ANCHORAGE — It is one of Alaska’s great success stories: rural health care, operated by Alaska Natives.

After decades of pushing for self-governance, Native people gained control of federally administered Indian Health Service programs for Alaska in 1998 and improvements in health care delivery have followed.

In the 16 years that have passed since the federal government turned over the keys, eight regional nonprofit tribal health corporations have formed that now operate under the umbrella of the statewide Alaska Native Tribal Health Consortium, or ANTHC.

The regional health corporations operate hospitals in larger communities, the newest in Nome, Barrow and Fairbanks, as well as clinics in dozens of villages.

These facilities serve Alaska Natives, but they also are open to anyone, a fact not known to many Alaskans.

The economic impact is big. In 2012, the ANTHC employed 2,180, and its revenues were just less than $500 million, the bulk of this spent on medical service delivery because the tribal corporations are nonprofit organizations.

A lot has been accomplished, but there are now clouds on the horizon.

A long-term trend of cuts in federal funding in recent years have created a situation today where only about 50 percent of the tribal consortiums’ cost of services are covered by federal Indian Health Service funding.

This is further aggravated by the federal budget sequestering of funds. Interestingly, Congress exempted other federal health programs, such as Medicare, Medicaid and veterans’ benefits from the sequester cuts, but not the Indian Health Service.

There are some possibilities for improvements, however. Valarie Davidson, ANTHC’s government affairs director, said the new federal Affordable Care Act, also known as “Obamacare,” holds out some solutions for the reduced funding.

To cover their costs, the health organizations have been able to rely on other funding including Medicaid, the state-federal program that pays medical services for very low-income Alaskans. The organizations can bill Medicaid to supplement the Indian Health Service payments.

That has helped, Davidson said, but Medicaid doesn’t cover everyone, such as single adult males, even at low-income level. Also, many Alaska Native families earn more than the Medicaid’s maximum allowable income. For those not eligible for Medicaid, all costs must be paid by the health organizations with only 50 percent reimbursement, on average, by the federal government. 

The Affordable Care Act can help in two ways, Davidson said. First, if Gov. Sean Parnell agrees to expand Medicaid, an option allowed for states by the federal law, Alaska’s Medicaid enrollment can be sharply expanded with higher allowable incomes and also extended to people currently ineligible, such as single adult males, she said.

This would financially strengthen the tribal health organizations by increasing their ability to tap Medicaid as a supplementary source of revenue. The federal government would pay the 90 percent of the costs for the Medicaid expansion, too, after fully funding the expansion for the first three years.

Parnell hasn’t yet made the decision to expand Medicaid for Alaskans, and a U.S. Supreme Court decision has left that choice up to the governors of states. The governor now says he will make the decision as he announces his proposed budget for state Fiscal 2014 on Dec. 15.

But whether Parnell expands Medicaid or not, many Alaska Natives may benefit from the Affordable Care Act in a second way, by purchasing their own private insurance through the new health insurance exchange for Alaska established by the federal law.

Alaska Natives registering on the exchange also may qualify for federal tax credits that would reduce the cost of the insurance. Most important, Davidson said, is that they may be able to get coverage for things not covered by the Indian Health Service.

For example, travel for a non life-threatening health problem is not covered by the Indian Health Service, she said. This is a real concern for residents of small villages where local clinics are limited.

It would include advanced medical procedures, but lack of dental care is a concern in many communities, and travel is usually required for any advanced procedure.

Insurance purchased through the exchange may have travel benefits not available under the Indian Health Service, as well as other coverage.

Meanwhile, the broader problem of chronic underfunding of the Indian Health Service is a problem that affects Native Americans in the Lower 48 as well as in Alaska.

Health care for Native Americans is one of the core trust responsibilities the federal government assumed when making treaties with Native American tribes, but it is one the government is now backing away from.

More specifically, the U.S. Department of Health and Human Services has moved to cap payments to tribal health organizations for Contract Support Costs for care.

The U.S. Chamber of Commerce, an influential business organization in the nation’s capital, has now weighed in on the side of American tribes. On Oct. 9, the chamber’s Executive Vice President Bruce Josten, wrote to Health and Humans Services Secretary Kathleen Sebelius, noting a 2012 U.S. Supreme Court decision in favor of the tribes full-funding of the costs and the department’s continued effort to fund only part of the costs.

“The chamber is strongly supportive of the tribal position on this matter, and strongly urge the (federal) administration to withdraw the contract support caps proposal,” Josten wrote in the letter.

The chamber urged Sebelius to work with the tribal governments to find a solution, and noted that the department is still seeking to cap the funds without consulting with the tribes.

The U.S. Supreme Court decision was the June 18, 2012, Salazar v. Ramah Navajo Chapter, which ordered the government to pay the contract costs in full.

The U.S. chamber is working with tribes through its Native American Enterprise Initiative, to strengthen a new trend in entrepreneurship among three million Native Americans in the Lower 48 and Alaska, Josten wrote in his letter, by removing legislative and regulatory roadblocks to their success. Access to health care is one such roadblock.

Tim Bradner is a reporter for the Alaska Journal of Commerce.