Alaska Officials Clash Over 2025 Budget Bill’s Impact on Medicaid, SNAP, and Energy Revenue
Assume yourself living in Alaska in mid-2025; a state where over one-third of the population depends on Medicaid, food costs are extreme, and energy policy shapes budgets. The passage of the “One Big Beautiful Bill Act” by the U.S. Senate has triggered a sharp divide between Governor Mike Dunleavy’s endorsement and Alaska legislators’ strong objections. The bill’s promised economic benefits are weighed against the risk of social safety net collapse.
What Is the “One Big Beautiful Bill Act”?
| Feature | Details |
| Bill Passed | July 1, 2025 — 51–50 in U.S. Senate (VP J.D. Vance cast tie-break vote) |
| Sponsored By | Congressional Republicans |
| Federal Impact | Adds ~$3.2 trillion to deficit over 10 years (CBO) |
| Alaska-Specific Provisions | Oil/gas royalties, delayed SNAP cuts, rural hospital funding |
| Key Federal Cuts | Medicaid, SNAP (food assistance), energy/environment regulations |
Governor Dunleavy’s Position: Supportive
- Governor Mike Dunleavy (R) called the bill a “path to fiscal stability”.
- He emphasized:
- Increased oil/gas royalties from federal lands (starting FY2035)
- Resource development in Cook Inlet and the 1002 Area of ANWR
- Alignment with Trump’s economic agenda
- Despite a previous warning that “we may end up losing money,” Dunleavy pivoted to full support on social media, echoing national GOP messaging.
Fiscal Background:
- Dunleavy vetoed over $230 million in state spending in FY2025 and another $122 million in FY2026.
- His history includes education and Medicaid cuts, consistent with a long-term resource-revenue strategy.
Legislative Leaders: Fiercely Opposed
House Speaker Bryce Edgmon and Senate Majority Leader Cathy Giessel authored an op-ed titled “Our State Cannot Survive This Bill.”
Their Key Warnings:
| Concern | Legislative Leaders’ Argument |
| Medicaid Cuts | Could result in 35,000–40,000 Alaskans losing coverage |
| SNAP Restrictions | Eligibility requirements could worsen hunger due to state-level staff shortages |
| State Budget Risk | Cost-shifting could force state tax hikes or further cuts to essential services |
| Rural Impact | Native communities and remote hospitals heavily reliant on Medicaid/SNAP will suffer most |
- In May 2025, the legislature passed Senate Joint Resolution 15, urging Alaska’s afederal delegation to oppose Medicaid cuts.
- The resolution cited an expected $194 million federal Medicaid funding loss in 2025 alone.
Alaska Officials’ Divided Views
| Policy Area | Gov. Mike Dunleavy | Legislative Leaders (Edgmon, Giessel) |
| Medicaid Funding | Accepts cuts; no state plan to offset loss | Opposes cuts; warns of coverage loss & hospital impact |
| SNAP Program | No detailed plan | Strong opposition; cites existing backlogs |
| Energy Royalties | Supports future royalties starting in 10 years | Sees as delayed and insufficient |
| Bill Position | Publicly supportive | Warns bill is dangerous without major changes |
| Fiscal Priorities | Long-term resource revenue | Immediate healthcare and food security |
Frequently Asked Questions
Q: How did Alaska officials react to the 2025 “One Big Beautiful Bill”?
A: Governor Dunleavy supported the bill, citing future oil and gas royalties. Legislative leaders opposed it, warning that cuts to Medicaid and SNAP could devastate rural healthcare and food security. They passed a resolution urging Alaska’s congressional delegation to block the bill unless amended.
Q: Why does Governor Dunleavy support the bill?
A: He believes increased oil and gas royalties and energy provisions will lead to long-term fiscal stability for Alaska, despite short-term budget risks.
Q: What are Alaska legislators warning about?
A: They fear the bill will cause mass disenrollment from Medicaid (up to 40,000 residents) and worsen SNAP distribution delays, particularly in rural areas.
Q: How will Medicaid cuts affect Alaskans?
A: Cuts could destabilize the state’s largest employer; its healthcare system, impacting coverage, staffing, and access in underserved areas.
Q: Did Senator Murkowski secure changes to help Alaska?
A: Yes. She helped delay SNAP cuts by two years and added rural hospital funding, but failed to protect Medicaid due to budget rules.
Q: Is the bill popular in Alaska?
A: Public sentiment is split. Protests have erupted in Wasilla and Anchorage, while energy advocates support the bill’s development incentives.
Real-World Implications for Alaska
| Metric | Estimated Effect |
| Medicaid Coverage Loss | 24,000–40,000 residents |
| SNAP Distribution Delays | 2–4 months (backlogged cases) |
| Healthcare Sector Job Risk | Thousands due to funding gaps |
| Budget Shortfall (FY2026) | $222 million due to declining oil prices |
| Projected Royalty Gains | Start in 2035 — estimated $400M+ over 10 years |
Conclusion
Alaska’s response to the “One Big Beautiful Bill” is emblematic of deeper tensions between long-term economic planning and immediate human needs. While Governor Dunleavy sees opportunity in future energy royalties, legislative leaders are focused on the bill’s short-term harm, especially to Medicaid and SNAP, lifelines for tens of thousands of Alaskans. As the bill moves to the House, this state-level political divide places Alaska’s most vulnerable residents in the crosshairs of national budget policy.
