American Rescue Plan Act of 2021 brings back federal incentives

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The new law settles the argument about whether Alabama can afford expansion

Contributed by the Cover Alabama Coalition

The new COVID-19 recovery stimulus legislation, known as the American Rescue Plan Act of 2021, was signed into law by President Joe Biden on Thursday. This law brings back federally financed incentives for states to expand Medicaid, but with a new angle this time. If Alabama expands Medicaid, the state would receive a five-percentage-point increase in federal funding for its traditional Medicaid coverage ‒ a larger population than the expansion group ‒ for two years.

This federal boost could mean an additional $940 million for Alabama Medicaid over a span of two years, early estimates show. The additional federal dollars from this increase would exceed the full state cost of Medicaid expansion for a number of years. Advocates for Medicaid expansion say this is a unique opportunity for the state to expand coverage.

Some 300,000 Alabamians are in the health coverage gap. That means they earn too much to qualify for Medicaid under Alabama’s stringent income limit but too little to qualify for subsidized marketplace plans under the Affordable Care Act. This includes more than 5,000 veterans and 8,000 of their family members. Tens of thousands more Alabamians are struggling to pay for coverage they can’t truly afford.

Medicaid expansion has proved to be politically popular. Nearly 70% of Alabamians support expanding Medicaid, including 64% of Republicans, a recent Cover Alabama poll administered by Cygnal found. These numbers increased when respondents were asked if they would support expanding Medicaid using federal funding.

The Cover Alabama Coalition calls on Gov. Kay Ivey and the Legislature to act quickly to expand Medicaid and make Alabama stronger and healthier. More than 40 Cover Alabama partners released statements in support of Medicaid expansion.

This law is a much-needed step toward closing the health coverage gap in Alabama. The American Rescue Plan Act would provide Alabama with financial incentives to expand Medicaid coverage at last. We have no time to waste. Tens of thousands of people have died in the South ‒ my home ‒ because they couldn’t afford to get the health care they needed. Medicaid expansion is the single biggest step Alabama can take to weather and recover from the COVID-19 pandemic and move our state forward. Congress did their job. Now it is time for Governor Ivey and our state lawmakers to do theirs and immediately expand Medicaid in Alabama.” ‒ Jane Adams, Campaign Director, Alabama Arise and the Cover Alabama Coalition

About Cover Alabama: The Cover Alabama Coalition is a nonpartisan alliance of more than 100 advocacy groups, businesses, community organizations, consumer groups, health care providers and religious congregations advocating for Alabama to provide quality, affordable health coverage to its citizens and implement a sustainable health care system.

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