Biden’s budget plan could close ‘coverage gap’ for 300,000 Alabamians

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By TODD STACY, Alabama Daily News

MONTGOMERY, Alabama – A provision of the massive budget proposal discussed in Congress this week would offer up to 300,000 tax credits to low-income, uninsured Alabamians to pay for health coverage.

Billed as President Joe Biden’s “Build Back Better” plan, the sweeping proposal would spend $ 1.75 trillion on long-sought Democratic priorities, including universal preschool education, an expanded children’s tax credit, climate change measures, social housing and reducing prescription drug costs.

As written, the budget also extends tax credits to uninsured people in the 12 states that have not extended Medicaid under the Affordable Care Act, including Alabama. The White House estimates that this will allow 4 million Americans to purchase private insurance through the Healthcare.gov exchange, including 300,000 in Alabama.

Alabama Congresswoman Terri Sewell D-Selma lobbied for expanded health coverage in the bill and worked with colleagues from other states without expansion to see the provision included in the bill. final law of the House.

Alabama has over 300,000 people who fall in this gap, where they earn too much money to qualify for Medicaid, but not enough to pay health insurance premiums, ”Sewell said in an interview. “We just made our # 1 request for it. In every room I’ve sat, whether it’s in the White House or at smaller tables here in Congress, health care is just my # 1 problem. 1.

“There’s no meeting with the president (Richard Neal, D-Mass.) I’m not talking about. There isn’t a Democratic caucus meeting that I don’t get up and talk about closing the Medicaid expansion gap, you know?

If enacted, the tax credits would expire after 2025. Like many provisions of the budget plan, the health care tax credits had to be cut to allay moderate Democrats’ concerns about the price of the bill. , which has been cut in half. of the original $ 3.5 trillion.

Early estimates show the bill’s coverage gap provision would cost more than $ 200 billion, but a final estimate from the Congressional Budget Office has yet to be released.

Who is covered?

Alabamians earning 0% to 138% of the poverty line would be offered the tax credit to purchase private health insurance for three years. According to the Center for Budget and Policy Priorities, this represents between $ 13,000 and $ 18,000 in annual income for an individual and between $ 22,000 and $ 30,000 for a family of three.

The plan is far from the final passage. House Speaker Nancy Pelosi is pushing for a vote in the House of Representatives this week, but moderate Democrats are waiting for the CBO’s full analysis on the true cost of the plan. Even if it passes the House, significant changes are expected in the Senate, where Democrats cannot spare a voice amid the United Republican opposition.

Sewell said she was about 70 percent convinced the coverage gap provision would survive and become law at the end of the process.

“I bet President Pelosi will be able to explain that a majority of her caucus sees this as an important provision,” she said. “If you listen to her press conferences and her statements, she talks about the lack of coverage every time.”

Meanwhile, the state’s largest insurer, Blue Cross and Blue Shield of Alabama, says it is preparing for an increase in enrollments if the proposal passes.

“Blue Cross and Blue Shield of Alabama welcome this opportunity to provide more Alabamians with access to the quality, affordable health care they need and deserve,” said Sophie Martin, director of BCBS corporate communications and community relations. “We are ready to provide our new potential clients with exceptional customer care and service to make the registration process as smooth as possible for them. “

Impact on hospitals

While many healthcare players are happy with the prospect of reducing the number of uninsured people, hospitals across the state are worried about another provision in the bill that could increase the cost of healthcare. destitute.

In some sort of trap, the bill would reduce the percentage the federal government pays to hospitals by a disproportionate share in non-expanding states to provide care for uninsured patients. According to Danne Howard of the Alabama Hospital Association, the reduction would start at 12% and increase from there, costing hospitals as much as $ 68 million a year.

“It’s like the carrot hasn’t worked and it’s the stick,” Howard said of Congressional Democrats pushing states to expand Medicaid.

“Would enough people switch to the exchange with the grants to help offset that?” And, remember, this is only temporary. So with no more answers on some of these things, all we can say for now is if it does fall into place and there is nothing else to help provide coverage. to uninsured Alabamians, then it’s an unbearable loss for hospitals. “

Howard said she was in contact with Sewell’s office to see if the reduction in DSH could be reduced as the bill progressed.

The Medicaid question

What will happen to those 300,000 once the tax credits are exhausted after 2025? Some say three years could provide the state with a “bridge” in determining how to close the statewide coverage gap, either through the expansion of Medicaid or through a hybrid system that includes the private sector.

Jane Adams, campaign manager for Cover Alabama, which advocates for the extension of Medicaid, said the temporary coverage is a “lifeline” for the state.

“The federal government is extending a temporary lifeline to our state. We believe it is still the responsibility of the governor and the legislature to have a permanent solution that extends health insurance for low-income Alabamians, ”Adams told DNA.

“We are happy to discuss ideas on how to permanently close the coverage gap with any legislator. “

During the 2021 legislative session, state lawmakers briefly considered using the revenues from a massive gambling bill to fund “improved health services,” which most often meant l expansion of Medicaid. The bill ultimately failed and it remains unclear whether another proposal could be presented in the election year session that begins in January.

When asked if closing the three-year coverage gap might give the state some leeway in determining health care options for low-income people, a spokeswoman for Governor Kay Ivey said she opposed the Biden plan and was still not convinced the state could afford to pay. for the extension of Medicaid.

“Governor Ivey does not think the way to improve access to health care is for Democrats to continue spending money that this country does not have,” spokeswoman Gina Maiola told the Alabama Daily News. “It also wouldn’t change the fact that a concern we have in Alabama is how to pay for it.”

For the expansion of Medicaid by the state, there are more resources than before.

Under the American Rescue Plan Act enacted in March, lawmakers have offered states another incentive to expand. As DNA previously reported, the state would receive an additional $ 940 million over two years for the Alabama Medicaid Agency if it grows. That’s enough to exceed the total cost for the state to expand the program for at least four years, according to supporters and political groups.

Meanwhile, advocates are preparing to educate Alabamians who may be eligible for subsidized health coverage if the bill becomes law.

“The Cover Alabama coalition, Enroll Alabama and other partners are working to identify and communicate with all Alabamians who will be eligible for free health insurance on Jan. 1,” Adams said. “Right now, anyone who wants to verify their eligibility for free or low-cost health insurance can call 2-1-1 to make an appointment with an enrollment browser. “

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