Over the weekend, a team of Alaska health care leaders huddled in a classroom at the University of Alaska Anchorage, part of incoming Gov. Bill Walker's transition conference. By Sunday afternoon, large sheets of paper scribbled with the state's most pressing health care priorities -- from behavioral health to changes in state leadership -- were plastered across the classroom walls.
Walker had asked the group to identify "low-hanging fruit," participant Valerie Davidson told the group, that he could accomplish within 90 days of being sworn into office. At the top of the list was Medicaid expansion, an initiative rejected by Gov. Sean Parnell, but which Walker said during the campaign would be one of his first priorities upon assuming office.
Walker has said repeatedly that Medicaid expansion will be a priority for his administration. Yet how Walker will forge ahead -- with or without the approval of the Republican-controlled Legislature -- is still up in the air, as legislators and the incoming governor parse out details of what is necessary to expand the government program to cover an estimated 40,000 additional Alaskans.
Medicaid expansion's short history
Medicaid expansion was one of the tenets of the Affordable Care Act, designed to be implemented in every state. But in 2012, a U.S. Supreme Court ruling struck down the requirement, making the expansion optional, left up to the discretion of state leaders. Twenty-eight states have chosen to expand Medicaid thus far.
Medicaid expansion was widely supported by Alaska health care and tribal organizations and the Alaska Chamber of Commerce. Two reports commissioned by the Alaska Native Tribal Health Consortium found that 40,000 Alaskans or more would be newly eligible for Medicaid under the expansion. The expansion would bring in $1.1 billion in federal revenue to the state, the reports found.
Meanwhile, Parnell commissioned his own report examining Medicaid expansion, which he ultimately rejected, calling it a "failed experiment" when he announced the decision in Nov. 2013.
Now Walker is set to reverse that decision, but many questions remain as to how to go about it, as differing interpretations exist on whether he can expand without legislative support.
Paths to expansion
Walker is reviewing two paths to expansion, said Grace Jang, Walker's spokesperson: administrative or legislative. An administrative action would be "essentially unilateral," whereas legislative would require the Legislature's blessing, she said.
"He's getting expert advice on which (path) to take," Jang said. On Sunday, Walker said he was still reviewing whether legislative approval was necessary.
An opinion from Legislative Legal Services on Tuesday offered no greater clarity: State statute is ambiguous.
Incoming state Senate president Kevin Meyer, R-Anchorage, said he has asked for a legal opinion on whether Walker can expand the program via an executive order. "My hope, though, is that we do it through a legislative process," he said. The Legislature "(wants) to work with him."
Meyer said he's undecided on whether to expand. Some legislators have been more vocal about opposing the expansion. Sen. John Coghill, R-Fairbanks, has repeatedly stated he is opposed to the expansion.
Sen. Pete Kelly, R-Fairbanks, wrote Tuesday that "Medicaid expansion will ultimately cause us to spend money we do not have. Those who believe the Federal government will cover the cost of the expansion are investing in a false hope."
Sen. Berta Garner, D-Anchorage, was more optimistic about the passage of Medicaid. "I don't believe the Legislature has really looked at it ... because Parnell was clearly opposed," she said, and added she has high hopes for its approval.
'Precarious' financial climate
Alaska Department of Health and Social Services Commissioner William Streur said Tuesday that the new governor would likely be able to expand Medicaid without the Legislature's approval. However, he believes additional funding -- for needs such as increased staffing -- would still need to come from the Legislature.
That includes approval for the federal funds promised under the Medicaid expansion. That's called "federal authority," Streuer said. "Even if it's not your money, it needs to be in your budget," he said, and the Legislature has to sign off on it.
Convincing the Legislature to fund an increase in administrative needs will be a "hard push" in the current economic climate, according to Streur.
"The Legislature is the hurdle the governor has to get over," deputy director of health care policy Josh Applebee said.
Walker steps in as governor in the midst of a "precarious" financial landscape, Meyer said Tuesday, and agreed that convincing the legislature of supporting additional staffing may be hard to do.
Yet whether funding must come from the Legislature at all is "not cut and dry," Walker spokesperson Jang said. With an expansion, Alaskans shifting services over to Medicaid will bring "significant savings" to the state health care department, Jang said. Those savings were identified in both Parnell's and one of ANTHC's Medicaid expansion reports. Those offsets may potentially be used to fund that initial investment, according to Jang.
"As for whether further legislative approval would be needed to fund the expansion, that is under review by the Department of Law," she said.
Looking forward
Regardless of how Walker moves forward, legislative approval will ultimately become necessary by 2016, when the state begins to pick up part of the tab. The expansion is fully covered by the federal government through 2016, after which it starts gradually dropping to 90 percent federally-funded by 2020, leaving the state with the remaining costs.
If Medicaid expansion moves forward, the state has a few options as to how to go about it, U.S. Department of Health and Human Services Regional Director Susan Johnson said. Some states, like Oregon and Washington, have chosen to implement a straightforward state amendment, a relatively quick process that can be put in place in as little as six weeks, Johnson said, though rolling out the process and enrolling Alaskans will take longer.
Other states, like Arkansas, have chosen to implement a lengthier waiver process that involves reforming other aspects of Medicaid concurrently with the expansion, Johnson said.
Regardless, "it starts with a dialogue," Johnson said. "Then it's finding where we can do things quickly, (and) things that might take more time."
In the meantime, a Medicaid reform advisory group created by Parnell will continue to function, Walker wrote Tuesday.
Correction: Due to an editing error, this article originally identified William Streuer as "outgoing" commissioner. Whether or not Streuer will continue in his position under the Walker administration is still under evaluation.