Funding Medicaid in the meantime

I have recently gotten comments on Left in Alabama that Medicare for All is a no go and I should do something practical instead. I disagree strenuously, and would like to point out that a “both/and” approach is better. Since we are stuck for at least the next couple of years with our fragmented, expensive and disparate system, I have some thoughts on funding Alabama Medicaid while we wait.

I propose a bill for the 2013 session. This one will be a little more complicated– let’s work out some details here and then find a sponsor. Please help me find any possible holes. I expect opposition will prevent it from passing this year, but we could get it on the option list now.

The ACA has penalties for large employers if their employees apply for and qualify for subsidized policies on the Exchange to start in 2014. There is speculation that because the penalties are cheaper than insurance, some people who now have insurance through work will be pushed to buy policies on the Exchange instead.

What’s missing? No penalty if employees or their children qualify for Medicaid!

So here’s my idea. For any business receiving state or local incentives or tax breaks starting in 2014, there will be penalties if employees and/or dependents qualify for Medicaid (except for disability, because that is federal and we don’t want to discourage hiring folks who are disabled). This includes both part and full time workers, as well as seasonal workers.

The penalty will equal the average age adjusted cost to Alabama Medicaid for a nondisabled person, prorated for less than full time workers (employer would pay a half penalty for a halftime worker). Alternatively, the employer may provide insurance coverage with benefits, prescription coverage, provider availability and cost-sharing (deductibles, co-pays, etc) at least as good as Alabama Medicaid. This is crucial to avoid low income families being saddled with unpayable $30 or so co-pays or any plan worse than Medicaid.

The penalty will be assessed quarterly and is earmarked for the state Medicaid budget. The maximum penalty in a year will be no more than the amount of incentive or tax break provided to the employer by state or local government.

What do you think? Those who say corporate incentives are an income generating activity for Alabama have never provided evidence. I suspect but can’t prove that some subsidized companies are failing to provide a living wage to all employees. These days, a living wage should allow employees to cover the healthcare needs of their families.

Medicaid is a growing expense to our state, and we need to push for the Expansion to include adults up to 133% of poverty. However, after the first 3 years, we will be on the hook for a significant portion of the cost. A $1 per pack cigarette tax won’t cover it, so we need to start now thinking of solutions.

At the same time, my pragmatic friends, please do NOT relegate Medicare for All to the pipe dream file. It is not just practical but inevitable– and we need to do it before there is no other option. By the time it is a last resort, serious damage could have occurred to our medical infrastructure, and far too much needless suffering and premature death will have happened.

Medicaid is not the best answer– it keeps the poor in a dual but often inferior system. Too few physicians accept patients with Medicaid. In the meantime though, it does save lives. Let’s make employers who benefit from our tax money help pay their way.



Filed under Healthcare reform, Medicaid, Politics

4 responses to “Funding Medicaid in the meantime


    Medicaid money for the expansion is free for 3 years and then will cost 10% cost share. The state is worried about the administrative costs and yet no one has considered the extra income from the expansion of our health system the state will be getting. Has anyone done a survey of what putting all adults on Medicaid (today the limitation is $3500 so adult Medicaid recipients that are not disabled are pretty well non-existent) up to 135% of poverty would mean as far as adding healthcare workers to payrolls all over this state and it seems to me just the income tax the state would derive would be enormous. Also it would help fund the Department of Menal Health that has taken a 44% cut over the last few years. All that money would go back into state cofers. Several years ago, the Medicaid reimbursement to a psychiatrist was so low there were none in Jefferson Cty. except at Community Health Centers and they only take the worst of the worst clients. The reimbursement rate has been raised considerably and there are more and more who are taking Medicaid clients. This would also give more adults access to drug and alcohol treatment and again that money would be funnelled into the state supported treatment centers. If you can find a numbers person that could do a cost/benefit analysis on this, I think you would find this money would put much more into state cofers than anyone has stopped to consider. Between taxes and the money that would go back to the state, I personally see it as a expansion of the states economy. Unfortunately, some folks in this state had rather demonize the poor than give the state a leg up. Keep fighting the good fight!

    • Probably analysis would have to be done by state because sounds pricey. I agree with the likelihood it will stimulate the economy, but I also know we have repeatedly come to the bottom of the barrel. How much of this new revenue do you think would be used in incentives, for instance? It seems to me some additional plans like this would buffer us against some of it, but maybe not.

  2. I think having a rise in minimum wage, and then having it indexed to inflation would help the wage disparity. And then everyone benefits. Get that done day one.

    If we do penalize businesses, make sure not to hurt the small business owners.

    Regarding drug and alcohol treatment, there is a pilot program in ObamaCare to repeal an very archaic Medicaid that excluded Institutes for Mental Diseases (IMD) from coverage. So, any drug rehab facility beyond the 28-day programs don’t take Medicaid patients. My sister works in a 28- day program site and they see some Medicaid patients many, many times. The money saved by allowing people 36 days, or 45 days if necessary. 15 states will participate. The idea is to reduce relapses which can endin up costinga lot more. They are concentrating people with serious mental illness right now, but this will open the door for drug treatments when the law is fulling repealed.

    Please click on my name for more info on the Medicaid IMD Exclusion.

    • Changing minimum wage to living wage is a federal task, but I don’t expect either party to do that soon. My idea won’t hurt small businesses, I don’t think– they aren’t the ones that rake in the incentive money here, or at least not much of it. We just had a Belk department store “incentivized” to move a few miles down the road to a different mall area, to the tune of millions. That’s the kind of handout I mean.

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