Alaska Medicaid expansion under Gov. Walker drove sharp growth, with long-term costs still climbing

By SUZANNE DOWNING

March 24, 2026 – When former Gov. Bill Walker expanded Medicaid in September 2015, Alaska’s program entered a period of rapid growth in both enrollment and spending that continues to shape the state’s fiscal outlook today.

The expansion widened eligibility to able-bodied adults up to 138% of the federal poverty level, adding tens of thousands of new recipients. The immediate effect was a sharp increase in overall program costs. Medicaid spending jumped 15% in FY2016 and another 18% in FY2017.

Combined, those increases produced a two-year jump of about 35.7%.

That growth marked a clear departure from the years leading up to expansion. From FY2012 to FY2015, total Medicaid spending grew at roughly 2.9% annually, a comparatively modest pace. After expansion, both enrollment and spending accelerated.

Enrollment growth illustrates the magnitude of the change. Alaska Medicaid participation rose from about 135,000 recipients in FY2010 to roughly 282,000 by FY2025. That is an increase of approximately 108.9%, meaning the number of recipients more than doubled over the period. Much of that increase came after eligibility was expanded.

While federal funding initially covered most of the expansion costs, Alaska’s state general fund share has begun climbing again following the phase-out of pandemic-era federal assistance. State spending increased about 16% in FY2024 and another 7% in FY2025. Combined, that equals roughly a 24.1% increase over two years, calculated by multiplying 1.16 by 1.07 to reach 1.241.

For many years, per-recipient spending remained relatively stable. From FY2005 through FY2022, costs per enrollee grew about 2% annually. More recently, however, per-recipient spending has accelerated. From FY2023 through FY2025, it increased approximately 11.6% annually. Over two years, that equals about a 24.5% total increase, calculated as 1.116 squared, or 1.245.

Long-term projections show continued growth. Forecasts presented to lawmakers by the Alaska Department of Health, using Evergreen Economics modeling, place total Medicaid spending at roughly $2.9 billion to $3.3 billion in FY 2025 and FY 2026. By FY 2045 or FY 2046, spending is projected to explode to approximately $7.4 billion to $8.2 billion.

That represents roughly 150% total growth over 20 years. Using the projected average annual growth rate of 4.7%, the compound increase equals about 2.5 times current spending.

While the projected 4.7% annual growth rate is slower than earlier forecasts and reflects cost-control efforts adopted in recent years, Alaska’s Medicaid costs remain far above national averages. In FY2023, Alaska’s per-enrollee spending was about $9,852, roughly 7.5% higher than the US average. Combined with increased enrollment and rising per-recipient costs, Medicaid continues to represent one of the largest and fastest-growing components of Alaska’s budget.