Alaskans say Medicaid cuts considered by US House could be 'catastrophic'

Yahoo

27-02-2025

Feb. 26—Alaska lawmakers say a budget resolution passed by the U.S. House of Representatives late Tuesday could lead to funding cuts that would gut Medicaid programs used by a third of Alaskans — or exacerbate Alaska's fiscal crisis by forcing the state to step in and cover the cost of programs that underpin the state's health care system.
The budget resolution — which passed in a 217-215 vote — was supported by Alaska's sole U.S. House member, Republican Rep. Nick Begich III, who did not comment on the resolution's potential impacts on Medicaid or the state's health care system.
In a social media post, Begich celebrated the resolution, saying the budget reconciliation process "will prioritize unlocking Alaska's potential for our nation and will support America's working families."
Begich did not answer questions sent to his office about the reconciliation process's impact on Alaska's health care. His spokesperson Silver Prout did not respond to multiple interview requests.
But state lawmakers wasted no time in sounding the alarm over potential impacts to Alaska. In both the House and Senate, legislators said that the $880 billion in cuts laid out in the budget resolution could translate to a loss of $1 billion in federal funding for Alaska's Medicaid program.
"It is not an exaggeration to say that these cuts would cut a lot of people and push them into medical bankruptcy," said Rep. Genevieve Mina, an Anchorage Democrat. "It will really destroy our own state budget, and it will cause a collapse in our health care system."
Rep. Andy Josephson, an Anchorage Democrat who oversees the operating budget in the House, said that Alaska's Medicaid budget is roughly $2.6 billion, of which $700 million comes from the state, and the remainder comes from the federal government.
Josephson said he believed that cuts, if they go forward as laid out in the budget resolution, would ultimately reduce the federal Medicaid spending in Alaska by $1.15 billion, causing at least 60,000 Alaskans to lose coverage.
President Donald Trump said Wednesday that Republicans are "not going to touch" Medicaid funding. But Medicaid spending was a likely target in coming discussions on cuts needed to afford Trump-backed tax cuts that are set to amount to $4.5 trillion.
Within Medicaid spending, one option would be to lower the 90% share that the federal government is required to pay to states that enroll in Medicaid expansion.
In Alaska, participants who are enrolled in Medicaid expansion number between 70,000 and 80,000 Alaskans, according to Jared Kosin, president of the Alaska Hospital and Healthcare Association.
The federal government pays more than $700 million of the state's annual Medicaid expansion cost, Kosin added. If the federal government's share of spending is reduced, the state could be faced with a choice: shoulder the extra spending to preserve Medicaid coverage, or cut coverage.
"This is a question: How much do all Alaskans sacrifice to provide effective government services to support our social and economic network in this state?" said Senate Majority Leader Cathy Giessel, an Anchorage Republican.
But a spokesperson for Alaska Republican U.S. Sen. Dan Sullivan said Wednesday that "it's premature to make any kind of blanket statements on what will happen to Medicaid so early in the process."
"These budget negotiations are just getting started," Sullivan spokesperson Amanda Coyne said in an email.
Sullivan last week introduced an amendment to the Senate budget resolution that declared an intent to work on "strengthening and improving Medicaid for the most vulnerable populations." Democrats voted against the amendment after U.S. Sen. Ron Wyden, an Oregon Democrat, said the phrase referring to the "most vulnerable" was "code for kicking Americans with Medicaid coverage off their health insurance if they're not sick enough, not poor enough, or not disabled enough."
In a statement, a spokesperson for Alaska Republican U.S. Sen. Lisa Murkowski said her office is "working to gauge" the impacts of proposals circulating in the House that would impact Medicaid funding.
"Healthcare costs in Alaska are already too high and Medicaid is a lifeline for so many in the state," said Murkowski spokesperson Joe Plesha in a written statement. "Sen. Murkowski has been an outspoken defender of Medicaid, and is working to ensure that her colleagues understand what's at stake when Medicaid is targeted for significant cuts."
During a presentation to the Legislature last week, Begich said he supported implementation of a work requirement for Medicaid. The requirement would eliminate coverage for Medicaid recipients who fail to work or volunteer for a minimum of 80 hours per month, he said. Begich did not explain how the requirement would be enforced, particularly given the share of Alaskans who live in rural subsistence-based communities.
"I think it's important for people that are able-bodied to contribute. I think that's what we should expect, I think that's what the taxpayers expect," said Begich. "When we do that, when we reinstitute those kinds of rules, it actually makes these programs more solvent for the people who need them most."
Begich also blamed the high cost of Medicaid on undocumented immigrants, repeating claims made by Trump. Immigrants without legal status are not eligible to enroll in federally funded coverage, including Medicaid.
Kosin, with the Alaska Hospital and Healthcare Association, said that eliminating Medicaid coverage for Alaskans who do not meet a work requirement would do nothing to reduce the cost of health care in Alaska.
"All that does is it increases uncompensated care, because people — regardless of whether they have coverage or not — when they need health care services, they're going to be more reluctant to go get them, but there always comes a point where you can no longer wait," said Kosin. "They're going to go where you go when you have no other options, and that's an emergency room."
"So we're essentially going to be diverting large masses of people to go use hospital emergency departments — the most expensive care setting — as their primary mode of health care," said Kosin.
Rep. Zack Fields, an Anchorage Democrat, said that if the budget reconciliation moves forward, "it is hard to overstate the impact on Alaska."
"Do people in Anchorage think homelessness is bad now? Try cutting off behavioral health care, which is Medicaid-funded. The impact of severe untreated mental illness and homelessness is hard to imagine," said Fields.
Majority members in both the House and Senate recognized the magnitude of using state funds to cover a cut in federal funding, but seemed reluctant to consider the alternative — shrinking the state's Medicaid program.
"We need to pull up our fiscal bootstraps and figure out how we're going to fill that gap if, in fact, the federal government pulls back," said Giessel.
Among those who stand to be impacted by cuts to Medicaid funding is Essie Frank, a Fairbanks resident who has worked as a caregiver for more than 30 years.
Frank, her daughter and her mother all rely on Medicaid for health care. Her mother is a breast cancer survivor who is suffering from kidney failure. Her daughter, an 18-year-old, has a rare stomach disease.
"If these cuts go through, that means death for my daughter and death for my mother," said Frank.
Frank said her caregiving clients rely on her for daily routines. The agency that employs Frank is reimbursed through Medicaid — which means cuts to the program could translate to cuts to the services her clients rely on, and income loss for Frank, she said.
"Not only would people lose jobs — people would lose lives," she said.
Frank traveled earlier this month to Washington, D.C., to speak with Alaska's congressional delegation about the importance of Medicaid. There, she said she was well received by Begich.
"He assured that he 100% backed us on fighting to not have any cuts to Medicaid," said Frank. Now, she said she feels betrayed by his vote.
Senate President Gary Stevens, a Kodiak Republican, said Tuesday that he was "waiting for the other shoe to drop."
"So often it seems like things come out of D.C. recently to shock us and just to get our attention and some backing off then occurs," he said.
Kosin said the magnitude of cuts under discussion has prompted Alaska health care providers to ramp up their federal advocacy.
"What we're laying out, which are very real possibilities, are so catastrophic on their face, that you only have to yell it so loud," said Kosin. "I think we need to come together and work on solutions and identify the things we can live with and accept, and the things that we, frankly, just can't."