By Brandon Moseley
Alabama Political Reporter
Wednesday, August 5, the Alabama House of Representatives passed a State General Fund (SGF) budget that slashed the troubled State Medicaid program by a shocking 23 percent.
State Senate President Pro Tem Del Marsh (R-Anniston) told reporters before the House vote that he felt that it was very unlikely that the Senate would pass that budget with those levels of cuts to Alabama Medicaid.
Marsh said, “I am all about not expanding Medicaid,” but stated that he didn’t think that it needed to be cut either.
Marsh said, “My answer (to the SGF budget crisis) is shifting the Use tax, from the Education Trust Fund to the SGF…The question is: where’s the back fill,” (to make that up for the ETF).” Marsh said that he did not think that there needed to be any back fill for the ETF that, “Their growth alone will make that up.”
Marsh said that the bottom line is that, “They (the House) couldn’t pass the tax,” and he didn’t think that the Senate had any appetite for raising taxes either.
Marsh said, “Medicaid says they have already taken cuts because we did not give them an increase. I don’t see any increase in Medicaid funding.”
Medicaid currently costs the State about $700 million.
Sen. Marsh said, “Discussions are taking place. I don’t know if we are going to get there or not.”
Senator Billy Beasley (D-Clayton) said that the $156 million in Medicaid cuts, “Will have a devastating affect.”
Sen. Beasley said that $156 million in cuts really equates into really $700 million when it is coupled with the loss of the accompanying federal matching dollars. Every dollar of state money going to Alabama Medicaid produces two dollars of federal money. The Medicaid agency provides healthcare services for one million Alabamians including the most vulnerable.
Beasley said that he supported fully funding Medicaid and agreed with Alabama Governor Robert Bentley (R) when he said that the budget that the House Republicans passed, “Wasn’t workable and was not acceptable.”
Sen. Beasley warned that if the state Medicaid agency is not fully funded then hospitals, nursing homes, optometrists, dentists, pharmacies, and services that support these providers will all be impacted. Think about how many jobs are affected.
Beasley said that doctors would have to turn away patients and not treat them and that at some drug stores most of their patients are on Medicaid. Rural hospitals will have to close their doors. We can not afford for that to happen.
Sen. Beasley said that Medicaid would have to shut down adult eye care, PACE, hospice, home health, and implementation of the Regional Care organizations. We can not allow that to happen. Every member of the Alabama House and the Senate needs to search their souls. Medicaid is the one department that needs to be fully funded. We need to make sure that we fully fund it.
Sen. Rodger Smitherman (D-Birmingham) said that more than 10 percent of the population in 66 of Alabama’s 67 counties lives below the poverty line and that cuts to Medicaid would be devastating. Shelby County is the only county in Alabama without a sizable population of poor people.
On Tuesday, August 5, the Alabama House of Representatives narrowly passed House Bill 1, the State General Fund (SGF) budget, sponsored by House Ways & Means Chairman Steve Clouse (R-Ozark). The controversial budget right sizes state government to fit existing revenue by cutting the most expensive program in the SGF: Alabama Medicaid by a shocking $156 million a year.
The Senate now has to approve or modify the budget that was sent by the House. If the two sides can’t come to some sort of an agreement then this special session will have failed. None of Governor Bentley’s $302 million package of tax increases were even debated on the floor of the House and appear to be dead at this point.
Senator Marsh wants to transfer the use tax from the ETF where it is currently to the SGF where the greatest need is. State School Superintendent Tommie Bice however is warning that that could lead to proration in the schools if these optimistic projections for the 2016 fiscal year which begins on October 1 fall short. The Legislature is currently forecasting a $262 surplus in the $5.8 billion ETF and needs over $1.82 billion to fully fund the SGF. The problem is that the SGF has only $1.62 billion in projected revenues. The State has avoided dealing with this problem by using trust fund raids and stimulus dollars to cover up for the flat revenues in the SGF.
The economy since the Great Recession of 2008-2009 has left more Alabamians jobless or underemployed. This combined with massive disability fraud and the aging of the baby boomer generation means 200,000 more Alabamians qualify for the President Lyndon Johnson “Great Society” program than qualified 8 years ago. To cut $700 million in Medicaid benefits would mean offering less generous benefits to Medicaid recipients, passing more costs of the program on to beneficiaries of the program through copays and deductibles, actually doing something about rampant Medicaid fraud, and further restricting eligibility for Medicaid benefits. Alabama already has the least generous Medicaid program in the country and the federal government could try to block this level of change to the very costly program.
The Senate will take up the budget as early as Thursday.