Bentley to Congress: Keep funding for Medicaid, hospitals

Jan. 19--If Congress moves forward with health care changes, Gov. Robert Bentley wants the states to have more power to determine eligibility and benefits for Medicaid recipients, end federal marketplaces for health insurance and replacement of the individual mandate for health insurance with incentives for enrollment.

But in a letter to House Majority Leader Kevin McCarthy, R-Calif., Bentley also asked Congress to maintain federal funding for the Alabama Medicaid and the Children's Health Insurance Program (CHIP). The governor also asked for at least 18 months to put in place any changes approved by Congress.

"Repealing the Affordable Care Act without a clear replacement could raise concerns among insurers nationwide and cause some to withdraw from the market, limiting consumer choice," the governor wrote in the Jan. 13 letter.

Health care provides a large stage for Alabama's tense mix of hostility to and dependence on the federal government. While Bentley and other Republicans in the state have denounced the ACA, over 166,000 Alabamians signed up for an insurance plan in an ACA marketplace through the end of 2016. In a statement, Alabama Arise, a group that supports the Affordable Care Act, also noted that the law prevented insurers from denying coverage for pre-existing conditions and allowed children to stay on their parents' health insurance plans until age 26.

"More than 2 million Alabamians have pre-existing conditions that would have made it hard or impossible for them to get full coverage before the ACA lifted coverage caps and guaranteed their access to insurance," the statement said. "And the ACA has significantly reduced the number of uninsured young Alabamians by allowing 35,000 of them to remain on their parents' plans until age 26."

Medicaid is even more critical to the state's health care. Eligibility requirements are strict. Able-bodied adults without children almost never qualify. Those with children only qualify for benefits if they make about 18 percent of the poverty line -- about $3,629 a year for a family of three. Benefits are also minimal.

Despite the limits, more than 1 million Alabamians, the majority of them under the age of 17, qualified for Medicaid last June. Medicaid is also crucial to the operations of doctors' offices and Alabama hospitals. Bentley called the Legislature into special session last summer to find additional revenue for the program.

The federal government pays more than two-thirds of the cost of the program, and Bentley asked Congress to maintain that match in his letter to Congress. But state legislators have found it harder to come up with the state's share out of the Alabama General Fund. The budget's revenue sources, most of which post flat growth, have been unable to keep up with rising costs in the program. Some legislators have suggested that cutting eligibility for the program might be a way to reduce costs.

The state's hospitals had been uneasy about scheduled reductions in Disproportionate Share Hospital (DSH) funds, or federal funds for uncompensated care. The revenue is particularly critical for the state's rural hospitals, the vast majority of which operate in the red.

The ACA as passed would have phased out the DSH payments. The law counted on an expansion of Medicaid eligibility to anyone making 138 percent of the poverty line ($16,394 a year for an individual; $33,534 for a household of four) to make up the difference. But when the U.S. Supreme Court ruled in 2012 that states could decline Medicaid expansion, hospitals in states like Alabama -- where leaders refused the expansion -- faced the loss of a key revenue source and possible closing.

The federal government delayed the implementation of the DSH cuts several times. Bentley's letter asked Congress to prevent them entirely. Danne Howard, executive vice president and chief policy officer for the Alabama Hospital Association, said Thursday that message on DSH payments was a message they brought to the state's congressional delegation.

"It's the answer to preventing things from getting worse," she said. "But it's not the answer for addressing everything going right now."

Congress may also consider turning Medicaid into a block grant program, which could reduce the amount of money available to the program and which many in the health care industry oppose. The governor did not address the matter in his letter but wrote that states should have the ability to reduce their Medicaid spending if Congress cuts federal funds for the program.

Bentley also asked Congress to continue support for CHIP and to continue funding money for primary care providers to stay in the Medicaid program.

The Kaiser Family Foundation, a Washington D.C.-based nonprofit that studies health care issues, has been reviewing similar letters sent to Congress by governors.

Robin Rudowitz, the associate director of the Kaiser Family Foundation's Program on Medicaid and the Uninsured, said in a phone interview that Bentley "raised important issues around DSH and CHIP" and that many other governors shared those concerns.

"All states have extended coverage for children above the minimum requirements in the federal law," she said. "All states go above those minimums."

At the same time, Rudowitz noted that states "have a great deal of flexibility" in determining things like payments to doctors, while noting that all states "have taken advantage of various options."

"I think these letters were structured to ask the states about what flexibility they would want," she said. "It didn't say what would you be willing to trade off."

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