GOP: Without new money to fund it, Medicaid expansion unlikely

GOP: Without new money to fund it, Medicaid expansion unlikely

By MARY SELL, Alabama Daily News

MONTGOMERY, Ala. — Alabama Democrats hope their support of Gov. Kay Ivey’s gas tax increase got them further on possible Medicaid expansion, but legislative leaders say expansion can’t happen without new money.

“There is no plan to feasibly make it work,” Sen. Greg Albritton, R-Atmore, said Friday about the possibility of expansion. He’s chairman of the Senate General Fund committee.

Ivey met with many Democrats in the past two weeks as she drummed up support for the 10-cents-a-gallon gas tax increase that takes effect this fall. Democrats used those conversations to again push expansion, as they’ve done since 2012. This year, the calls for expansion seem louder, in part driven by the Alabama Hospital Association. Alabama is one of 14 states that hasn’t expanded Medicaid under the Affordable Care Act.  Thirteen Alabama hospitals, including seven rural ones, have closed since 2011. Another closure was announced last month.

While proponents tout the economic benefits of health insurance for more Alabamians, the state is currently waiting for federal approval to implement work requirements that would result in some being removed from the Medicaid rolls.

Senate Minority Leader Bobby Singleton, D-Greensboro, said last week he had no confirmation of expansion, “but I trust the governor when she said that we would sit down soon.”  

“Whether it’s Medicaid expansion, or we might rebrand it to something else to have it in a different state of mind for people,” Singleton said last week after attending Ivey’s gas tax and infrastructure signing. “And we’re OK with that as long as it actually does happen because we are beginning to see more rural hospitals closing down in Republican districts than there are in Democratic districts. 

“So it’s not just a Medicaid or federal issue, it’s an Alabama issue. It’s about our people. So I hope [Governor Ivey] will give the same leadership that she gave on these roads as she will for healthcare for Alabamians as a whole.”

Medicaid provides health coverage to more than 1 million Alabamians. To qualify now, families with children must have a household income at or below 18 percent of the poverty level. Expanding the program would take that threshold up to 138 of percent the poverty level, offering access to as many as 325,000 Alabamians.

Ivey could make the decision to expand, but funding for the state’s portion of the cost would be up to the Legislature.

Asked if the governor is contemplating expansion, her office said she is “considering all options.”

“Gov. Ivey is scheduling regular meetings with both caucuses from each chamber to allow elected officials to continue to discuss issues facing the state, while exploring every possible and realistic proposal to address each issue,” spokesman Daniel Sparkman said.

Rep. Steve Clouse, R-Ozark, is the House General Fund committee chairman. He said he thinks some in his party are softening on their original positions on expansion under the Affordable Care Act, better known as Obamacare, but now the issue is financial.

“I think it’s evolved from a political issue in 2014 to an economic issue at this point,” Clouse said.

A study released by the Alabama Hospital Association this year estimated that expansion would generate about $11 billion in four years in increased federal funding and economic activity.

Clouse said Alabama would need about $167 million in the first year to expand Medicaid.

“It’s not possible with existing revenues,” he said. “There would be have to be a new revenue source with recurring revenue to do it at this point.”

Clouse said there are still Republicans who simply don’t want expansion.

“But I think there are more who see the need for our rural hospitals,” he said. “I’m in that category.” 

When President Donald Trump was elected in 2016 and the GOP controlled the House and Senate, Clouse said Alabama leaders thought they’d be getting block-grant funding for Medicaid with the repeal of Obamacare. But that didn’t happen.

“If it’s not going to be repealed and replaced, and this is what we’re operating under … it’s an economic issue for our health care system.”

Alabama’s Democrats in Congress,  Sen. Doug Jones and Rep. Terri Sewell, have each filed legislation to incentivize states like Alabama to expand. Their proposals would give latecomers the same level of federal matching funds as states that expanded earlier under the terms of the Affordable Care Act.

Though the federal government covers most of Medicaid’s expenses, it also sets coverage mandates that affect the state’s costs. That lack of state control is an issue for Albritton.

“It’s not a slippery slope, it’s a complete downhill with no breaks,” he said.

“… Alabama could probably take care of its own in many ways, but not under the conditions where the feds are in such great control of it.”

Expansion aside, the state will have to find more money for health insurance. Ivey is expected to propose in her 2020 budges a transfer of about $30 million from the Education Trust Fund to the General Fund to pay for additional costs in the Children’s Health Insurance Programs (CHIP) for low- to mid-income children. In 2021, another $70 million will be needed, Clouse said. 

“We’re looking at a little more than $100 million in CHIP funding that we’ve never had before,” Clouse said.

Sen. Linda Coleman-Madison, D-Birmingham, said Democrats pushed Medicaid during the gas tax and road improvements discussions as a way to deal with “human infrastructure.” 

“We look at that as something that could have crossed between Republicans and Democrats as a common core life issue, just as the roads are,” Coleman-Madison said. “So while we understand that this is the governor’s focus of what we can do to impact the whole state, you’ve got to start somewhere.

“… I do feel like it’s an issue we will have to come back to at some time.  This is putting additional strain on those hospitals and particularly in larger cities.”

Alabama Arise, an advocacy group that has lobbied for expansion, says it will outline possible funding sources during a press conference this week.

Work requirement 

Last year, Ivey asked the federal government to allow Alabama to impose a work requirement on able-bodied adults’ access to Medicaid. 

About 75,000 able-bodied Alabamians with incomes of just a few hundred dollars a month receive Medicaid. Most of the recipients are caregivers to young children or others who receive health care through Medicaid because their family income is at or below 18 percent of the federal poverty level. For a family of four, that comes to $377 a month or less.

The number of able-bodied adults on Medicaid in Alabama has more than doubled in the past five years, according to the agency.

In its waiver request to the federal Centers for Medicare and Medicaid Services (CMS), the Alabama agency said a work requirement will assist able-bodied recipients to “improve their health outcomes and improve their economic stability, which will assist the state in having healthier citizens.” It also said the change would make Medicaid more sustainable.

The request is still pending.

“Medicaid is continuing to have discussions with CMS on the (waiver) and is moving forward with that process,” agency spokeswoman Melanie Cleveland said last week.

Opponents say the proposal puts poor adults in a Catch-22, forced into jobs that pay enough to disqualify them for Medicaid but not enough for them to purchase health care coverage.

Because there is a list of possible exemptions from the waiver rule, including age or being a single parent to young children, it’s not clear how many current Medicaid recipients would be removed if the waiver is granted.

Meanwhile, President Donald Trump’s 2020 budget plan calls for a nationwide work requirement for Medicaid. It would reduce Medicaid spending by $130 billion over 10 years, according to the budget, the AP reported.

Independent experts and advocates say that’s partly because it would leave millions uninsured.

Alabama Daily News reporter Caroline Beck contributed to this story.