Under the Federal Healthcare Law, or Obamacare, Alabama could stand to save millions in prison inmate health insurance costs.
The only "if" is whether the state decides to expand Medicaid, something it has resisted doing for the past year.
"Right now we look at a Medicaid program that we cannot fund as it stands today" said Sen. Cam Ward who chairs Legislature's Joint Oversight Committee on Prisons.
If Alabama expanded its Medicaid program to include more than 300,000 newly eligible patients, it could also shift costs from the Department of Corrections to Medicaid for healthcare for many, if not most of its inmate population.
Under the law, inmates are included in new eligibles that exceed the 133% threshold of the poverty level.
According to a recent study by The Sentencing Project, a Washington DC nonprofit, most of country's inmates would likely be eligible, as long as they signed up themselves, or they're signed up by their facilities.
According to Dr. Susan Phillips, author of the study, "The Affordable Care Act: Implications for Public Safety and Corrections Populations," the expansion of Medicaid means, "states can essentially use federal Medicaid funds to increase treatment services that could reduce incarceration and recidivism and public safety."
Using Medicaid funds to pay for prisoners' healthcare isn't a new concept. Since 1997, some states have taken advantage of a federal policy that allowed corrections facilities to use Medicaid to pay for services outside of prison healthcare facilities that weren't otherwise available. The departments could only use Medicaid if the inmate was eligible.
Alabama's Department of Corrections spent $113 million on healthcare for inmates in 2011 according to the department's annual reports. The annual report for 2012 isn't yet available on the department's website.
There aren't estimates for what Medicaid expansion would specifically mean for Alabama's prison population, but it remains a possibility that the department's healthcare costs could be slashed.
Corrections is one of the biggest agencies funded by the cash-strapped General Fund budget, which provides funds for all non-education agencies.
Sen. Ward, R – Alabaster, has been working on sentencing reform for the past few years. He's warned in the past that overcrowding in the state's prisons is one of its biggest issues. There are more than 25,000 inmates in the state's prisons, which is 190% of capacity. The state's prison system is designed to house only 13,000. To Ward, the funding issues with prisons need to be addressed directly, before any talk of a Medicaid expansion.
Ward asks, "If that expansion were to go toward the corrections system, say you were to cover additional inmates, say they're men, whether it be a certain segment of the population of the corrections system, my concern would be how do we pay for that expansion?"
Gov. Bentley has said that he refuses to expand Medicaid because he considers it to be a "broken system."
Under the Affordable Care Act, the federal government would cover the entire cost of the Medicaid expansion for the first three years, 2014-2016 and decreasing to 90% by the year 2020. Alabama would have to come up with that remaining 10% which could amount to roughly $800 million between 2014 and 2020.
To Republicans who control the legislature and the appropriations process, any savings the state would benefit from by expanding Medicaid in the short-term, would be wiped out by new costs over the long-term.
"If we were to increase the amount we owe by an additional 10% of the match to pull down the federal dollars, where will get that money from? Nobody has explained that to me" Sen. Ward said. "That's something that until I feel satisfied that we can afford to pay that additional match, then I would be exposed to expanding it."
Overall, Alabama would receive approximately $1.5 billion annually from the federal government each year for the first three years of Medicaid expansion starting in 2014. If Alabama doesn't expand its program before the end of 2013, then it will lose $375 million in new federal Medicaid funds during the first quarter of 2014.
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