If Alabama would choose to expand Medicaid under the federal Affordable Care Act, the state could gain about $1 billion in new tax revenue, according to two well-respected University of Alabama at Birmingham health care economists. That was the finding reported in a study released last month. In the most likely scenario, some 300,000 more state residents would be covered under an expansion, according to David Becker and Michael Morrisey at the UAB School of Public Health. UAB, which has the largest hospital in the state and one of the largest public hospitals in the country, released the report saying the research was a “win-win” for the state and Medicaid-eligible patients. Dr. Becker said in a UAB press release:
Across the first seven years of Medicaid expansion, the net budgetary effect is positive throughout. In a very real sense, the state makes money while expanding coverage to nearly 300,000 Alabamians.
Gov. Robert Bentley has said he wants to see cost-saving measures and more flexibility for the state before deciding on any expansion. Under the federal law, the federal government will cover 100 percent of health care expenditures from 2014 through 2016. So for three years it would cost almost nothing. As I understand it, during these first years of the program, Alabama would only be responsible for a share of the administrative costs of the expansion. The federal matching rate declines after 2016, falling gradually to 90 percent in 2020. As a result, the annual costs to the state increase from $39 million in 2014 to $222 million in 2020 for a total over the years of $771 million. It’s rather hard to understand how Alabama can afford to say no on this issue.
The federal expenditure during that time would be an additional $11.7 billion more on Medicaid in the State of Alabama. This would be new income coming into Alabama. It was pointed out recently that when doctors, hospital employees, pharmacists and other employees in the health care sector receive these new dollars, they likely will spend the money on things like groceries, gasoline, and clothes. But the real benefit – if the program is run right – will be a healthier Alabama.
I have great respect for Gov. Bentley and believe that he has done a very good job as governor during some tough times. But I hope he will reconsider his position on Medicaid. If the Medicaid program in Alabama is broken in any respect, I suggest we fix it. But turning down the extension of Medicaid, which would make Alabama better, isn’t the route to take. I believe we can improve the overall health of Alabamians by taking advantage of the needed funding and by making sure the Medicaid program works properly and efficiency.
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