Senior Fellow and Senior Counselor
Senators Bill Cassidy and Lindsey Graham have reportedly spent the last several days modifying their Affordable Care Act (ACA) repeal plan, including to add additional resources for Alaska. But no last-minute changes can alter the fact that Cassidy-Graham harms Alaskans — as well as people in every other state.
1. Every independent analysis has found that Cassidy-Graham would cut Alaska’s funding for coverage in the near term and even more dramatically in the long term, even taking into account the supposed “Alaska fixes” already in the bill.
While these different analyses focus on different time periods, they unanimously conclude that Alaska would see reduced federal resources due to the bill.
Importantly, these estimates take into account Cassidy-Graham’s exemption of Alaska and four other low-population-density states from the bill’s Medicaid per capita cap through 2026. Even with that exemption, Alaska would face large, near-term funding losses due to the funding formula under the block grant that it creates, which penalizes states like Alaska that expanded Medicaid under the ACA or have high health care costs. And after the exemption ended, Alaska would face the same deep cuts to Medicaid funding outside the ACA — which pays for care for seniors, people with disabilities, and families with children — as the rest of the country.
2. Even if Cassidy and Graham added more funding for Alaska, their plan would still hurt Alaskans.
Some of the plan’s harm results from its huge funding cuts. But much of it results from the plan’s restructuring of federal health programs to eliminate protections for vulnerable groups (including people with pre-existing conditions), make federal funding less responsive to need, and create massive uncertainty in both the individual market and Medicaid. Adverse effects that additional funds for Alaska’s block grant simply can’t address include:
As the bipartisan National Association of Medicaid Directors explained:
The scope of this work, and the resources required to support state planning and implementation activities, cannot be overstated. States will need to develop overall strategies, invest in infrastructure development, systems changes, provider and managed care plan contracting, and perform a host of other activities. The vast majority of states will not be able to do so within the two-year timeframe envisioned here, especially considering the apparent lack of federal funding in the bill to support these critical activities [emphasis added].
Or, as Becky Hultberg, the President and CEO of the Alaska State Hospital and Nursing Home Association, put it more simply: “It would be 50 states of chaos.”
Particularly given the state’s persistent budget problems due to low oil prices and declining oil production, Alaska would be highly unlikely to assume this much risk. That means it probably couldn’t continue offering Medicaid coverage to all low-income adults who need it. Nor could it likely continue offering tax credits that adjust as needed to shield most individual market consumers from premium increases.
In addition, once Alaska’s exemption from the Medicaid per capita cap ends after 2026, over 150,000 seniors, people with disabilities, pregnant women, and families with children covered by the state’s longstanding, pre-ACA Medicaid program could face cuts in coverage and benefits.
3. Special deals put Alaska’s future at risk. As Senator Lisa Murkowski explained, “This is like a really big deal to get this right for the country. Let’s just say they do something that’s so Alaska-specific just to quote ‘get me.’ Then you have a nationwide system that doesn’t work. That then comes crashing down and Alaska’s not able to kind of keep it together on its own.”
Special deals attract criticism from policymakers from other states; even if enacted into law, they can easily become targets for repeal in future legislation, especially if policymakers are looking for ways to save money in order to finance other priorities.
But even more important, as Senator Murkowski notes, Alaska’s health care system is intertwined with the rest of the country’s. The only way to ensure that coverage programs work well for Alaskans in the long run is to establish a system that works for the rest of the nation as well.