It is a basic principle of supply and demand. If the demand for goods or services decrease, the market corrects itself and lowers the number of those goods and services on the market.

Consider what lowered demand for health care in Alabama would do to the supply of health care. The Alabama House of Representatives in April approved a General Fund budget for the 2012-2013 fiscal year that would decrease the money spent on Medicaid by $200 million. Because those dollars are matched by the federal government on an almost two-to-one ratio, the House version of the budget would essentially cut the demand for health care by $600 million in Alabama.

Dr. Don Williamson, the state health officer and leader of a task force overseeing the state’s Medicaid Agency, said this week the cuts could lead to a “positive death spiral” driving many health care providers out of the state.

“Suddenly it’s not just the Medicaid patient who doesn’t have access,” Williamson said. “It’s you and it’s me, and it’s the Blue Cross patient, and it’s the Medicare patient.”

Williamson and Gov. Robert Bentley say they need at least $600 million in the budget to make Medicaid work. But the governor continues to oppose new taxes and fees, insisting instead that Medicaid should be funded strongly with $200 million from a rolling reserve fund.

While the governor’s proposal helps him keep his no-new-tax promise, it hardly fixes the issue for the long haul.

Many among us simply dismiss Medicaid as one of the government’s “gimme” programs and support the currently-proposed levels of cuts. Our guess is that those people wouldn’t like the big-picture effects of these cuts in services to all when health care providers begin leaving Alabama for states that have higher demands for health care.

The legislature and the governor need to compromise to find funding for this program.