if we don’t manage it,” Sen. Peter Micciche, who oversees the state health department’s budget for the Senate, told the paper.

A few more factoids as reported by the Daily News:

  • “Total spending on Medicaid in Alaska, including federal cash, has grown to $2.2 billion this year from $1.6 billion three years ago.”

  • The “health care industry is one of the only bright spots in Alaska’s economy, which has otherwise lost thousands of jobs amid the recession.”

  • “The state’s Medicaid budget still grabbed lawmakers’ attention this month when [it became a distinct possibility that the “administration would ask for an extra $100 million in their ‘supplemental budget’ to cover costs overruns in last year’s spending plan.”

  • “There’s also a backlog of 15,000 applications still awaiting processing, some of which are two years old, said Monica Windom, director of the health department’s Division of Public Assistance. Some 60 percent of applications are typically approved, she added.”

All this presents a significant fiscal issue for the state. But one of the most alarming things in this article was this: “[Governor Bill] Walker’s administration warned last year . . .  that there would likely be cost overruns because lawmakers weren’t setting aside enough money for Medicaid to begin with. The Legislature’s chief budget analyst, David Teal, made that point in a hearing . . .

“He said the Walker administration doesn’t have the power to control the program’s costs itself when there are specific eligibility requirements and defined payment rates for doctors and hospitals.”


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