Gov. Bill Walker said Thursday he would use his executive power to expand the public Medicaid health-care program to newly cover as many as 40,000 low-income residents.
The decision comes after the Alaska Legislature earlier this year rejected Walker's efforts to expand the program through the state budget process, then adjourned without allowing a vote on a separate expansion bill.
Walker's move makes Alaska one of 30 states to approve Medicaid expansion, a key plank of the federal Affordable Care Act, or "Obamacare," that was aimed at cutting health-care costs and giving more Americans insurance.
Expansion was originally required by the 2010 law, but in 2012 a U.S. Supreme Court ruling made expansion optional, and many Republican governors and legislatures have rejected it.
Walker is a Republican-turned-independent who was elected with support of the state Democratic Party, and Medicaid expansion was one of his key campaign promises.
He made his announcement at a morning news conference in Anchorage at the headquarters of the Alaska Native Tribal Health Consortium, an organization that has backed Medicaid expansion for years. Its former director of legal and intergovernmental affairs, Valerie Davidson, is now Walker's health and social services commissioner.
She and other members of Walker's Cabinet stood behind him as he addressed hundreds of supporters assembled in a conference room. The crowd offered cheers and rounds of applause.
"Today, Alaska becomes the 30th state to accept the benefits of Medicaid expansion," Walker said. "This is the final option for me -- I've tried everything else."
His remarks were followed by a string of state commissioners and hospital executives who praised the governor and outlined their views of expansion's benefits. Those include what the Walker administration has estimated as 4,000 new jobs, and fewer uninsured patients who can't pay their bills.
"I'm here to tell you it is the absolute right thing to do," said Julie Taylor, the CEO of Alaska Regional Hospital.
Walker's unilateral move was one he considered soon after his election in November but ultimately set aside. He and his administration instead engaged in a months-long battle over Medicaid expansion with the Republican-led caucuses that control the state House and Senate -- a battle that extended through more than two dozen legislative hearings.
"I wanted to honor the process," Walker said. "And I gave it every opportunity."
Alaska's Medicaid program currently covers about 120,000 low-income children, pregnant women and people with disabilities. Walker's move makes newly eligible about 42,000 more Alaskans who make less than $20,300 annually, or couples with combined incomes of less than $27,500, though only 21,000 are expected to enroll in the first year.
Under the Affordable Care Act, states' costs for Medicaid expansion are fully funded by the federal government through 2016, though that scales back to 90 percent funding by 2020.
Walker said he notified a House-Senate budget committee Thursday of his intent to accept about $150 million in federal money to pay for the expansion.
When the Legislature isn't in session, the committee, the Legislative Budget and Audit Committee, has the authority to review requests for Alaska to accept federal money and to make recommendations.
The committee has 45 days to consider the governor's notice and give its advice. But it doesn't have the authority to directly block receipt of the federal money, and Walker said at his news conference he intends to go ahead with expansion regardless of the committee's decision.
Asked whether the committee process was essentially a formality, Walker responded: "It is my intention to accept Medicaid expansion -- that's correct."
The budget committee's chairman, Anchorage Rep. Mike Hawker, was one of many Republican legislators who challenged Walker's efforts to expand Medicaid during the legislative session.
Those lawmakers questioned the governor's projected savings from Medicaid expansion and reforms, and said additional savings were needed before the state expanded the program.
In an interview after Walker's news conference Thursday, Hawker said the governor's request would be treated like any other made of the budget committee. He added that he'd like to see the request given expedited consideration, though Walker didn't ask for that in his letter, Hawker said.
Hawker added he personally supports Medicaid expansion and said his objections during the legislative session were based on the Walker administration's financial claims. Walker's choice to expand the program unilaterally, Hawker said, "might not be the best approach" given the importance of the policy decision.
"But it's the choice he made and I respect the choice," Hawker said. "It is fully and completely within his constitutional and statutory authority."
Republicans put language in this year's budget to block Walker from accepting money for Medicaid expansion, but two legal opinions -- one from the executive branch, and one from a legislative attorney -- say that maneuver likely violates the Alaska Constitution.
Walker's decision to expand Medicaid without legislative approval is unusual, but it's also not without precedent, Laura Snyder, senior policy analyst at the Kaiser Commission on Medicaid and the Uninsured, said in a phone interview earlier this week.
Governors in both Kentucky and West Virginia enacted Medicaid expansion through executive orders in 2013, according to a Kaiser review. The order in Kentucky was challenged in court, but it was upheld.
Jeremy Price, the Alaska director for one conservative group, Americans for Prosperity, said in a phone interview earlier this week the organization was reviewing its legal options in case Walker decided to expand Medicaid unilaterally.
In a prepared statement Thursday, however, Price offered no indication his group would challenge Walker's decision even as he offered sharp criticism.
Walker, Price's statement said, is "expanding Obamacare to over 40,000 able-bodied, working age, childless adults to a program that is already devouring the state budget."
The Alaska Republican Party, meanwhile, called Walker's decision "pound-foolish," and said in a prepared statement that he "risks bankrupting Alaska."
"What Alaskans heard today was, 'Damn the Legislature -- full steam ahead' on expansion with no accountability," the party's statement said.
Alaska currently spends about $640 million annually on its Medicaid program, with the total state operating budget at just over $5 billion this fiscal year. About 45 percent of the 42,000 Alaskans newly eligible under expansion are employed, according to the Walker administration.
The Walker administration maintains Medicaid expansion will save the state money, largely by replacing state spending with federal money. It also says it plans to reduce costs by making other changes to the program.
On Tuesday, for example, the health department issued a request for proposals for a consultant to create a plan for the state to opt into a federal program that pays for care for people with significant disabilities stemming from conditions like Alzheimer's disease or traumatic brain injury.
When it's implemented in 2018, the Walker administration says it will save the state $58 million over the following four years.
The state has also hired a separate consulting firm, Agnew Beck, to work on a broader redesign of Alaska's Medicaid program, Davidson, the health commissioner, said in an interview Thursday.