Alaska to roll out health care law after losing federal funds

WASHINGTON — After allowing the application deadline to pass for $1 million in federal health care assistance, Alaska Gov. Sean Parnell said Thursday he will begin implementing the new health care law after all, now that a Florida judge has told the states to do just that.

That same lower court Judge, U.S. District Judge Roger Vinson of Pensacola, Fla., had earlier found part of the new federal health care law unconstitutional, a decision cited by Parnell as justification for walking away from the federal money to assist the uninsured get health insurance. But Vinson stayed his order Thursday to give the Obama Administration time to appeal, leaving Parnell no choice but to begin putting the law into effect in Alaska.

"We will begin moving forward with state funds, rather than federal funds," said Parnell's spokeswoman, Sharon Leighow.

Federal judges in other jurisdictions have upheld the 2010 Affordable Care Act. But in any event, according to a legal analysis by the Alaska Legislature's legal division, neither Vinson's original ruling nor the rulings of any of the other lower court judges would have any force in Alaska.

State Sen. Hollis French, an Anchorage Democrat who sought the legal analysis, said Parnell should attempt to seek a waiver for his missed deadline.

Alaska, one of 26 states challenging the law's constitutionality, had held back on putting in place some aspects of health care, including turning down federal money to help set up a state insurance exchange. Alaska was the only state to refuse the money, which funds the preparations for an online exchange. Failing to apply for the grant also meant Alaska would be ineligible for an Exchange Establishment Grant, which would fund the exchange's operations through 2014.

In his order Thursday, Vinson reiterated his decision that it's unconstitutional for the law to mandate that individuals buy insurance. But Vinson also said that states must go forward with implementation, as long as the Justice Department files an appeal of his decision within seven days. Nearly everyone, including Vinson, believes the case will be decided by the Supreme Court.

"It would be extremely disruptive and cause significant uncertainty" to stop implementation of the health care act, the judge wrote. "The sooner this issue is finally decided by the Supreme Court, the better off the entire nation will be."

Parnell said Thursday in a statement that his administration "will treat the federal health care law as being in place, as we are directed by the judge in the lawsuit to which our state was a party."

The Justice Department had asked Vinson to clarify his ruling so that states would know whether they should proceed with the Affordable Care Act. A spokeswoman said they will promptly appeal Vinson's ruling.

Alaska appeared to be the only state that was deliberately holding off on implementation, and many questioned the legal backing for Parnell's move. Democrats in the Alaska legislature asked for a legal opinion on the matter; they were told Monday that a court decision by a federal judge in Florida was not binding in Alaska, which is in a different judicial circuit.

French was elated by the Florida judge's latest ruling.

"This is a good day for Alaska," said French, who like Parnell is an attorney. "The Governor can no longer evade the issue." He said it was time for Parnell to help the estimated 115,000 Alaskans who don't have health insurance.

"I hope the governor takes the opportunity to work with his administration and the legislature to implement what are some very good insurance reforms," French said.

Earlier this week, Parnell said he has moved to implement some aspects of the federal health care law into health insurance plans for state employees, including the requirement that children up to age 26 be allowed to stay on their parents' insurance policy.

But he wouldn't say whether he would pursue waivers for Alaska to design its own health care program, an option that opened up to all states earlier this week. On Monday, President Barack Obama told Parnell and other governors at their winter meeting in Washington that he supports a move to let states use waivers to design their own health care systems starting in 2014. Those state systems must meet the goals of the president's health care law, which previously wouldn't allow state waivers until 2017.

Parnell on Monday said he wouldn't apply for waivers because that would be an acknowledgment that the "the law is currently in place."

But Thursday, he said that Alaska will make decisions on a case-by-case basis about how to proceed with health-care reform. That means he'll decide whether the state "will undertake with our own money or with federal money how to implement the provisions of the law," Parnell said.

"My sole responsibility is to act in Alaska's best interests and we will do so," he said. "I continue to strongly prefer to use state resources for state-based health care solutions to increase access and improve affordability, rather than become more entangled."