When confronted with escalating health care costs and forecasts that thousands of Alaskans will lose health coverage, Republicans like Alaska’s U.S. Sen. Dan Sullivan have furiously gestured at a multi-billion-dollar pot of money that he insists will “transform” the state’s health care system.
At his annual address to lawmakers last week, Sullivan touted the Rural Health Transformation Fund as a landmark achievement that will provide the state with about $270 million a year for five years to overhaul its health care system. Exactly what those transformations can and will be isn’t clear, but the money is part of a larger national fund aimed at mitigating the impact of Trump’s Big, Beautiful Bill on rural communities.
In Alaska, the entire state qualifies as rural under the program’s definition, so the money could foreseeably flow to every corner of the state. Though, as critics have pointed out, the money will fall far short of the loss of health care spending through Medicaid reductions.
Still, pitching the fund has been one of the Alaska Delegation’s top priorities when discussing health care under Trump.
“This is the biggest federal investment in Alaska health care history,” Sullivan told legislators. “Now it’s up to us to take advantage of this historic opportunity on health care.”
But as lawmakers are working to unpack just what the money can and will be used for, they’re running into a mountain of limitations and strings that suggest the fund won’t be quite as world-changing as Sullivan and his allies claim. The money can’t be used to help self-employed people afford health insurance, can’t be used to pay for costly basics like broadband or expanding facilities, can’t be used to pay or retain frontline health care system workers, can’t be used to build much-needed housing for health care workers, and can’t use it to build up the state’s capacity for the new Medicaid work requirements.
“You fought for H.R. 1, and you helped shape the Rural Health Transformation Program funds,” asked Rep. Genevieve Mina, the Anchorage Democrat who chairs the House Health and Social Services Committee, during an abbreviated question-and-answer session with the senator. “Why are these funds so difficult for us to use to address Alaska’s core issues? And how will this finite fund help address the thousands of Alaskans who will lose their health insurance?”
“Well, look,” Sullivan said. “This is not going to be a panacea that solves everything.”
Like with many issues raised by lawmakers, Sullivan suggested they should reach out to his office with concerns so he can consider working behind the scenes to convince the Trump administration to change its rules for Alaska.
That’s what the Legislature is now in the process of doing with House Joint Resolution 32, which was heard on Tuesday in the House Health and Social Services Committee. At the hearing, lawmakers heard about the massive legislative and regulatory changes the state needs to make in the next year to be eligible for the money. That, in broad terms, includes six independent law and regulatory changes that could take as long as a year each to implement.
The resolution outlines those concerns, urging the federal government to maximize flexibility in how the money can be used to expand health care access in the state and to delay the state’s deadlines to meet the fund’s requirements.
“It’ll still be a ton of work, a heavy lift to have those all passed this year,” Lori Wing-Heier, the state’s former insurance director who now works as the health care specialist for the House Majority Coalition. “The impetus behind the resolution is to work with our federal delegation, our congressional delegation and the Governor, as well as the Department of Health, to see if there’s anything we can do to buy some more time so that the legislation can be passed in a meaningful way.”
While legislators seemed generally open to asking for extensions and flexibility on the bill, Anchorage Democratic Rep. Zack Fields said they should keep in mind who they’re ultimately dealing with.
“The Trump administration telling us what to do about health care policy is, frankly, sick and comical at the same time,” he said. “You know, we could pass all these bills, and they might reduce our funding because they didn’t like something that Lisa Murkowski did two days ago, or Dan Sullivan did the day before. We might fail to pass any of them. They might give us more money because, you know what, Alaska was their favorite state of the week. … Let’s not delude ourselves that this is a rational or fair administration in any way.”
Work on the resolution is expected to continue next week.
Matt Acuña Buxton is a long-time political reporter who has written for the Fairbanks Daily News-Miner and The Midnight Sun political blog. He also authors the daily politics newsletter, The Alaska Memo, and can frequently be found live-tweeting public meetings on Bluesky.
