Co-chair Josephson convened the House Finance Committee on March 3 and heard a presentation from Ted Helvoit, president of Evergreen Economics, on Medicaid enrollment and spending trends and a 20-year forecast covering roughly FY2025–FY2045. Helvoit told the committee the forecast projects total Medicaid spending in Alaska of about $3.0 billion in 2025 and roughly $7.4 billion by 2045, with most long-term growth driven by rising provider reimbursement rates.

The forecast matters because it sets a baseline for state budgeting and illustrates how federal policy, demographic change and provider rate increases interact to shape Alaska’s share of Medicaid costs. Helvoit and committee members repeatedly framed the numbers in terms of state general-fund exposure, the effect of the federal “continuous enrollment” unwind after COVID-era rules, and the role of Indian Health Service (IHS) eligibility in shifting costs to the federal government.

Helvoit opened by noting the forecast’s methodological constraint: “What’s really important is that each forecast is based on medicaid as exists today, as the policy exists today,” meaning the model does not assume future policy changes. He said the department and legislature have used the annual forecast as a baseline for planning since the initial forecast the contractor produced for the legislature in 2006.

Key numbers and near-term dynamics

- Evergreen’s baseline for FY2025: roughly $3.0 billion in total Medicaid spending in Alaska; projected FY2045 spending: about $7.4 billion (total dollars). Helvoit said nearly all of the long-term growth in the forecast is driven by provider reimbursement increases rather than enrollment growth.
- State vs. federal share: using the forecast’s weighted averages, Helvoit said roughly 30 percent of additional spending would be borne by the state (general fund) and roughly 70 percent by federal sources; in 2025 that equates to about $700 million state share and about $2.0 billion federal share in annual Medicaid spending.
- Continuous enrollment/unwinding: Helvoit summarized the COVID-era continuous enrollment rule that limited terminating people from Medicaid rolls; Alaska saw about a 40,000 increase in enrollees during the public-health emergency and a net decline of roughly 18,000 enrollees since unwinding began. He told the committee that, although enrollment fell, month-to-month Medicaid spending did not fall correspondingly. In the two-year period Dec. 2022–Dec. 2024, average spending per recipient rose about 18 percent (roughly 8.7 percent per year), a change he attributed primarily to provider rate rebasing.

Enrollment versus recipients

Helvoit emphasized a persistent divergence between Medicaid enrollees (anyone enrolled during a year) and recipients (those who actually use services during a year). He said many more Alaskans are enrolled in Medicaid today than in the pre-expansion era, but not all enrollees receive services each year. That distinction, he said, partly explains why unwinding reduced enrollees but did not proportionally reduce total spending.

Drivers of spending growth

Helvoit told the committee the principal driver of future spending growth is higher provider reimbursement rates (rebasing). For roughly a decade prior to 2021 Medicaid reimbursement rates were relatively flat while medical-price inflation for private coverage rose faster; beginning in 2021 Medicaid rates rose substantially to address provider sustainability. Helvoit’s forecast assumes Medicaid reimbursement will continue to rise in coming years and will remain a major long-run cost driver.

Chronic conditions and concentration of costs

Helvoit highlighted that Medicaid spending is highly concentrated: in the most recent fiscal-year snapshot about 1 percent of recipients accounted for roughly 22 percent of spending, and the top 10 percent of recipients accounted for about two-thirds of total spending. He said roughly 81 percent of Medicaid spending in 2024 was for recipients with one or more diagnosed chronic conditions; under current demographic trends that share is projected to rise to about 84 percent by 2045. Mental-health conditions and comorbidities were flagged as important drivers of high-cost cases.

IHS eligibility, Medicaid expansion and federal match

Committee members and Helvoit discussed how Alaska’s IHS-eligible population affects state costs. Helvoit said IHS-eligible users often draw 100 percent federal financial participation (FFP) for certain services, which reduces state general-fund exposure. He also explained that Medicaid expansion enrolled many working-age adults (some IHS-eligible and some not) and that changes to the federal expansion match would affect state budgets materially: Helvoit calculated that for 2025 the non-IHS expansion population’s total spending is about $460 million, of which the state’s share is roughly $46 million; every percentage point reduction in the expansion match would raise state costs by about $4.6 million in that year.

Federal-policy risk and committee follow-up requests

Committee members asked about the potential effects of federal changes. Helvoit said he did not have inside knowledge of congressional negotiations but identified the expansion match and other federal funding changes as material risks to state budgets. Several legislators asked for supplemental analysis: Representative Galvin and others asked about the impact of expanded infant eligibility (0–1 year) on costs (Helvoit said the impact would be negligible and that the current forecast does not isolate that subgroup), Representative Tom Meschefski and others asked about fraud and claims legitimacy (Helvoit said his claims-based dataset cannot identify fraud and that the state has a Medicaid fraud unit within the Department of Law), and Representative Stapp asked whether utilization and reimbursement could be broken out by subpopulations (Helvoit said that request is feasible using the claims data if the department provides the specification).

Helvoit also confirmed to the committee that a detailed analysis of the counterfactual—how spending would shift if personal care attendant services were substantially curtailed—is possible but was not included in the presentation. He said he has conducted similar analyses previously but that the current slide deck did not include that modeling.

Administrative notes and next steps

Courtney Enright, legislative liaison for the Department of Health, told the committee that redeterminations tied to the federal unwinding are largely complete and that the department expects to finish redeterminations by March 31. The committee requested follow-up data breaks and said staff would coordinate with the department and Evergreen Economics on additional analyses.

The meeting adjourned at about 3:00 p.m.; the committee’s next scheduled meeting listed in the transcript is March 4 at 1:30 p.m., when the Department of Commerce, Community and Economic Development will present its FY26 budget overview.