Could gambling money lead to Medicaid expansion in Alabama? – Alabama Reflector

Buried in the gambling expansion bill is a provision that might give give Alabama the chance to expand Medicaid.

But no one seems to want to discuss it.

Not Rep. Andy Whitt, R-Harvest, who has helped draft the legislation. On his way to the House floor Thursday, Whitt said that providing health care to working adults has been a point of discussion in the past, but “the governor is the only one who could expand Medicaid.”

Not Alabama Arise, which has advocated for Medicaid expansion. The group declined comment on the provision Thursday.

House Minority Leader Anthony Daniels, D-Huntsville, also avoided discussion about the bill. But he was clear when asked if he would support a gambling bill that lacked the provision.

“No,” he said.

The appearance of Medicaid in the legislation adds an unprecedented opportunity to bring Medicaid expansion to the state, a long-held goal of both Democrats and health care professionals, particularly hospitals that say it’s essential to address a mounting crisis in public health in rural areas.

But it also adds risk to the legislation’s prospects. Some Republicans may balk at supporting a program they have long opposed on ideological grounds. Taking it out could threaten support from Democrats, whose support has been needed to pass prior gambling proposals amid divisions in the House GOP caucus.

The bill would allow — but not require — lawmakers to fund rural health care and qualified health benefit plans for “for adults with income below 138 percent of the federal poverty level and parents or other caretaker relatives of dependent children with income between 14 and 138 percent of the federal poverty level.”

If allocated, the money for expansion would come from a Gaming Trust Fund, where taxes on casino and sports wagering would be held. A 2020 report from a commission convened by Gov. Kay Ivey estimated that fully expanded casinos and sports betting could bring between $310 and $410 million into state coffers.

Medicaid expansion under the Affordable Care Act expands Medicaid services to anyone making up to 138% of the poverty level ($20,783 for an individual; $35,632 for a family of three).

Rep. Sam Jones, D-Mobile, the lone Democrat in a study group charged with introducing a comprehensive gambling bill, said Thursday that they wanted to include health care, including mental health in the distribution of gambling revenue. Legislators, he said, wrote the provision broadly so they “can either have Medicaid expansion or private plans.”

Like Whitt, Jones said Ivey will make the call on expansion. The bill, he said, would give them the option to do it.

“If we’re going to get new money in the state, we want to address some of the issues that we’ve not addressed for some period of time now,” Jones said.

Senate Finance and Taxation General Fund Committee Chair Greg Albritton, R-Atmore, a supporter of a comprehensive approach, has previously said he opposes Medicaid expansion, and said Wednesday after the bill was unveiled that the provision might be in the bill to garner “particular votes.”

Gov. Kay Ivey’s office did not return a request for comment Thursday.

Alabama has so far resisted Medicaid expansion, which has left 219,000 Alabamians in a limbo known as the coverage gap, according to KFF. Those in it make too much to qualify for traditional Medicaid and too little to qualify for subsidized Affordable Care Act plans offered in the marketplace.

House Republicans have expressed support for an Arkansas-type program that would use Medicaid expansion dollars in a public-private partnership.

Previous research indicated that increased economic activity would eventually balance what the state would spend on expansion. According to a PARCA study, expansion would save Alabama an average of $172.4 million in health care costs over six years. That would be more than enough to cover the cost of the program.

The study estimated that spending in Alabama would go up by an average of $225 million a year over current Medicaid costs, but the state would also average nearly $400 million in savings over those same six years each year. Additionally, expansion would create an average of about 20,000 new jobs per year over the next six years and have an estimated average economic impact of nearly $2 billion per year over the next six years.

Danne Howard, deputy director of the Alabama Hospital Association, said in a phone interview Thursday that they support the wording in the bill. She said that according to their projections, closing the coverage gap would need funding from the state for at least 10 years.

“There’s no cost at stake, but who knows what things might look like 10 years from now or later. That additional revenue may be needed. This is an opportunity, or this is language, that would allow for it in future years, if it’s needed — but not mandated it if it’s not,” she said.

The Alabama Hospital Association plans to meet with staff from  the governor’s office next week to discuss what they describe as a plan to close the coverage gap.

“It’s never a bad idea to have the possibility of a revenue stream if it’s needed years out. That is insurance,” she said.

Sports betting industry veteran David Vinturella, an instructor at the University of Nevada Las Vegas College of Education’s sport management program, said in an interview Thursday that revenues from both casinos and sports betting have been trending upward.

Nevada, he said, just broke a record of the most money wagered in casinos in the state, and it’s gone up every year before that, Vinturella said. Revenue for casinos were up 9% in December compared to December 2022.

“The revenue in the casinos like here in Nevada — it goes up every year, because they’re shifting the odds, they’re changing the way some of the games are played,” he said.

In Ohio, Vinturella said, over $1 billion dollars was bet in the first month of legal sports betting in the state, with a tax rate of 10%. Because of that success, the state increased the tax rate to 20%.

“They were so successful in that first month that the state of Ohio went back and passed legislation to double their tax rate to 20%, effective July 1, so it was such a huge success in the state of Ohio,” he said.

House Ways and Means committee Chair Rex Reynolds, R-Huntsville, said Thursday that the provision is just part of “categories” the Legislature “could” fund.

“It’s just identifying some important categories that we may need to look at,” he said.

While he did not say where he leaned on the bill, he supports the money going to the General Fund to allow the Ways and Means committee to make those decisions on a year to year basis, “because our priorities may change,” he said.