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Economy

Sewell calls on state to expand Medicaid to shore up rural hospitals

Brandon Moseley

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Congresswoman Terri Sewell, D-Selma, called on the state of Alabama to expand the Medicaid program on Tuesday.

Sewell made the remarks during a hearing of the House Ways & Means Committee. Sewell drew on her visit to Sumter County’s Hill Hospital last week to highlight the dire state of Alabama’s rural hospitals and the need to expand Medicaid.

“Last week, I had the fortune of visiting one of my rural hospitals in Sumter County, Alabama,” Sewell said. “Over 90 percent of this hospital’s patients are either on Medicaid or Medicare or are uninsured – 90 percent. Our state Medicaid program reimburses these hospitals at about 10 percent of emergency room costs in some cases, and Medicare doesn’t reimburse higher than 67 percent of costs. First and foremost, our states need to expand Medicaid. We know that nearly 90 percent of rural hospital closures have occurred in states that had not expanded Medicaid before the closure.”

“It’s very important that we put politics aside and help hospitals and citizens in states that have been left behind by their state leaders’ decisions not to expand Medicaid,” Sewell continued. “At the same time, we cannot expect our rural hospitals in non-expansion states to survive if the Medicare program continues reimbursing for hospital services at bare-bone levels. … I look forward to working with my colleagues on this committee, specifically Congressmen Ron Kind, Adrian Smith, Jodey Arrington and others to modernize the way we reimburse rural hospitals and health care providers.”

Sewell’s office said Medicaid expansion would allow Alabamians making up to $23,336 per year for a household of two, or 138 percent of the poverty level, to receive health care they can afford. Some 320,000 Alabamians would benefit, and, by extension, hospitals would see increased reimbursements from an increased insurance population. Because many of those who would be impacted by Medicaid expansion live in rural parts of the state, rural hospitals especially stand to benefit from expansion.

To incentivize Gov. Kay Ivey and the Alabama Legislature to expand the program, Sewell introduced legislation earlier this year to allow states that expand Medicaid to receive a 100 percent federal match for the first three years, 95 percent for the fourth year, 94 percent for the fifth year, 93 percent for the sixth year and 90 percent for each year thereafter, regardless of when they decide to expand. Under current law, states that have not yet expanded Medicaid have missed the window to receive a full federal match for any amount of time.

Sewell’s legislation has not passed the House of Representatives yet, and it is doubtful that it would pass in the Republican controlled U.S. Senate and be signed by President Donald Trump.

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Former Gov. Robert Bentley’s decision not to expand Medicaid is saving Alabama taxpayers an estimated $176 million a year, now that the initial federal match would have run out. Congress has transferred an estimated $110 million a year to the state’s long beleaguered state general fund budget in Children’s Health Insurance Program costs beginning in the 2021 budget, with the state absorbing an estimated $48 million hit in the 2020 budget.

The federal courts and the Justice Department are also demanding that the state address the long neglected overcrowded and understaffed Alabama Corrections system. Properly staffing the prisons, providing more mental health services, better healthcare and the cost of building new prisons could cost the SGF an additional $100 to $130 million a year going forward beginning in 2021. There are still severe mental health needs that have not been properly addressed by the state.

Given the Alabama Constitution’s bizarre system of accounting and earmarking, it is almost impossible for legislators to transfer funds from the education trust fund — where all the income tax dollars are earmarked — to the $2.1 billion SGF where Medicaid, prisons, mental health, the courts and 70 other state agencies are funded. An effort to create a state lottery that would have added as much as $166 million to the SGF was defeated in this session due to some legislators’ insistence that at least half of the money go to education, even though the ETF’s funds are at an all time high.

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Some legislators have told the Alabama Political Reporter that expanding Medicaid is not feasible, and even if the federal government picked up the first three years of the cost of expansion, that would only be kicking the can down the road.

The problem that rural hospitals face is that many of the small rural counties are hemorrhaging population. Sumter County had a population of 17,131 in 1984, after peaking at 32,710 in 1900. Since then the population has plummeted to just 12,687, the smallest population for the county in Census records which go back to 1840 when 29,937 lived there. Sumter County has a tiny population and an average household income of just $21,663. Residents often have to travel to Meridian or Tuscaloosa to see a specialist.

Sewell is a member of the Ways & Means Subcommittee on Health and represents Alabama’s Seventh Congressional District.

Brandon Moseley is a senior reporter with eight and a half years at Alabama Political Reporter. You can email him at [email protected] or follow him on Facebook. Brandon is a native of Moody, Alabama, a graduate of Auburn University, and a seventh generation Alabamian.

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Economy

New unemployment claims continue to drop

Micah Danney

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(STOCK PHOTO)

There were 11,692 unemployment claims filed in Alabama last week, down from 17,439 the previous week, according to the Alabama Department of Labor.

Seventy-six percent of the claims from July 26 to Aug. 1 were related to COVID-19, according to the Alabama Department of Labor. That compares to 89 percent the week before.

New claims increased over the first half of July but declined in the second half.

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Economy

Alabama Power is returning $100 million to customers

Brandon Moseley

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The Alabama Public Service Commission approved a plan Tuesday to credit Alabama Power Company customers on their October bills. The move returns approximately $100 million to Alabama Power Company customers.

“Putting money back into the pockets of hard-working Alabamians is one of the ways we can help on the road to recovery,” Public Service Commission President Twinkle Andress Cavanaugh said on social media. “Alabama Power to refund $100 million to customers.”

The typical Alabama Power customer will receive a $25 credit on their October bill. The newly approved credit is on top of a 3 percent rate reduction that customers are already enjoying in 2020. This previous rate cuts and the October credit amount to about $300 million in savings for Alabama Power customers this year.

“We appreciate the commission voting today to expedite this credit for our customers,” said Richard Hutto, Alabama Power’s vice president of regulatory affairs.

The global economic collapse due to the COVID-19 pandemic has hurt people across Alabama. It has also dramatically lowered fuel costs for Alabama Power Company’s plants.

A typical residential customer using 1,000 kilowatt-hours of electricity per month is expected to receive a credit of $25. Customers who use more energy will receive a larger credit. Customers who use less power receive a smaller credit but had a smaller bill to begin with. Adjustments to fuel costs are typically calculated at the end of the year, with savings passed to customers beginning in January, but due to the economic downturn and pandemic-related job losses, Alabama Power and the PSC are rushing that money to Alabama families and businesses.

“Many of our customers have been hurt by COVID-19. We hope this credit will provide some additional relief at this difficult time,” Hutto explained.

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The 3 percent rate reduction, that took effect in January, was based on earlier estimates of lower costs for fuel and other expenses for 2020. The rate reduction alone equates to about a $4.50-per-month reduction for the typical residential customer.

“Our employees are working every day to keep costs low while providing industry-leading reliability for our customers,” Hutto added.

Alabama Power said in a statement that their total retail price is below the national average and has been for decades. When adjusted for inflation, the price customers pay for electricity is lower today than it was 30 years ago.

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Alabama Power has been assisting customers in other ways during the COVID-19 outbreak. Since the start of the pandemic, the company has suspended disconnects and late payment fees for customers hurt by the coronavirus.

Cavanaugh is seeking another term as president of the Commission.

“It is crucial that we have strong pro-jobs conservatives supporting President Trump’s agenda at all levels of government,” Cavanaugh said on social media.

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Economy

Payroll Protection Program deadline has been extended to Saturday

Brandon Moseley

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Congresswoman Martha Roby, R-Montgomery, this week reminded business owners that the deadline to apply for the Payroll Protection Program, knowns as the PPP, has been extended to Saturday.

“The Small Business Administration’s Paycheck Protection Program (PPP) application deadline was recently extended to Saturday, August 8,” Roby wrote in an email to constituents. “Do not forget to fill out your application if you are a small business that has been impacted by the Coronavirus pandemic.“

The PPP was a loan program administered by the Small Business Administration. It was part of the bipartisan CARES Act to address the economic collapse caused by the COVID-19 global pandemic and the forced economic shutdowns, which were implemented in the early months of the public health emergency in an attempt to slow the spread of the novel strain of the coronavirus and allow public health agencies and health care systems time to build up testing, contact-tracing and hospital bed capacity.

The PPP loans are 1 percent interest loans available through the SBA. If the business uses the money to make payroll and pay standard operating expenses then the loans will be forgiven. Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease. The loan forgiveness form and instructions include several measures to reduce compliance burdens and simplify the process for borrowers.

The PPP has been very popular, so much so that that program ran out of money just weeks after Congress passed it. Congress had to go back and provide more funding for the PPP.

Businesses can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union and Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating in the program.

Senate Democrats are meeting with the Trump Administration, Senate Republicans and House leadership on a compromise plan for a fifth coronavirus relief package. A big point of contention has been the size of the total package. Speaker of the House Nancy Pelosi, D-California, supports a $3.2 trillion coronavirus relief bill while Republicans prefer a more modest $1 trillion relief bill. The two sides are expected to continue to negotiate through Friday in an attempt to reach a compromise before the August recess.

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Roby is serving in her fifth term representing Alabama’s 2nd congressional district. She is not seeking re-election.

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Economy

State’s unemployment claims slowed last week

Last week saw the lowest number of new claims since the week-to-week number first spiked from 1,824 to 10,982 when the lockdown started in mid-March.

Micah Danney

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(STOCK PHOTO)

The number of unemployment claims in Alabama slipped last week after increasing through the first half of July.

There were 17,439 claims filed from July 19 to 25, according to the Alabama Department of Labor. Of those, 15,461, or 89 percent, were COVID-19 related.

Claims soared at the start of the pandemic in late March, hitting a weekly high of 106,739 in the first week of April. The rate of new claims declined sharply in May, with each week counting under 30,000 claims.

Since then, the number has decreased somewhat steadily. Claims rose several thousand over the course of this month, from 19,058 in the week ending July 4 to 23,678 in the week ending July 18.

Last week saw the lowest number of new claims since the week-to-week number first spiked from 1,824 to 10,982 when the lockdown started in mid-March.

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