Gov. Sean Parnell announced Friday that the State of Alaska will not participate in a controversial expansion of Medicaid, expected to be primarily funded by federal dollars.
Speaking at the Atwood Building in Downtown Anchorage, Parnell rejected the proposed expansion on cost grounds, calling the proposal in its current state a "hot mess."
"Federal dollars are enticing but not free," Parnell said.
Characterizing himself as "responsible for all Alaskans," Parnell said he was unwilling to attach the state's citizens to what he characterized as a "failing Obamacare system."
Rather than join the federal program, Parnell pledged to form a Medicaid advisory group, for which he would call for additional funding from the state Legislature. He anticipated that its report would be delivered in about a year.
The governor says the group will focused on three main issues:
· Stability and predictability in budgeting.
· Increasing the efficiency of navigating the system by providers.
· Providing whole care for the patient by uniting physical and behavioral health treatment.
The expansion is meant to extend Medicaid coverage beyond low-income families with children to help much of the working poor. Individual states face a Dec. 15 deadline to decide whether they will participate in the expanded program.
During the last legislative session, Parnell said he was opposed to expanding Medicaid.
The state spent nearly $80,000 in November 2012 to hire Virginia-based consultants The Lewin Group to produce an April report (PDF) on the effects of expanding Medicaid, which was released Friday but had yet to be released to the public as of September. Parnell said he received the report two weeks ago, after having the state Department of Health and Social Services break down its findings.
In October, DHSS Commissioner Bill Streur said the state was taking its time choosing whether to expand Medicaid for fear of burdening future generations with “a stupid decision.” Streur has said the state was examining a proposal by Arkansas to buy insurance plans using Medicaid expansion funds, which would cover low-income patients without expanding Medicaid itself.
A study by the Alaska Native Tribal Health Consortium found that the state could receive a $2.5 billion economic infusion by accepting the expansion. Streur says the state’s study has shown different findings, but refused to elaborate.
In a Friday statement, state Senate Majority Leader John Coghill (R-Anchorage) says he approves of Parnell's decision.
“Considering the failure of the Affordable Care Act, the Governor is wise to refuse Medicaid expansion at this time," Coghill said. "It’s a matter of dollars and cents -- America can’t afford it. They don’t have the money to pay for this and they’ll take it from future generations.”
The Alaska Democratic Party was just as quick to respond, blasting Parnell for turning down the influx of federal funds.
“Governor Parnell just told 40,000 Alaskans to go fend for themselves when it comes to finding health coverage,” said Mike Wenstrup, Chairman of the Alaska Democratic Party. “This decision ignores the very clear economic benefits of expanding Medicaid in favor of playing more politics with Alaskans’ lives.”
The dispute has become intensely political, with state lawmakers citing both the fiscal and social justice implications of whether Alaska expands coverage. Earlier this week, Sen. Mark Begich answered an attack by Parnell for not voting to repeal the Affordable Care Act by blaming Parnell for denying Alaskans affordable health care under the proposed expansion.
Channel 2’s Adam Pinsker and Grace Jang contributed to this story.
This is a developing story. Please check KTUU.com and the Channel 2 newscasts for updates.