Alabama Governor’s Refusal to Expand Medicaid Will Cost State Billions of Dollars


Alabama Governor Robert Bentley’s refusal to expand Medicaid under the Affordable Care Act will leave hundreds of thousands of Alabamians without health insurance and increase spending, a new study shows.

Alabama is one of fourteen states that have chosen not to expand Medicaid, the federal-state program that provides health insurance to low-income families. The Affordable Care Act provides support to expand Medicaid to include families that earn up to 138% of the federal poverty level. The federal government will pay 100% of the costs for expanding Medicaid beginning in 2014 through 2016, and then gradually decrease support to 90% beginning in 2020.

A new study by the nonprofit research group, the RAND Corporation, shows the decision rejecting the expansion will cost these 14 states $1 billion more in spending on uncompensated care in 2016 alone, plus $8.4 billion annually in federal payments, and leave 3.6 million people without health insurance. The study’s authors found that expanding Medicaid is “in the best economic interests of states.”

In Alabama, Medicaid expansion would mean health care for about 300,000 additional people, most of whom will otherwise remain uninsured. Researchers at the University of Alabama at Birmingham School of Public Health estimate the expansion would generate nearly $20 billion in new income, which would mean $1.7 billion in additional tax revenue in state and local governments across the state.

David Bronner, the long-time head of the Retirement Systems of Alabama, estimated that the expansion would create 35,000 jobs and add as much as $20 billion in economic development for Alabama. “Economically how can we turn this money down,” he said in a recent speech. “It would impact every county in this state economically. But far more important it would affect 330,000 Alabamians who need better medical care.”

Experts estimate that expanding Medicaid in Alabama would save 550 lives each year.

Alabama’s governor, a doctor, rejected the Medicaid expansion option after the United States Supreme Court ruled that states can refuse to participate in that part of the new health care law. A recent poll shows that 64% of Alabama residents support expanding Medicaid to cover more low-income adults.