Last week’s federal budget resolution — which narrowly passed the U.S. House of Representatives with a 217-215 vote — has sparked serious concerns about healthcare funding for Alaska’s most vulnerable. The resolution directs the House Committee on Energy and Commerce to cut $880 billion over 10 years from the section of the federal budget that oversees Medicare and Medicaid.
Petersburg Medical Center CEO Phil Hofstetter, Jared Kosin with the Alaska Hospital and Healthcare Association, and Brandy Boggs PMC Patient Navigator joined Hannah Flor on KFSK’s radio program PMC Live last Thursday to discuss the potential federal cuts to Medicaid that could have significant consequences for Petersburg residents and healthcare facilities throughout Alaska.
What is Medicaid and how does it work in Alaska?
Medicaid is a healthcare program that serves approximately one in three Alaskans — about 250,000 people statewide. Unlike Medicare, which primarily serves older Americans, Medicaid provides healthcare coverage for lower-income individuals and families, children, people with disabilities, and those requiring long-term care.
“When you think of Medicare, you think of our older population. When you think of Medicaid, you think of our poorer population,” explained Kosin. “It's not just low-income people. You know, we're also talking children.”
Denali KidCare and Alaska’s Children’s health Insurance Program (CHIP) are Medicaid programs that make access to healthcare possible for children and pregnant women in Alaska when a family meets income qualifications.
Medicaid operates through a partnership between federal and state governments. With traditional Medicaid, costs are typically split 50/50 between federal and state governments. And with Medicaid Expansion — which was implemented in 2014 and specifically covers approximately 72,000 Alaskans — the federal government pays 90% and the state covers 10%.
In Petersburg, Hofstetter noted that the hospital received $6.7 million in Medicaid revenue last year, with about 60% supporting long-term care.
The current threat
to Medicaid
Kosin highlighted Medicaid expansion as a particularly vulnerable target of the federal healthcare spending cuts: “We're very concerned about Medicaid expansion... If that were to roll back, which has been contemplated at the federal level very seriously, then you would talk about shifting the burden to the state.”
Kosin explained that if federal funding for Medicaid expansion drops from 90% to 50%, Alaska would need to find an additional $330 million to maintain coverage for those 72,000 Alaskans.
“Considering what we're all talking about at the State House about our budget, that's a really hard figure to reconcile with our fiscal situation,” said Kosin.
Beyond Medicaid expansion, “we haven't even talked about the enhanced premium tax credits that, you know, 28,000 Alaskans used to purchase their private insurance on the federal marketplace,” added Kosin. “And those expiring at the end of the calendar year, and how that will lead to premiums doubling or tripling, which is going to result in more loss of coverage.”
These enhanced premium tax credits, part of the Affordable Care Act, help make private insurance more affordable for many Alaskans. Without congressional action, their expiration would create another healthcare crisis for thousands of residents.
Medicaid cuts affect everyone – not just
Medicaid recipients
When people lose Medicaid coverage, they don't simply stop needing healthcare. Instead, their care patterns shift in ways that impact the entire community.
Kosin explained the ripple effect: “If you drastically cut Medicaid coverage for that one out of every three Alaskans, then they no longer have healthcare coverage. And so when they go to use the healthcare resources in our state, it actually just drives up costs for everybody.”
Emergency rooms become the default healthcare provider for the uninsured. “When someone doesn't have healthcare coverage and you're in trouble and you're really sick or you're really hurt, what do you do? You're going to go to the emergency room because that's what's available to you, and hospital emergency rooms will always serve you,” Kosin said. “We're required by law to do so.”
Hofstetter described how a PMC data analysis showed that the cost for inpatient care in the ER works out to be about four times more expensive than if the patient had insurance coverage and could made appointments at the clinic for needed services.
For low-income individuals, those ER costs might be impossible to pay, and the medical center is faced with absorbing those costs. “Ultimately it does get shifted to the reliable payer source, which is the private insurance section of healthcare,” Kosin emphasized. “All of this ultimately drives up the cost of insurance for people who have private insurance.”
Costs cascade when needed medical services are not received and treatable problems become emergencies. “Often what happens is they need a higher level of service and they're medevacked,” said Hofstetter. “And if you want to talk about the single biggest cost in healthcare in Alaska, it's medevacs.”
The higher costs of care and the lower hospital revenues inevitably lead to staffing shortages. “What ends up happening, especially in the rural community, is that you start burning your staff out really fast,” said Hofstetter.
Long-Term Care
in Petersburg
About 60% of PMC's Medicaid revenue supports long-term care services that are vital for Petersburg's quickly aging population.
Brandy Boggs, Patient Navigator at PMC, emphasized that virtually no one in Petersburg could afford long-term care without Medicaid support.
She noted that many residents in Petersburg's assisted living facilities rely on “the Medicaid waiver,” a program that pays for their services. Similarly, home health services, adult day programs, and the long-term care unit at PMC all depend on Medicaid funding.
Moving forward
responsibly
When asked how PMC is preparing for potential Medicaid cuts, Hofstetter emphasized the need for flexibility and careful planning while avoiding unnecessary alarm.
“We just got to be reactive and be nimble and be flexible. And I feel like that's our strength here at PMC,” Hofstetter said.
The first step, according to Hofstetter, is information gathering: “I wouldn't know how to forecast anything until I know where they're cutting and which services would be impacted, and then we would come together and get a strategy together related to that.”
While healthcare officials work with state and federal legislators to mitigate potential cuts, Boggs stressed the importance of personal planning, particularly for long-term care needs.
“These planning sessions are more important than ever,” she said. “We are very strong at being creative and supportive, and that's what I want people to really start thinking about, is how do I plan for my long-term care needs.”
PMC is hosting two more Medicaid planning sessions at the Dorothy Ingle conference room on March 7, and 8. No registration is required, and participants can attend any session to learn about strategies like Medicaid asset protection trusts, which require a five-year “look back” period.
For now, the message from local healthcare leaders is clear: stay informed, plan ahead, and recognize that healthcare funding affects everyone in the community, regardless of whether they personally use Medicaid.
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