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Before big Parnell decision, Health Commissioner Streur's Medicaid comments scrutinized

Pat Forgey
Alaska Gov. Sean Parnell and Bill Streur, who heads the Department of Health and Social Services, will discuss the prospect of a Medicaid expansion in Alaska at a press conference in Anchorage Friday morning. He and Parnell will conduct a press conference Friday morning in Anchorage to discuss the issue. Loren Holmes photo

With health care for thousands of Alaskans -- and possibly life or death itself -- hanging on the state's decision about whether to expand Medicaid in Alaska, Health Commissioner Bill Streur's public statements in recent months may provide some clues about the state's eventual decision.

Streur, who heads the Department of Health and Social Services, will make a recommendation to Gov. Sean Parnell, who will make the final decision about whether to include Medicaid expansion in next year's state budget.

"It's a dilemma, it's very definitely a dilemma I'm facing," Streur said. While he promises a "thoughtful recommendation," Streur's public statements are being parsed for clues to which way he’s leaning. Among the statements that may be telling are his suggestions that additional health care may not actually prevent deaths.

He and Parnell will conduct a press conference Friday morning in Anchorage to discuss the issue.

Does more spending mean better outcomes?

The United States already spends more on health care per capita than any other country, with Alaska's health care costs among the highest of any state. Yet U.S. outcomes don't compare favorably with other countries.

"Does that mean that more care kills more people? I don't know," Streur said.

And Streur questioned whether uninsured Alaskans were really going without care -- or were getting treated anyway.

He said that accusations that the state is denying coverage to children by not expanding Medicaid are false.

"I hear all these stories about children not getting coverage," he said, while actually children are already covered at up to 175 percent of poverty level under Denali KidCare.

Under the Affordable Care Act, states are being urged to increase Medicaid eligibility from the current 100 percent of poverty level up to 138 percent for adults.

"What's the true population affected by this expansion?" Streur said will be part of the state's analysis.

One study, he said, showed that Alaska hospitals wrote off $200 million in care for which they were not paid.

Enough doctors, medical providers?

Reducing the number of uninsured Americans is a key part of President Obama’s Affordable Care Act, because the cost of their care is passed along when they get sick, driving up bills for others.

Streur questioned whether those costs could actually be recovered, even if everyone in the state had health-care coverage.

"If we do Medicaid expansion, if we embrace the ACA, are they willing to reduce their rates by $200 million?" he asked.

The commissioner is also renewing an argument he made last year -- that the state's medical community didn't have the capacity to provide care to an additional 40,000 people.

"Do we have the providers to be able to pick up the load?" if Medicaid is expanded, he asked.

Alaska is already having difficulty attracting enough medical professionals.

"As much as we all love Alaska, not everybody wants to come live in Alaska," he said.

That competition for doctors, nurses and other trained professionals could become more intense as other states expand health care and increasing demand, he said.

That was an argument Streur made last year as well, when Parnell rejected expanding Medicaid in the current year's budget. That means that while federally expanded Medicaid will begin Jan. 1 for millions of Americans, Alaskans won't be among them.

There appears to be a growing push in Alaska for expansion, a move backed by the Alaska and the Anchorage chambers of commerce as well as the Anchorage NAACP.

The cost of Medicaid expansion to Alaska will be perhaps the most important factor, Streur indicated.

But the cost that's got Streur really concerned is if the federal government doesn't maintain the promised amount.

"At any time that match could be reduced from 90 percent to 50 percent," he said.

The basic Medicaid match rate for those up to the poverty level is 50 percent, and at a cost of $1.6 billion, the state’s share of that is one of the Alaska's biggest budget items every year.

'A hard decision to make'

A reduction of the Medicaid expansion match could mean a cost of $150 million to the state budget at a time when the state couldn't afford it, Streur said.

During a legislative hearing recently, Rep. Les Gara, D-Anchorage, who supports expansion, said that if the federal government didn't maintain its commitment, Alaska wouldn't be obligated to keep funding it either.

But a skeptical Rep. Mark Neuman, R-Big Lake, said he doubted the courts would allow Alaska to withdraw, even without full federal funding.

"Once you start down this path, you are there," he said.

Legally, Streur said, Alaska could withdraw some Medicaid coverage, but that it would be difficult politically.

"You are taking away a benefit from the most needy individuals in the state. Are you willing to do that with $40 billion in the bank," Streur said, referring to the Alaska Permanent Fund.

"That's going to be a hard decision to make," Gara acknowledged.

Streur said his recommendation will be balanced with positives along with the negatives -- detailing what the costs might be to the state budget contrasted against the benefits.

Analysis is continuing about which state programs would see costs decrease if the Alaskans they serve gained Medicaid coverage.

Some of those savings could be significant, and doing that complicated analysis is part of the reason the department's analysis is taking months, Streur said. His recommendation won't be made public before next year's budget is released in December.

Contact Pat Forgey at pat(at)alaskadispatch.com