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API Says $710 Million Estimate is Likely Low

Brandon Moseley

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On Wednesday, December 2 the ‘Alabama Political Reporter’ reported that the Alabama Policy Institute (API) had warned state decision makers that expanding the expensive Alabama Medicaid program would cost tax payers another $710 million over six years. That is in addition to the $1.9 billion a year that the state already spends each year paying for its federally mandated share of the state’s Medicaid program.

The article brought up the question of where exactly API got those numbers.

api2On Wednesday, API’s Senior Policy Counsel, Andrew A. Yerbey wrote to the ‘Alabama Political Reporter’: “One point of clarification: The estimates that we reported regarding Medicaid expansion—namely, that it would cost $710 million and make 300,000 more people eligible—are estimates that the government has made, not that API has made. Indeed, we suspect that those estimates are underestimated.”

Yerby continued, “Our argument is that the government’s estimates, already immense and prohibitive, are furthermore unreliable. That is, such estimates have increasingly been shown to have been wildly wrong in states that have expanded Medicaid.”

In Alabama Governor Robert Bentley’s (R) first term there was no more staunch opponent of Obamacare. Bentley told reporters then: “We simply cannot afford it (the Medicaid expansion).” Now the Alabama Media Group’s senior writer, Chuck Dean, is reporting the Doctor Governor Bentley is leaning toward announcing that the state will expand the state Medicaid program even though the early dollars the federal government put up to lure state’s to expand the Great Society social program are about to expire.

Yerby referenced an Associated Press article by Christina A. Cassidy in which the AP is reporting that more than a dozen states that opted to expand Medicaid under the Affordable Care Act have seen enrollments in the program surge way beyond the optimistic projections. Their state budgets will have to absorb the enormous extra cost when the federal government begins to roll back its current level of support in 2017.

Cassidy is reporting that in Kentucky 2014 enrollments were more than double the number originally projected, with almost 311,000 newly eligible residents signing up…..and more people signing up for the free healthcare coverage going forward.

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36 states, including the District of Columbia, expanded (or plan to expand) Medicaid on average they saw enrollments increase by 28.2 percent. That could be worse in Alabama where household incomes, labor force participation rates, and the current Medicaid benefits all trail the national average.

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California has 2.3 million additional people on its Medicaid rolls, which is almost three times the number that state experts had predicted when they were considering the expansion.

Critics of Medicaid Expansion, like API, fret over the costs of expanding the program, which is both the largest line item in the federal budget and the largest program in Alabama’s struggling State General Fund budget.

Proponents still extoll the benefits of Medicaid expansion and the Affordable Care Act. Greater Birmingham Ministries wrote on their website: “. The equalization of access to affordable insurance along with protection for the state’s poorest citizens through the Medicaid safety net brings universal healthcare a step closer to reality. This is why GBM is a staunch supporter of both the Affordable Healthcare Act and Medicaid expansion.”

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