Short-term fix for Medicaid shortfall found in BP settlement; not solution, senator says

The day before the special session ended Sept. 7, lawmakers passed a plan to buoy Medicaid with BP oil settlement money.

After two proposed lottery bills failed to offer a solution, lawmakers came together Sept. 6 to focus on BP oil settlement money, using most of the $1 billion that BP is set to pay over 18 years for the 2010 oil spill in the Gulf Coast.

In 2018 the bill (HB 36) will split the settlement between Medicaid, debt repayment and road projects in Mobile and Baldwin counties.

Immediate need

For the immediate $85 million need of the 2017 Medicaid budget, Gov. Robert Bentley has allocated $70 million — $50 million from the first BP payment and $20 million from the General Fund. The additional $15 million will be given directly to Medicaid from the BP settlement, according to Birmingham Business Journal.

The bill issues bonds and then uses the BP payments to pay off the bonds. It also creates the Alabama Economic Settlement Authority to issue the bonds estimated at $640 million. The money will be divided as follows:

•$120 million to Medicaid, which is split $15 million in 2017 and $105 million in 2018.

•$162 million to repay the General Fund Rainy Day Account. That money was used seven years ago to support the budget and must be repaid by 2020.

•$238 million to the Alabama Trust Fund, also to replenish funds transferred a few years ago to support the budget.

•Remaining $120 million would go to Mobile and Baldwin counties for specific road projects.

Awaiting signature

The bill also includes an amendment from Sen. Rodger Smitherman, D-Birmingham, which earmarks at least $4 million in Medicaid funds for outpatient dialysis and reinstates Medicaid reimbursements to doctors back to what they were before Aug. 1.

Lawmakers approved the bill 22–8 in the Senate and 87–9 in the House. Bentley signed the bill into law Sept. 8.

The bill’s sponsor, Rep. Steve Clouse, R-Ozark, said, “We have not solved the problem on Medicaid. … This is just something we’ve got to continue to work on.” (Maggie Walsh)