Last month, Alaska Governor Bill Walker announced his intention to circumvent the state legislature and “go it alone” on Medicaid expansion. If he follows through, this move will inflict long-lasting damage on the state’s legislative process, and shut taxpayers out of the debate over whether Medicaid expansion is the best way to serve the needs of Alaska’s uninsured.
Under the Affordable Care Act, states may choose to expand Medicaid eligibility to able-bodied, working-age adults earning below 138 percent of the poverty line, which is $20,313.60 in annual income. The federal government currently pays $0.50 for every dollar the state spends on vulnerable populations in the Medicaid program today. For able-bodied adults in Obamacare’s Medicaid expansion, the federal government promises to pick up almost the entire tab.
If Medicaid expansion is such a great deal for Alaska taxpayers, why does the governor need to exclude the public and their elected representatives from the discussion? Perhaps because the federal government may not fulfill its funding promise to the states and the law is falling short in reducing the number of people who are uninsured.
The federal government only picks up the tab until the end of 2016, and even with the pledged federal funds, Alaska will be on the hook for millions in administrative costs. If the federal government changes the funding formulas — or if the state runs out of cash to pay its share of administrative costs, Alaska will have no recourse to exit from the program. But Governor Walker should already be aware of this.
The Obama administration has twice tried to change the rules of the funding game, which would leave state taxpayers to pick up a bigger portion of the Medicaid expansion tab. During the 2011 debt limit negotiations the president proposed a “blended” Medicaid match rate that would have reduced the overall Medicaid payments to states. The president’s budget for fiscal 2013 once again proposed reducing Medicaid payments to states.
Another discussion the governor may be seeking to avoid is how little Medicaid expansion would actually move the needle on the uninsured rate. A recent analysis by Evergreen Economics revealed that more than 50 percent of those eligible under an expansion already have health coverage.
Evading a public debate about these tough questions in favor of unilateral executive action will do far more damage than saddling the state with a raw deal. It will set a dangerous precedent for future governors to enact legislation by press conference, without the protection of legislative checks and balances.
The legislative process is a fundamental feature of the rule of law, protecting the people from arbitrary rule by one elected official. Bypassing the people’s representatives eviscerates those protections, encouraging arbitrariness, inconsistency and unpredictability.
Expanding Medicaid by unilateral executive action will also invite costly legal battles. For starters, Gov. Walker is seeking funds from the Alaska Mental Health Trust Authority in order to fund the administrative costs of expansion. Established to support and ensure mental health continuum of care for Trust beneficiaries, beneficiaries may have legal grounds for action against the Trust should it divert resources away from its designated purposes.
Arizona legislators sued former Gov. Jan Brewer when she bypassed the state’s constitutional requirement that taxes be approved by a legislative supermajority in order to fund Arizona’s Medicaid expansion. Kentucky Gov. Steve Beshear is facing a court challenge over his executive orders to expand the state’s Medicaid program and to establish a state-funded health insurance exchange. Years later, these lawsuits are still pending in court. Meanwhile, threats of litigation derailed Virginia Gov. Terry McAuliffe’s plans to impose expansion without legislative support.
Respect for the traditional legislative process is critical regardless of one’s preferences about Medicaid expansion. Alaska legislators ought not kowtow to the demands of the executive branch but rather defend their vital lawmaking role on behalf of their constituents.
Alaska is among 21 states that have, so far, wisely resisted the temptation to take the “free” federal money to expand Medicaid. But regardless of the path that Alaska ultimately takes, any discussion of how to best meet the needs of Alaska’s uninsured should take place as part of the normal political process not as a unilateral executive action that would both undermine taxpayers’ interests and inflict untold damage on the rule of law.
Naomi Lopez Bauman is director of healthcare policy at the Goldwater Institute. Christina Sandefur is vice president for policy at the Goldwater Institute. Thinking of submitting an op-ed to the Washington Examiner? Be sure to read our guidelines on submissions.
