Lawmakers briefed on health insurance expansion plan

MONTGOMERY — A few dozen Alabama lawmakers heard a presentation over the weekend on "ALL Health," a proposed, Alabama-specific plan to use Medicaid expansion dollars to offer private health insurance to low-income families through a public-private partnership.

The presentation, obtained by Alabama Daily News, was made by the Alabama Hospital Association in Hoover. It outlined a proposal to provide health care coverage to as many as 260,000 uninsured Alabamians.

"We've been working for more than a year to try to come up with an Alabama-specific plan to close the coverage gap that would be both cost effective and sustainable, with a lot of the fears of 'how are we going to pay for closing the coverage gap' now answered in this," Danne Howard, AHA deputy director and COO, told Alabama Daily News Monday.

"It's a private-public partnership that would be unique and specific to the state of Alabama, and not cost the state any money at all for what we think will be maybe more than 10 years."

Under the plan, Alabamians making up to 138% of the federal poverty level — $20,783 a year for an individual as of January — would be eligible for full Medicaid benefits but would receive coverage through a private insurer.

Current Medicaid eligibility in Alabama is among the most strict in the country, with parents and caretaker relatives only eligible for the program with incomes of up to $370 a month for a family of three.

The coverage gap has emerged recently as a workforce development issue, due to survey data showing that fear of losing Medicaid benefits is one factor keeping low income Alabamians from seeking employment.

Where the plan would differ from traditional Medicaid expansion plans is that many of those newly insured would be covered through health care plans on the private marketplace, subsidized in large part through federal dollars.

Awarded to states that expand Medicaid under the guidelines of the Affordable Care Act, those federal dollars, according to the AHA, would cover 100% of the expansion costs for a minimum of five years, though likely 10 years.

AHA projects that, if adopted, the "ALL Health" plan would provide coverage for an additional 260,000 Alabamians at a cost of $1.22 billion over five years. Under this base projection, however, the state would receive more than $1.5 billion in federal funds, which include additional federal dollars provided under the 2021 American Rescue Plan Act for states that expand Medicaid.

Including all federal incentives, the AHA projects that Medicaid expansion costs could be fully covered by federal dollars for up to 10 years.

"It's hard to predict in any area what 10 years from now looks like, but what we can say with total certainty is that the plan put together will be of no cost to the state for at least five years," Howard told ADN.

In the presentation, which was also heard by Alabama hospital CEOs and board members, the AHA also argued for the financial benefits that flow to state that expand Medicaid, citing poor health as a significant factor in the state's low labor participation rate, which currently sits at 57.2%, well below the national rate of 62%.

Expanding health insurance coverage, the AHA argued, could also reduce state health spending on incarcerated Alabamians, whose health care costs could be offset with the influx of federal dollars.

Legislation is not required to adopt the plan; rather, the governor could grant the Alabama Medicaid Agency permission to enter negotiations with Centers for Medicare & Medicaid Services to expand its program.

Howard said that in the coming weeks, the AHA will meet with Gov. Kay Ivey's staff to present their plan.

Alabama Democrats have advocated for Medicaid expansion for years, whereas Republicans have largely opposed the measure, often citing its cost. House Speaker Nathaniel Ledbetter, R-Rainsville, however, has recently floated the idea of expanding Medicaid through a private-public partnership, very much in line with the AHA's new plan.