Summary: The number of people on Medicaid is set to grow in the state, according to to Ted Helvoigt, economist with Evergreen Economics. But the major driver of costs will be inflation of health care costs. The amount of people with chronic conditions will also grow which will add to costs over time. Helvoigt’s presentation to the committee can be found here.
Today Medicaid spending is significantly lower than projected in 2006. Costs were lowered by cost saving measures by DHSS and the expansion of adult enrollment.
The past forecast did not include the expansion which took place in 2015, Helvoigt says. Also, seniors today are wealthier than previously anticipated and thus not eligible for Medicaid services.
Population, enrollment, utilization, and intensity of use will have a relatively low impact on spending growth, Helvoigt tells the committee. The biggest driver of costs will be inflation of health care costs.
Even in the most transparent of states health care is extremely opaque, Helvoigt says.
Rep. Ben Carpenter, R-Nikiski, asks how competition in the lower 48 drives prices down in those states, and whether Alaska’s small population limits competition and thus increases price.
Higher populations in other states should not affect the growth of health care costs over time, Helvoigt says.
Carpenter asks if Helvoigt is suggesting Alaska has a higher percentage of “greedy people,” who simply charge higher prices because they can.
Helvoigt says that as an economist, he sees market power. Providers setting prices rather than taking prices because of a relatively closed networks and consolidated health care providers.
Rep. Jennifer Johnston, R-Anchorage, suggests Carpenter refer to University of Alaska Institute of Social and Economic Research reports on the effects of out of network costs.
Most Medicaid enrollees are under 20 or over 65, Helvoigt says, but the median age of a Medicaid enrollee is projected to increase.
Sullivan-Leonard asks why people over 65 who are eligible for Medicare are also on Medicaid. Most Medicare eligible seniors are also eligible for Medicaid, Helvoigt says, and Medicare costs are often covered by the Medicaid fund.
The number of adults (ages 20-64) on Medicaid is expected to grow, as is the cost of the program. Medicaid spending is projected to grow at 4.6% per year, according to Helvoigt.
In 2015, the Alaskan economy began to retract but the need for medical services didn’t. So while Gross State Product declined, the percentage of spending on Medicaid services has gone up.
Health care price inflation is growing faster in Alaska than elsewhere in the US.
Sullivan-Leonard asks if competition between doctors can help lower the costs of health care inflation. Doctors do have a lot of “market power,” according to Helvoigt. But in a relatively small and isolated market doctors can price set because it’s not easy for people to go to competitors.
Other states have required prices to be published in order to open up scrutiny that could bring prices down, Helvoigt says. The prices of health care that have increased in Alaska are private prices as well, not just Medicaid.
Between fiscal years 2015 and 2019, Medicaid enrollment grew by 51%, Helvoigt said, and most of that spending was covered by the federal government with 93% and state funding at 6%.
Rep. Colleen Sullivan-Leonard, R-Wasilla, asks why there was so much growth in Medicaid. Helvoigt says there are a number of factors including injury and loss of employment that can lead people to Medicaid, but the available data does not give specific reasons why there was such a growth.
There was also an expansion of Medicaid services in many states. However, enrollment in Medicaid services doesn’t necessarily mean people are using those services, Helvoigt says.
Department of Health and Social Services Commissioner Adam Crum opens the House Finance Committee meeting by saying that while Medicaid is often thought of as an immediate program, there’s a need to take a look at the long term forecast of what the state is going to spend on the program.
He introduces Ted Helvoigt, vice president of Eugene, Ore. based Evergreen Economics which has created a 20-year forecast for Medicaid spending in the state. The forecast assumes that Medicaid will exists exactly as it does today for making it’s projection. It doesn’t take into account any potential policy changes or other major shifts.
Summary: Murkowski repeated several times politics had moved past debate and was now focusing on solutions. Work is being done in Washington and at the state level to solve Alaska’s problems.
Sen. Donny Olson, D-Golovin, asks about Real ID, and the difficulty people in rural areas have in trying to obtain one.
It is a very real challenge, Murkowski says. There are no easy answers for that. An exemption or an extension isn’t going to happen she says. It’s going to take significant effort to try and get eligible IDs for rural communities, Real IDs or otherwise.
Sen. Peter Micciche, R-Soldotna, asks about what state lawmakers can do about fentanyl in communities.
Congress often appropriates funds to combat a single drug, making drug-fighting efforts like, “whack-a-mole.”
We don’t want to so narrowly define our efforts towards opioids so that we can’t be nimble enough to react where there’s need.
The tariffs against China have given the president some leverage when negotiating with that country, which is the source of most fentanyl.
Sen. Jesse Kiehl, D-Juneau, asks about the federal effort to look into PFAS contamination.
Murkowski says she was able to secure funding in the Environmental Protection Agency budget to help identify areas that might be contaminated. There is additional funding for firefighters who might have been exposed.
We are still learning the extent of what we’re dealing with, but I don’t think any of us should assume that we’re going to be able to approve funds for this in a couple of funding cycles.
Rep. Ivy Sponholz, D-Anchorage, asks about the 2020 census and privacy concerns in that count.
The census is essential to secure funding for Alaska, Murkowski says.
The data is private, but when you’rs in a very small community, it can be easier to figure out who is who, she says. But we cannot afford an under count. The algorithm used by the census might pose some privacy concerns she admits. She asks the local legislators to be vigilant about reporting what they’re hearing from their constituents.
Rep. Sara Rasmussen, R-Anchorage, asks about the attack on Alaska’s resource development and what state legislators should do to attract renewable energy.
Some of the outside pressure from companies like Goldman Sachs, which recently declined to help funding oil development in the state, is not the way forward.
Alaska has an excellent environmental record when it comes to resource development, she says, and outside parties should respect the state’s right to develop its resources.
Rep. Dan Ortiz, I-Ketchikan, asks about trans-boundary mining.
Not as much work has been done on the issue as she would have liked, but there’s is work being done. Every time she meets with her Canadian counterparts she brings the issue up.
Murkowski is now taking questions from lawmakers. Rep. Tiffany Zulkosky, D-Bethel, is first and thanks her for her work on missing and murdered indigenous women and asks about the status of the Elizabeth Peratrovich $1 coins being minted.
Murkowski says she has spoken with the White House and the treasury about getting the coins into wider circulation. As of now, the only way to obtain the coin is by specifically ordering one from the treasury website, which is too slow, she says.
Washington is not as dysfunctional as it may seem. There have been a number of bipartisan bills passed through Congress. She has repeated several times that people both in Congress and the state have moved passed debate and are working on solutions.
2020 will be a difficult year, she says. Partisanship is as high as she’s ever seen it.
A day doesn’t begin when she doesn’t think of a quote from Ted Stevens: “To hell with politics, just do what’s good for Alaska.”
Ocean science is critical for our nation, she says, especially for Alaska. She is working on funding data collection for the nations ocean.
What we do should be based on science and not partisan preferences. When she returns to Washington she says she will be introducing a number of clean-energy bills.
One of those clean-energy sources is nuclear, not large reactors that would power large cities but small reactors that would power small, rural, communities.
You can power communities, military bases, and resource projects cleanly and safely, she says.
It’s troubling to hear some people call for Alaska to abandon it’s resources. Traditional resources will be used for a long time even as there’s work to lower carbon emissions.
“The very last drop of oil that the world uses should come from Alaska’s North Slope.”
She is working with the Trump administration to exempt the Tongass National Forest from the Roadless Rule. The exemption is not about timber, she says, but about reasonable access to resources for islanded communities.
“Highways include a Marine Highway, it’s just as simple as that,” she says to a round of applause from some legislators. While there won’t be a massive infrastructure bill in the near future she says, there is a highway funding bill in the works that will provide funding for ferries.
Expansion in the Arctic is continuing as well she says. A second ice-breaker ship is being built by order of the president.
A center for Arctic security will be established and named after the late Sen. Ted Stevens.
She turns now to the issue of missing and murdered indigenous women. The issue has become an important issue for the Department of Justice.
Tribal health care and housing consortiums are the envy of other state tribal organizations she says.
She has been working nationally on lowering health care costs.
The nation is no longer debating things like health care and broadband internet coverage but focusing on solutions.
Murkowski begins by saying the Legislature is like a family, and begins by talking about her own children and what they’re doing. She introduces her husband Vern, who is attending her address to the Legislature for the first time.
She says she feels worn down from one of the darkest, most partisan experiences of her career.
The division is Washington is a reflection of what we have become, she said. As we went further down the partisan pit I realized my vote would do nothing but drag the judiciary down.
She says she has deep concerns about abuses of power, not just in this administration but in past ones as well, of both parties.
Congress must re-establish itself as a co-equal branch of government.
House members are in the chamber and Senators are filing in. There’s a lot more press here than usual, lots more TV cameras.
Today at the Capitol: U.S. Sen. Lisa Murkowski, R-Alaska, will address a joint session of the Legislature at 11 a.m. Following her speech she’ll be holding a press conference to answer additional questions.
Later in the day, the House Finance Committee will be getting a presentation on projected long-term Medicaid spending in Alaska. When the governor released his supplemental budget earlier this month, he requested $120 million for Medicaid payments after having cut funding from the program in last year’s budget.
• Contact reporter Peter Segall at 523-2228 or email@example.com.