Doubt on Medicaid emergency
State Superior Court Judge Jennifer Henderson ruled that the state’s move to cut Medicaid reimbursements to health care providers was not an “emergency” justifying immediate action outside normal procedures for rate adjustments, but the judge did not rule on an injunction requested to halt the action. The Alaska State Hospital and Nursing Home Association filed the lawsuit, challenging the expedited action by the state administration on an emergency basis. Judge Henderson said the action was not due to an emergency because a big cut to the state Medicaid budget this year had been known in advance by the state.

DH&SS struggles with cuts
Meanwhile, the Department of Health and Social Services is said to be struggling with how to achieve target reductions in the state Medicaid budget. A $50 million veto of current year funds for the program is on top of a $75 million reduction from last year that was proposed earlier by the administration, so the total is really a $125 million cut for FY 2020. The problem is that Medicaid is a joint state-federal program that operates largely under federal rules. Until those are changed, and the state is said to be working on this, Medicaid recipients are entitled to services.

While the state administration does have some options and reducing payments to providers is one (see item above) it’s not clear what will happen next spring if the program just runs out of the money appropriated. There could be a request for a supplemental appropriation but Health and Social Services officials assured legislators last spring they would achieve the reductions and not be back to the Legislature in 2020 to ask for more money.

Moda reenters Alaska market
Moda Assurance Co. is reentering Alaska’s small individual health insurance market after exiting the state in 2016. Moda will begin selling policies in January. There are about 18,500 Alaskans purchasing individual health plans, mostly self-employed people with families. Moda and Premera Blue Cross competed vigorously in 2014 and 2015 when the “metallic” (bronze, silver and gold) health plans were first offered under the federal Affordable Care Act. Moda actually increased its share of the market from 36 percent in 2014 to 51 percent in 2015 but it did this mainly through very aggressive pricing, which contributed to heavy losses and the company’s decision to pull out of Alaska, at least temporarily. The state also bolstered the individual insurance market by negotiating an innovative plan for the federal government to subsidize health coverage in the individual market for Alaskans with serious health issues. That cut the insurers’ losses, and has now encouraging Moda to be back as a competitor to Premera, now the only company selling coverage.