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Two remaining bills need Senate passage to avoid Medicaid budget crisis

Chip Brownlee

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Two companion bills needed to balance the General Fund Budget and keep Alabama’s Medicaid Agency solvent still need to be passed in the Alabama Senate.

As the Legislature heads into what is expected to be the final day of the 2018 legislative session, the bills — which would extend existing taxes and surcharges on nursing home beds and private hospitals — are expected to be up on the Senate calendar.

Together, the two taxes produced nearly $375 million in revenue last year for Alabama’s Medicaid Agency, according to their fiscal notes. An additional $17 million could come in next year because the proposed bills increase the assessment rate on private hospitals by a quarter of a percent.

The money is used to pay state matches for inpatient and outpatient Medicaid recipients.

Without the revenue, Alabama’s Medicaid Agency could lose nearly a billion dollars in federal funding, leaving a gaping hole in the agency’s nearly $7 billion annual budget. The federal government currently pays about 70 percent of Alabama’s Medicaid costs. For every dollar the state puts into the program, it gets about $2.35 in federal match money.

The Medicaid assessment on private hospitals and the taxes on nursing home beds, which amount to more than $2,500 annually on each licensed nursing home bed in the state, are set to expire later this year if they aren’t renewed.

The bills were passed in the House in February, but Sen. Trip Pittman, R-Montrose, the chair of the Senate Finance and Taxation General Fund Committee, held the bills in committee for a month.

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The two bills were reported out of committee Tuesday night and are expected to be on the Senate’s Wednesday calendar.

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