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Alabama's Refusal To Expand Medicaid May Hurt Its Economy

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Alabama's refusal to expand Medicaid eligibility to 235,000 uninsured, low-income residents is hindering the state’s economic development efforts, experts argued at the Economic Development Association of Alabama’s summer conference on Monday.

Without adequate funding, a dozen rural hospitals across the state have already shuttered their doors and a dozen more could potentially shut down over the next two years, said Danne Howard, senior vice president of government relations and emergency preparedness for the Alabama Hospital Association.

"Things are tough," Howard said, according to AL.com.

In 2012, the average operating margin for rural Alabama hospitals was 1.1 percent, with 22 of these hospitals operating at a negative profit margin. The problem, Howard said, stems in part from the state’s refusal to expand Medicaid eligibility to residents making up to 138 percent of the federal poverty level.

While 26 states and the District of Columbia have opted to widen Medicaid's reach under the Affordable Care Act, Alabama Gov. Robert Bentley (R) and other state lawmakers have rejected the expansion on grounds that it will become too costly to sustain in the long run. "We will never see an end to the plague of poverty by offering a deeper dependence on a flawed government system," Bentley argued during his State of the State speech in January.

According to a White House study released in July, that decision will cost Alabama $3.63 billion in federal funding, 15,100 jobs and $2.6 billion in increased economic activity through 2017.

In the meantime, Alabama's health care providers and the insured bear the costs of uninsured patients, Howard argued on Monday. "Emergency room care is the most expensive form of care," she said, noting that 75 percent of emergency room patients in Alabama are uninsured and they tend to enter the system at a more advanced and costly stage of illness.

Medicaid expansion would help to lower these costs by covering more preventive care, said Howard. The preservation of local health care facilities would also make the state's struggling rural areas more attractive to business, she said.

In recent months, health care leaders and Democratic lawmakers in Alabama have united to advocate for Medicaid expansion, emphasizing its importance at a time when Medicare outlays for hospital services have been cut $220 billion.

Parker Griffith, Bentley’s Democratic challenger in November, has set Medicaid expansion at the forefront of his gubernatorial campaign, criticizing Bentley, who is a dermatologist, for failing to protect patients' best interests.

Bentley's refusal to implement Medicaid expansion is "not based on what's best for the people in Alabama, but on the fact that he doesn't like the current president,” Griffith, a retired oncologist who voted against the Affordable Care Act as a Republican congressman in 2010, said at a townhall-style meeting last Thursday. “It appalls me that a man who signs his name with the initials M.D. would put politics before helping people."

Most Southern states -- including Alabama, Georgia, Florida, Mississippi, Tennessee, Louisiana, North Carolina and South Carolina -- have opted not to extend Medicaid coverage under the Affordable Care Act. As of March, 1.02 million Alabamians were enrolled in Medicaid, the majority of whom were children and people with disabilities.

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