JUNEAU — State senators had a cool reaction to agency estimates on the fiscal impact of legislation intended to contain costs within the state Medicaid program.
The Senate Finance Committee is working to finalize the bill but wants to hear more on the costs and savings. Medicaid is one of the areas that legislators have targeted for reform as they try to reduce the size of the state budget.
During a hearing Friday, committee co-chair Anna MacKinnon, R-Eagle River, asked that agency officials review their numbers. She and co-chair Pete Kelly, R-Fairbanks, both commented on the number of new employees that would be added.
“It seems like we have a whole lot of new employees and not a lot of cost savings” from the fiscal notes reviewed Friday, MacKinnon said, adding later: “We’re going to need a little bit more conservation on the dollars that you’re expending versus the dollars that you’re saving.”
The bill is from Kelly and incorporates ideas proposed by Gov. Bill Walker’s administration. It was shaped by a special subcommittee led by MacKinnon. State health commissioner Valerie Davidson said she’s pleased with the bill and the process that led to it.
Kelly said the bill will yield long-term savings “in a big way.” But he said he hadn’t seen estimates on the impacts that provisions related to such things as telemedicine, eligibility verification and care coordination might have, and wants to.
MacKinnon said she hoped to advance the bill Monday but had concerns with the fiscal notes and planned to meet with administration officials over the weekend.
Also this coming week, the House is expected to finalize and vote on its version of the state operating budget. The Senate, which has set an aggressive timeline for its budget work, isn’t far behind. Legislators have opted to focus on looking for cuts to state spending before deciding on any potential new or additional revenue sources.
The House Finance Committee has proposed some creative funding approaches along with its cuts, including using $24.7 million in excess funds from a program that provides assistance for rural areas faced with high electricity costs to replace a portion of state unrestricted general funds for the university system. House Finance co-chair Mark Neuman said the goal is to reduce unrestricted general fund spending and the state’s draw on reserves. The state’s deficit is in unrestricted general funds.
That doesn’t mean the alternate funding, if adopted, would be used indefinitely. “We’re coming back saying, Next year, the budget’s going to be lower,” the Big Lake Republican said.
House Finance removed agency funding for the major liquefied natural gas project the state is pursuing. It was expected to consider funding during the amendment process, with agencies asked to submit budgets for the state’s share of costs through the rest of the project’s current phase.
“But my sense is right now that we should probably not be putting more money into that until we know what’s going on,” Neuman said. If it’s determined during session that more money is needed, that can be attached to other spending bills, he said.
Walker last month said the state and its partners on the project would look at different options for moving forward amid low oil prices. Additional details are still pending.
