Bentley task force backs expanded Medicaid

A task force created by Gov. Robert Bentley voted Wednesday to recommend Medicaid expansion, citing the potential public health and economic benefits and the need to keep state hospitals open.

Bentley and the Legislature will still have to decide how -- and if -- to move forward on the proposal, which could extend health insurance to 300,000 people in the state. But the vote by the Alabama Health Care Improvement Task Force, passed without dissent, means one step forward in a difficult process.

Expansion could be critical to the health of rural Alabama. John Waits, a physician from Centreville who co-authored the resolution, said about three-quarters of his patients are on Medicaid or Medicare. The proposal, he said, would help "pay our employees (and) keep the hospitals open."

"If our neighbors had insurance, then you keep the doors open, you make jobs, they have insurance, (and) health care outcomes are better," he said. "That's the biggest impact in our area. The number goes from 15 to 20 percent uninsured to below five percent."

Jennifer Ardis, a spokeswoman for Bentley, said Wednesday the governor would review the recommendation.

The resolution does not use the phrase "Medicaid expansion." But it urges Bentley and the Legislature to "move forward at the earliest opportunity to close Alabama's health coverage gap with an Alabama-driven solution." The governor has said for almost a year he might accept Medicaid expansion if Alabama could create its own version of the program.

Jim Carnes, policy director of Alabama Arise and the other author of the resolution, noted that "there's been a lot of controversy over the language of Medicaid expansion."

"That really just names the program and the administrative policy change," he said. "We are naming the problem in our recommendation. We are trying to move beyond the semantics in our recommendation."

The Bentley administration is already pursuing a change in Medicaid delivery that aims to move the program from a fee-for-service model to one based on outcomes.

Alabama Democrats have long advocated Medicaid expansion. Senate Minority Leader Quinton Ross, D-Montgomery, said in a statement Wednesday evening that the issue had been "studied long enough."

"I think it is clear that we need to expand Medicaid, based on the recommendation of the task force, and based on what the Democratic Caucus has been saying all along," the statement said. "The best thing that the governor can do for the citizens of the state of Alabama and the state’s economy is to expand Medicaid.”

Alabama has strict limits on Medicaid eligibility. Childless adults almost never qualify, and parents of eligible children can only receive Medicaid if they make 18 percent or less of the poverty level – about $2,867 a year for an individual, and $4,365 for a household of four.

Despite the restrictions, more than 1 million Alabamians – 22 percent of the state – were eligible for Medicaid in June, according to the Alabama Medicaid Agency.

Under expansion, people making up to 138 percent of the poverty level -- $16,243 a year for an individual, and $33,451 for a household of four -- could receive Medicaid. Studies suggest up to 300,000 Alabamians could gain coverage if the state expanded Medicaid. That would include 139,000 in a “coverage gap,” unable to obtain Medicaid or subsidies for Affordable Care Act plans in the federal exchanges.

The resolution also notes that expansion would improve access to preventive care, which could end up preventing between 215 and 562 deaths each year.  The program may also bring more than $1 billion in new revenue to the state.

Hospitals will also be fighting for Medicaid expansion. Many in the state rely on disproportionate share hospital (DSH) payment to offset the costs of providing uncompensated health coverage. The DSH payments could fall in 2018. The Alabama Hospital Association warns that without Medicaid expansion making up the difference, many hospitals could close.

The federal government pays 100 percent of Medicaid expansion through 2016. The states' share rises after that, topping out at 10 percent by 2020.

The Alabama Legislature needs to approve enabling legislation for expansion and funding, which could reach $200 million a year once the 10 percent state match goes into effect.

To pay for it, the committee will consider a recommendation next month to raise the cigarette tax by 75 cents a pack. Under the proposal, most of the new revenue, about $180 million a year, would go into a trust fund to help pay the state match. Studies have also suggested states that expand Medicaid see the federal program absorb many of their health-related costs, which could help the General Fund budget.

But legislative budget chairs said last week that any tax increase proposal would face a fight. Sen. Gerald Dial, R-Lineville, underlined the point before Wednesday's vote. While supportive of expansion, Dial stressed the need for a "grass roots" effort to bring lawmakers on board.

"How do you address that to people in that chamber who say, 'I am not voting for taxes of any kind?' " he asked.

Others stressed the costs that could roll out of the General Fund with Medicaid expansion. Mitch Cohen, pediatrics chair at the University of Alabama Birmingham, noted that Medicaid expansion would pay for the hospitalization of prisoners, which the Department of Corrections currently pays for. Cohen also noted that while the state already covers children through Medicaid, general outcomes could improve.

"I do think the children of Alabama would benefit, because healthy families mean healthy kids," he said.

Dial, who does not plan to seek re-election, said after the meeting expansion would be critical for the state.

"You can't be from rural Alabama like I am and not support expanding the Affordable Care Act," he said. "If we don't do something, my rural hospitals are going to go away. My doctors are going to go away. I'm going to have to drive 40, 60 miles to get adequate health care."