NEWS: Medicaid Expansion Can Help Avoid the Risk of a Recession in Alaska

Rep. Les Gara

Democratic Lawmakers Urge Republican Colleagues to Drop Opposition to Economic Boost for Alaska

June 25, 2015

ANCHORAGE – A recent report commissioned by the Alaska Mental Health Trust Authority suggests Alaska is at risk of a recession for the fourth time in the state’s history.  The report indicates a recession could be prolonged due, in part, to the downturn in oil prices and subsequent decreases in state spending.  However, the report outlines options to mitigate a recession including accepting Medicaid expansion, which will be paid for almost entirely by the federal government.  House Finance Committee member Representative Les Gara (D-Anchorage) tried repeatedly this past session to garner legislative approval for Medicaid expansion but the Republican-controlled Majorities refused to allow the issue to be put to a vote.

“We should never play Russian roulette with the Alaska economy,” said Rep. Gara.  “The risk of recession and the loss of 4,000 jobs are reasons to accept the $330 million in state budget savings over the next six years from Medicaid expansion and reform.  Medicaid expansion is projected to create 4,000 jobs and bring in $145 million in federal funding that will ripple through the Alaska economy and protect us from a recession.”

The decision by the House and Senate Majorities to reject Medicaid expansion is costing the state $390,000 a day and $1.1 billion over the next six years in lost federal revenue.  Medicaid expansion is projected to create 4,000 jobs and reduce uncompensated care in Alaska by at least $18 million a year.

The Alaska Legislature has had multiple opportunities to accept Medicaid expansion including legislation offered the last two years by Representative Andy Josephson (D-Anchorage).  Rep. Josephson and Rep. Gara were joined by the other members of the Alaska Independent Democratic Coalition in proposing an amendment to the FY 2016 budget allowing for Medicaid expansion.  However, the Republican-controlled Majority in the House cut off debate through the unusual move of tabling the amendment.  

“A leading state economist, Greg Erickson, indicates that a recession is likely here in Alaska.  He fears it could rival the one I lived through in the mid to late 80’s,” said Rep. Josephson.  “Erickson reports the potential loss of 4,000 jobs, which just so happens to be the number of jobs Medicaid expansion is projected to add to the economy.  With today’s U.S. Supreme Court ruling affirming the legality of the Affordable Care Act we have an even greater assurance of the reliability of receiving expansion dollars totaling some $147 million per year. It is imperative the Legislature and the Governor act to receive those dollars immediately.”

In the new report titled “The Great Alaska Recession”, the authors suggest that accepting Medicaid expansion would be a tangible way to mitigate the ongoing economic downturn in Alaska and could be a factor in an eventual economic recovery.

Rep. Gara and Rep. Josephson both support calling a Special Session later this year to address the Medicaid expansion issue. 



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