Bentley takes tougher tone on Medicaid expansion under Obamacare

Montgomery Advertiser, Bryan Lyman, Dec. 15, 2013

Gov. Robert Bentley has expressed opposition to Medicaid expansion for more than a year, but in recent weeks, his tone has grown notably harder.

“I can’t think of anything worse right now than to have expanded Medicaid and have all these people on an entitlement program right now and for this entire thing to go under, which, I think, is going to happen,” Bentley said on Nov. 18. “So I think my decision is right. But I’ve always thought it’s right.”

Just over a week later, the governor called a study that found expansion would create 30,000 new jobs “bogus,” and reiterated his belief that the Affordable Care Act, which offers the state the chance to expand Medicaid to those making 138 percent of the poverty level, would unravel.

The governor’s tough talk, reassuring to conservative critics of the health care law, poses a dilemma for groups trying to convince Bentley to opt into the expansion. Last week, a coalition that includes hospitals and anti-poverty groups launched a website called alabamasbest.org, that seeks to educate the public about the benefits of Medicaid expansion to the state’s health and to its economy.

But the aim may be at Bentley. Without a legislative route to Medicaid expansion, or any major challenge to Bentley’s re-election bid next year, supporters of expansion have to trust that they might change the governor’s mind.
“We are concerned that the governor’s language about expansion seems to have sharpened in recent comments,” said Jim Carnes, communications director for Alabama Arise, which supports expansion.

Carnes, however, stressed that they were trying “educate” people about the benefits of Medicaid expansion, rather than criticize its opponents.

“We’re not interested in calling the governor out and pointing fingers,” he said. “Other people are taking that approach, which we don’t agree with. We’re building a strong case.”

Bentley has never been coy about his opposition to the Affordable Care Act, a stand that plays well in deep-red Alabama, and his office insists that the governor’s position is the same as it has always been.

“He’s been crystal clear,” said Jennifer Ardis, a spokeswoman for the governor. “Reforming Medicaid is a long-term process. For years, Alabama’s Medicaid program has been broken, and we are beginning the long-term process of fixing that broken system.”

Bentley during his 2010 campaign expressed support for the state setting up its own health insurance exchange, and established a commission to study its implementation. In November 2012, Bentley said he would not take the Medicaid expansion or have the state set up its own exchange. He said he believed that if states declined Medicaid they might be able to force changes to the Affordable Care Act.

Still not ruling out expansion

Still, both the governor and his office seem unwilling to entirely rule out Medicaid expansion, focusing instead on a task force led by State Public Health Officer Don Williamson that seeks to overhaul the way Medicaid is delivered in the state. In June, Bentley said he had no plans “at the present time” to opt into the Medicaid expansion.

Alabama imposes strict limits on Medicaid eligibility, and generally only children and the disabled can receive benefits through the program. Childless adults rarely qualify for Medicaid, and parents of children in the program qualify only if their income tops out at $194 a month — $2,328 a year.

The federal government currently covers about 68 percent of the cost of the state program, but even with that support, the state share — currently at about $615 million — consumes an ever-larger portion of the General Fund budget, which sees limited revenue growth each year.

The expansion of Medicaid under the Affordable Care Act would expand the pool to individuals making $15,856 a year and households of four making $32,499 annually. The federal government will pick up the entire cost of Medicaid expansion in 2014, 2015 and 2016, then dial down its coverage to about 90 percent by 2022. A UAB study released last year estimated that 300,000 Alabamians would be covered under the expansion.

A 2010 study by the Kaiser Family Foundation, which studies health care issues, estimated the cost of expansion to Alabama would be between $78 million and $115 million a year. But with the budget tight, and lawmakers reluctant to find new revenue sources, some critics argue that the state can’t afford the expansion.

Cameron Smith, vice president and general counsel for the conservative Alabama Policy Institute, which says Medicaid expansion would not be prudent, also said it was uncertain that the federal government would indefinitely cover 90 percent of the Medicaid expansion.

“If the percentage declined over time because of a split between state and federal government, that could have material impact,” he said. “You just pull up the president’s proposed budget. (Spending) trajectories are not indefinitely sustainable.”
Not expanding could hurt hospitals

The expansion was initially a requirement under the ACA, but the U.S. Supreme Court ruled last year that states could not be forced into it. That poses a dilemma for hospitals.

The Affordable Care Act also is scheduled to cut payments to hospitals to offset the costs of treating indigent individuals, known as DSH payments. The intention was that Medicaid expansion would make up the difference. The cuts are expected to be relatively small for the first few years of ACA implementation, but could accelerate by the end of the decade.

Rosemary Blackmon, executive director of the Alabama Hospital Association, an advocate of expansion, said smaller hospitals could feel the bite there.

“It’s definitely going to be hard for those hospitals to make thin margins meet,” she said. “I think it could mean cuts in services, and in the worst case scenario, hospital closure.”

Ardis said in a statement that the governor’s office expected the cuts to the payments to be “relatively minor in the short term.”

“We are working on ways to mitigate the impact to hospitals,” she said.

Kaiser has estimated that the decision to not expand Medicaid has left 191,000 Alabamians in a “coverage gap,” where they can neither obtain Medicaid nor qualify for subsidies to pay for health insurance plans offered in the federal health insurance exchange

Economic impact hard to estimate

A study released by the University of Alabama’s Center for Business and Economic Research, and commissioned by the Alabama Hospital Association, estimated that expansion would create 30,000 new jobs and add over $2.1 billion to the state GDP.

Smith, however, argued that the spending was part of a broader problem with government spending in the nation that, he said, might ultimately hurt the state economy. “Anytime you introduce federal dollars that were not there previously, you have an economic impact,” he said. “That’s just reality. The problem is it’s broader than that. There are macroeconomic impacts nationally that are not in the analyses that impact Alabama.”

Democrats plan to make Bentley’s decision an issue in the 2014 election. House Minority Leader Craig Ford, D-Gadsden, has no compunction about pointing fingers.

“It’s in his hands,” said Ford. “Here’s the sad situation. 300,000 Alabamians’ health care is in his hands. He’s a physician himself, and he should know better.”

Rebekah Mason, a spokeswoman for Bentley’s re-election campaign, said that no one should be surprised by the governor’s recent comments.

“The best long-term solution to any health care solution is to fund jobs,” she said. “That’s the governor’s long-term goal. I think it’s clear where he stands on Medicaid, and I don’t think what he said should come as a surprise.”

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