Alaska Attorney General Jahna Lindemuth has decided the 49th state should stay out of the fight over the Affordable Care Act because it’s unclear which side to join.
Texas led 19 Republican states in filing a February lawsuit against what is popularly known as Obamacare. New Jersey on Monday took the point for 15 Democrat states asking to intervene in support of the federal law.
Alaska is among the handful of states avoiding what is shaping up as the legal battle of 2018.
This an election year in the 49th state, as well, and Obamacare is a tricky political issue. A loser in the 2010 Republican primary, Gov. Bill Walker teamed with Democrat Byron Mallott to win the 2014 election with 48 percent of the vote.
Alaska, however, remains a red state, and it was asked by Texas to join the suit, according to the Department of Law. Had the state done that, Walker would have risked alienating a solid block of Democrats who stood by Mallott when he stepped down as the 2014 Democrat candidate for governor to join Walker as lieutenant governor on a so-called “Unity” ticket.
Joining with Democrat states supporting Obamacare would likely have amounted to political suicide for Walker in the conservative state of Alaska. But Lindemuth, according to her official spokesperson, Marie L. Bahr, solved the problem.
“While many considerations go into this kind of decision, the AG alone made the decision to pass, primarily because the impacts from any decision on the Alaska health care market, and individual Alaskans, were largely unknown,” Bahr said in email.
Other states appear to have had less trouble sorting things out.
Oregon Attorney General Ellen Rosenblum called the Texas lawsuit an “assault on our people and our health care system.” Oregon, a blue state, joined the D-team.
Everything is politics
Anchorage attorney Don Mitchell, a sometimes political commentator for the Huffington Post and an advocate for Alaska voters electing an attorney general, wasn’t quite buying the Bahr story, and he used some off-color language in describing the situation.
“There is a reason that well more than 40 states elect their attorneys general, rather than, as is the situation here, having the AG be the whore of whatever governor at whose pleasure he or she serves,” he said.
Mitchell went on to list a number of questionable decisions made in past years by attorneys general working for late Gov. William Egan, late Gov. Wally Hickel and iconic late Gov. Jay Hammond.
“In 1980, Jay cooked up the idiotic idea of annually giving every Alaskan out of the permanent fund $100 for each year that he or she had lived here,” Mitchell said. “Any first year law student could have told Jay that was flagrantly unconstitutional. But (attorney general) Av Gross signed off on it because Jay wanted him to. So (Ron) Zobel had to go all the way up to the U.S. Supreme Court to correct the error.”
Zobel v. Williams (Williams being Commissioner of Revenue Tom Williams) became a landmark Alaska lawsuit. The Supreme Court ruled that giving Alaska residents bigger or smaller dividends based on how long they’d lived in the state violated the equal protection clause of the U.S. Constitution.
Ever since, Alaskans have all received the same dividend. Mitchell is of the belief that Gross wasted a lot of state money, and delayed the first PFD payments to Alaskans, by playing politics instead of following obvious law.
“And now, in the run-up to the 2018 gubernatorial election, Jahna Lindemuth professes to be a disinterested agnostic regarding the Texas Barry Obamacare lawsuit, in my view of it for no reason other than that, because of the grief they took from the (MatSu) Valley and Fairbanks over Medicaid expansion, Walker and Mallott don’t want to remind voters of that prior to the election,” he said.
Medicaid has cost the financially strapped state about $100 million with costs expected to continue to grow, but there were solid political underpinnings for Walker’s decision to expand Medicaid. Nearly 200,000 Alaskans take advantage of the program.
The number of Alaskans affected by Obamacare is about a tenth of that.
One Alaskans story
Reached on Saturday by telephone, Eagle River’s Ray Jakuczak had no trouble defining his view on what the Obamacare issue in Alaska. The former state pipeline coordinator, Jakuczak offered a very blunt opinion on what is wrong in the state in general.
“The corruption in the Department of Law is staggering,” he said.
An Alaskan who has found Obamacare insurance costs onerous, he is of the opinion the Department of Law is driven largely by politics. As pipeline coordinator, he said, state attorneys advised him to perform legally questionable acts and “not ask questions” in order to follow political directives.
Since leaving state service, he said, he’s seen nothing to convince him anything has changed.
Jakuczak was featured in a story in Roll Call magazine story last year that focused on Alaska’s attempt to shore up the Affordable Care Act with a reinsurance program.
“Under Alaska’s program, people who suffer from 33 relatively expensive conditions, like end-stage renal disease, hemophilia or cerebral palsy, would still buy their plan from the state’s Blue Cross plan, Premera, and pay the same premiums as anyone else who relies on HealthCare.gov.,” Roll Call reported. “But behind the scenes, their health care claims would be paid out of a $55 million state pool of reinsurance money, rather than Premera’s own funds.”
Roll Call reported the scheme saved almost $10,000 in premiums for Jakuczak and his wife. Jakuczak said that left them paying $2,600 per month for a policy with a $10,000 deductible.
Adding up the monthly payments and the huge deductible, they realized they’d have to spend $41,200 out-of-pocket before insurance started picking up any of their medical costs.
Jakuczak is semi-retired, but does some consulting. His wife is a veterinarian. Before the Affordable Care Act became law, he said, the couple obtained health insurance through the American Veterinary Medical Association at a reasonable rate.
The Jakuczaks were left with the Affordable Care Act and health insurance costs higher “than any other expense in their budget. Now, despite his deep love for his mountain views and his local coffee shop, he’s thinking about moving south,” Roll Call’s Erin Mershon wrote.
The Jakuczaks, however, stayed – sort of.
Ray said they ended up buying a second home in the lower 48 and splitting their time between two residences. They then bought health insurance in the Outside state.
“The insurance costs are half,” he said, and the deductible is lower.
Jakuczak is not a fan of the Affordable Care Act and criticized Sen. Lisa Murkowski, R-Alaska, for repeatedly voting against the act when it didn’t matter, and then voting to keep the act when there was a vote that counted.
As a political issue in Alaska, Obamacare is something easily ignored by politicians. The Act’s constituency is small. The Jakuczaks are two among fewer than 20,000 Alaskans taking advantage of the program.
Most Alaskans are covered by some sort of insurance provided by their employers. Hundreds of thousands more a covered by free or heavily subsidized federal health programs: Medicaid, Medicare and the Indian Health Service.
Because of this, only 18,313 people – down from 19,145 last year – applied for ACA insurance for 2018, according to the state health insurance exchange.
Alaskan participation in the program has been falling almost since it began. Why is unclear. It could be due to people leaving the state, but Lori Wing-Heier, director of the state Division of Insurance, last year told Roll Call that some working people just can’t afford the insurance rates.
And that has happened despite the state effort to bail out the program with the $55 reinsurance scheme, which was driven in party by a desire to keep Premera – Alaska’s last private insurer – from abandoning the state.
Most of the people utilizing Obamacare in Alaska qualify for federal insurance subsidies as Americans of limited income. Of the people in the plan now, 93 percent qualify for subsidies “versus 84 percent of enrollees nationwide,” the Alaska State Health Insurance Exchanges website says. “Premium subsidies extend to higher income levels in Alaska due to the higher threshold for the federal poverty level in the state.”
With the subsidy-threshold limit set at four times the poverty rate, the ceiling for a family of four in Alaska is $123,000 per year. The exchange does not say what the average Alaskan enrolled in the ACA pays for health insurance, but does note the “average subsidy in Alaska was $976 per month, compared with an average of $371 per month nationwide.”
CNN last year called Alaska the state in the “eye of health care reform storm.” It reported 49th state premiums “remain the nation’s highest, $904 a month for a 40-year-old nonsmoker in Anchorage on Premera’s second-lowest silver plan, which sets the benchmark for subsidy levels.”
The silver plan has a deductible of $4,500 for individuals, $9,000 for families. Because of high deductibles, a significant number of healthy Americans have been avoiding the federal requirement for insurance and electing to pay a federal penalty of 2.5 percent on income for refusing to obtain insurance.
For healthy individuals this is a rational decision. Someone making $50,000 per year could pay the annual penalty of $1,250 for the year, spend $2,000 on minor medical expenses, and still come out thousands of dollars ahead of paying monthly insurance premiums plus covering the deductible before insurance kicked in.
With a premium of $904 per month and a $4,500 deductible, an individual would need annual medical costs of $15,000 per year to come out ahead.
But Congress in December eliminated the insurance mandate and along with it the penalty imposed on those refusing to enroll in the Affordable Care Act. Congress kept the program itself alive, but the repeal of the “tax” on those who refused to get insurance is now at the heart of the Texas lawsuit.
“The Texas lawsuit is a complicated matter, and the impacts from any decision on the Alaska health care market, and individual Alaskans, are unknown,” Lindemuth’s spokeswoman said.
But the lawsuit is actually pretty simple. The essence is “that it’s illegal for the federal government to tell the citizens of the U.S. they must buy health insurance,” the suit says. The issue has been to court before, and, as the Texas filing notes, “the Supreme Court held that Congress lacks the constitutional authority to compel citizens to purchase health insurance.”
There was, however, a catch.
A majority of the court decided that the mandate to buy insurance or pay the penalty – ie. the tax – gave Congress the authority to act using its power to tax. In other words, Congress couldn’t tell Americans how to act, but it could tax them so as to force them to act in certain ways.
With the tax now gone from the law, Texas and the states siding with it argue there is no legal basis for the law. Other states are trying to save the law for the obvious benefit it provides to low-wage earners. Some of the states supporting the law have significant numbers of voters collecting subsidies.
The pool of Obamacare-subsidized voters in Alaska is,however, small. There about 10 times as many people on Medicaid, a free health care program for low-income Alaskans of which Walker has been a big supporter despite the costs it’s adding to the already financially cash-strapped state.
More than 184,000 people are now covered by the Medicad in Alaska, according to the Henry J. Kaiser Family Foundation. Just shy of 60 percent of them live in rural Alaska.
Though the majority of rural residents are Alaska Natives who qualify for Indian Health Service care, the Medicaid program is favored by many because it picks up transportation costs.
Most Alaska villages have nothing but a health aide, and Medicaid will pay for non-emergency transportation “for services that are covered by Medicaid and not available in your community,” the Alaska Medicaid Recipient Handbook says. “Medicaid will cover transportation to the nearest available facility that provides the recommended
service. Medicaid will cover transportation for an Indian Health Services beneficiary to travel to the nearest available Indian Health Services facility that provides the recommended service.
“The state of Alaska has contracted with air carriers to transport Medicaid recipients for health care in other communities. The Medicaid Travel Office will book your travel on an approved air carrier.”
The availability of Medicaid-funded air transport to see doctors in Anchorage and Fairbanks for non-emergency care has made life undeniably easier for people in rural Alaska, a part of the state considered a Walker-Mallott stronghold.
And given the confused state of American health care, no politician courting the rural Alaska vote would want to do anything to indicate he is in anyway against publicly funded health care or former President Barack Obama.
Obama carried about half of rural Alaska in the 2008 Presidential election cycle when former Alaska Gov. Sarah Palin, whose husband is an Alaska Native, ran as the vice-presidential candidate on the ticket with Republican John McCain, and Obama dominated in rural Alaska in 2012.
Walker and Mallott would have good reason to suggest to Lindemuth that she ignore the request from Texas, but it’s entirely possible she made the decision on her own as her spokesperson suggested.
Whether she made the decision independently is another matter, as Mitchell points out. Lindemuth is doomed as attorney general if Walker loses the election in November. It would be in her own best interest, if she wants to stay in the job, to make the decision that would do the most to increase her boss’s chances of winning re-election.
As Nobel laureate Thomas Mann once observed, “everything is politics.”
Correction: An earlier version of this story left out the 2008 Presidential election results in rural Alaska.