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Medicaid expansion - it's your business

Posted: October 31, 2013 - 6:27am
Rachael Petro, President & CEO Alaska Chamber of Commerce
Rachael Petro, President & CEO Alaska Chamber of Commerce

The issue of Medicaid expansion in Alaska is finally garnering the attention of Alaska businesses. After all, the new federal health care law makes health care everyone’s business. This issue is not alone in affecting the business environment in Alaska.

Alaska Chamber members recently met and adopted 40 policy positions. When asked to prioritize these policies, members selected opposition to the referendum to repeal oil tax reform, support for comprehensive workers’ compensation reform, and support for Medicaid expansion as priorities.

The Alaska Chamber Board ratified these priorities and decided to also keep the high cost of energy, permitting efficiencies and access to resources as priorities. While each of these top priorities is distinct, the fundamental underlying issue is the same – the cost of doing business in Alaska.

The Alaska Chamber’s core mission is to make Alaska the best place to do business. It’s about making Alaska competitive and there are many factors businesses consider when deciding how much and where to invest.

The decision of the Alaska Chamber to support Medicaid expansion is a pragmatic one. Like it, love it, or hate it, the Affordable Care Act is the law of the land and businesses have no choice but to deal with it. Most importantly, Alaska businesses are looking for ways to stay in Alaska and grow our economy. To stay in the competitive game, Alaska businesses are looking to reduce and contain costs.

Given the federal fiscal situation, and the track record the feds have with keeping commitments, Alaska Chamber members support Medicaid expansion with caveats. Those caveats include support for a fail-safe provision and/or supporting an alternative to Medicaid expansion. A fail-safe provision means that if the feds renege on their funding commitment, Alaska will opt out of the expansion. Alaska Chamber members are also open to finding a private sector alternative to address Alaska’s uninsured under the new federal law.

As taxpayers, all Alaskans are subject to the increased federal taxes established to fund the Affordable Care Act. If Alaska does not expand Medicaid, Alaskan’s taxes will pay for the uninsured in other states. Alaska businesses and all insured Alaskans will bear even higher insurance premiums and health care costs to cover those uninsured.

Currently, the cost of care for uninsured Alaskans who are unable to pay for their care are covered by those who are insured. In the health care industry it is called uncompensated care. Employers providing insurance to their employees and individuals buying health insurance pay for this uncompensated care in the form of increased premiums costs.

If Alaska does not expand Medicaid, we will continue to pay these increased premiums as well as pay the new federal taxes. If Alaska expands Medicaid, a portion of the federal taxes Alaskans pay will return to the state and uncompensated care losses will decrease. Alaska Chamber members believe this will result in lower or slower growth of health care premiums.

It’s worth noting that the Alaska Chamber also supports a reduction in the State of Alaska’s spending levels to a more sustainable level of $5.5 billion in total general fund spending. Current state spending levels are unsustainably high and are damaging to Alaska’s competitiveness and our economic future.

Make no mistake, even with expected cost offsets, expanding Medicaid increases costs for the State of Alaska. How then can the Alaska Chamber support Medicaid expansion? It’s simple. Alaska businesses, which fund the state’s coffers, simply can not afford to pay once, much less twice, to provide health care for Alaska’s uninsured.

To compete, to grow, and to secure a future for our state, Alaska businesses know that costs must be controlled. This means the Alaska Chamber promotes policies that create a good business environment. We support reasonable tax structures, sustainable state budgets, efficient permitting systems, increased access to resources, meaningful changes to workers’ comp and taking a pragmatic approach in response to the Affordable Care Act . That’s our business, and it’s your business too.

• Rachael Petro is the President and CEO of the Alaska Chamber, a private, non-profit corporation, operating since 1952, works to promote a positive business environment in Alaska. The Alaska Chamber is the voice of small and large business across the state with a Board of Directors comprised of 80 members representing all regions of the state.

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