Senate passes General Fund budget with $85 million Medicaid shortfall

The Alabama Senate approved a $1.8 billion General Fund budget Wednesday that will provide level-funding to most state agencies, despite a threat from Gov. Robert Bentley that he would veto any budget that did not adequately fund Medicaid.

The budget passed by the Senate leaves Alabama’s Medicaid program about $85 million short of the money it had requested.

The point of contention for Alabama lawmakers was Bentley’s plan to pull $181 million from education to fund the increase in Medicaid allocations. Senate Pro Tem Del Marsh has said repeatedly throughout the session that there is no appetite among lawmakers to pull from the education budget or to raise taxes any further.

The House passed the budget last week and House Speaker Mike Hubbard (R-Auburn) echoed much of Marsh’s sentiments. Hubbard said that the requested increase to Medicaid’s coffers would come at the expense of other state agencies.

A failure to provide Medicaid with adequate funding would obliterate the state’s earlier announced plans to institute a Regional Care Operation (RCO) programs. With the RCO plan in jeopardy, many state lawmakers have backed out of their previous promises to see the program come to life.

“Alabama took bold steps towards improving healthcare in our state with our plan for regional care organizations and today’s announcement proves our efforts are paying off,” Hubbard said when the plan was announced. “This investment could lead to a more streamlined and localized system, produce better outcomes, and save millions of taxpayer dollars in the long-term.”

“The Federal government has determined that Alabama has been innovative with our plan to transition to regional care organizations,” Marsh said at the time. “Over time it will save the taxpayers millions of dollars and will serve as a potential model for states as an alternative to expanding Medicaid.”

Despite Bentley’s repeated threats to veto the budget, Alabama Republicans who favor the bill would easily be able to override such a move by the governor.