Alabama legislators got some good news, at least for the short term, from the Alabama Medicaid Agency today.

Medicaid, the biggest consumer of dollars in the state’s General Fund, expects to carry forward $53 million into next year, offsetting the need for an increase in state funding for 2019.

Medicaid Commissioner Stephanie Azar made a presentation today at a legislative budget hearing in Montgomery. Lawmakers are preparing for their annual session, which starts Tuesday. A key task will be to pass a state budget for 2019.

Legislators also heard from the Alabama Law Enforcement Agency and the departments of Corrections, Mental Health and Public Health.

For this year’s budget, the Legislature appropriated $701 million from the General Fund to Medicaid, plus $105 million in one-time money from a BP oil spill settlement. 

There’s no oil spill money available for the 2019 budget.

Azar said Medicaid’s state funding need for 2019 would be $810 million, but with the carryover, the General Fund request is $757 million. That’s less than the combined amount of the General Fund and BP money for this year.

“The major reason for that carry-forward was that in 2017 drug costs went significantly down than what was previously estimated,” Azar said.

Also, Medicaid enrollment, which had been on the rise, has leveled off and actually decreased slightly.

“It has remained flat, which is really good news,” Azar said.

Azar said it’s hard to say whether that will become a long-term trend.

“Hopefully if our economy continues to do well in Alabama then that enrollment may stay that way,” Azar said.

Medicaid is a massive program, consuming more than one-third of the $1.8 billion General Fund this year. About one million Alabamians receive some services from Medicaid. About half are children up to age 18 who live in families with incomes below 146 percent of the federal poverty rate. Other main groups include the disabled, the blind, adults over 65 in poverty and pregnant woman.

Federal funds pay about 70 percent of the cost. Still, because of the size of the program, $6.5 billion in 2017, covering the state’s share of the cost has forced lawmakers to borrow or rely on one-time funding sources in recent years.

But the outlook for 2019 is better, at least for now.

“It was good to get some temporary good news from Medicaid,” Rep. Steve Clouse, chairman of the House Ways and Means General Fund committee, said after today’s hearing. “They had some cost savings on drug costs. Enrollment went down slightly.”

Last year, when the Legislature passed the 2018 budget that’s now in effect, they set aside $93 million for contingencies, such as changes to Medicaid, the Children’s Health Insurance Program and the prison system.

Clouse said that is going to make the 2019 budget more manageable. A key uncertainty remaining is whether Congress will renew full federal funding of the Children’s Health Insurance Program, known as ALL Kids in Alabama, as it has the last two years.

The Alabama Department of Public Health requested a $53.6 million increase in its General Fund appropriation in case Congress requires the state to provide a 20 percent match for CHIP, which serves about 84,000 children up to age 19 in Alabama.

“We feel like we’re getting some positive vibes from Washington but they still haven’t come through with it,” Clouse said. “Hopefully in the next couple of weeks we’ll have some positive answers there.”

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Alabama Medicaid Agency delivers good news, at least for now