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Red state governors tout economic success of Medicaid expansion

Bill Britt

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Montana’s Gov. Steve Bullock presented a report in early January that shows Medicaid expansion has added $270 million to the state’s economy annually since its passage in 2015, according to The Great Falls Tribune.

“I think that it’s time we finally fully recognize the value of Medicaid expansion is as much for Montana businesses as it is for the Montanans receiving health care,” Bullock said.

Montana’s success — as well as Idaho’s recent decision to expand the health insurance program for low-income individuals — may serve as a model for Alabama.

Alabama is one of 14 mostly southern, conservative states that have not expanded Medicaid under the Affordable Care Act, President Barack Obama’s 2010 health care law.

Alabama Attorney General Steve Marshall was one of several Republican attorneys general who sued to overturn the law in a case that is still pending appeal.

Meanwhile, Alabama has witnessed the closing of six hospitals since 2011, according to the Alabama Hospital Association. They have warned that the closures could get worse as more cuts are anticipated later this year.

Hospitals that rely on so-called disproportionate share hospitals payments — or DSH  — are barely operating in the black, and it wouldn’t take much to put them in the red.

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“If the state has not expanded Medicaid in 2020, as the DSH cuts are scheduled to take effect, that will close a significant number of hospitals,” said Danne Howard, the association’s chief policy officer in December. “That will cripple. That will be the straw that the hospitals can’t survive.”

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Louisiana’s expansion of Medicaid in 2016 resulted in a $1.85 billion direct economic impact, according to an April 2018 report. It has also led to the creation of 19,000 new jobs.

Three deep-red states — Idaho, Nebraska, and Utah — joined the 32 expansion states through ballot initiatives in November 2018. Solid majorities in each conservative state voted for the measure. Three other states — Kansas, Wisconsin and Maine — elected Democratic governors who are likely to push expansion.

Should Medicaid expansion be on the 2019 legislative agenda? Experts say it has to be

Recent estimates show that between 235,000 to 300,000 people in Alabama would gain access to Medicaid if the state were to accept federal funding to expand Medicaid. In 2018, the federal government paid 94 percent of the cost of Medicaid expansion. That funding will drop to 90 percent by 2020, but will remain at that level going forward.

A UAB School of Public Health study found that expansion would cost the state about $770 million over the first seven years in costs, but could potentially result in $20 billion in economic growth over the same time period.

In her inaugural speech, Gov. Kay Ivey eluded to tackling health care but didn’t address Medicaid expansion directly.

A look at other issues Ivey touched on in inaugural address

Senate President Pro Tempore Del Marsh, R-Anniston, said in an interview that expansion is unlikely to be on the agenda for the 2019 legislative session.

Former chairman of the State Senate Health Committee Gerald Dial in an Op-ed said that if the state doesn’t expand Medicaid, “More hospitals will close.”

He also pointed out that beyond the six rural hospitals that have already closed, 88 percent of the remaining rural facilities are operating in the red.

“Many have had to eliminate services, cut staff and if nothing changes, a number of them will likely have to close their doors,” Dial said. “And when a community loses its hospital, it also loses doctors, pharmacies, and other providers, devastating the community not only in terms of access to health care but in job and economic losses.”

Opinion | Retiring Republican state senator: Alabama should expand Medicaid

Ivey’s administration is riding high both in her personal approval rating and with the state’s booming economy. The governor seems poised to use her political capital to move the state forward despite political considerations.

Economic gains in Montana and Louisiana could convince a majority of the state’s conservative lawmakers that expansion is a winning proposal. Mississippi, another deeply conservative state, also appears ready to move forward with a version of the expansion.

Republican lawmakers are expected to impose work requirements on social welfare benefits in the coming legislative session. Some say this is a precursor to expanding Medicaid.

 

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