The Senate’s Obamacare repeal bill may protect Alaska and up to four other sparsely populated states from major cuts to Medicaid through 2026, a potential boon to the home of pivotal GOP swing vote Sen. Lisa Murkowski.
The plan from Lindsey Graham (R-S.C.) and Bill Cassidy (R-La.) allows a limited number of states to opt out of its new Medicaid financing system, which would give states set sums to run their programs and do away with the open-ended entitlement that exists today.
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Murkowski helped kill the GOP’s “skinny” repeal bill in July and is being heavily courted by Republicans to support the latest repeal effort.
Murkowski has remained publicly noncommittal. But Republicans will likely need her if they want to make good on their campaign pledge to repeal Obamacare. Republicans can only lose the votes of two of their 52 senators and still have Vice President Mike Pence cast a deciding tie-breaker vote to pass the bill.
The Medicaid delay would potentially apply to Alaska, Wyoming, South Dakota, North Dakota and Montana, based on their low-density populations. Those states would be allowed to opt out from the bill’s fixed payments if certain health spending conditions are met in the prior year or the HHS secretary determines the new funding system is insufficient. The chance to opt out would end in 2026.
It is unclear exactly whether all five states would qualify. A Kaiser Family Foundation analysis assumes Alaska and Montana would meet the requirements for exemption. Those that do would continue to get Medicaid funding in the current fashion.
Edwin Park, vice president for health policy at the Center on Budget and Policy Priorities, said the difference between states that opt out and other states could be substantial. A similar provision existed in the the Senate’s previous repeal bill.
Delaying the implementation could help the state mitigate some of the impact of the bill, according to the Alaska State Hospital and Nursing Home Association. But after 2026, “Alaska would very quickly see huge gaps emerge,” according to association president Becky Hultberg. The group opposes the Graham-Cassidy bill.
There are reasons that Alaska — a large but sparsely populated state — would need additional funding.
“Alaska is so unique,” Graham said. “It’s like 750,000 people and a third of the size of the United States. So when they say they’re different, they really are.”
Graham said Alaska will fare well under the bill and has made that pitch to the state’s senators. But independent analysis shows the state, over time, would see less funding than it gets today.
The Center on Budget and Policy Priorities estimated the state funding would drop by $255 million in 2026.
“It will not only work for them — it’s as good as it can be for them,” Graham said Tuesday. “They have to compare it with what’s coming. What’s coming over time is the collapse of Medicaid. It’s just fiscally unsustainable. We have to get on a fiscally sustainable path.”
Democrats were quick to blast the provision.
“Senate Republicans are blatantly attempting to buy Lisa Murkowski’s vote for a plan that would cause 32 million Americans to lose their health insurance and put the cost of covering preexisting conditions through the roof,” said American Bridge spokesperson Andrew Bates.