Alabama Hospital Association: Two new studies support Medicaid Expansion

By Amy Yurkanin | ayurkanin@al.com

The Alabama Hospital Association released two reports last week laying out almost $3 billion in financial benefits for expanding Medicaid – a step state leaders have declined to consider since the Affordable Care Act ( also known as Obamacare) passed in 2010.
Leaders of the hospital association held a press conference at the Renaissance Ross Bridge Friday morning to tout the findings. The organization has been one of the strongest supporters of Medicaid expansion in Alabama, claiming the move would benefit hospitals and patients.
David Becker, a professor in the UAB School of Public Health, created similar reports in 2012 and 2016 – when federal funds covered all the costs of expanding Medicaid to low-income adults. The match is down to 93 percent this year and will drop to 90 percent in 2020, where it will remain.
Owen Bailey, CEO of USA Health, said the deal still makes sense for Alabama.
“It’s obvious that by expanding Medicaid, the state would have a huge return on investment,” Bailey said. “For every one dollar the state provides, we will get nine dollars to match it.”
Becker’s study found that implementing Medicaid expansion now would be costlier for the state than it would have been in 2014 because of the loss of federal matching dollars and the increased cost from low-income patients who purchase insurance through the exchange. Bailey said 12 hospitals have closed in Alabama in the last eight years.
“The state did miss out on the deal of the century,” Becker said. “I don’t have a time machine. All we can do is look forward. The case for expansion remains very strong.”
Medicaid expansion is one part of Obamacare, which also created regulations on health insurance and subsidies to purchase private insurance. Alabama is one of 14 states that have not expanded Medicaid. Residents of Utah, Nebraska and Idaho recently voted to expand Medicaid in statewide referenda.
Alabama’s lack of action has kept millions in federal dollars out of the state that could help support rural hospitals that often care for the sick and uninsured, said Don Williamson, president of the Alabama Hospital Association.
“Hospitals and healthcare are every bit as important for infrastructure as roads are,” Williamson said. “Otherwise they are building roads to communities that are dying because their hospital has closed.”If Alabama expanded Medicaid, the program would grow to cover adults who earn up to 138 percent of the federal poverty level. Currently, the program only covers caregivers of people on Medicaid who earn less than 20 percent of the poverty level. The change in Alabama would add more than 300,000 people to the Medicaid rolls, according to the study.
That expansion would cost Alabama $227 million in 2020, according to Becker’s calculations. The state would receive nearly $2 billion in funds from the federal government that year.
The other study, by consulting company Manatt, said the state could pay up to $216 million in additional costs and get more than $2 billion from federal sources. The state would save additional money in other areas, including medical care for prisoners, Williamson said.
The Alabama Hospital Association has submitted similar reports in 2012 and 2016. Williams said they are hopeful legislators will give expansion serious consideration this year. He said unsuccessful votes to repeal Obamacare and midterm successes by Democrats running on healthcare show the law has staying power.
“For a lot of people, there was a belief that Obamacare was going to disappear,” Williamson said. “The last election has pretty much taken repeal and replace off the table. The number of states, including some very Republican states have gone to expansion and they are seeing the benefits. Our hope is that the reality that this is going to be here, that it’s not going away, will become clear to Alabama lawmakers.”