Office of Management and Budget Director Donna Arduin and members of her budget team takes time to explain Gov. Mike Dunleavy’s state budget at the Capitol on Wednesday, Feb. 13, 2019. (Michael Penn | Juneau Empire)

Office of Management and Budget Director Donna Arduin and members of her budget team takes time to explain Gov. Mike Dunleavy’s state budget at the Capitol on Wednesday, Feb. 13, 2019. (Michael Penn | Juneau Empire)

Proposed Medicaid, health care cuts spark outrage

More than quarter of Alaskans benefit from Medicaid

On the day their budget proposal was released, Gov. Mike Dunleavy and Office of Budget and Management Director Donna Arduin repeatedly said this budget will affect all Alaskans.

Many lawmakers and health care experts agreed — but did so in a different tone. Particularly as a result of the governor’s plan to make cuts to Medicaid, many agreed Wednesday that seniors and those in need of affordable health care would be negatively affected by the cuts.

The amended budget proposes more than $1.6 billion in cuts, including a $271 million cut to Medicaid. That’s nearly a 40 percent decrease from last year’s budget, according to OMB budget documents released Wednesday. The budget proposal lists a 31 percent decrease in Department of Health and Social Services funding.

More than a quarter of Alaskans benefit from Medicaid, according to a release from the Dunleavy administration Wednesday. According to DHSS statistics, nearly 20,000 people in Southeast are Medicaid enrollees (the department didn’t have the number of Juneau-specific enrollees).

The release states that the governor believes the state’s Medicaid program is “not financially sustainable” in its current form.

“The commissioner is working with the Centers for Medicaid Services and we’ll propose legislation to restructure the program,” Arduin said in a press conference Wednesday, though she didn’t give specifics on what that restructuring will look like.



Those in the health care field were immediately critical of the governor’s cuts to health care services in the state. Becky Hultberg, CEO and president of the Alaska State Hospital and Nursing Home Association (ASHNHA) said in a press release that the governor’s budget is “outrageous” and that hospitals will close, health care specialists will leave the state and a decrease in addiction and behavioral health treatment might lead to more crime.

“While Gov. Dunleavy may not believe government has a role in health care, his belief is disconnected from the reality that our current health care system relies on government payments for a significant percentage of total services, and our entire system will crumble without them,” Hultberg said in the release. “This is a classic example of ideology taking precedent over practicality, and all Alaskans will feel the consequences.”

In 2015, Gov. Bill Walker’s administration expanded Medicaid access. According to DHSS, there are more than 47,000 people statewide who are enrolled in Medicaid as a result of the 2015 expansion. If Alaska repeals or reverses this Medicaid expansion, it would be the first time ever that a state reversed or repealed the expansion of coverage for low-income adults, according to a November report from Modern Healthcare.

Dunleavy said during his press conference Wednesday that there is nothing in the budget proposal that calls specifically for a Medicaid repeal. Mike Barnhill, a policy director at OMB, said during a press conference earlier in the day that the long-term vision for Medicaid in the state isn’t necessarily to totally get rid of coverage.

“At this point, there’s no proposal to eliminate coverage for any population,” he said. “It’s reducing provider rates and finding a new way to providing coverage at a reduced cost to the state.”

During his gubernatorial campaign, Dunleavy was critical of Medicaid expansion. Critics of the expansion have said the state spends too much money on residents already and that people who don’t need medical coverage might be taking advantage of easier access to Medicaid.

[Opinion: Medicaid expansion is out of control]

Democratic lawmakers, including were vehemently opposed to many of the items in the proposed budget, according to a series of statements in a press release. Sen. Donny Olson, D-Golovin, was particularly incensed at the 31 percent cut to DHSS.

“The draconian cuts to the Health & Social Services budget are not just an attempt to dismantle Medicaid and Alaska’s health care system but is an outright full assault against those who are the most vulnerable; the young and the elderly,” Olson said in the release. “It deepens the divide between the haves and the have nots. It strikes rural Alaskans more acutely, forcing them to leave their communities and head to the metropolitan center.”


• Contact reporter Alex McCarthy at 523-2271 or amccarthy@juneauempire.com. Follow him on Twitter at @akmccarthy.


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