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Alaska governor to expand Medicaid under Obamacare

JUNEAU, Alaska -- Gov. Bill Walker said Thursday that he intends to accept federal money to expand Medicaid coverage in Alaska, regardless of whether he gets the blessing of state lawmakers to do so.

"Today, Alaska becomes the 30th state to accept the benefits of Medicaid expansion," Walker said to applause at an event announcing his plans in Anchorage.

Walker, who was elected last fall, campaigned on expanding Medicaid to provide health care coverage to thousands more lower-income Alaskans. But he ran into resistance from leaders in the Republican-led Legislature, who among other things expressed concern with adding more people to a system they saw as broken.

Some legislators wanted to see reforms before moving toward expansion.

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Critics also raised issues with Alaska's troubled system for paying Medicaid providers. Health department officials, however, have said the system has vastly improved, with most new claims being paid correctly.

Lawmakers recently passed a budget that sought to restrict spending for expanded Medicaid. But the Legislature's top attorney and state's attorney general have said such provisions could be unconstitutional.

"This is the final option for me, I've tried everything else," Walker said. "And one thing people have to learn about me, I never give up, and I won't give up."

The administration on Thursday sent the Legislative Budget and Audit Committee notice of Walker's intention to expand the program. State law spells out a process by which a governor goes through the committee when seeking to spend more in federal or other funds on a budget item than allocated by the Legislature.

But even if the panel disagrees, a governor can move ahead. Walker said Thursday that that was his intention.

The committee chair, Rep. Mike Hawker, said while his committee's role is a formality, hearings "may be the only available forum for legislators to further discuss the governor's action."

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While he said he supports expansion, Hawker, R-Anchorage, said in a release he would have preferred a process that would have ensured expansion is sustainable.

A study released this year estimated that nearly 42,000 Alaskans would be eligible for Medicaid expansion during this fiscal year and that about 20,000 would enroll.

Expansion has broad-based support from groups across Alaska.

If Walker goes ahead with expansion, "that's going to be a fact," Senate Majority Leader John Coghill, R-North Pole, said, and probably not something that lawmakers would kill. "Then it's a matter of, what modifications can we do from there."

Medicaid is a driver of the state operating budget and widely seen as unsustainable in its current form. The Walker administration has seen expansion as a way to leverage federal dollars to help finance efforts to contain and curb program costs.

For states accepting expansion, the federal government is to pay 100 percent of health care costs for newly eligible recipients through calendar year 2016, stepping down to 90 percent by 2020. The Walker administration has said Alaska would not participate in expansion if the match rate fell below 90 percent.

In a statement, Walker said it would be "foolish" to pass up federal money that could help the economy of a state facing budget deficits amid low oil prices.

Senate Finance Committee co-chair Pete Kelly said regardless of the federal money, the state can't afford the Medicaid system it has now.

"Adding tens of thousands of people to a broken system will do nothing to improve quality of care, access, or efficiency," Kelly, R-Fairbanks, said in a statement.