Alaska legislators wary of Dunleavy plan to split health and social services agency

JUNEAU — A legislative committee has advanced a measure that could block Gov. Mike Dunleavy’s plan to split the Alaska Department of Health and Social Services.

Members of the House Health and Social Services Committee said Tuesday that the split may be a good idea, but because they cannot amend any problems and because they have only a limited time to consider it, they are unwilling to support it.

“I’m not opposed to reorganizing the department … but how you do it really matters,” said Rep. Ivy Spohnholz, D-Anchorage.

The Department of Health and Social Services is the state’s largest agency, controlling a $3.4 billion budget and more than 3,400 employees. The department’s biggest job is to oversee Medicaid, which provides medical coverage to one in three Alaskans, but it also handles programs and services as varied as the Office of Children’s Services, Pioneer Homes and public assistance programs.

In December, Dunleavy proposed splitting the agency into a Department of Health and a Department of Family and Community Services, and he issued an order in January to make the split happen.

That order will become effective March 21 unless a majority of the Legislature, meeting in joint session, formally votes against it. Tuesday’s vote by the House Health and Social Services Committee is the first step toward that vote.

The split would cost more on an annual basis, but Health and Social Services Commissioner Adam Crum said the result would be more efficiency, generating better results and long-term savings for the state without affecting health care or other services.

“There is no disruption of the services, the programs or the payment structures that people receive, whether they are providers or beneficiaries,” Crum said.

But in a series of hearings, various groups testified that they weren’t contacted for input until after the governor introduced his proposal.

Some pointed to technical elements that could affect their specific programs. The union representing police officers in Anchorage said it is opposing the split because the governor’s proposal would eliminate the definition of a “crisis stabilization center” and could affect the way police assist people with mental health issues.

Jason Lessard, executive director of Anchorage’s chapter of the National Alliance on Mental Illness, said Saturday he is “vehemently opposed” to the manner in which the split was rolled out, even if he doesn’t necessarily disagree with the concept.

“I’m asking that the Legislature slow the rollout on this,” he said.

That’s a problem, because an executive order can’t be amended or delayed. Legislators could take no action, in which case the split happens on March 21, or they can vote no, which would cancel the split. In theory, the governor’s administration could start over with a redrafted order or propose legislation to enact the split.

The state House took a month to organize, which meant no substantive hearings were held on the issue until February. That has left lawmakers uncertain about the issue even now.

Legislative attorney Andrew Dunmire said Saturday that in his opinion, “there is substantial litigation risk if this executive order becomes law” because the governor’s order may be so broad that it infringes upon the Legislature’s authority.

The Senate Finance Committee has scheduled a meeting Thursday to analyze those legal issues.

With no answers and an impending deadline, House committee members said they felt they needed to act now in order to preserve their options later. Several said they will be watching the Senate meeting with interest, and the result of that meeting could decide their final votes.