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Alabama will not take the federal expansion incentives, but is considering using gambling revenues to fund more rural healthcare.
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Brenda Smith of Selma urges Alabama Gov. Kay Ivey to expand Medicaid during a rally on the Capitol steps on April 14, 2020. (Mike Casonfirstname.lastname@example.org)
When it comes to expanding health care services for rural and poor people in Alabama, the Legislature is rolling the dice on gambling.
With few days left in the legislative session, the GOP-controlled Legislature’s answer to a possible health care expansion is wrapped into a legislative proposal to earmark new gambling revenues for “the provision of health care services, including rural health care services.” Lawmakers are set to debate and possibly vote on a historic gambling package by Thursday.
But any effort to fund a Medicaid expansion is on hold for the time being. An expansion plan was missing in the state’s $2.5 billion General Fund budget that is effective for the fiscal year starting on October 1 and was adopted by the Alabama Senate on Thursday.
“My personal position is when we have an answer on how to fund it, that’s when we’ll talk about it,” said State Sen. Greg Albritton, R-Atmore, chairman of the Senate budget committee on Thursday. “If you talk to the feds, it doesn’t cost us anything. But they are not looking at what we need to pay. They have never completely answered how much it will cost the state of Alabama to do it.”
Advocates for expanding Medicaid say it could be done with a simple stroke of Alabama Gov. Kay Ivey’s pen, but the governor has been hesitant to do so since she took office in 2017. Ivey’s office says it’s up to the Legislature to agree upon a way to fully fund the expansion, which could affect up to 300,000 Alabamians. The costs to do so has varied; a 2019 University of Alabama at Birmingham study estimated it would be around $250 million per year.
It’s also unknown how the $2 trillion American Rescue Plan Act, signed into law in March, could lower Alabama’s obligation over time. New financial incentives were included within the coronavirus relief package for the states that have opted against Medicaid expansion. The incentives would provide a 5 percentage point increase on the federal match to cover the people already enrolled in Medicaid in Alabama as long as the state commits to expanding the program.
Alabama is one of 12 states that have not expanded Medicaid eligibility under the Affordable Care Act, the 2010 federal health care law that was a signature policy achievement for former President Barack Obama. Republican leaders have, for years, expressed political opposition to the program and concerns about its costs to state taxpayers.
“Ensuring every Alabamian has access to quality health care is important to the governor and always has been a priority of hers,” said Gina Maiola, the governor’s spokeswoman. “However, as she has made clear, the problem has always been how to pay for it. She is open to the discussion, but right now, we simply do not have all the facts. This is a massive package, and our Finance Department and Medicaid Agency will need to thoroughly review it before we can fully weigh in on the issue.”
State Rep. Barbara Drummond, D-Mobile, provides an update on Alabama House Democratic initiatives during a news conference on Wednesday, April 28, 2021, at the State House in Montgomery, Ala. Standing to her left is Rep. Jeremy Gray, D-Opelika, and Rep. Dexter Grimsley, D-Newville. (John Sharpemail@example.com).
Democratic lawmakers have repeatedly called on their Republican colleagues to expand Medicaid, citing the American Rescue Plan Act as a rare opportunity for the state to reconsider its opposition.
State Rep. Barbara Drummond, D-Mobile, said the failure to expand the program is “costing lives” in addition to gaudy economic opportunity projections. An Alabama Hospital Association study says that expanding Medicaid to include over 300,000 new recipients would bring between $2.7 billion to $2.9 billion of annual economic activity into the state.
Medicaid expansion would provide insurance coverage to people making up to 138 percent of the federal poverty limit.
“It’s the right thing to do and we should do it right now,” said Drummond.
Robyn Hyden, executive director with Alabama Arise – a Montgomery-based non-profit agency that supports anti-poverty policies – said while the finances are complicated, she believes there is enough information for lawmakers to support the latest Medicaid expansion request. She said Alabama could save over $700 million over the next two years by accepting the deal offered in the coronavirus relief package.
“It yields a tremendous benefit in state savings and all of the immediate economic development impacts (that will help pay) for doctors and nurses,” said Hyden. “We think the math has never been better.”
She said what is less known is whether gambling is a stable bet for boosting financial support for health care. Lawmakers are set to debate that various parts of the wide-ranging and ever-changing gambling and lottery package during committee hearings on Tuesday. The main aspects of the package include authorizing a lottery, six new casinos, and sports betting and an encouragement for negotiations on a compact with the Poarch Band of Creek Indians.
Even if lawmakers support a gambling provision, it will have to go to the voters for final approval. The last time voters got to decide on a lottery plan was in 1999, when they defeated a ballot initiative by 8 percentage points.
“I’m not sure what will happen with gaming and the lottery,” said Hyden. “If it passes the Legislature, it takes a constitutional amendment and a statewide (referendum). But Arise will continue to lobby the governor (for the Medicaid expansion). The best thing we could do for our health care infrastructure, including rural health care, is expand Medicaid as much as possible.”
Danne Howard, executive vice president of the Alabama Hospital Association, said her organization is pleased that Alabama lawmakers are including a provision to fund rural health care within gambling legislation. SB310, which was approved out of the Alabama Senate last month, dedicates 25% of net gaming revenue toward rural health. Gambling legislation also includes significant money to fund broadband and mental health services in Alabama.
Substitute legislation, released on Monday, increases the percentage of gambling revenues to health care to 40%. The latest version does not specify an amount to rural health care or rural hospitals.
With state lawmakers negotiating a final version of the gambling package, Howard said she is unsure what it might ultimately mean for the rural hospitals.
“We are please they are dedicating some money for the ‘provision of health care services,'” said Howard, quoting the verbiage contained in SB310. “I can tell you that I don’t know what is meant by that. But we are happy health care and the provision of those services (are included).”
Alabama State Senator Greg Albritton takes questions from the media on Thursday, April 29, 2021, at the State House in Montgomery, Ala. (John Sharpfirstname.lastname@example.org).
Albritton said the gambling legislation appears to be the only path forward for immediate health care expansion and addressing rural health deficiencies.
“That’s the only source we are going to have that is available to get the resources to deal with what we need to deal with,” he said.
Rural hospitals continue to be a concern for Alabama where seven have shut down since 2010. The percentage of rural hospitals operating in the red increased from 39 to 47 percent in the past five years leading up to the COVID-19 pandemic, which has only heightened the need for more doctors and nurses in small towns.
The Chartist Group, a healthcare analytics company, published research last year that indicated that 12 out of 45 rural hospitals in Alabama are most vulnerable to closure due to several factors that includes the lack of Medicaid expansion.
Said Drummond, “I think COVID has taken our skeletons and threw them out of the closet. It showed where our deficits are in health care. I think Republicans see the need and urgency as well. If we don’t fix health care, not only is there an economic disadvantage to do so but it will spiral in these other areas of education and jobs.”
This story was updated at 1:39 p.m. on May 4, 2021, to clarify how Medicaid expansion will work under the American Rescue Plan Act signed into law in March.