In 2018, one of the signature components of then-Democratic gubernatorial nominee Walt Maddox’s campaign was to expand Medicaid.
It wasn’t a new idea. Former Gov. Robert Bentley flirted with the idea as governor, but eventually dismissed it.
Maddox argued “free money” would benefit the state by not just helping those who are disadvantaged, but it would also bolster the state’s economy by providing an economic stimulus.
At the time, his opponent — Gov. Kay Ivey — dismissed Maddox’s overtures as “misguided.”
Then, Ivey defeated Maddox by 20 points.
One would have thought Maddox’s electoral drubbing would be the death knell for Medicaid expansion in Alabama.
Not so fast.
Earlier this month, State Sen. Jabo Waggoner, R-Vestavia Hills, commented that the Legislature shouldn’t necessarily close the book on Medicaid expansion. While Republicans aren’t likely to support Medicaid expansion, its eulogy may have been a bit premature.
At a minimum, the idea is on life support.
First of all, what is Medicaid? It’s a federal government program that provides health care coverage to so-called low-income individuals. Eligibility is determined by each state. In Alabama, an individual’s income level must not exceed certain defined limits based largely on family size.
Why expand it? Proponents argue it could be the antidote to the problems plaguing Alabama’s rural hospitals, seven of which have closed in the last eight years.
If this idea gains traction, the Legislature would expand the Medicaid rolls by raising the eligibility income limits. If more people are covered, theoretically they would use more health care services, including rural hospitals. With more customers, there would be more cash flow, and that would make the Alabama rural hospital model financially sustainable and less likely to close.
That’s in theory. There are a lot of other reasons Alabama’s rural hospitals have closed beyond not having expanded Medicaid. Populations in rural areas are shrinking. People are dying off, or they are moving away from a lot of small towns in Alabama to seek better opportunities elsewhere. Without people to serve, there is no need for some of those hospitals.
The Medicare Wage Index, which determines a hospital’s payment from the Medicare program, favors other states with higher standards of living than Alabama.
Expanding Medicaid may or may not bring any of those hospitals back, and that is part of the gamble.
However, there is a disconnect. Alabama’s economy seems to be thriving. Every jobs report the Alabama Department of Labor releases shows shrinking unemployment. Gov. Ivey is hosting a ribbon-cutting or ground-breaking ceremony every other week.
If the economy is doing so well, why is the overall number of hospitals in Alabama on the decline? Shouldn’t the number of hospitals be increasing to serve a population allegedly with employer-based health insurance or more money in their pockets?
There are some market factors to consider. Alabama does not exist in a vacuum. Other states have already expanded Medicaid and have reaped the benefit of additional federal funding. It only stands to reason that hospitals in those states that have expanded Medicaid can pay nurses and physicians more. Why would that physician or nurse remain in Georgiana, Alabama, when they could go to a hospital in Oakdale, Louisiana, and earn a lot more money?
In a perfect world, we would have none of that. With government involved, there are market disruptions that go beyond state line boundaries, which could force the hands of a lot of states to join the Medicaid expansion brigade.
However, there are a lot of reasons not to join that brigade.
Republicans are in charge of Alabama. They were elected because they support conservative principles. Ideologically, they cannot be intellectually consistent and support the expansion of government.
Morally, while Republicans who control the levers of power in Montgomery don’t want people to suffer without access to health care, most strive to decrease the reliance of people on government assistance. Such an expansion — telling people who are currently self-sufficient to get on the government dole — would violate that ethos.
The dollar cost, however, seems to be the biggest hang-up for the GOP. Should the state government lower the eligibility requirements, the federal government would offer up a massive cash infusion, potentially $3 billion by 2023, for an upfront state investment of $25 million, according to Alabama Hospital Association President and CEO Dr. Don Williamson.
Williamson made his claims on Alabama Public Television last week. He added that the state’s match would only be 10 percent and that the number was set into the future “as far as we can see.”
If the federal government giveth, it can taketh away.
Republicans in Washington, D.C., have long had their eyes on repealing the Affordable Care Act, or “Obamacare.” Similarly, Democrats aren’t shy about their goals to entirely remake the American health care system. What if this expanded Medicaid offering is taken away for something either party deems to be the greater good?
That’s why this would be a gamble. If tomorrow Ivey and the GOP-led Legislature say let’s go ahead and expand it, they could be on the hook for maintaining these lower requirements (ironically allowing higher incomes to qualify for government assistance) if our federal government changes its mind.
In America’s history, we have rarely seen the government offer an entitlement and then take it away. Once people grow accustomed to something, they expect it to continue in perpetuity. Should that happen, the state of Alabama could be on the hook for a lot more than it initially bargained.
Ultimately, our elected leaders will be forced to make a difficult decision on Medicaid expansion, but it won’t be without some consequence. It’s not just “free money.” It has sad implications for traditional American self-reliance, and it won’t be without gambling on the future.
This page is available to subscribers. Click here to sign in or get access.
It looks like you are opening this page from the Facebook App. This article needs to be opened in the browser.
iOS: Tap the three dots in the top right, then tap on "Open in Safari".
Android: Tap the Settings icon (it looks like three horizontal lines), then tap App Settings, then toggle the "Open links externally" setting to On (it should turn from gray to blue).