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House Cuts Medicaid by 23 Percent

By Brandon Moseley
Alabama Political Reporter

Wednesday, August 5, the Republican controlled Alabama House of Representatives passed a controversial state General Fund (SGF) budget that if actually passed and implemented will have enormous impacts on both low income Alabama households and the Alabama healthcare industry.

The four biggest payers of medical bills in the state of Alabama are: Medicare, Medicaid, Blue Cross Blue Shield, and the military’s Tricare for Life. A 23 percent cut to Medicaid affects an awful lot of people in Alabama.  An estimated million Alabamians get Medicaid benefits.

Arise Citizens’ Policy Project policy director Jim Carnes issued a written statement on Wednesday in response to the Alabama House’s passage of a SGF budget that would cut state Medicaid funding by 23 percent. Carnes said, “A budget is more than a balance sheet. It’s a statement of our values. And the Alabama House’s decision today to gut Medicaid sent a stark message to a million Alabamians: Your health coverage doesn’t matter.”

Carnes said, “The House voted to balance the General Fund budget on the backs of the most vulnerable Alabamians: children, seniors, and people with disabilities. The plan would set our State’s health system and economy on a dangerous course. Dozens of hospitals could be forced to shut their doors, and every Alabama community would see its quality of life decline.”

Some legislators, including Senate President Del Marsh, support fixing this budget situation by transferring the use tax from the Education Trust Fund (ETF). State Representative Ed Henry (R-Hartselle) said in a statement on Facebook, “Today’s fight is going to be over the General Fund Budget. After a small group of Republicans killed the tax measures yesterday House leadership came out with a new budget cutting all agencies 5 percent and cutting Medicaid approx 25 percent.”

Rep. Henry warned, “I am afraid it is an attempt to force us back into a special session to only focus on Medicaid, which you will see commercials of Hospitals closing and grandparents being kicked out of nursing homes. Under that kind of pressure a majority of the legislature would raise your taxes. The Education Budget will still have an excess of $370,000,000 FY2016 (We only need $225 million) but certain people in key positions would rather raise taxes than use that excess.  Very hard decisions to be made today.”

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The Alabama Foundation for Limited Government opposes moving money from the ETF to grow programs like Alabama Medicaid in the SGF. Foundation President former Senator John Rice (R) wrote, “It appears that if Governor Bentley does not get his way in raising taxes, that he is going to try to raid hundreds of millions of dollars from the Education Trust Fund to pour money into Medicaid and caring for inmates or letting them go. Education funding has already been cut $1 billion over the past seven years, and Alabama has had more education funding cuts than any state in the country. If Alabama wants to attract high paying jobs to grow, then Alabama doesn’t need to take away education money. Putting money in education is an investment into Alabama’s future. Taking away money from education to put into Medicaid and prisons is throwing good money after bad. Gov. George Wallace told me in 1983 when I was in the legislature that Medicaid is a black hole that can never be filled. Swiping money from education to throw down a black hole is backward thinking.”

The members of the House Black Caucus opposed the proposed cut of $156 million to the Alabama Medicaid Agency in the State General Fund Budget for FY 2016.  Black Caucus members debated the proposed cut for hours and appeal to the membership of the House of Representatives to work together to identify a more appropriate solution.

On Tuesday, an attempt by House Ways and Means General Fund budget committee Chairman, Representative Steve Clouse (R-Ozark) to raise taxes on cigarettes to pay for level funding Medicaid was defeated in committee when four Democrats on the Committee voted with four Republicans to defeat the tax increase 8 to 7. Conservative Republicans want to balance the budget through cuts alone and Democrats are refusing to support any taxes without legalizing gaming and lottery legislation. House Republicans then united to balance the budget by cutting $156 million from the state’s Medicaid program for the next budget year.

State health officials claim these cuts will devastate Alabama’s Medicaid program, resulting in the loss of critical services. Programs offering hospice, outpatient dialysis, prosthetics, orthotics, eye care and other services will be eliminated as a result of the cut. In December 2014, more than 1 million Alabamians were eligible for Medicaid.

Chairman of the House Black Caucus John Knight (D-Montgomery) said, “Today, an unconscionable choice was made to gamble with the lives of men, women and children across this state to balance the General Fund Budget on the backs of our state’s most vulnerable citizens. This vote effectively terminates Medicaid in the State of Alabama, and it virtually decimates our health care infrastructure.”

Medicaid insures poor seniors, half of the children in the state, most pregnancies in the state, poor families, and the poor disabled. The Medicaid situation has worsened partially due to new Obamacare rules which prevents Medicaid eligible persons from being able to buy alternative insurance through Obamacare.

In addition to the loss of $156 million of its $700 million in state appropriation, Medicaid will lose at least $650 million in matching funds.

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Arise Director Carnes said, “This isn’t a game. People’s health and livelihoods are at stake. We urge the Senate and Governor Bentley to block this reckless maneuver. It’s time to restore good sense to the budget process and make Alabama stronger.”

The budget passed the House 46 to 44 after it was brought back for reconsideration.  The House had earlier defeated the measure 46 to 45.


Brandon Moseley is a former reporter at the Alabama Political Reporter.

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