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Governor Bentley, State Health Officer Discuss Consequences of Underfunding Medicaid

Press Release

Location: Montgomery, AL

Governor Robert Bentley and State Health Officer Dr. Donald Williamson on Tuesday discussed budget challenges facing the Alabama Medicaid Agency and how underfunding the agency would have a dramatic impact on the state's health care system as a whole.

"Medicaid funding affects all people, whether they're enrolled in Medicaid or not," Governor Bentley said. "Hospitals, doctors' offices, and nursing homes depend on Medicaid to provide funding that sustains the services they offer to all patients. Without proper Medicaid funding, the strain on the health care system would be severe. We must provide Medicaid the state funding it needs in order to ensure that health care providers are in a financial position to serve the public and save lives."

Dr. Williamson was recently chosen by Governor Bentley to conduct a review of Medicaid's operations and finances. Dr. Williamson presented his findings, showing that Medicaid will need a minimum of $600 million from the state's General Fund in fiscal year 2013 to remain a viable agency.

"In my 20 years as State Health Officer, the budget decisions that will be made over the next few weeks will be the most crucial I have ever seen," Dr. Williamson said. "The $600 million figure is a bare minimum funding level, and even at that funding level, Medicaid will still be a lean program. Any cuts below $600 million would seriously impact people's health. We would start to see hospitals and nursing homes reducing beds, eliminating services, or even closing, leaving patients with nowhere else to turn for critical care."

Already, Alabama provides among the lowest level of benefits for Medicaid recipients when compared to other states. Any significant cuts to the already lean agency would have devastating consequences.

Governor Bentley called on legislators to ensure that budget decisions are made with the urgent needs of the Alabama Medicaid Agency in mind.

"The good news is the state has resources available to offset cuts and sustain the program," Governor Bentley said. "We have more than $200 million sitting in a savings account in the Education Trust Fund. Rather than let that money sit in a savings account, we can use that funding to sustain Medicaid."

"Think about your personal finances," the Governor said. "If you have two bank accounts, and one of them is in dire need while the other has a large amount of money in savings, you would transfer that money from one account to the other to meet the need. State government must do the same. We have money available to meet the need. This is simply a matter of allocating the money we have available in a way that sustains essential services."

Governor Bentley also pointed out that every dollar that is cut from Medicaid benefits costs the state at least $3 when matching federal funds and provider payments are considered. Also, a strong health care system is crucial not only to public health but also to the long-term economic health of the state.

"A primary reason why companies locate in Alabama is access to good health care," Governor Bentley said. "Proper funding for Medicaid gives our health care facilities the backing they need to remain strong and provide life-saving services to all people."

"We have an opportunity over the next few weeks to avoid a Medicaid funding crisis," Governor Bentley added. "By making the most efficient use of the funding we have available, we can sustain the Medicaid program while also living within our means. Certainly, Alabama faces budget challenges. By maximizing our resources, we can meet those challenges and maintain essential services for the people who depend on them."

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