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No, Alabama can’t spend COVID-19 relief funds on Medicaid expansion

MONTGOMERY — During the (COVID-19) coronavirus pandemic, Democrats and members of the media in Alabama have amped up their continued drum beat for the state to expand Medicaid under Obamacare. However, the unanswered issue remains of how to pay for the state share of expanding the program.

The direct line item to the Alabama Medicaid Agency already accounts for over 34% of the state legislature’s proposed Fiscal Year 2021 General Fund budget, and estimates project that expanding Medicaid would cost the state an additional $250 million per year.

Asked by Yellowhammer News in a recent interview, Governor Kay Ivey advised that her thinking on expanding Medicaid has not been affected by the pandemic.

“Nothing’s changed. How do you pay for it?” Ivey said.

The Alabama Democratic Party and The Montgomery Advertiser in recent days have attempted to answer that question by suggesting the federal COVID-19 relief monies handed down to Alabama through the CARES Act could fund the state share of Medicaid expansion.

However, these suggestions (unwittingly or not) fly in the face of federal law, as well as federal guidance regarding how CARES Act funding can be utilized by each state.

The U.S. Treasury Department on April 22 issued formal guidance listing “Expenses for the State share of Medicaid” at the very top of the list of “ineligible expenditures” for the CARES Act.

The Treasury further cited two federal rules in issuing that specific Medicaid guidance.

This included 42 CFR § 433.51, which outlines that federal funds cannot pay the state share of expanding Medicaid under Obamacare. Additionally, 45 C.F.R. § 75.306 explains that federal funds are not generally eligible to be used to match or share with other federal funds.

Simply put, the U.S. government has already made it clear that Alabama cannot expand Medicaid with federal COVID-19 relief funds.

For expansion advocates, the key question remains unanswered: “How do you pay for it?”

Sean Ross is the editor of Yellowhammer News. You can follow him on Twitter @sean_yhn

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