The costs and savings of pandemic-era Medicaid expansion in Alabama

AHA president, governor speak on coronavirus, Medicaid

MONTGOMERY, Ala. (WSFA) - The current public health crisis will be one of the greatest tests for Alabama’s health care infrastructure. As a result, a growing chorus of advocates are urging state leaders to take the long-delayed action of expanding Medicaid.

“Medicaid expansion to us, both personally as a physician and on behalf of my hospitals, is critically important,” stated Dr. Don Williamson, M.D., Executive Director of the Alabama Hospital Association.

Prior the pandemic, Medicaid expansion would have provided health insurance for more than 300,000 residents, according to a host of studies. That number is likely now around half a million, given recent job and insurance loss, which poses dire financial consequences for hospitals and health care providers.

“We see clear data now that infant mortality rates are lowered in states that have expanded Medicaid, because women have better access to prenatal care,” Williamson explained. “We see breast cancer diagnosed earlier, hence reducing the death rate due to breast cancer. We see diabetes, being diagnosed earlier. We just see a general improvement in life expectancy and health outcomes associated with people having access to health care, and Medicaid is the vehicle for a large number of our of our citizens who are currently uninsured to get that access to health care.”

Around 25 percent of the state’s population qualifies for Medicaid, more than half are children. Currently Alabama receives a 73 percent funding match from the federal government to cover Medicaid expenses. With expansion, that match would increase to 90 percent, but with some associated costs. The state budgeted $752 million for Medicaid in FY 2019. Expansion would cost an additional $168 million during the first year. That number could drop as low as $50 million with savings and revenue increases in the years to follow, according to some in the health care community.

Costs remain Alabama Gov. Key Ivey’s chief concern surrounding expansion. She says a revenue source must be identified to cover the increase before the state could move forward.

Advocates argue Alabama has already paid a high price for not expanding Medicaid when the federal government offered a zero percent state match. 13 hospitals, the majority in rural Alabama, have closed since 2011. Williamson says the pandemic has only highlighted the health disparities across the state, noting some populations have no insurance, no local access to medical care, and poorer health outcomes as a result.

“There’s a recent analysis of some 10,000 patients published by CDC just last weekend and what it found was that minority citizens are more likely to die under 65 years of age due to COVID and their white counterparts,” he explained. “One of the hypothesized reasons, was because many of them lacked health insurance and delayed coming because they wanted to avoid the health care expenses.”

The New England Journal of Medicine recently published an article citing expansion states increased Medicaid spending by 24 percent, which was largely covered by the federal government.

“We also found no evidence that Medicaid expansion forced states to cut back on spending on other priorities, such as education, transportation, or public assistance, despite frequent assertions by opponents of expansion that the policy would inevitably have such harmful effects,” the article cited. “Given these realities — and the fact that existing Medicaid expansions have not produced the dire effects on state budgets that critics predicted — there is no moment in recent memory more critical than now to bolster Medicaid.”

Williamson noted that expansion is credited for improving non-health-related outcomes as well.

“In states that have expanded Medicaid, we see credit scores have improved for citizens. We see the risk of bankruptcy decline in for citizens in states that have expanded Medicaid,” he said. “And if you look at what it does with jobs, we have clear data that Medicaid expansion has increased jobs, certainly in the pre-COVID era, at least in expansion states.”

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