Alabama’s innovative reform to Medicaid is paying dividends

One of the toughest, yet least-talked about, challenges facing the U.S. today is how to effectively deliver affordable health care to America’s growing population of senior citizens. The U.S. Census Bureau has predicted that by 2035, the number of adults over the age of 65 will exceed the number of children under the age of 18. The graying of America’s population especially creates a challenge for what, at times, can be a fractured and overly complicated health care delivery system.

In Alabama, over 90,000 senior citizens’ health care is funded in part via Medicaid, the federally-mandated insurance program that serves the elderly, the poor, and the disabled. Even though Medicaid is federally-mandated, that definitely does not mean that the federal government covers all of the costs — Alabama’s portion of the costs provided by the general fund was $755 million in Fiscal Year 2019, a figure which eats up 37% of all non-education spending by the State of Alabama.

Over the past several years, I have worked closely with the past two governors, other legislative leaders, Medicaid Commissioner Stephanie Azar and private sector partners to identify new delivery models that will bend the cost curve down for Medicaid, while ensuring Alabama’s senior citizens on Medicaid still receive good medical care.

In early 2017, I went to Washington, along with Speaker of the Alabama House of Representatives Mac McCutcheon, Medicaid Commissioner Azar and other state leaders, to meet with Dr. Tom Price, who then served as President Trump’s Secretary of Health and Human Services.

That trip and subsequent phone calls and data presentations paid off: in 2018, the Centers for Medicare and Medicaid Services (CMS) in Washington granted Alabama the opportunity to pursue a new delivery model of health care services for the more than 20,000 senior citizens in Alabama who are receiving long-term care through Medicaid.

Let me tell you: it is not an easy thing to persuade a federal agency to grant a state a waiver from any program’s requirements. Federal government employees – even the hardest-working and best-intentioned – are not necessarily keen on innovation.

In October of 2018, Alabama launched the Integrated Care Network (ICN). In this new model, Medicaid contracts with an Alabama-based healthcare provider to serve the 22,500 patients who are receiving long-term care through Medicaid. These senior patients and their families have expanded choices through the ICN: most are in nursing homes, but about 30% have chosen to receive care in the comfort of their own homes.

Where are we nearly a year down the road from the ICN launch? A few weeks ago, I convened a meeting of Medicaid, the Department of Senior Services, nursing home owners and health care providers. Their reports were encouraging. According to Medicaid’s estimates, the ICN model has already saved the state $4 million — and Medicaid projects the savings to grow over the next few years.

In 2039, if trends hold, 42% of Alabamians will be 60 years or older. For the senior citizens who will need Medicaid’s assistance, it is imperative that we continue to modernize and innovate in the area of health care, especially for programs like Medicaid that are funded by the taxpayers.

Newton’s first law states that an object will remain at rest or in uniform motion along a straight line, unless it is acted upon by an external force — inertia, in a word. That is a concept that often applies to government programs and agencies. In this instance, the innovation of the Integrated Care Network represents the external force that is moving Medicaid to a sounder fiscal footing.

Greg Reed is the Alabama Senate Majority Leader, and represents Senate District 5, which is comprised of all or parts of Walker, Winston, Fayette, Tuscaloosa, and Jefferson counties.