Next year Alabama will not expand Medicaid as proposed by the federal health care reform law, the Affordable Care Act, instead opting to restructure the program first. Meanwhile, the law will also cut federal payments to health care providers who treat the uninsured, regardless of the state’s decision.
The result could mean hospitals in Alabama will face increased costs to care for the uninsured, health industry experts say. And with 18,163 uninsured residents in Calhoun County — 15.6 percent of the population according to the Census Bureau, higher than the state average of 14.3 percent uninsured — hospitals here could be even harder hit.
Next year, the federal government will begin expanding Medicaid to millions of adults while covering 100 percent of the cost for the next three years for the states. However, Gov. Robert Bentley has said he will not expand Medicaid before the state’s program is reformed. The state Legislature is currently considering a bill to restructure the program.
Yet, at the same time, the Affordable Care Act will reduce, by $18.1 billion, the federal money used to reimburse hospitals for uncompensated care to all states between 2014 and 2020.
“The original idea is there will be less need for these funds because more people will be covered by Medicaid,” said Rachel Garfield, senior researcher for the Kaiser Family Foundation, a nonprofit research group that focuses on health care issues facing the country.
But with Alabama apparently opting out of the Medicaid expansion, at least for the foreseeable future, the cuts could pose a financial burden for area hospitals, Garfield said.
“That will mean less help for these hospitals,” Garfield said.
Paige Powell, assistant professor of health care management at the University of Alabama at Birmingham, agreed that not expanding Medicaid could be a problem for area hospitals.
“Hospitals in general could be negatively impacted,” Powell said. “By not expanding Medicaid, for hospitals and other facilities, there may be a tightening of resources.”
Rosemary Blackmon, vice president of the Alabama Hospital Association, said hospitals in the state know first-hand the costs associated with caring for patients without insurance.
“By not having coverage and by usually waiting until the last minute when their condition is at its worst and since most are seen in emergency rooms, the care is much more costly,” Blackmon said. “And the care is not usually as good as it could have been if they had coverage.”
Blackmon said, however, that her organization is committed to working with Bentley to reform the state Medicaid system and make it more efficient.
“And once that is done, we’re hoping we can go back and expand the system,” Blackmon said.
Powell noted that some of the burden on Alabama and area hospitals might be lifted next year by the introduction of insurance exchanges, marketplaces in which low-income residents can buy potentially more affordable insurance. Insurance exchanges are another provision of the Affordable Care Act.
“People will have the potential to get premium subsidies so they can purchase insurance through the exchange that is somewhat more affordable,” Powell said.
Garfield said, however, that the subsidies do not apply to the poorest residents below the poverty level. The Affordable Care Act expected that those residents would gain Medicaid, but Alabama will not have that expanded coverage, Garfield said.
“So that means people with the least means to purchase insurance will be left out,” Garfield said.
David McCormack, CEO of Regional Medical Center in Anniston, which provides millions of dollars in uncompensated care every year, said he is concerned about the decision not to expand Medicaid.
“There is still a window for Gov. Bentley to change his mind ... we’re certainly hoping he does change his mind,” McCormack said.
McCormack said a decrease in uncompensated care funding would likely not mean a decrease of services at the hospital, but a readjustment of spending.
“We’ll just have to tighten our belts a little bit and we’ll have to be a little more efficient,” McCormack said.
Staff writer Patrick McCreless: 256-235-3561. On Twitter @PMcCreless_Star.