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Begich Highlights $10 million Alaska Boost for Medicaid


Recovery Act means State has reduced obligation for drug costs under Medicaid

U.S. Sen. Mark Begich announced today that the State of Alaska will save more than $10 million in scheduled Medicaid payments as the result of a prescription drug provision in the federal stimulus package.

The relief comes from the extension of a higher federal matching rate for Medicaid included in the American Recovery and Reinvestment Act (ARRA), and its effect on state residents eligible for prescription drugs under both Medicaid and Medicare.  According to the U.S. Department of Health and Human Services, Alaska will save $10.03 million in reduced state obligation for the period Oct. 1, 2009 through Dec. 31, 2010.

"This is good news for Alaska at a time we're seeing a growing Medicaid population and State officials are working to balance previous Medicaid shortfalls," Begich said. "As the success of the economic recovery effort is being debated, this is yet another example of how it is having a positive impact in Alaska."

Begich pointed to other examples of ARRA funding in Alaska, including up to $152 million for construction of the new Nome hospital, which will resume early this spring.  That project alone will create hundreds of jobs.

In addition, required State of Alaska reporting on ARRA includes highlights such as:
  • Creating or saving more than 570 jobs during the quarter ending Dec. 31.
  • Between 2009 and 2011, projected spending in Alaska of $264 million in highways, bridges, airports and transit projects; $148 million for the Sikuliaq research vessel; $144 million in Medicaid services; $93 million in a state stabilization fund to preserve education funding; and $56 million in energy and weatherization projects.
Thursday's announcement from HHS Secretary Kathleen Sebelius applies the increased federal Medicaid match rate in ARRA to so-called "clawback payments" states are required to make for dually eligible Medicaid and Medicare recipients.  The clawback payment is the amount states pay to the federal government as required by the Medicare Prescription Drug Improvement and Modernization Act of 2003 (MMA). 

Prior to MMA, state Medicaid programs covered all prescription drug costs for these beneficiaries.  Because Medicaid is a state/federal matching program, the higher matching rate under ARRA results in a temporary reduction of the states' share of spending and in the clawback obligation.  In all, the announcement means $4.3 billion in financial relief to states.

The American Recovery and Reinvestment Act is expected to bring about $1.5 billion and save or create 8,000 jobs in Alaska over two years. Sen. Begich has said about 65 percent of the money will be put to work in projects across Alaska this spring. Begich's vote supporting the ARRA was key to its passage last year. More information about the American Recovery and Reinvestment Act is available at Recovery.Gov.

More information on the HSS announcement, including a state-by-state chart, is available at:
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