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Alaska Editorial: Medicaid decision not best course

Posted: November 26, 2013 - 1:00am

The following editorial first appeared in the Fairbanks Daily News-Miner:

Gov. Sean Parnell’s skepticism about the Affordable Care Act is understandable, given that recent breakdowns in its structure are following the predictions that skeptics have long put forward.

However, the governor’s decision not to seek an expansion of Medicaid can’t be well enough justified by the law’s broader troubles. Expanding Medicaid in Alaska to cover all low-income adults would be a good policy regardless of the other difficulties in the national health care law.

The expansion made sense for Alaska for a few reasons. First, it would avoid forcing Alaska to subsidize other states with no return to itself. The federal government will pay the vast majority of the bills in states that do expand Medicaid. So, without a similar expansion here, Alaska’s residents and businesses would be paying the taxes to provide Medicaid to those states that do expand services, while seeing none of the money come back here. If we don’t expand, we’ll see a net drain of tax money to other states.

Of course, this assumes that the federal government actually would cover the expansion costs in Alaska and other states. Parnell has expressed doubts about whether Congress could afford to do so. That, again, is a reasonable fear. Federal deficits, while declining, are still mind boggling and need to be reduced. The proponents of the Affordable Care Act say its increased costs, such as the Medicaid expansion, won’t contribute to the deficit, but that assertion relies in part on a big assumption — that the federal government will cut billions from Medicare (which pays for health care for Americans over 65) by dialing back reimbursements to doctors and hospitals. Those cuts will be opposed vigorously and perhaps successfully in Congress.

Nevertheless, the state could expand Medicaid while also compensating for the uncertainty. It could make the expansion contingent upon the federal payments materializing. That’s the path that the Alaska State Chamber of Commerce recommended. It wouldn’t be ideal, but it would protect the state’s budget.

The second reason for expanding Medicaid is just a matter of fairness. The Affordable Care Act offers sliding-scale subsidies to purchase health insurance for those people whose incomes range from 100 percent to 400 percent of the federal poverty level. Under the original law, Congress assumed those who made less would be covered by expanded Medicaid. But that assumption rested upon another: that states would expand Medicaid to cover all people below the poverty level (not just primarily parents, children and disabled people, as the program exists today). When states decline to expand eligibility to all poor people, it creates the bizarre situation in which middle-income families have their health care federally subsidized but some who are truly poor do not.

Gov. Parnell, in an op-ed piece published in the Newsminer Nov. 16, said Obamacare is unraveling. Indeed, when President Obama today back-pedals and promises to deliver on his broken campaign promise — that if you like your plan, you can keep it — he’s undermining a key policy that makes the law work, in theory at least. That key policy is the requirement that young, relatively healthy people buy a mandated level of insurance. If the law doesn’t force those cheaper people to buy the more expensive, broader insurance plans, the people left buying those plans will have to pay a lot more for them, which will increase opposition to the law.

Whether that opposition is enough to unravel the law isn’t yet clear. And even if other aspects of the law do unravel, the Medicaid question can still be considered as a stand-alone. Given that the governor has made up his mind, though, perhaps it’s time for the Legislature to take up the issue.

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