Medicaid problems - a symptom of Alabama’s sick economy

January 31, 2014 chris
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There is a disturbing trend happening in Alabama – the growing number of people enrolling in Medicaid and what this says about our economy and job creation.

Every year for the past five years, Medicaid’s enrollment has dramatically increased. In 2010, the state spent $307 million on Medicaid, with a significant portion of that coming from the federal stimulus money. Last year, Medicaid received $615 million from the state. This year, the program’s administrators are asking for $700 million.

This increase in Medicaid enrollment is not a part of the Medicaid expansion or Obamacare. Gov. Robert Bentley has made it very clear that he will never support expanding Medicaid, even though Alabama taxpayers are paying for that expansion.

There are two reasons why more and more Alabamians are turning to Medicaid for their healthcare needs. Both of those reasons are directly related to our stagnant economy and job growth.

The first reason for the growth in Medicaid enrollment is due to the kinds of jobs we are creating and, more importantly, the kind of jobs we are losing and not replacing.

Alabama has lost thousands of jobs over the past five years. These were jobs that paid a livable wage and usually came with some kind of health benefits. But we have been hemorrhaging jobs for years now.

The reality is that for almost every job we are creating we are also losing a job. Alabama is currently ranked 49th in the country for job creation. We only added 300 jobs to our economy in the last fiscal year. In fact, we are one of only five states that saw our economy shrink in 2013.

The people who lost these good jobs are now left having to work part-time or lower-wage jobs that do not come with benefits, leaving hard-working Alabamians living in poverty. Our job growth in the “leisure and hospitality” industry is almost as high as our growth in manufacturing. That means of the jobs we are creating, just as many have been maids or fast-food workers as have been machinists or welders.

Because we are losing good-paying jobs and replacing them with low-wage jobs that do not come with benefits, more and more Alabamians are having to rely on Medicaid to provide their children with basic health care.

But there is a second reason that more Alabamians are enrolling in Medicaid – more people are dropping out of the workforce because they have given up hope of finding a job. The clearest evidence of this is the dropping unemployment rate and the shrinking size of our workforce.

Over the past five years, thousands of Alabamians have quit looking for work. Some have started looking again, but most have never come back. Because they are not looking for work, the government treats them like they do not exist and does not count them when calculating the unemployment rate. This is why our unemployment rate has gone down.

But because they are not employed and have given up looking for work, these Alabamians do not have health insurance. For them, Medicaid is the only way they can provide their children with health insurance.

Medicaid enrollment has ballooned since 2010, more than doubling its cost to the taxpayers. The only way we can bring Medicaid’s expenses down is to create jobs that pay a livable wage and come with benefits so that Alabamians will not be forced to rely on Medicaid.

But clearly we are not doing that. Our economy is limping along on life-support and our state leaders seem to be out of solutions. That is why House Democrats proposed a legislative agenda that focuses on job creation and education. Our legislation would increase funding for vocational and workforce development training, as well as dual enrollment for high school students. This will allow existing businesses to expand while also making us much more attractive to the industries we are trying to recruit to our state.

Our agenda would also require that no corporate tax incentives could be given without a commitment to create jobs, and would put clawback provisions on all tax incentives. So if a company does not create or keep the jobs it promises, the taxpayers will get their money back.

These are common sense solutions that will put our economy back on the road to recovery. There is still more that needs to be done, but these proposals are a good start. Our problems with Medicaid are just a symptom of the illness. It is time to get Alabama’s economy off life-support!