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In Alabama, Report Provides Hope for Medicaid Expansion

By Marissa Evans, CQ Roll Call

November 23, 2015 -- Alabama lawmakers are mulling the idea of expanding Medicaid coverage to 290,000 low-income residents, a potential political U-turn for a state that has long opposed participation in the federal health care law. 

The idea was endorsed by the Alabama Health Care Improvement Task Force, a group that includes health care providers and Republican lawmakers, in a three-page report released on Nov. 18.

"Across the country, in every region and in some very conservative political environments, states are finding that local reform to Medicaid helps working families, local economies and state budgets," the task force members wrote. "We have an opportunity to design a plan that reflects Alabama's values and meets Alabama's needs. What would closing the gap mean for our state?" 

Republican Gov. Robert Bentley has not officially embraced the report, but he hasn't dismissed it, either. And he has indicated previously that he sees the state's high rate of uninsured residents as a hurdle to economic progress.

"I am concerned about the plight of the working poor," he said in a Nov. 12 speech, according to the Associated Press. "If doctors are not paid for seeing those patients, doctors will not go to rural Alabama because you can't expect a doctor to go to rural Alabama and lose money."

Twelve Republican-controlled states have expanded their Medicaid programs under the 2010 health care overhaul, which allows state to extend the state and federal insurance plan to people with incomes up to 138 percent of the federal poverty line. The cost is 100 percent covered by the federal government until 2017, when states that expanded will have to start chipping in. By 2020, states will have to cover 10 percent of the cost. Thirty states and the District of Columbia are participating in the expansion already.

Republican state lawmakers around the country have raised doubts that the federal government will keep its financial promise to cover most of the cost. 

The three-page health task force report outlined positive impacts from expansion, including less use of emergency rooms and health clinics for primary care and hospitals being financially stable enough to keep their doors open.

'A Win for the State Budget'

The task force also noted how Medicaid expansion is "a win for the state budget" as Alabama would see savings on mental, behavioral and public health services for low-income adults and providing care for inmates.

The program would generate an additional $1.2 billion into the state's economy, according to the report. 

Republican lawmakers' concerns about continued federal funding also were addressed in the report: "For 50 years the federal government has kept its Medicaid promise to states" and that Alabama can opt-out of the program anytime. 

The report has given providers a long awaited glimmer of hope and at a critical juncture for the state's hospitals, according to Rosemary Blackmon, executive vice president for the Alabama Hospital Association. 

Serving a large population of uninsured patients has cost Alabama hospitals millions of dollars, she said. Since 2011, five rural Alabama hospitals have closed and among the ones still open, 45 percent are operating in the red, according to the report. Blackmon said many hospitals are cutting services, reducing staff or being more efficient with their supplies to save money and stay open.

"They're dipping in reserves or utilizing other sources of income that are not specifically hospital related," Blackmon said. "In the end you can't continue to operate in the red and survive."

But while three of the state's Republican legislators—Reps. Jim Carnes and April Weaver, and Sen. Gerald Dial—served on the committee, selling the idea of expansion to other Republicans won't be easy.

Republican state Sen. Del Marsh said that he and many of his party's colleagues are concerned that Alabama could underestimate the number of residents eligible for Medicaid expansion, leading to unexpected costs. Marsh also said after the state's grueling two special sessions to get a budget passed, it will be tough to get Republicans on board with more taxes.  

"We've only got so much money to spend and every time we make further commitments to Medicaid without raising revenue then that money has to come from someone else," Marsh said. 

Among expansion states enrollment is projected to increase on average of 4.5 percent in fiscal 2016, according to a Kaiser Family Foundation report released last month. During fiscal 2015, beneficiary enrollment rose on average by 18 percent and Medicaid spending increased on average by 17.7 percent for the then 28 states and District of Columbia that had expanded.

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