MONTGOMERY — The newest federal coronavirus relief bill's enactment has renewed calls to expand Alabama's Medicaid program.
According to early estimates, the American Rescue Plan Act of 2021 could mean an additional $940 million over two years for the Alabama Medicaid Agency if it expands. That's enough to exceed the full state cost of expanding the program for at least four years, according to expansion supporters.
That money is separate from the more than $4 billion coming to state and local governments through the massive, Democrat-pushed package.
Those who have long advocated for expanding access to Medicaid services are saying the financial incentives are too good to pass up and would help about 300,000 Alabamians living in the health coverage "gap." They earn too much to qualify for Medicaid under the state’s stringent income limit but too little to qualify for the subsidized Affordable Care Act's marketplace plans.
According to the liberal Center on Budget Policies and Priorities, the act incentivizes the 14 states that have not yet implemented the ACA's Medicaid expansion to do so quickly by increasing government funding, known as the federal medical assistance percentage, by 5% for current enrollees for two years. Meanwhile, expansion states already receive 90% federal funding, more than non-expansion states.
Alabama Medicaid covers more than 1 million low-income and disabled people, most of them children.
"Medicaid expansion is the single biggest step Alabama can take to weather and recover from the COVID-19 pandemic and move our state forward," said Jane Adams with the Cover Alabama Coalition. "Congress did their job. Now it is time for Gov. Ivey and our state lawmakers to do theirs and immediately expand Medicaid in Alabama.”
Alabama Arise Executive Director Robyn Hyden said the $1.9 trillion American Rescue Plan Act "offers budgetary breathing room for policymakers to tackle chronic problems, address longstanding racial and gender inequities and build an economy that works for every Alabamian."
Medicaid expansion could also provide a funding lifeline for many of Alabama's rural hospitals that are struggling.
"Closing the health equity gap by providing a route to health care insurance for low-income adults will have a positive domino effect for everything you can imagine," said Danne Howard, executive vice president and chief policy officer of the Alabama Hospital Association. "Access to healthcare coverage leads to a healthier Alabama, lower infant mortality rates, a stronger workforce, economic development, thriving rural communities, state budget gains, and the ability to recruit and retain providers."
A spokeswoman for Gov. Kay Ivey said the governor is "open to the discussion" but wants to study carefully the numbers to see if the state can truly afford it.
"As she has made clear, the problem has always been how to pay for it," said Gina Maiola, press secretary for Ivey. "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."
Not everyone is keen on expanding Medicaid, including conservatives who have long opposed such efforts. Phil Williams of the conservative Alabama Policy Institute said his group remains fundamentally against the idea.
"Any expansion of Medicaid would eventually become an economic strain on Alabama's already burdened General Fund," Williams said. "Medicaid currently represents one of the largest expenditures of state dollars, leaving the Legislature very little ability to appropriate with any degree of flexibility."