Health care highlights in Alaska’s budget

With Alaska’s special session set to end on June 14, the Senate passed the state’s operating budget off the floor on Monday. Action in the Senate comes after the House passed the budget over the weekend.

Funding from the operating budget, the language section of the bill, and the mental health program budget combined — as included in the Division of Legislative Finance reports — amount to a $10.37 billion budget. $4.5 billion of the total is in unrestricted unrestricted general fund (UGF), $857 billion in designated general fund (DGF), $2.34 billion in other funds, and $2.72 billion in federal funds.

The finalized budget stops short of many of the funding cuts proposed by Gov. Dunleavy in February.


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In terms of health spending, the budgets allocate  $3.21 billion for DHSS – this represents a $35.7 million cut compared to the 2019 budget.

The allocation for DHSS is, however, $712 million more than Dunleavy’s proposal, $46 million more than the Senate’s version of the budget, and is $9.7 million less than the House’s version.

The majority of the cuts to DHSS come from Medicaid Services, where the Legislature approved an $82.7 million cut ($2.18 billion total allocation). 

The operating budget bill includes several requirements under the umbrella of Medicaid Services. These include:

  • No funds under Medicaid Services be expended on abortions unless considered a mandatory service under Title XIX of the Social Security Act;
  • The intent that Critical Access Hospitals be exempt from the 5% rate reduction proposed by DHSS;
  • The intent that long-term care facilities be exempt from provider rate reductions; and
  • DHSS will report quarterly progress reports to the Legislature on cost containment efforts.

Also facing cuts in the approved budgets is the Public Assistance Division ($4 million cut), the Behavioral Health Division ($11.5 million cut), and the Senior and Disabilities Services Division ($253,000 cut).

Balancing out some of these cuts are a $38.8 million increase for Alaska Pioneer Homes, a $10 million increase for the Public Health Division, and an $8.9 million increase for the Alaska Psychiatric Institute.

The approved budget will now head to the governor’s desk for approval. Gov. Dunleavy has previously indicated that he may use his power to line-item veto, if he decides the Legislature hasn’t cut enough of the budget.