By Brandon Moseley
Alabama Political Reporter
On Wednesday, May 4, the Alabama Legislature met for the last time in the 2016 Regular Session. Even though the legislature level funded the troubled Alabama Medicaid Agency in the 2017 State General Fund (SGF) budget at 2016 levels, Governor Robert Bentley (R) insisted that Medicaid will need $85 million more in 2017 to continue to offer the same level of benefits that it offers now and to implement the Regional Care Organizations (RCOs) plan that the legislature passed in 2012, but did not fund. The Alabama Hospital Association is urging Gov. Bentley to call the legislature back to increase funding for the troubled program.
The Alabama Hospital Association wrote in a statement, “Ignoring the issue is not an option. A special session to find long-term sustainable funding is not an option, it’s a must. Alabama’s hospital leaders implore the Governor and the Alabama legislature to make the difficult but responsible decision to support initiatives that will preserve the state’s healthcare infrastructure – for every Alabamian.”
On Thursday, April 28, the Alabama House of Representatives passed a plan that would have raided much of the BP oil spill settlement money to pay for road work as well as provide $55 million in one time money so that Alabama Medicaid would not have to implement benefits cuts in the 2017 fiscal year, which begins on October first. That plan went to the Senate where it failed to get out of committee.
Afterwards Alabama Chapter of the American Academy of Pediatricians called on state lawmakers to begin work on finding a new Medicaid funding solution before the beginning of the next fiscal year.
The President of the Alabama Chapter-American Academy of Pediatrics, Cathy Wood said, “We are deeply saddened that time ran out on the legislature before lawmakers were able to find a compromise to fund Alabama’s Medicaid program. Either of the two BP settlement bills would have gone a long way toward guaranteeing that pediatricians across the state would be able to maintain the current levels of care for all Alabama children. As a result of the legislature’s inability to find a funding solution, it is likely that families on Medicaid and private insurance will find it more difficult to see a physician in their community as early as this Fall. We are hopeful that Governor Bentley and state legislators will work together before the next fiscal year to reach a compromise that reassures Alabama families that the level of medical care they currently receive will be unaffected.”
Cathy Wood, MD, FAAP, is a pediatrician at Partners in Pediatrics Clinic in Montgomery.
In 2012 the rapidly escalating costs of the Alabama Medicaid program and the long neglected Department of Corrections, led the legislature to pass a one time raid of $437 million of the Alabama Trust Fund (ATF) where the State’s oil and gas royalties have been deposited for the previous 30 years. That raid subsidized the SGF budget until 2016. When that raided one-time money was exhausted the legislature passed over $64 million a year in tax increases on cigarettes, prescription drugs, and nursing homes and transferred approximately $66 million a year in use taxes from the Education Trust Fund (ETF) to the SGFs. That reportedly is not enough and the costly program, which has doubled in cost since 2010, needs even more Alabama tax dollars. Some conservatives suggest that it is time to begin implementing cuts to the benefits. The Alabama Hospital Association has argued that if there are cuts to Medicaid many of Alabama’s struggling rural hospitals will close.
Many healthcare provider groups and the road builders are calling on the State to never pay back the 2012 raid of the Alabama Trust Fund even though Gov. Bentley and the legislature promised voters in 2012 that they would implement cuts to pay back the plan. State Treasurer Young Boozer (R) wants the State to use the one-time BP oil settlement money to pay down the nearly $800 million in debt that it has accumulated. Gov. Bentley wants to not pay back the $437 million owed to the ATF and borrow a $billion for one-time spending. The BP money would be used to pay down that new debt. Bentley also wanted to borrow $800 million to build four new mega prisons. That would have been funded out of current SGF revenues. The legislature also considered passing a massive bond issue to fund road projects using higher fuel taxes to pay off that bond issue. None of the bond issue plans passed the legislature. The issue of what to do with the BP oil settlement revenue remains unresolved.
Medicaid pays for over half of the births in Alabama and insures almost half of Alabama’s children. Approximately 25 percent of the program goes toward paying for the nursing home care of Alabama seniors.