The cost versus benefit of Medicaid expansion in Alabama

Apr 9, 2020

An APR News Feature --Part of an innovative collaboration between Alabama Public Radio, the commercial newsroom at WVUA23-TV, and the University of Alabama's Center for Public Television.

Alabama lawmakers are looking at short-term and long-term plans on how to keep Alabamians safe as Coronavirus plagues the state. Some now say expanding Medicaid is one option that needs to be considered. 

“I think that it’s time that people really speak up and demand that the state of Alabama invest in people’s healthcare coverage,” Alabama Democratic senator Doug Jones said.

He’s been calling for Medicaid expansion in the state since 2017, when he ran for a seat in the U.S. Senate. He said the move would give health insurance benefits to over 300,000 Alabamians who currently don’t have coverage.

Alabama U.S. Senator Doug Jones
Credit APR

“There’s been resistance to that because it is a project that costs money. The state has to match some,” Jones said. “I don’t think we can afford not to, and I think this crisis, now expanding Medicaid, it gives us the perfect opportunity to try and do that right now. So that we can not only get the money coming in, but we can get some health insurance for folks who are wondering 'What am I going to do if I get sick?'”

But some Alabama lawmakers like Republican state senator Cam Ward say expanding Medicaid right now isn’t realistic.

“I think the issue is this,” he said “One, we have to meet to be able to expand Medicaid. Two, with the budget uncertainty, with all the businesses closing, where do you come up with the $155 million we’re going to need to have for the first year of expansion?”

But Jones is pushing back against critics of expansion. He said enough time has gone by with lawmakers dragging their feet.

"With all due respect to my friend Cam, that’s just an excuse,” Jones said. “They’ve met for the last three years, they’ve met for the last seven years. They could get this done. The governor could do it by executive order too, if she had the blessing of the legislature or the leadership down there. This could get done."

So what would Medicaid expansion look like, and how quickly would a plan be put into place if Governor Kay Ivey and the Alabama Legislature agreed to it?

"Part of it depends on the length of time the Centers for Medicare and Medicaid Services take to approve new plan amendments from the state,” said Linda Blumberg, an institute fellow in the Health Policy Center at the Urban Institute. “And there we’ve seen a lot of variation, too, but we have seen that CMS can move extremely quickly when they decide to do that. So depending upon the capacity of the state, and the ability to modify IT systems, it could be a matter of a few months, potentially, if everything moves smoothly.”

Blumberg is pushing for Medicaid expansion, but said for some states like Alabama that haven’t expanded, lawmakers could get caught up in the dollars and cents. Right now under current law, Alabama would need to cover 10% of the costs associated with the expansion.

"In the first three years of the implementation of the ACA, states could expand and have it fully paid for by the federal government,” she said. “And then over a number of years, the cost phased up to 10%. Right now, if you expand as a late-expanding state, you’re expected to start paying 10% of the total cost immediately.”

Critics of expansion like Ward say Alabama can’t come up with the funds required to get the job done.

Alabama State Senator Cam Ward
Credit Camward.com

“We’re required to have a balanced budget,” Ward said. “We can’t deficit spend. The feds they can just print that money and do it. We can’t do that. We’re not allowed to do that under our constitution.”

But Jones sais the benefits far outweigh the upfront cost of expanding. One possible benefit is the billions of dollars being pumped into the state’s economy.

Jones is urging state lawmakers to look past the dollar and cents and think of the most vulnerable Alabamians getting hit hardest by the coronavirus pandemic, like Susan Ellis’s family. Ellis is the executive director of People First. The organization advocates for Alabamians with developmental and intellectual disabilities, like her son, Matthew. She said her family is just one of many affected by the COVID-19 pandemic. Ellis said she also worries about health care workers during this chaotic time.

“Our department of mental health is one of the states that applied for an 11-35 waiver,” Ellis said, “which will help with some of the emergency needs of people who are receiving home and community-based services like our son, Matthew. He has a Medicaid waiver, but right now, we don’t really need another person in our home. That person is losing wages. It’s a domino effect.”

Blumberg said expanding Medicaid would not only relax eligibility limits for uninsured Alabamians. But, it would help the healthcare system as a whole and the workers it employs.

“So the more people that we can get covered now, for whatever their needs are, a Medicaid expansion for example, the more we’re relieving the financial stress that is exploding now on our healthcare system,” Blumberg said.

She said it could take up to three months to see the effects of Medicaid expansion in the state. But Jones said he thinks lawmakers could make it happen sooner.