No State-Run Health Insurance Exchange or Medicaid Expansion in Alabama

Governor Bentley told the Birmingham Business Alliance today that he would not set up a state-run health insurance exchange, and he will not expand Medicaid as provided under health care reform.

Once established, the health insurance exchanges will be places for individuals and businesses to shop for health insurance plans. The exchanges are supposed to be in place by January 1, 2014, when the individual mandate to buy health insurance goes into effect. Alabama had until Friday to tell the federal government if it wanted to set up a state-run health insurance exchange. This decisionmeans that the federal government will set up a health insurance exchange on behalf of the state. Governor Bentley said he has been in communication with other governors about the decision, including the Republican governors of Louisiana, Florida and Texas, and he expects similar decisions out of those states.

Governor Bentley also said the state could not afford a Medicaid expansion. The expansion of Medicaid would have allowed individuals between the ages of 19 and 65 or households making up to 133 percent of the poverty level to enroll in Medicaid. Eligibility for the program is currently restricted to children and those on disability. A Kaiser Family Foundation study in 2010 found the Medicaid expansion could have given 244,000 individuals in Alabama insurance for the first time. Although the expansion would have been paid for almost entirely by the federal government, Governor Bentley explained that he is concerned about the long-term cost to both the state and nation.


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