A December 2017 Federal Reserve Bank of Atlanta publication titled “Atlanta Fed Explores Rural-Metro Economic Divide” begins by noting, “In the Southeast, the Sun Belt [economic] boom feels as distant as the polar ice caps.” In other words, in our region of the country two economic worlds exist: one urban, the other rural. One prospering, the other languishing.
Metropolitan Statistical Areas or MSAs — a county or counties with a core urbanized area of at least 50,000 people — throughout the Southeast are turning into hubs of economic growth and activity. As these urban economies expand, they are becoming population magnets as well. According to the Atlanta Fed, 86 percent of the Southeast region’s population live in MSAs. This is up from 75 percent in 1990 and 53 percent in 1970.
Yet despite the significant increase in urbanization and the attendant positive economic gains, there are still more than 7 million people living in rural areas. These areas are far from being places of economic opportunity and growth — quite the opposite. Alabama and Mississippi, the Atlanta Fed notes, “remain uncommonly rural.” As a consequence, the economic despair in the rural areas of these two states is particularly acute.
Poverty hovers over them like a cloud. Held in place by low education levels and meager incomes, this cloud of poverty shows few signs of dissipating. In rural locales throughout Alabama, the rays of economic opportunity and advancement are perpetually hidden.
However, methods for breaking through the dense cloud of economic hopelessness have become clearer. According to Atlanta Fed Economic policy analysis specialist Ellie Terrey, “It appears that an important factor in keeping rural residents out of the workforce is poor health.”
Concurring, Lesley McClure, outgoing regional executive at the Atlanta Fed’s Birmingham branch, observed earlier this year, “Alabama’s rural areas continue to struggle. In fact, it’s hard to see much of an [economic] recovery at all in many places. Several rural hospitals have closed, and it’s really hard to attract business when you can’t offer health care.”
Fifty-three of Alabama’s 67 counties are considered rural. More than 40 percent of Alabamians live in rural areas. Throughout our state, quite a few have to contend with formidable obstacles when it comes to seeing their prospects for economic opportunity and upward social mobility realized.
To change their fortunes and seriously tackle the entrenched poverty in our state, research has shown three crucial areas must be comprehensively and strategically addressed: health care, education and safety-net programs. Done well, these can serve as a ladder out of the deep poverty with which many Alabamians contend. Done poorly, they can make their plight worse. It seems as though we are pursuing the latter.
Take health care, for example.
When the Affordable Care Act was passed, it offered states the option to expand Medicaid, with the federal government picking up the lion’s share of the tab. Groups such as the Alabama Hospital Association implored state leaders to adopt the expansion. However, these entreaties have been met with steadfast refusal, with predicted outcomes.
Since 2011, six rural hospitals have closed in Alabama and others are currently operating on life support. Remember, the Federal Reserve has noted, as have other governmental entities and public policy organizations, the critical role that access to health care plays in lifting individuals out of poverty.
Donald Williamson, M.D., the former state health officer, stated, “rural hospitals not only contribute to the health and wellness of their local residents, but also to the overall strength of the community’s economy. Hospitals are usually one of the largest employers in their counties … and every hospital job creates additional jobs in the local area.”
Despite such counsel, we refuse expansion.
According to the nonprofit Kaiser Family Foundation, Medicaid expansion in Alabama would allow an extra 200,000 Alabamians to receive health insurance. These would be low-income workers who make too much to qualify for Medicaid yet can’t afford private plans. The expansion would provide them the access to preventive care and other medical services that are so critical to ensuring workforce participation and overall longevity in the workforce. These are key components of economic stability and future upward mobility. Despite such facts, we refuse expansion.
Now, in a move that seems utterly counterproductive and will undermine health care opportunity for those in areas that need it most, the state of Alabama is looking at adding work requirements for those who meet the already stringent requirements to receive Medicaid here.
On the surface it appears cut and dry. Yet, as many policy observers have pointed out and the data show, such a change would significantly impact female heads of households in rural areas. As it is, able-bodied adults who are single with no kids or couples with no kids cannot qualify for Medicaid in Alabama. Parent(s) of children who do qualify must make 18 percent of the federal poverty level or less. For a family of three, that equates to a yearly income of no more than $3,676, or $312 per month.
The new work requirement does not include funding for child care, transportation or job training services, which will most surely be needed if the goal is to truly provide a path to economic self-sufficiency. In their current form, the new requirements would serve to drive many Alabamians deeper into the abyss of economic despair.
As Arise Citizens’ Policy Project officials told state leaders: “Because Alabama has not expanded Medicaid to cover adults with incomes below the poverty level, the state’s work requirement plan would create a Catch-22 that forces people into the coverage gap. … That would leave thousands of Alabama parents in a no-win situation: they would lose their Medicaid coverage if they don’t work — and also if they do. … Threatening loss of health care in an attempt to force work efforts, without providing the supports that would make those work attempts successful, is flagrantly cruel and will result in no outcome other than poorer, more desperate and less-healthy Alabama families.”
If our goal is to truly bring economic opportunity, upward mobility and self-sufficiency to areas of Alabama and citizens of the state that have been deprived of it, let’s implement sound policy — not policy that only perpetuates misery and despair.
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