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Alabama hospitals pitch Medicaid expansion to House committee


Alabama hospitals pitch Medicaid expansion to House committee

Mar 22, 2023 | 8:00 pm ET
By Alander Rocha
Alabama hospitals pitch Medicaid expansion to House committee
Danne Howard, deputy director for the Alabama Hospital Association, tells legislators why AHA supports closing the coverage gap in the state. (Alander Rocha/Alabama Reflector)

Republicans in the Alabama Legislature have resisted Medicaid expansion for years. 

But an Alabama House committee meeting Wednesday suggested some willingness to discuss the issue – even if a plan to do so wasn’t specifically mentioned.

The House Health Committee held what Rep. Paul Lee, R-Dothan, the chair of the committee, called an educational meeting on addressing the state’s coverage gap for people who neither qualify for Medicaid nor Affordable Care Act plans. According to Alabama Arise, a nonprofit group that works on poverty issues, about 300,000 Alabamians live in the gap.   

“It’s impossible to fix a problem and find a solution unless you understand exactly what the problem is,” he said. “And I found that it’s very important this committee understands what we’re dealing with in our state, which is all over the nation as well.”

Committee members prepare for meeting
Members of the House Health committee, including Chairman Rep. Paul Lee (far right), prepare for the informational meeting on providing coverage for the uninsured. (Alander Rocha/Alabama Reflector)

The meeting featured presentations from the Alabama Hospital Association, a longtime advocate for Medicaid expansion, and Blue Cross Blue Shield of Alabama, the state’s largest insurer. Both stated their support for expanding Medicaid and discussed not only about who the Alabamians living in the coverage gap are, but the economic benefit of providing insurance to Alabamians without.

Medicaid in Alabama mainly covers children, the elderly and the disabled. Childless able-bodied adults almost never qualify. Adults with qualifying children must make no more than 18% of the poverty line ($2,673 a year for an individual; $4,475 for a family of three) to receive Medicaid. 

Medicaid expansion would open the program to households earning up to 138% of the poverty line ($20,120 for an individual; $34,307 for a household of three). The federal government would cover at least 90% of the cost of expansion.

As of Wednesday, Alabama was one of 11 states that had not expanded Medicaid. The North Carolina General Assembly appeared poised to approve Medicaid expansion on Thursday.  

Alabamians who earn between 18% ($4,475) and 100% ($24,860) of the federal poverty rate for a family of three typically fall into this coverage gap. Subsidies for insurance plans under the Affordable Care Act are only available for those making between 100% and 400% of the poverty line, leaving those who earn less ineligible.

The Alabama Hospital Association sees Medicaid expansion as a way to help distressed hospitals, particularly in rural areas, and to address large uncompensated care expenses. Danne Howard, deputy director of the Alabama Hospital Association, said that hospitals in the state provide about $600 million in uncompensated care. Hospitals have to absorb the costs when medical bills go unpaid.

Howard said they are looking at options “for an Alabama-driven solution,” and considering other states’ approaches, with Arkansas’ expansion model being the main one. 

Howard also discussed the economics of covering the uninsured. She said that states that have expanded Medicaid have increased their labor participation.

“A healthier workforce is a more secure workforce,” she said.

Howard said about 70% of those in Alabama’s coverage gap live in a home with at least one working adult. 28,000 are food service workers, and 23,000 are cashiers. 

“When you go to the grocery store, as you bag your groceries, those who ring you up – many of those are in the same category – they are in the coverage gap,” she said.

Other workers likely to be uninsured and in the coverage gap are cleaning and maintenance workers, transportation workers, barbers and hairstylists, and those who have part-time jobs, she said.

“They do not qualify for anything. But they’re making some money. They are doing their job. They are trying to support themselves, but they don’t have enough money to pay for their college, their living expenses, and to purchase healthcare insurance,” she said.

Howard told the committee that she was once like someone in the coverage gap.  She said she only had catastrophic insurance as the single mother of a nine-year-old child about 30 years ago. Howard said she lived in fear that something might happen, even when she didn’t know what she does now.

Howard also said she was diagnosed with multiple sclerosis 20 years ago. Without insurance through her job, she would have to pay $6,000 a month for her medication. Without access to health insurance and the medications she takes, she said she probably wouldn’t have been standing there.

Ted Hosp, who oversees government relations for BCBS, said that rural areas of Alabama have a disproportionate share of the uninsured population. About 25% to 30% of people who walk into a rural hospital don’t have insurance. He also said there are about 11,000 veterans whose families fall into the coverage gap.

However, he said, that it does have an impact in the private market. He said they think a shift from the private market to the Medicaid market should be avoided, and there are ways to avoid that.

Hosp, however, declined to discuss specifics when Rep. Laura Hall, D-Huntsville, asked about the ways that it would affect insurance, deferring to Lee. 

“We need to go there. I just don’t know that we need to do that today because we are not settled or there’s not been anything put out – it would be speculation – and I rather have a clear answer for you,” Lee said.

“I would prefer a clear answer,” Hall said.