Medicaid Expansion Would Provide Economic Benefits for Alabama

Dec 14, 2018 at 12:04 pm by steve

Danne Howard

Editor's note: Last month we covered the Alabama Hospital Association's campaign to expand Medicaid in Alabama and how expansion would improve access to care. This month we continue the coverage with a discussion about the economic benefits expansion would bring to the state's healthcare providers.

"Medicaid is a complicated subject," said Danne Howard, executive vice president and chief policy officer of the Alabama Hospital Association (AHA). "And unfortunately, there's a lot of misinformation out there. Under the current program, the majority of those covered are children or the aged, infirm or disabled. Most people don't understand that."

The AHA campaign,, is intended to educate the public, healthcare providers and elected officials about the benefits of expanding Medicaid in Alabama. Medicaid expansion would also include the working poor who are currently in a gap, earning too much to qualify for Medicaid, but not enough to afford health insurance. The AHA estimates an additional 300,000 Alabamians would have health coverage as a result.

Expansion would also have significant economic impact for the state, according to Howard, including healthcare providers. "Alabama has great job numbers, but those jobs are not translating into more people with health insurance, and the uninsured rate of patients in the ER has gone up," she said. "If we continue on the current trajectory, more hospitals are going to have to cut back services and have layoffs.

"When more people are covered and have access to care, it creates more opportunities for providers, whether that be physicians or hospitals, to provide services. The more providers who are getting reimbursed, the more who are willing to see those patients," said Mark Jackson, Medical Association of the State of Alabama executive director.

Jackson said Alabama primary care physicians are reimbursed at a reasonable rate under Medicaid because of a "primary care bump" the Alabama legislature has kept in place. "Under the Affordable Care Act, the legislation required that Medicaid reimburse primary care physicians at the Medicare rate," he said. "In Alabama, that was significantly higher than what Medicaid had been paying. That provision expired after two or three years, but Alabama kept that bump in place. Now we have to work on the specialty rate, so specialists will be more willing to take Medicaid patients."

Howard also pointed to the economic importance Medicaid expansion will have with rural hospitals. The campaign website says "Investing in the rural health care infrastructure is critical as Alabama works to improve rural prosperity. Alabama's rural hospitals are an anchor in their communities‒creating jobs, providing critical care, and supporting other industries. When a rural hospital closes, other mainstays in the community often follow - local pharmacies, physicians, banks, and grocery stores to name a few. When a rural hospital closes, it's very difficult to attract new business. Rural hospitals in Medicaid expansion states are less vulnerable. Expansion states have seen fewer hospital closures than non-expansion states. In fact, hospitals in expansion states are 84 percent less likely to close than hospitals in non-expansion states."

Rural hospitals are not the only beneficiaries, however. "In Alabama, 75 percent of all hospitals have red operating margins, meaning their reimbursement is not enough to cover the cost of care," Howard said. "It's 88 percent for rural hospitals. Alabama hospitals do an amazing job, considering the obstacles, but what business can continue to operate on that kind of margin? When you have that volume of hospitals struggling to make ends meet, to keep the lights on, to make payroll, to purchase and be participants in advancements in medicine and diagnostic technology, and one thing we can do to help is provide insurance coverage to more people, how could we not do that? It's an investment we cannot afford to miss."

For more information about the campaign, visit

The site provides information about the positive effect expansion could have on Alabama's economic infrastructure:

  • AL Hospitals have $20 billion annual economic impact.
  • Hospitals employ 90,000 people statewide and support an additional 96,000 jobs.
  • Good health care is critical in recruiting new businesses and keeping existing ones.
  • Medicaid is a vital part of Alabama's health care system. It supports thousands of jobs and billions of dollars in the health care sector.
  • Without Medicaid, many providers (hospitals, doctors, pharmacists) could not survive, leaving communities without access to health care.

The Alabama Medical Association completed a study in partnership with the American Medical Association (AMA) earlier this year. Here's what they found:

  • Physicians in Alabama generate an estimated 101,000 jobs across the state
  • Physician practices generate an estimated $565 million in state and local taxes
  • One physician generates on average 10 additional jobs
  • One physician generates $839k in total wages and benefits
  • One physician generates $1.9 million in economic output

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May 2024

May 21, 2024 at 01:33 pm by kbarrettalley

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