News-Miner Community Perspective:
Medicaid as it stands is ticking toward a greater financial explosion.
Moral and humanitarian arguments for Medicaid expansion are plentiful and they are just.
But equally important are wide-spread financial realities assured to explode into financial disaster if not addressed:
1) Consider how operating budget cuts will eliminate hundreds of Alaska jobs in the public sector — state employees, teachers, clerks and policemen. Lost with these positions will be their purchasing power in the Alaska economy, which in turn will cost goods-and-
services jobs in the private sector. Also affected will be real estate values, and still further, sales and real estate tax revenues for municipalities. And this won’t be the end of job loss and diminished municipal revenues. Next year more cuts and job loss seem certain. The Alaska economy is entering a recession.
2) Consider how Medicaid as it stands will demand more and more dollars. First, state funds are paying for sickness and disability at a rising rate and at a much higher cost than is required. Second, because nothing is being done to help Alaska’s uninsured prevent their own sickness and disease, thousands more will line up behind the 9,000 individuals already in line for admission to Alaska Medicaid. Many of them are going to be sick and some probably incurably sick.
Reforming and expanding Medicaid in Alaska will address both the economic effects of budget cuts and the rising costs of Medicaid in its present form. With Medicaid expansion will come good-paying, permanent, professional positions across Alaska, thus adding demand for private sector goods and services and helping municipal revenues. If income taxes are in Alaska’s future, which seems likely, these many new positions will help that revenue.
As for the cost of Medicaid if expanded now, for the next year, all of it is paid for. Some required state costs will also be paid for both immediately and permanently. Expansion now will reduce the deficit more than any other measure in this overwhelming first year of state budget cuts, and ballooning Medicaid costs will be not only reduced permanently but also in many cases prevented.
In the years to come, Medicaid expansion will save not just millions but billions of dollars. First, savings occur in the match return of not 50 percent but of 100 percent. The match then lowers over years to a permanent 90 percent. Second, the largest savings will be in preventing future sickness and disease. Prevention costs a fraction of the cost of treating disease, a cost that is high and unending and that can make whole families wards of the state.
Some majority legislators need encouragement from voters to consider how Medicaid reform and expansion can help keep an emergency from blowing up into a statewide financial disaster. Legislators have the power to do something meaningful and immediate to protect Alaska’s economy by passing Medicaid reform and expansion. It will not solve Alaska’s financial emergency, but it will address a big part of it.
The framework is in place. A majority of Alaskans in every section of Alaska supports expansion. From around the state, 154 organizations endorse expansion (doctors, nurses, hospitals, city governments, Native corporations, chambers of commerce and nonprofit social services). With a simple email, Alaskans can easily encourage their legislative representatives to complete this task. Alternatively, they may address all legislators through GOV.AllLegislators@alaska.gov. They need encouragement to act, because every day of delay ticks closer to making a financial disaster not just possible but probable.
Art Petersen has been a resident of Juneau since 1975 and is a retired faculty member of the University of Alaska Southeast.