Louisiana officially installed a new Democratic governor last week, and the first thing he did was expand Medicaid under ObamaCare. Governor John Bel Edwards reversed the long-held position of his predecessor, Republican Bobby Jindal, who had rebuffed the Obama administration’s overtures, which include a promise to cover the entire cost of expanding the government healthcare program for the first year, before tapering its contribution down to 90 percent by 2020.
It is that promise of “free” money that the Obama administration hopes will win over the 19 states who continue to refuse to expand Medicaid to cover individuals up to 138 percent of the poverty level, including Alabama, where a task force appointed by Governor Robert Bentley voted late last year to recommend Medicaid expansion.
“The White House is proposing new financial incentives to convert the remaining 19 states, like Alabama,” said Debbie Elliot in a National Public Radio (NPR) report. “The Obama administration hopes to lure more states by offering money — three years of full funding for Medicaid expansion before the federal match tapers off.”
It is a tempting proposition for state leaders, who find themselves eager to accept “free” money from the federal government. Governor Bentley has expressed a desire to expand the program, but has not yet been able to make the numbers work.
“(Y)ou have to realize it is going to cost the state of Alabama over the next six years $710 million in the General Fund,” Bentley said in November. “Now folks, I can’t even get (the Legislature) to raise a hundred million dollars. So we’ve got to look at a funding stream if we’re going to do it.”
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The head of the Alabama Medicaid Agency last week asked lawmakers for an additional $156 million in 2016, but was met with fierce opposition from Republicans, including Rep. Arnold Mooney (R-Birmingham) who insisted that Alabamians are “not going to put money into failing programs.”
One of the main difficulties for states when it comes to Medicaid is that, because the federal government covers 70% of the cost of the program and mandates certain levels of coverage for enrollees, the state has essentially no control over the exploding costs.
Medicaid is already the largest line item in Alabama’s budget, comprising 37 percent of the General Fund. According to the Alabama Policy Institute, Alabama’s Medicaid expenditures increased by 53% between 2001 and 2013. The state’s Medicaid rolls eclipsed 1 million in 2010. In 2015, over 38,000 new enrollees became Medicaid recipients in a single year. More than one in four Alabamians is now enrolled in the government healthcare program, and as the state’s senior population increases, costs are expected to grow even further.
Alabama lawmakers are wary of expanding the program, not only because of their philosophical concerns, but also because they have experienced in recent years how taking “free” money in the short term can put them in a bind a few years down the road.
In 2012, the Alabama legislature sought to patch a budget hole by borrowing $437 million from the state’s oil and gas trust fund. When the funds ran out again last year, even typically anti-tax Republicans were ready to dip back into taxpayers’ pockets to extract more revenue.
A similar timeline could play out again, should GOP leaders give in to the Obama administration’s Medicaid expansion overtures.
The legislature will convene the first week of February for the 2016 Regular Legislative Sessions.
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