The reality of Alabama's dire fiscal condition was confirmed May 25 when state legislators passed an austere $1.77 billion General Fund budget for Fiscal Year 2012 that allocated approximately $640.5 million for Medicaid, a cut of about $9.75 million from what had been previously approved. Because of Medicaid's favorable 68 percent federal-32 percent state matching rate, the loss of $9.75 million from the General Fund means Alabama Medicaid must reduce its overall budget by about $30 million. The budget now goes to Governor Robert Bentley for his signature.
The newest budget cut widened the gap between the $700 million the Agency had requested in February to maintain the existing program, to cover the cost of a growing number of Medicaid recipients and to replace federal stimulus funds. If unchanged, the newest budget cuts potentially jeopardize the state Medicaid agency's optional programs - including pharmacy, kidney dialysis and transplants - unless alternatives are found to restore the funds cut from the budget, said Medicaid Commissioner R. Bob Mullins, Jr., MD.
"I agree with the Governor in that I am disappointed in the General Fund budget that was approved by the legislature and will do whatever is necessary to do to provide as much as we can for our recipients," he said. "However, if the money runs out before the end of the year, the optional programs will probably not be paid."
Potential remedies include one or more Executive Amendments to restore the funds by the Governor, or tax breaks for providers to offset any fee cuts that might be required. Both will require legislative approval. "We have to protect the federal match in order to have a state Medicaid program," Dr. Mullins said. We are anxiously waiting to see if the supporting bills will be of any help."