Medicaid spending in Alabama

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Medicaid spending in Alabama

Overview

Number of enrollees: 874,1931

Total spending: $5.5 billion3

Spending per enrollee: $4,7174

Percent of state budget: 24.1%4

Medicaid eligibility limit: 141% FPL3

Expansion?: No2

CHIP spending: $267.4 million4

CHIP eligibility limit: 317% FPL2

Data years 1March 2017 22018 32016 42015 52013

Medicaid spending in the U.S. • Medicare • Medicaid • Obamacare overview

Alabama's Medicaid program provides medical insurance to groups of low-income people and individuals with disabilities. Medicaid is a nationwide program jointly funded by the federal government and the states. Medicaid eligibility, benefits, and administration are managed by the states within federal guidelines. A program related to Medicaid is the Children's Health Insurance Program (CHIP), which covers low-income children above the poverty line and is sometimes operated in conjunction with a state's Medicaid program. Medicaid is a separate program from Medicare, which provides health coverage for the elderly.

This page provides information about Medicaid in Alabama, including eligibility limits, total spending and spending details, and CHIP. Each section provides a general overview before detailing the state-specific data.

Background

Established in 1965, Medicaid is the primary source of health insurance coverage for low-income and disabled individuals and the largest source of financing for the healthcare services they need. In 2014, about 80 million individuals were enrolled in Medicaid, or 25.9 percent of the total United States population. According to the Kaiser Family Foundation, Medicaid accounted for one-sixth of healthcare spending in the United States during that year.^[4][5][6]

The federal Centers for Medicare and Medicaid Services (CMS) monitors state Medicaid programs and establishes requirements for service delivery, quality, funding, and eligibility standards. Medicaid does not provide healthcare directly. Instead, it pays hospitals, physicians, nursing homes, health plans, and other healthcare providers for covered services that they deliver to eligible patients.^[6][7]

The Patient Protection and Affordable Care Act of 2010, also known as Obamacare, provided for the expansion of Medicaid to cover all individuals earning incomes up to 138 percent of the federal poverty level, which amounted to $16,643 for individuals and $33,948 for a family of four in 2017. A 2012 United States Supreme Court decision made the Medicaid expansion voluntary on the part of the states.^[8][9]

Eligibility

Eligibility for each state's Medicaid program is subject to minimum federal standards, both in the population groups states must cover and the maximum amount of income enrollees can make. States are required to cover the following population groups and income levels:^[9][10]

• states must cover pregnant women up to at least 138 percent of the federal poverty level ($16,643 for an individual, $33,948 for a family of four in 2017)
• states must cover preschool-age children up to at least 138 percent of the federal poverty level ($16,643 for an individual, $33,948 for a family of four in 2017)
• states must cover school-age children up to at least 100 percent of the federal poverty level ($12,060 for an individual, $24,600 for a family of four in 2017)
• states must cover elderly and disabled individuals up to at least 75 percent of the federal poverty level ($9,045 for an individual, $18,450 for a family of four in 2017)
• states must cover working parents up to at least 28 percent of the federal poverty level ($3,376 for an individual, $6,888 for a family of four in 2017)

The Affordable Care Act authorized states to expand their Medicaid programs to offer coverage to childless adults up to 138 percent of the federal poverty level, though they were not required to do so. As of November 2018, a total of 36 states and Washington, D.C., had expanded or voted to expand their Medicaid programs.Alabama had declined to expand its Medicaid program as of July 2017. Full details on Medicaid eligibility for Alabama and three of its neighboring states are provided in the table below.^[11]

Expansion under the Affordable Care Act

The Affordable Care Act (ACA) provided for the expansion of Medicaid to cover childless adults whose income is 138 percent of the federal poverty level (FPL) or below. The provision for expanding Medicaid went into effect nationwide in 2014. As of July 2017, Medicaid expansion had been approved in 31 states, including Washington, D.C.

Alabama had not expanded its Medicaid program as of January 2017. Former Governor Robert J. Bentley (R) was against Medicaid expansion as outlined in the ACA, but stated he would have considered expanding the program if "the federal government let the state control the money" and added the requirement that able-bodied enrollees must be employed. According to the Alabama Political Reporter, Governor Kay Ivey (R), who was sworn in following Bentley's resignation, also stated that she was against Medicaid expansion.^[1][2][3]

Support

Arguing in support of the expansion of Medicaid eligibility in an April 2013 article, the Center for American Progress states that the expansion helps increase the number of people with health insurance and benefits states economically. The organization argues that by providing health insurance to those who would otherwise be uninsured, Medicaid expansion allows low-income families to spend more money on food and housing:^[12]

Regarding financial costs for states, the organization argues that "states that expand their Medicaid coverage will not incur unsustainable costs," citing a Congressional Budget Office report that estimated an increase in spending of 2.8 percent. The organization also argues that states will offset these costs with increased revenues and other financial gains:

Marilyn Tavenner, President and CEO of the health insurance trade association America's Health Insurance Plans, also spoke in support of Medicaid expansion in September 2016, saying she would like to see all states expand the program. "Medicaid is going to become the bigger issue [from the] affordability perspective," Tavenner said, arguing that Medicaid expansion would pressure the country to address rising health costs.^[14]

Opposition

Arguing against Medicaid expansion in a February 2014 article, Michael Tanner, a fellow at the Cato Institute, states that Medicaid expansion is costly for states and does not provide better access to healthcare for low income individuals. Tanner argues that although states are required to pay at most 10 percent of costs for enrollees who became eligible under expanded programs, this still represents a significant cost increase for states. Tanner also argues that states will see greater costs than predicted as previously unenrolled individuals discover they are eligible under the traditional eligibility limits.^[15]

Regarding healthcare access, Tanner cites a study from the Oregon Health Insurance Exchange, which "concluded that 'Medicaid coverage generated no significant improvements in measured physical-health outcomes.'" Tanner also states that "Other studies show that, in some cases, Medicaid patients actually wait longer and receive worse care than the uninsured." Tanner argues that this is due to Medicaid's level of reimbursement to doctors:^[15]

The National Federation of Independent Business (NFIB) also advocated against Medicaid expansion in February 2017, arguing that the federal government may not always agree to cover 90 percent of the costs:^[16]

Benefits

In large part, the states "determine the type, amount, duration, and scope" of benefits offered to individuals enrolled in Medicaid, according to the Centers for Medicare and Medicaid Services. However, benefits are subject to federal minimum standards. The federal government has outlined 16 benefits that are required of all Medicaid programs:^[17][18][19]

In addition, the Affordable Care Act required that all Medicaid enrollees who became eligible under expanded programs receive coverage for prescription drugs, substance abuse treatment, and mental health treatment. Beyond the required benefits, there are several other optional benefits states may choose to offer enrollees, such as dental care and physical therapy. Other services may be offered with approval from the secretary of the United States Department of Health and Human Services. Benefits offered may not differ from person to person due to diagnoses or condition of health.^[17][19][20]

Optional benefits offered in Alabama

According to the Henry J. Kaiser Family Foundation, as of 2017, the optional benefits included in the bulleted list below were offered in Alabama. Note that other, less common specialized services may also be offered, such as nutrition services and acupuncture. For more complete information on Medicaid benefits, links to state Medicaid offices can be found here.^[19][21]

State and federal spending

Total spending

See also: Medicaid spending and enrollment statistics

During fiscal year 2016, Medicaid spending nationwide amounted to nearly $553.5 billion. Spending per enrollee amounted to $7,067 in fiscal year 2013, the most recent year for which per-enrollee figures were available as of June 2017. Total Medicaid spending grew by 33 percent between fiscal years 2012 and 2016. The Medicaid program is jointly funded by the federal and state governments, and at least 50 percent of each state's Medicaid funding is matched by the federal government, although the exact percentage varies by state. Medicaid is the largest source of federal funding that states receive. Changes in Medicaid enrollment and the cost of healthcare can impact state budgets. For instance, in Alabama, the percentage of the state's budget dedicated to Medicaid fell from 25.8 percent in 2010 to 24.1 percent in 2015. However, state cuts to Medicaid funding can also mean fewer federal dollars received by the state.^[22][23][24]

During fiscal year 2016, combined federal and state spending for Medicaid in Alabama totaled about $5.5 billion. Spending on Alabama's Medicaid program increased by about 8.6 percent between fiscal years 2012 and 2016. Hover over the points on the line graph below to view Medicaid spending figures for Alabama. Click [show] on the red bar below the graph to view these figures as compared with three of Alabama's neighboring states.^{[25][26][27][28][29]}

Spending details

In 2013, the most recent year per enrollee spending figures were available as of June 2017, spending per enrollee in Alabama amounted to $4,717. Total enrollment in 2017 amounted to about 874,000 individuals. Total federal and state Medicaid spending for Alabama during 2016 amounted to about $5.5 billion. The federal government paid 70.4 percent of these costs, while the state paid the remaining 29.6 percent. Medicaid accounted for 24.1 percent of Alabama's budget in 2015.^{[30][31][32][33][34]}

Medicaid spending can generally be broken up into the following categories:

• Acute care services are those that are typically provided within a short time frame, such as inpatient hospital stays, lab tests, and prescription drugs.
• Long-term care services are those provided over a long period of time, such as home care and mental health treatment.
• Disproportionate Share Hospital (DSH) payments are funds given to hospitals that tend to serve more low-income and uninsured patients than other hospitals.
• Payments to Medicare include covering Medicare premiums for individuals who are dually eligible for both Medicaid and Medicare.
• FFS refers to fee-for-service payments, in which doctors are reimbursed for each test and service performed.
• Managed care is the practice of paying private health plans with Medicaid funds to cover enrollees.

The largest portion—54 percent—of Medicaid spending in Alabama in 2016 went to FFS acute care. The next-largest portion of Medicaid spending in Alabama went to FFS long-term care, which comprised about 28 percent of spending. About 5 percent of Medicaid spending in Alabama was used for payments to Medicare. Hover over the sections in the column chart below to view more data points for Alabama and three of its neighboring states.^[35]

Children's Health Insurance Program

The Children's Health Insurance Program (CHIP) is a public healthcare program for low-income children who are ineligible for Medicaid. CHIP and Medicaid are related programs, and the former builds on Medicaid's coverage of children. States may run CHIP as an extension of Medicaid, as a separate program, or as a combination of both. Like Medicaid, CHIP is financed by both the states and the federal government, and states retain general flexibility in the administration of its benefits.^[36]

CHIP is available specifically for children whose families make too much to qualify for Medicaid, meaning they must earn incomes above 138 percent of the federal poverty level, or $33,948 for a family of four in 2017. Upper income limits for eligibility for CHIP vary by state, from 175 percent of the federal poverty level (FPL) in North Dakota to 405 percent of the FPL in New York. States have greater flexibility in designing their CHIP programs than with Medicaid. For instance, fewer benefits are required to be covered under CHIP. States can also charge a monthly premium and require cost sharing, such as copayments, for some services; the total cost of premiums and cost sharing may be no more than 5 percent of a family's annual income. As of January 2017, 14 states charged only premiums to CHIP enrollees, while nine states required only cost sharing. Sixteen states required both premiums and cost sharing. Eleven states did not require either premiums or cost sharing.^{[9][36][37][38][39]}

As of 2017, Alabama served CHIP enrollees through a separate program. Its upper eligibility limit was 317 percent of the FPL, meaning a family of four had to make less than $77,982 per year to qualify. The state imposed both premiums and cost sharing beginning at 141 percent of the FPL. Below is a table with some general information about CHIP in Alabama, including spending figures, the state's federal match percentage, and enrollment in the program. These data points are compared with those of its neighboring states.^{[40][41][42][43][44]}

Historical data

Enrollment

Dual eligibility

See also: Medicaid and Medicare dual eligibility

Recent news

The link below is to the most recent stories in a Google news search for the terms Medicaid Alabama. These results are automatically generated from Google. Ballotpedia does not curate or endorse these articles.

See also

• 

  Healthcare policy in Alabama

• 

  Effect of the Affordable Care Act in Alabama

• 

  Alabama state budget and finances

Medicaid in the 50 states

Click on a state below to read more about the Medicaid program in that state.

Footnotes

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