State wants study of Medicaid expansion costs

By BECKY BOHRER

JUNEAU, Alaska (AP) — The state health department is soliciting proposals for a study on the cost of Medicaid expansion in Alaska.

The study is intended to help state officials as they weigh whether to expand Medicaid coverage levels for adults.

It's a choice that arose from this year's U.S. Supreme Court decision on the federal health care overhaul. While the court upheld most of law, it also found that states cannot lose existing Medicaid funding if they don't expand Medicaid coverage levels for adults to 133 percent of the federal poverty threshold, beginning in 2014.

Gov. Sean Parnell has said he wants to thoroughly understand the costs to the state before making a decision. Rising costs with the current Medicaid program have been a concern for the administration, which has blamed budget increases over the past several years, in large part, on formula-driven programs, like Medicaid and education.

The solicitation anticipates the study would be completed in December. The budget for the project is $100,000.

A 2011 state report, which provided a long-term forecast of Medicaid enrollment and spending in Alaska, estimated 32,000 newly eligible individuals would be covered by Medicaid under the expansion, at a cost of nearly $220 million in 2014. The federal government would pay 100 percent of medical expenses for the new enrollees from 2014 to 2016, with the state contributing toward the cost of the newly eligible individuals after that, reaching a 10 percent contribution by 2020 and after.

Total care costs for the newly eligible are expected to continue rising, according to the report, reaching about $570 million by 2030.

The health department, through the new study, is seeking a more comprehensive look at Medicaid costs — an actuarial analysis — including the costs of expansion and possible cost-control measures, said Josh Applebee, deputy director for health care policy with the agency.

He said Alaska isn't the only state that's taking time to look into the financial impact of any change.

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