Huntsville Hospital CEO sees Medicaid expanding again in Alabama

The head of Huntsville Hospital Systems, North Alabama’s largest healthcare provider, expects another attempt to expand Medicaid coverage in the legislature this year. And he has a question for business leaders who oppose it.

“When I speak to business leaders who oppose Medicaid expansion, I ask, ‘Why would you want to pay for it instead of making the federal government pay for it?'” Jeff Samz told the Huntsville-Madison County Chamber Thursday. “I think there’s a better way to do it.”

Gov. Kay Ivey and conservative lawmakers disagree. They are skeptical or openly opposed to expansion, fearing federal subsidies will taper and states will remain on the hook for the federal share. Washington would bear 90 percent of the cost of the expansion, and the state 10 percent. It is estimated that 340,000 people in Alabama would have access to Medicaid if the state accepted federal funding to expand the program.

Samz said his 12-facility hospital system spends between $112 million and $115 million a year on unpaid care. “That’s our cost of providing that care,” Samz said. “That’s not the charge.”

There are two ways to pay for it, Samz said. One is a wealth tax for that purpose, but Samz said he’s glad Madison County doesn’t have one. “Most of it you pay for it,” Samz told the business audience. “That’s how it works. I have to negotiate a higher rate with Blue Cross to make sure I can cover the $100 million and still have enough wiggle room for facilities and everything.

“That’s what hospitals do all over the country,” Samz said. “This is not a Huntsville Hospital business. In the industry we call it cost shifting. It’s something we don’t talk about, but I thought we might as well.”

Expanding Medicaid would cover people up to 138 percent of the federal poverty line, Samz said. “The vast majority of people who would be affected are working people who have a job,” he said. “You pay taxes. They contribute to society but cannot afford health insurance.”

Samz acknowledged that Medicaid is already “crazy expensive.”

“The Medicaid budget is the largest item in the Alabama General Fund’s budget,” Samz said. “That’s $800 million a year. The expansion will cost an additional $200 million. To downplay it, when it’s $200 million in ongoing expenses for the state, those costs need to be taken seriously. I understand why state legislators are reluctant to add something that costs $200 million. You can’t take that lightly.”

On the other hand, Samz says research from the Public Affairs Research Council of Alabama (PARCA), a nonprofit study group, “shows that savings from expansion and incentives over the next five years more than recovered costs.”

Samz said he hopes the state can put aside the politics of expanding a federal program and focus on the numbers. “If we could talk about it, and I think there’s an opportunity for that, I think that would be great for the state and for our community,” he said.

And if you own a private business, Sams told chamber audiences, “It means I have to negotiate less to get Blue Cross to pay for the uncompensated care, and it takes some of the pressure off of your premiums.”