Governor still hesitant about Medicaid expansion

Decatur Daily, November 2, 2015

On the website Alabamasbest.org, which advocates for Medicaid expansion, there’s a rolling ticker that shows how much federal money the state has left on the table the past two years by refusing to increase enrollment.
As of last week, it was more than $3 billion.

Those in favor of expansion still are hopeful Gov. Robert Bentley will change his mind about expanding health care coverage to more low-income Alabamians. Others are concerned about another amount: the millions of dollars expansion would cost the state already struggling to pay for Medicaid.
“I’ve been observing what I would call a warming trend,” said Jim Carnes, policy director at Alabama Arise, an advocacy group for low-income residents. “We’ve seen the governor acknowledge the futility of resisting the Affordable Care Act.
“We’ve seen sister states like Arkansas come up with plans that suit them, and we think we could take that same approach.”
Bentley last month said his office was “certainly looking at” expansion, but “not right now.”
Many of Bentley’s GOP counterparts in the Statehouse remain adamant the state can’t afford expansion. Increasing the state’s cost significantly would be absurd, Sen. Arthur Orr, R-Decatur, the Senate General Fund chairman, said last week.
Under the Affordable Care Act, the federal government is picking up 100 percent of expansion costs from 2014-16; 95 percent in 2017; 94 percent in 2018; 93 percent in 2019 and 90 percent in 2020 and beyond.
Bentley is the only one who can green light Medicaid expansion in the state. Since 2012, he has opposed it, saying he won’t make a broken system bigger. He also cited the potential cost to the state. His office last week said it didn’t have numbers about the potential cost of expansion. In 2013, a spokeswoman said the net state cost for expansion would range from $188.4 million to $217.2 million in 2020.
State obligation

A University of Alabama at Birmingham School of Public Health report in July estimated if the state were to pick up 10 percent of expansion costs, the obligation will be about $222 million a year. If the current approach to funding the state’s match is maintained, the General Fund would be responsible for about 33 percent of that amount, or about $73 million a year.
Last month, Bentley told reporters the state needs to look at whether there is adequate funding for rural doctors and primary care doctors.
“They cannot treat a third of their patients for free and stay in business,” he said. “It’s a business that they run.”
Bentley spokeswoman Jennifer Ardis last week said Bentley remains committed to making the current Medicaid system more effective and efficient.
As recently as this spring, Republicans in the Alabama Senate passed a resolution opposing Medicaid expansion. The resolution said the state should pursue reforms based on reducing Medicaid dependence, rather than increasing dependence. It also said the Legislature has no intention of allocating funds to support expansion.
Largest line item

Medicaid is the largest line item in the General Fund budget, and it has been growing. This year, Medicaid received about $685 million. The state’s 2017 General Fund situation will depend greatly on Medicaid’s projected needs.
“What might appear as a good bargain today could be a terrible long-term deal for the state,” Orr said last week. “We would have to examine the numbers very, very closely. One thing is for sure: We can’t afford the Medicaid program we have today. It has wrecked the General Fund budget and, as a result, other state services.”
Orr said the state has little control over the program or its costs.
“Are we going to raise taxes on other Alabamians to fund this? The money has to come from somewhere,” he said. “And I can tell you based on letters, emails, conversations, etc., that more and more taxpaying constituents are getting resentful of the growing number of people dependent on the government largesse.”
This year, lawmakers passed a cigarette tax and increased nursing home and pharmacy provider taxes to support Medicaid. Bentley last month also said the $20 million settlement from Transocean Offshore Deepwater Drilling, owner of the Deepwater Horizon, will go toward Medicaid.
Democrats in the Statehouse have advocated for expansion, but the minority party’s efforts haven’t gone far.
Rep. Marcel Black, D-Tuscumbia, said last week some of Bentley’s recent comments made him wonder if the governor “is testing the water” on expansion.
“It would be a benefit not only to the economy but many hardworking people who can’t afford health insurance,” Black said.
Advocates and economists estimate expansion would have a $20 billion economic impact on the state and create 30,000 jobs.
Black said rural areas risk losing hospitals, doctors and pharmacies without expansion.
One day last week, Sen. Larry Stutts, an obstetrician, and two other doctors performed a three-hour surgery on a woman who had no insurance or means to pay them.
“It happens every day,” said Stutts, R-Tuscumbia. “She needed the surgery … none of us are going to get paid.”
But Stutts, a member of the Senate General Fund committee, is opposed to expanding Medicaid.
“Granted, it’s money up front, but once you expand a program it’s hard to shrink it,” he said. “I’m more interested in getting more people to work than getting more on Medicaid.”
He said he knows many who would qualify for coverage under the expansion are already working, but the state needs to focus on recruiting well-paying new businesses and helping existing businesses expand.
As for indigent care, Stutts said he’d like to see doctors and hospitals get tax deductions in exchange for the free care they provide.
“Then we don’t need to expand Medicaid; the existing system would take care of it,” he said.

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