Alaska's most vulnerable residents will pay price for Dunleavy's Medicaid chaos

On June 28, Gov. Mike Dunleavy created an emergency in the state Medicaid program by vetoing more than $100 million in state and federal money that helps provide health care for poor people in Alaska.

The Dunleavy cuts, added to legislative cuts, created “immediate danger” to Medicaid recipients, according to the Dunleavy administration, a reduction that in the end may come to about $150 million.

The left hand knows what the right hand is doing, but it doesn’t care.

The state said the Dunleavy hair-on-fire emergency meant there was no time for public hearings and an orderly process. The state needed emergency Medicaid regulations to prevent catastrophic results and the elimination of essential health care coverage for thousands of Alaskans.

Without emergency regulations, poor people would be denied medicine, sick Alaskans who get health assistance would be “stranded at home with no ability to complete basic activities of daily living” and young Alaskans would be denied psychiatric care, the governor’s underlings warned.

And Medicaid money could be gone by April. “If this happens it would be catastrophic as no providers will be paid, no services will be rendered, and no one will be getting the health care they need,” the state claimed.

Instead of admitting the circular nature of this Dunleavy emergency, the state health department called for an emergency reduction of 7 percent in the amount it pays many health care providers.

And a week later, the state said the emergency regulations should be made permanent.

While the health department revealed its emergency plan at 4 p.m. on June 28, the same day as the Dunleavy vetoes, the health department claims it knew nothing about the governor’s Medicaid veto and was reacting only to the legislative cut. We are supposed to believe the timing was a coincidence, but there is no such thing.

Perhaps the Dunleavy administration decided to use the information silo approach to defend the “I knew nothing about the Medicaid vetoes made on the same day” argument in court, hoping to prevent the emergency from being identified as a phony.

We are supposed to believe, according to the state, that either the governor refused to tell his own health department about his Medicaid veto even one day or one hour in advance or that the department knew enough to never ask the question. Either way, it is more evidence that Dunleavy’s handling of the budget is incompetent.

The so-called “emergency” created by the governor has been challenged in court by the Alaska State Hospital and Nursing Home Association, which says that Dunleavy has moved to illegally cut Medicaid spending and that it will lead to a decline in health care services to vulnerable Alaskans.

The association says that the simultaneous nature of the vetoes and the emergency regulations is the best evidence that “this underfunding is an occurrence entirely of the Dunleavy administration’s own deliberate creation.”

From the Dunleavy point of view, the beauty of emergency regulations is that they do not require the clear analysis that financial matters must have if life is to proceed in a coherent fashion.

Better to create chaos and avoid the public explanation and examination that Alaskans deserve.

In keeping with all other elements of the Dunleavy Disaster, the governor has provided no analysis of what his budget cuts mean to health care organizations in Alaska or the people with no voice who depend on Medicaid coverage.

The state response to this chaos is that the health care groups have not proven that the total $145 million in Medicaid reductions will lead to a loss of health care coverage for the poor. This is backwards. The state has a responsibility to Alaskans to provide that information before it acts unilaterally.

By the way, it appears that Dunleavy unintentionally or negligently vetoed the wrong line in the budget, with the state losing an additional $40 million in federal funds. This is the kind of thing that a careful review would catch before it became law.

The net result is a Medicaid decline of $117 million in state and federal funds created by the governor, on top of $77 million in cuts made earlier by the Legislature. (The cuts are from different pots of money and are subject to some debate, but the combination translates into a major cut in Alaska health care.)

The governor’s mistake was fixed in the budget bill approved by the Legislature last week, though it remains to be seen if Dunleavy wants to correct his budget errors to reclaim the $40 million in federal matching funds or if he will stick with his veto.

The Medicaid mess is a small part of what Dunleavy claims as his goal—an unplanned reduction of more than $700 million in state and federal spending on health care. There is no analysis about the impact on Alaskans, just empty words about efficiency, waste, fraud and abuse.

The health care organizations suing the state are right to point out that Dunleavy must analyze the consequences of his actions before cutting for the sake of cutting. The state announced cuts on a Friday that took effect the following Monday.

The CEO of Providence Hospital predicted that the cuts may mean that Medicaid patients will lose access to specialty care in Alaska. He said that many private clinics are reducing the number of Medicaid patients they see or not seeing any at all.

The state “seems to think it can target a rate reduction and paper it over after the fact,” the health care providers said in a court filing, breaking the system and reducing access to health care.

The governor, his temporary budget director and his health commissioner continue to treat this as a statistical game in which numbers are adjusted on paper without regard for what cutting health care by more than $100 million means to the lives of 216,000 Alaskans.

The state hospital group said “the hospitals in Juneau and Fairbanks operate on very narrow margins. Medicaid reductions would have a significant impact on their financial position and potentially their ability to continue providing current levels of service in their communities.”

Those communities and many others are being placed at unnecessary risk by the reckless and irresponsible handling of the health care budget.

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