Senate's proposed Medicaid cuts worry Alabama health care providers

Brian Lyman | Montgomery Advertiser

Alabama health care organizations and advocacy groups Thursday expressed concerns about possible cuts to Medicaid in the Senate health care bill, saying it could affect hospitals and pediatric offices.

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The Senate version of legislation to repeal the Affordable Care Act appears to make even deeper cuts to federal funding for Medicaid than a version that passed the U.S. House of Representatives in May. That could mean trouble for Alabama’s health care system, which relies on Medicaid.

“Our initial impressions are that it’s going to be devastating for Alabama’s hospitals, our Medicaid, our health care delivery system,” said Danne Howard, executive vice president and chief policy officer for the Alabama Hospital Association.

Requests for comment were sent on Thursday to the offices of U.S. Sens. Richard Shelby and Luther Strange, both R-Alabama.

Medicaid covers over 1 million Alabamians, despite strict coverage requirements. Childless able-bodied adults almost never qualify. Parents of children eligible for Medicaid can receive benefits if they make 18 percent of the poverty line – about $3,629 a year. The program chiefly covers children – who make up more than half of recipients – the elderly and the disabled. The program covers about half the births in the state and plays a major role keeping hospitals open and pediatricians seeing patients.

“A large portion of their practice is Medicaid,” said Dr. Cathy Wood, president of the Alabama chapter of the American Academy of Pediatrics. “It’s getting harder and harder to provide care in rural communities generally, just because of medicine in general. Take away the financial security of saying these patients are going to be funded, and you’re going to get fewer and fewer.”

The federal government and the state split the costs of the program. The state has struggled to pay for its share, due to rising costs and legislators’ unwillingness or inability to raise taxes or create new revenues for the General Fund. But the federal match is generous: Alabama gets about $2.35 from the federal government for every state dollar it spends. The Alabama Medicaid Agency says the state in fiscal year 2015 received $4.1 billion from the federal government for the program.

The bills in Congress would drop the match and replace it with a per capita block grant that would provide a fixed amount of money per enrollee. The House version would have used 2016 as a baseline, which could cut funding to the state because Alabama already spends less on Medicaid than other states and did not take a Medicaid expansion.

The Congressional Budget Office has yet to score the bill and its specific effects. According to The Washington Post, the Senate version would put the block grants in place in 2021 and would allow them to grow more slowly than the House version, which could mean deeper cuts.

The loss of federal money would require the Alabama Legislature to raise taxes to replace the lost funds, or reduce services. The Republican-controlled bodies have never shown any willingness to increase taxes. That would likely mean cuts to the program, which could extend waiting times for patients, even those with private insurance, and lead to closures of hospitals and primary care practices, particularly in rural areas that count on Medicaid.

Kimble Forrister, executive director of Alabama Arise, a group which works on poverty issues, called the bill “bad for Alabama and bad for America” in a statement.

“The Senate bill would be devastating for children, seniors, working families, and people with disabilities across Alabama,” the statement said. “This mean-spirited plan would slash Medicaid and force millions of low and middle-income Americans to pay more for insurance that covers less.”

Howard said with few services offered by Alabama Medicaid already, the state would have to cut reimbursements to doctors in Medicaid or adult prescription services, which she called “unconscionable.”

Strange and his opponents in this summer’s Senate primary have, for the most part, expressed wariness about block granting Medicaid but not said if that would be a deal killer for them. Wood said providers were uneasy at the thought of Montgomery having fewer dollars for health care, and more control over how it’s spent.

“It seems like if you had federal participation the way we had it, there was some security there,” she said. “It made us feel like ‘OK, we can scratch here.’ The federal government holds the state government accountable. Now it may not.”