Report shows Medicaid cuts won’t save much

Health care workers say it might cost the state more

Streamlining the state’s health care services has been a priority for Gov. Mike Dunleavy as his administration looks to close a $1.6 billion deficit in the state by cutting services.

As part of that effort, the Dunleavy administration commissioned an analysis in May to look at ways to reform health care programs in the state, namely Medicaid, the federally funded program for low-income people.

The administration wanted to look at moving certain eligible patients from the state-administered Medicaid to federally reimbursed private insurance plans offered under the Affordable Care Act.

That report, done by Boston-based Public Consulting Group, came out earlier this month and said that while it was feasible for some Medicaid patients to be moved to private insurance under the ACA, it was not clear that doing so would save the state money or produce better health outcomes.

Health care providers and experts in the state went a step further and said the reforms covered in the analysis and being considered by the administration would not only be more expensive but create worse health care outcomes.

“Right now, the way Medicaid works is if you go see a doctor, the bill gets submitted and Medicaid pays for that, so it pays for actual services,” Andrew Cutting, said.

Medicaid cuts will have broad impact for Juneau

Cutting is a data analyst working for the Alaska Children’s Trust (ACT), a non-profit children’s advocacy group based in Anchorage, who examined the analysis as part of his work at ACT.

Under private insurance, Cutting said, not only were services paid for, but so is the administration of insurance.

“There is no possible way that that’s going to be cheaper,” Cutting said. “The only way to make that cheaper is for you to get less care. So they kick people off their insurance or to pay providers less.”

Providers in Alaska have already taken reductions for reimbursement from Medicaid services.

In July, the Alaska State Hospital and Nursing Home Association, quietly filed a lawsuit against the state and the Department of Health and Social Services, which administers Medicaid in Alaska. The suit alleges that the Dunleavy administration improperly sued a state of emergency declaration to cut Medicaid reimbursement.

“The story you keep hearing is providers are taking Medicaid now, but they can’t taking cuts and seeing patients (on Medicaid),” Cutting said. “So at some point the providers in Alaska will just draw a line and say and we can’t afford to take more medicaid.”

What’s more, patients on private insurance are not necessarily covered.

Andrea Nutty, Program Director of the Alaska Nurses Association, said private insurance often saddles patients with high deductibles, the money a patient needs to pay before insurance kicks in.

“If you switched some people who are on Medicaid right now to a private plan and they suddenly have a $3,000 deductible,” Nutty said, “That’s the same thing as kicking them off their care because someone who is very poor is not going to be able to pay those costs up front.”

When people don’t have coverage, they don’t get the preventative care they need and typically end up seeking emergency medical care.

“It ends up making a lot more financial instability for hospitals because they aren’t receiving reimbursements for the care they’re providing and (costs) end up getting passed on to all the consumers,” Nutty said.

Another provision examined in the study was implementing work requirements in order to qualify for Medicaid. The PCG study pointed to other states such as Arkansas where work requirements for Medicaid had been implemented.

In March of this year, a federal judge threw out those requirements.

Work requirements for Medicaid have been through the courts several times, Cutting said, “and they’ve lost every time.”

That’s because Medicaid is a health care program, not a work program, Cutting said.

The Empire made several requests for interview with DHSS Commissioner Adam Crum, and on Wednesday received an email linking to the state’s Medicaid Redesign website.

On Friday, Aug. 23, it was announced that a second private insurance company, Moda Assurance Company would enter the individual health care market beginning Jan. 1, 2020.

Moda will offer Alaskans health insurance plans covered by the ACA but it is not yet clear what the specifics of those plans will be.

• Contact reporter Peter Segall at 523-2228 or

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