Senate panel OKs costly new SNAP, Medicaid limits that would punish struggling Alabamians

There’s an old saying: If you like laws or sausage, you should never watch either one being made. Wednesday afternoon was a perfect example of how stomach-turning it can be to see how laws are often made in Alabama.

The Senate Fiscal Responsibility and Economic Development Committee approved a bill Wednesday to cut new holes in Alabama’s safety net. This plan would erect harmful, expensive new barriers to food assistance under the Supplemental Nutrition Assistance Program (SNAP), health coverage under Medicaid, and cash aid under the Temporary Assistance for Needy Families (TANF) program. And it would increase hunger and hardship for tens of thousands of struggling Alabamians in the process.

The bill – SB 294, sponsored by Sen. Arthur Orr, R-Decatur – is a version of the “HOPE Act” promulgated by the Foundation for Government Accountability (FGA), a nationwide conservative organization based in Florida. The bill now awaits consideration in the full Senate.

At a public hearing Wednesday, four Alabamians spoke against SB 294:

  • Carol Gundlach, policy analyst at Alabama Arise.
  • Jim Jones, director of Alabama Childhood Food Solutions.
  • Laura Lester, executive director of the Alabama Food Bank Association.
  • Ashley Lyerly, director of advocacy with the American Lung Association in Birmingham.

All of us agreed that this bill would make people in Alabama poorer, hungrier and sicker. The only speaker in support was an FGA staffer from Arkansas who repeatedly misstated many of the bill’s provisions. Compounding the problem, many committee members showed unfamiliarity with how safety net programs work in Alabama. The result was a frustrating discussion that consistently mixed up SNAP, TANF, Medicaid and even SSI eligibility requirements. In the end, few people left the room with a clear understanding of the bill.

How SB 294 would hurt struggling Alabamians

But it’s important to recognize the wide-ranging harm this plan would cause. SB 294 would take many steps to worsen life for Alabamians in poverty:

  • Reinstitute a SNAP asset test that could deny food assistance to some families with more than one automobile or to seniors with small savings accounts for medical or funeral costs.
  • Eliminate a slightly higher gross income limit for seniors, which helps make up for their higher medical costs.
  • Prohibit Gov. Kay Ivey from requesting a federal waiver of work requirements imposed on a small group of SNAP recipients, unless the unemployment rate is greater than 10%.
  • Require every non-disabled SNAP participant over age 16 to participate in an expensive workfare program, including parents with children over 6. This requirement would make it impossible for Alabama to continue operating an excellent job-training program that serves 36 counties.
  • Deny SNAP food assistance to people who fail to “comply” with child support services. But the word “comply” is not defined in SB 294. So we don’t know for sure what hoops people would need to jump through to get SNAP.
  • Reduce the maximum number of months that parents can receive TANF cash assistance to 36 months in a lifetime. This would cut even more adults off TANF, which is already a shadow of what was once the country’s most important anti-poverty program.
  • Require SNAP and Medicaid participants to recertify eligibility every six months. This complicated process inevitably would end assistance for otherwise eligible people who simply couldn’t navigate the red tape.

Many of SB 294’s would-be limits lack specificity. But proposed new data verification requirements are spelled out in minute detail. The bill also would allow Alabama to contract with a private company to comply with those requirements, a provision that raised several eyebrows.

The good news: SB 294 is a long way from becoming law

Now that it has won committee approval, SB 294 could appear on the Senate’s calendar at any time. But we expect the Senate to vote on the education budget next week, so SB 294 is unlikely to come up before May 7 at the earliest. And even if the Senate passed the bill, it still would have to clear the House as well. The closer we get to the end of the regular session, the less time SB 294 has to become law.

We’ll be keeping an eye on this harmful bill while we organize Arise supporters to make their opposition known. Watch this space for further updates!

Arise legislative recap: April 19, 2019

“The grocery tax is a tax on a basic necessity of life. It’s a tax on survival. And it’s time for Alabama to bring this tax to an end.”

Arise communications director Chris Sanders discusses a recent bill by Rep. Chris England that would be a major step forward on untaxing groceries. The video also details Arise’s plan for how Alabama could end the state grocery tax and expand Medicaid without cutting a dime from the education budget.

Removing the FIT deduction would allow Alabama to untax groceries, expand Medicaid

Alabama’s federal income tax (FIT) deduction provides a huge tax break for high-income individuals – but at what cost? $719 million to be exact.

The FIT deduction is one big reason Alabama’s tax system is upside down. For those who earn $30,000 a year, the deduction saves them about $27 on average. But for the top 1% of taxpayers, the FIT break is worth an average of more than $11,000. The higher the income, the more the FIT deduction is worth for those who can most afford to pay more to fund education, health care and other vital needs.

Only two other states offer a full FIT deduction like Alabama does. (Three other states offer a partial deduction.) Ending the FIT deduction would bring in an additional $719 million a year, the Institute on Taxation and Economic Policy estimates. That would be enough to allow Alabama to remove the state sales tax on groceries. For most people in our state, the net result would be a tax cut.

This proposal would make it easier for everyday Alabamians to make ends meet, but its benefits wouldn’t end there. Alabama also could use the new revenue to expand Medicaid, ensure full funding for the Children’s Health Insurance Program (CHIP) in 2021 and make critical investments in education and other areas. CHIP supports health coverage for more than 170,000 children through Medicaid and ALL Kids.

Alabama’s constitution dedicates income tax revenue to education, and the FIT deduction is written into the document as well. So this plan would require the Legislature and the public to approve a constitutional amendment. But ending the FIT deduction would be a good way for Alabama to begin prioritizing public investments that benefit everyone over tax breaks that primarily benefit a select few.

Alabama Medicaid reforms aim for better care, lower cost

Alabama is making some big changes in the way Medicaid members get their care. Alabama Arise believes the new plans, if carried out well, will be a significant improvement over the current Medicaid system. One way to improve the chances for success is to have a strong consumer voice at the policy table.

The changes are happening on two tracks:

  1. Primary care for children, pregnant mothers and family planning.
  2. Long-term care for people who need assistance with activities of daily living.

Alabama Coordinated Health Networks (ACHNs) for primary care, maternity care and family planning

Under the new plan, seven regional Alabama Coordinated Health Networks (ACHNs) will coordinate primary care for Medicaid children, pregnant mothers and people who receive family planning services. Primary care includes well-child visits; EPSDT (Early Periodic Screening, Diagnosis and Treatment); adult screening, diagnosis and treatment; and preventive care. Each member will choose a primary care doctor to be their “patient-centered medical home.”

(Note: A “medical home” is not a live-in care facility, like a nursing home. It’s more like a “home base” you stay in touch with for all your health care needs.)

Your ACHN will have a phone line to call when a Medicaid member has a health problem. The basic idea is that nurses, social workers and care coordinators working with the primary care doctor can help people get the right care for the right problem without going straight to the emergency room (ER) whenever they get sick.

ER services are important when there’s a real emergency (like a broken bone, chest pains or other critical need). But they’re also very expensive. So going to the ER for routine problems like a sore throat or upset stomach is a drain on the Medicaid budget. And it’s not the best way to get the right care for ordinary health needs. Getting checked first by your primary care doctor or nurse leads to better care at lower cost.

The ACHN can help patients identify health goals, create a care plan and connect with community resources that promote better health. Another feature aimed at improving care is bonus payments for doctors who reach quality benchmarks.

The new ACHN plan will begin Oct. 1, 2019. It will serve about 750,000 Medicaid members across seven regions. Each ACHN will have a consumer representative on its board, as well as a Consumer Advisory Committee (CAC). Arise is working to recruit Medicaid members, parents and caregivers to serve in these important roles. We also are urging Medicaid to add a second consumer representative to each regional ACHN board.

Integrated Care Network (ICN) for long-term care

On the long-term care side, Medicaid already has started a new plan called the Integrated Care Network (ICN). The ICN coordinates care for Medicaid members who live in nursing homes or receive certain home- and community-based waiver services. There are only about 25,000 of these members across Alabama, so one statewide ICN serves all of them. Right now, about 70% of people served by the ICN live in nursing facilities, and 30% are living at home. The program’s goal is to help more people get long-term care services in their home and community, if that’s what they want. The ICN works with 13 Area Agencies on Aging across Alabama to coordinate long-term care for Medicaid members who qualify.

The ICN has a strong consumer voice at the policy table. Four consumer advocates serve on the governing board. And the Consumer Advisory Committee includes eight consumer representatives, including Alabama Arise, along with a long-term care doctor.

What triggered reform?

Since it began in 1970, Alabama Medicaid has operated on a fee-for-service basis, with patients seeking care on their own from providers who then bill Medicaid for services rendered. For healthy patients, such a system can provide sufficient care at a reasonable cost. But many Alabama Medicaid patients have complicated health problems, involving one or more chronic conditions that are difficult and expensive to treat. Care providers often have difficulty monitoring patient care over time and educating patients on prevention and healthier lifestyles.

As Medicaid costs rose with enrollment growth during the Great Recession of 2008, state officials began to consider program changes that would both control budget growth and improve health outcomes.

In 2011, a few regional pilot projects began providing care coordination for people with chronic conditions, such as diabetes, cancer or substance use disorder. These successful experiments laid the groundwork for the regional care organizations (RCOs) that the Legislature authorized in 2013. Under the RCO plan, Alabama offered care coordination to people with chronic conditions statewide. Technical delays and other problems led Gov. Kay Ivey to cancel the RCO plan shortly after she took office in 2017, but the care coordination system remained in place. This time around, Medicaid will expand it even further – to serve not just patients with chronic illness but the majority of Medicaid members.

Long-term care reform took a different but parallel path. Alabama has long relied mainly on nursing homes to provide Medicaid long-term care services, even though home- and community-based services are far less expensive. The aging of the Baby Boom generation poses big challenges for the old system. A surge in nursing home patients would strain state budgets, and a movement for greater patient choice is changing the long-term care business. Alabama’s ICN has the potential to become a national model for expanding options in long-term care.

Bottom line for members

  • Regional ACHNs open Oct. 1, 2019. Through their primary care doctor, children, pregnant moms and family planning patients can get new services focused on prevention, care coordination and health improvement.
  • The primary care doctor is the patient’s “medical home” – the first place to contact for ordinary health needs. The goal: Reserve ERs for true emergencies.
  • A new focus on improving patient health gives doctors bonus payments for better outcomes. Special projects will target substance use disorders, infant mortality, and obesity and obesity prevention.
  • The ICN now gives long-term care patients more coordination of services and more choice in their care setting.
  • Consumer representatives give Medicaid members a new voice at the policy table.

Map of Medicaid ACHNs

Keywords in Medicaid reform

A basic understanding of these keywords will help Alabama Medicaid members navigate the changes that are underway and help advocates and others follow ongoing developments in the program:

ACHN (Alabama Coordinated Health Network) – beginning Oct. 1, 2019, any of seven regional organizations that administer Medicaid services for children, pregnant women and family planning patients in Alabama, with a special focus on care coordination to eliminate barriers to adequate health care.

Area Agency on Aging (AAA) – any of 13 regional offices that serve older Alabamians by coordinating state and federal services such as senior centers, Aging and Disability Resource Centers and the Alabama Cares caregiver support network. The AAAs provide case management for Medicaid long-term care in the home, community and nursing facilities through the new Integrated Care Network (ICN).

Care coordination – the practice of organizing patient care activities and sharing information among all parties concerned to achieve more effective and efficient care. Care coordination has a narrower focus than case management.

Case management – a collaborative process of assessment, planning, coordination and advocacy for options and services to meet a person’s health needs. Case management has a broader reach than care coordination, also addressing social determinants of health like housing, nutrition and transportation.

EPSDT (Early Periodic Screening, Diagnosis and Treatment) – comprehensive and preventive health services guaranteed for children under age 21 who are enrolled in Medicaid.

Home- and community-based services (HCBS) – Medicaid long-term care services for qualifying members who choose to live at home or in a community care setting. In Alabama, these services are delivered through seven waiver programs. Two of these – Elderly & Disabled (E&D) and Alabama Community Transition (ACT) – are part of the new Integrated Care Network.

ICN (Integrated Care Network) – Alabama Medicaid’s long-term care reform program promoting person-centered care in the least restrictive setting of the patient’s choice.

Long-term care – health care, personal care and social services provided to people with chronic illness or disability, either in institutional or home and community settings.

Medicaid – federal and state health insurance program for people with low incomes and few resources. Alabama Medicaid covers mainly children in families up to 146% of the federal poverty level (FPL), pregnant women up to 146% FPL, low-income people with disabilities, and low-income people in nursing homes. Parents are eligible in Alabama only if their income is 18% FPL or lower.

Medicaid member – any individual enrolled in a Medicaid program.

Patient-centered medical home – a health care setting that offers patients comprehensive, coordinated primary care; an ongoing relationship with a primary care doctor; and referrals for necessary additional care.

Preventive care – health care that emphasizes healthy behavior, regular testing and screening aimed at early detection and treatment.

Primary care – routine health care, including diagnostic, therapeutic and preventive services, as well as management of chronic conditions.

Waiver – permission granted by the federal government that allows the state to “waive” or change ordinary Medicaid rules to provide specific services to a targeted group, such as long-term care patients.

Arise legislative recap: March 29, 2019

Lawmakers may have been on spring break this week, but we still have plenty to discuss in our second video update of the 2019 legislative session.

 

Watch Arise organizing director Pres Harris discuss upcoming community forums on Medicaid expansion, as well as reminders on action you can take in anticipation of the Legislature reconvening on April 2.

Arise legislative recap: March 22, 2019

We had a problem Tuesday – and we were glad to have it. So many people came to Arise Legislative Day that we couldn’t fit everyone in the State House’s largest committee room! Nearly 300 Arise supporters came to Montgomery to tell their lawmakers that it’s time to expand Medicaid. We appreciate everyone who showed their support for this investment in a healthier Alabama.

 

Click above to watch Arise executive director Robyn Hyden talk about our successful Legislative Day, as well as the Senate’s vote for a bill to make Alabama’s justice system more equitable. We’re excited to build on this momentum when the Legislature returns from spring break on April 2.

Revenue options for Medicaid expansion

Alabama’s budget is an expression of our values. Medicaid expansion means healthier families, thriving communities and a stronger economy. Policymakers have a range of options for making this bold investment in a brighter future. Now is the time to choose.

Remove the state deduction for federal income taxes (FIT)

$719 million in new revenue per year

Only two other states offer a full FIT deduction

This money would allow Alabama to achieve multiple goals:

Expand Medicaid (cost: $168 million in first year, $25 million per year thereafter)*

— Remove the state sales tax on groceries (cost: approximately $400 million per year)

— Secure long-term funding for ALL Kids (cost: $38.4 million for 2020, approximately $90 million for 2021)*

Remove the state deduction for FICA payroll taxes

$261 million in new revenue per year*

Only one other state offers a full FICA deduction

Raise the cigarette tax by $1 per pack

► $180 million in new revenue in 2020

Other revenue options include:

► Make large landowners pay their fair share of property tax

► Tax sugar-sweetened beverages and vaping-related products

► Close corporate tax loopholes – for example, enact combined reporting*

 

* Would require transfer from Education Trust Fund to General Fund

What we’re watching during the 2019 special session

This week brought a first in recent memory at the Alabama Legislature: a session within a session. The regular session began Tuesday, but lawmakers have put it on hold until March 19 to make way for a special session on the state gas tax.

At Gov. Kay Ivey’s call, legislators will consider a proposed 10-cent gas tax increase, to be phased in over three years. (The current tax is 18 cents per gallon.) Ivey’s plan aims to strengthen Alabama’s roads, bridges and port, which has become a mantra for state leaders in the run-up to the 2019 session.

Arise hasn’t taken a position on the gas tax proposal, but we have a lot to say about infrastructure. We’re calling on lawmakers to claim a larger vision of infrastructure as Alabama begins its third century of statehood.

Rural hospitals, for example, are key infrastructure but weren’t mentioned in the governor’s State of the State address Tuesday night. Seven rural hospitals have closed since 2011, including one in Georgiana that will close Friday. Another overlooked sector is public transportation, which receives no state funding in Alabama.

There’s a good chance we’ll see Arise issues emerge in the gas tax debate. For example, the Montgomery Advertiser on Wednesday cited a potential push for Medicaid expansion to win gas tax votes from Democratic members. Some lawmakers also have expressed interest in reducing the grocery tax to offset the effects of the gas tax hike. Wouldn’t it be amazing if a plan to rebuild roads and bridges became the first step toward helping struggling Alabama families get health coverage and make ends meet?

Why is this special session happening?

Ivey called a special session to remove a procedural hurdle for the gas tax bill. To pass in the regular session, any bills other than the Education Trust Fund and General Fund budgets must first win a three-fifths majority in both chambers in a vote called the budget isolation resolution (BIR). But in a special session, any bill included in the governor’s “call” can pass with a simple majority.

The Legislature can meet for up to 12 legislative days across 30 calendar days during a special session. But because the regular session started first, each day of the special session also will count against the 105 calendar days available for the regular session. Lawmakers can meet for up to 30 legislative days during the regular session.

Medicaid expansion by the numbers

  • ± 223,000 Alabamians are caught in the coverage gap, unable to afford health insurance. Another 120,000 or more are stretching to pay for private or employer-based coverage.
  • 13 Alabama hospitals – including 7 rural ones – have closed since 2011.
  • 88 percent of Alabama’s rural hospitals operate in the red.
  • If we expand Medicaid to cover low-income adults, the permanent federal match is 9:1.
  • The first four years of federal match would generate $11.4 billion in new economic activity:

— $6.7 billion in direct federal spending

— $4.6 billion in indirect economic activity

  • Over four years, the enhanced match would free up $316 million in current state spending to address additional unmet health care needs:

— Existing Medicaid groups – $87.1 million

— Mental health & substance abuse – $121.6 million

— Corrections – $46.8 million

— Public health – $60.6 million

  • Expansion-related economic activity would generate $446 million in state tax revenues over four years. New local tax revenues would total $270 million over four years.
  • Net cost to the state would be $168 million in the first year, dropping to about $25 million annually in the following years because of savings and revenues, for a total of $239 million over four years. (This figure does not include local revenue gains.)

Bottom line

Medicaid expansion would help more than 340,000 Alabamians get health coverage, stabilize our rural hospitals and jump-start our economy – all for a dime on the dollar. It’s a bargain Alabama can’t afford to pass up.

(Sources: U.S. Census Bureau; Alabama Hospital Association; David J. Becker, “Medicaid Expansion in Alabama: Revisiting the Economic Case for Expansion,” January 2019; Manatt, “Alabama Medicaid Expansion: Summary of Estimated Costs and Savings, SFYs 2020-2023,” February 2019.)

How to advance our vision for Alabama’s next century

What kind of future do we want for Alabama? It’s a question worth reflecting on as our state enters its third century this year. Are we all right with limiting power and prosperity to a select few? Or would we rather build a state where everyone has a voice and where people of all races, genders and incomes have a real chance to get ahead?

Alabama Arise believes in justice and opportunity for all, and our policy priori­ties flow from that vision. It’s why we support expanding Medicaid for Alabam­ians who can’t afford coverage. It’s why we want to rebalance an upside-down tax system that taxes struggling families deeper into poverty. And it’s why we urge stronger investments in education, housing, public transportation and other services that improve quality of life and promote economic opportunity.

We expect lots of infrastructure talk at the Legislature this year. The regular session starts Tuesday, but lawmak­ers may move quickly into a special session on the gas tax. Gov. Kay Ivey has asked legislators to increase the state’s 18-cent gas tax by 10 cents over three years. That money would fund road and bridge maintenance and oth­er infrastructure improvements.

Many of Alabama’s deteriorating roads are overdue for repair. But the defi­nition of “public infrastructure” goes far beyond tar and gravel. Education, health care and public transportation also help lay the foundation for shared prosperity. This session could bring chances to strengthen those invest­ments – and to make the tax system that funds them more progressive.

Hope on grocery tax, Medicaid expansion

One key breakthrough could be on a longtime Arise priority: ending the state grocery tax. We came heartbreaking­ly close in 2008, when a bill to untax groceries passed the House and fell one vote short in the Senate. But Arise members never gave up the advocacy fight. Now legislators face renewed pressure to end or cut the state’s 4 percent sales tax on groceries. (Some conservative lawmakers are urging a grocery tax reduction to accompany a gas tax increase.) Alabama is one of only three states with no tax break on groceries. It’s a highly regressive tax on a basic necessity, hitting hardest on people who struggle to make ends meet.

Pressure also is building for Alabama to expand Medicaid to cover more than 340,000 adults with low incomes. Medicaid expansion would save hun­dreds of lives annually and create a healthier, more productive workforce. It also would help save rural hospitals, support thousands of jobs and pump hundreds of millions of dollars into the economy.

Our work for a brighter, more inclu­sive future won’t end there. We’ll keep pushing for stronger consumer protec­tions against high-cost payday loans. We’ll make the case for the state to fund public transportation and remove barriers to voter registration. And we’ll continue seeking an end to injustices in Alabama’s civil asset forfeiture and death penalty systems. Visit our website and follow us on Facebook and Twitter for updates on these issues throughout the year.