CEO touts new approach for Alabama Medicaid expansion

Birmingham Business Journal, July 25, 2014

A new report claims Alabama could lose billions of dollars by continuing to refuse the expansion of Medicaid.

The White House study claims Alabama could miss out on $3.63 billion in federal funding and $2.6 billion in increased economic activity.
While Alabama Gov. Robert Bentley is holding firm in his opposition to the expansion, which the White House claims would allow 235,000 Alabamians to gain insurance, some hospital executives say the state should explore alternatives.
UAB Health System CEO Will Ferniany said there are other ways of offering levels of coverage by not expanding Medicaid, such as following the example of Arkansas, Iowa and Pennsylvania.
These states have implemented the ACA’s Medicaid expansion by using Medicaid funds as premium assistance to purchase coverage in marketplace qualified health plans for some or all newly eligible beneficiaries, according to the Kaiser Family Foundation.
Alabama has not made that move yet.
But Ferniany acknowledges that some sort of expansion must come soon.
“If we don’t have this expansion, many hospitals in Alabama will be in trouble,” he said.
Numerous Birmingham hospital CEOs have expressed concern about the governor’s refusal to expand the program. Baptist Health CEO Keith Parrott compared the state’s decision to “shooting ourselves in the foot.”
“Alabamians are spending hundreds of millions of dollars in new taxes to the federal government. And by not expanding Medicaid, that money is not coming back to the state,” Parrott said. “Alabamians are just funding the expansion of health care to other states.”
But Bentley and others have maintained that the state, which recently overhauled its Medicaid program, cannot afford the expansion.
“The Alabama system is a broken, unworkable system,” said Jennifer Ardis, Gov. Bentley’s spokeswoman. “It doesn’t make sense to expand such a broken system.”
The federal government will cover 100 percent of the expansion costs until 2016, but the federal share will gradually reduce after that, which is when opponents say the state could run into trouble with an expansion.

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