MONTGOMERY, Ala. — During a pre-legislative session budget hearing on Wednesday, State Representative Lynn Greer (R- Rogersville) warned that the unchecked growth of Alabama’s medicaid program is threatening to bankrupt the state.
“Unless we can get control of Medicaid… it can be the downfall of the state of Alabama,” he said.
Medicaid is the joint-federal and state healthcare program designed to provide coverage for low-income and disabled individuals.The program is currently 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, and as the state’s senior population increases, costs are expected to grow even further. But because the federal government covers 70% of the cost of Medicaid and mandates certain levels of coverage for enrollees, the state has essentially no control over the exploding costs.
The head of the Alabama Medicaid Agency on Wednesday 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.”
Alabama’s Medicaid rolls eclipsed 1 million in 2015, after over 38,000 new enrollees became Medicaid recipients in a single year. More than one in five Alabamians is now enrolled in the government healthcare program.
Medicaid reforms passed by the legislature last year are expected to save the state an estimated $1.5 billion over the next decade, if the Obama administration grants Alabama a “waiver” that would allow the reforms to go into effect.
But the Bentley administration is also believed to be exploring ways to expand the program, which Governor Bentley concedes would be a costly proposition.
“(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.”
The governor appointed the state’s Health Officer to chair the task force, which was given the responsibility of finding ways to improve the accessibility, affordability, and quality of healthcare for Alabamians. The governor appointed 37 other people to the task force, including legislators, healthcare professionals, and insurance company representatives.
Among those appointed are several members who have been longtime Medicaid expansion advocates, including three Democratic members of the state legislature, the policy director of the liberal advocacy group Alabama Arise, and an employee of Blue Cross Blue Shield of Alabama.
Several representatives from the University of Alabama at Birmingham (UAB) were also appointed to the task force. In 2014 UAB released a study saying Medicaid expansion would create thousands of jobs and bring increased tax revenue to the state. Governor Bentley called the study “bogus” at the time, and another study from Troy University later refuted the majority of its claims.
The only two Republican legislators on the task force were the chairmen of the Alabama House and Senate Health committees.
Similar to Pennsylvania and Arkansas, which are also led by Republican governors, Gov. Bentley has suggested he would like to be able to funnel federal tax dollars through the state government and into private insurers. The private insurers would then use those taxpayer dollars to cover uninsured individuals up to 138 percent of the federal poverty level, the same ultimate outcome as Medicaid expansion under ObamaCare. The political benefit is that by receiving a “waiver” from the Obama administration, Republican governors have been able to expand the program while selling it as something completely different. In Pennsylvania they call it the “Healthy PA” plan. In Arkansas it’s commonly referred to as the “private option.”
Conservative policy and advocacy groups have taken to calling such plans “Medicaid expansion by another name.”
Gov. Bentley has insisted he would only pursue such a plan as a “block grant” from the federal government. Block grants are federal funds granted to states that include more flexibility in how they are spent than traditional “categorical grants.”
“It would have to be in the private sector and there would have to be some requirements on it,” Bentley told reporters in December. One specific requirement he mentioned was that he’d like to see the system tied to employment. “(Recipients) need to be working on getting a job, or having a job.”
Other states that have tried to tie work requirements to Medicaid benefits have been denied. In rejecting such a proposal from Utah last year, U.S. Health and Human Services Department spokesman Ben Wakana said, “encouraging work is a legitimate state objective. However, work initiatives are not the purpose of the Medicaid program and cannot be a condition of Medicaid eligibility.”
The bottom line is, the Obama administration will have to sign off on any plan Alabama pursues.
The legislature will convene for its 2016 legislative session next month.
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