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Alaska Governor to Expand Medicaid Despite Legislature

By Marissa Evans, CQ Roll Call

July 16, 2015 -- Independent Alaska Gov. Bill Walker said last week that he'll use a fiscal maneuver to extend health care coverage to nearly 42,000 low-income residents by Sept. 1 without his Republican-controlled legislature's approval.

"This is the final option for me," Walker said at a news conference announcing the plan. "I've tried everything else. One thing you have to learn about me is I don't give up, and I won't give up."

Walker said he'll accept the federal government's extra funding for states that are expanding Medicaid plus money from the Alaska Mental Health Trust Fund Authority to bring his plan to fruition. Expanding Medicaid, the state's health insurance program for low-income individuals, would bring in $146 million in new federal money for the state's 2016 fiscal year and more than $1 billion by the 2021 fiscal year.

The governor said he'll send the funding plan to the state's Legislative Budget and Audit Committee, which reviews requests to accept non-general funding when the legislature is out of session. The committee has 45 days to recommend whether the state should take the money, but its recommendation is not binding. The waiting period also gives the legislature time to reconvene for a special session if its leaders wish.

This is the eighth time an Alaska governor has used this maneuver, Walker said.

"We're going to help those that need our help," Walker said. "It's good for them, it's good for Alaska and it's good for our economy. We're not going to step away from this opportunity to help fellow Alaskans."

The announcement comes on the heels of a contentious budget battle between Walker and Alaska Republicans. The governor tried to include the Medicaid expansion funding in his 2016 budget, but the legislature stripped it out. Walker's expansion proposals were not taken to the floor for a vote during the latest session or the last two special sessions.

Alaska Republicans tried to put a line item in the 2016 budget that would prevent Walker from using funds to expand the program. However, according to a May memorandum by Alaska's Legislative Affairs Agency, this tactic was unconstitutional.

Under the 2010 federal health care law, states can accept federal funds to expand Medicaid eligibility to people with incomes at or below 138 percent of the federal poverty level. The federal government pays 100 percent of the cost until next year, when the U.S. subsidy begins to decline, falling to 90 percent by 2020.

Twenty-eight states and the District of Columbia are participating in the expansion already. States that did not expand their Medicaid programs under the health care law receive an average reimbursement of just 57 percent of their cost. Montana voted to expand Medicaid this past legislative session, but the plan is still pending approval from the Centers for Medicare and Medicaid Services.

Republican-led legislatures around the country have been adamant about not expanding Medicaid, citing doubts that the federal government will keep its financial promise to cover the cost and that extending coverage will further stretch state budgets.

Matt Salo, executive director for the National Association of Medicaid Directors, said Walker's unilateral action had to be a tough decision because "it's the nuclear option." A move like this could further polarize the governor's office and the legislature.

"It's not unique to Alaska that it's going to take multiple efforts to get it through," Salo said in an interview. "Medicaid expansion can happen anywhere, but the question ultimately isn't 'Do we provide better health insurance options to low-income people,' it's 'How do we best do it,' and that's what a lot of these conversations are," Salo said. "There are modifications or improvements that may be a better fit for our states."

Walker isn't the first governor to attempt to bypass the legislature to expand Medicaid, though efforts by Missouri Gov. Jay Nixon and Democratic Virginia Gov. Terry McAuliffe failed.

Montana House Republicans this year voted down Gov. Steve Bullock's Medicaid expansion plan in March but soon came up with their own proposal requiring beneficiaries to contribute to premiums and encouraging their participation in job training. Bullock signed off on the plan in April.

Meanwhile, Utah Republican Gov. Gary R. Herbert has appointed a commission working toward a July 31 deadline to negotiate the meshing of his Healthy Utah expansion plan with the House's Utah Cares plan, an alternative Medicaid expansion plan.

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