Debate Continues Over Medicaid Expansion

| January 27, 2013
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The expasion of Medicaid is being heavily debated across the country right now including in our local area.  Click to hear KMZU’s Kristie Cross talk to Chief Executive Officer of Carroll County Memorial Hospital Jeff Tindle:

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Depending on the lawmaker with whom you speak, it’s quite possible to hear varying reports on the consequences of the expansion to rural hospitals.  Many say failure to do so will cost those facilities millions of dollars in investments and a massive loss of jobs.  Tindle said it’s not a clear cut situation.  “It is a very controversial subject,”said Tindle,”The fact of the matter is that this is a requirement of the Afforable Care Act somewhat known as Obamacare.  The genesis of this is to provide healthcare for all citizens and they have chosen to do that through the expansion of the medicaid program.”

The healthcare law expands eligibility to 138% of the federal poverty level.  The federal government would initially cover the entire cost of those newly eligible; however, that would fall to 90% over the next 10 years.

In a recent poll released by the Kaiser Family Foundation, 46% opposed cuts to Medicaid while 55% wanted the creation of a health insurance exchange to be a top priority for local governments.

Some, including the Missouri Hospital Association, have indicated that failure to expand the program would be detrimental to rural facilities.  Tindle was hesitant to go quite that far.  “I actually don’t think that it would be detrimental,”said Tindle,” Where we see the challenge is in our emergency room.  A lot of people realize that hospitals, by nature, not only have to see you, but they can’t require payment.  We do think that if the program weren’t expanded, we would continue to see self-pay patients utilizing the emergency room as opposed to a physician’s office as they should.”

Missouri hospitals reportedly provided $1.1 billion of uncompensated care to Missourians in 2011.

According to the executive, there are some other things to keep in mind from a local perspective.  “The challenge for rural hospitals is that we have a lot of citizens in Carroll County today who qualify for Medicaid, but are not signed up for the program,”said Tindle,” So, just because you create a program does not mean you’re going to get everyone signed up.  We think that we’re going to be stuck in the middle of trying to administer a program that a lot of people said publicly and through election ballots they weren’t in favor of.”

With constituents contacting their lawmakers on this topic right now, KMZU wondered what Tindle would recommend those voters say to their elected officials.  “That’s another very good question, but a difficult one to shoot a single arrow at,” said Tindle,” This is all about money to be honest with you.  If the state of Missouri chooses not to participate, the loss of federal support would be enormous.  They would lose funds for many programs that are very, very important to this state, important to Carroll County, and important to Carroll County Memorial Hospital.  It’s also an issue that falls on the line of understanding that if you accept federal funds on one side, you’re also accepting some responsibilities on another.”

The United States Supreme Court issued a ruling last year making the expansion optional for states.  A poll conducted by the St. Louis Missouri Foundation of Health found 52% of respondents favored expanding the program.

Governor Jay Nixon has stated his hope to do just that.  According to a statement released by his office, the Governor said,” I believe that as folks consider the benefits of making health care more accessible to working families and bringing billions of dollars to our state, they will come to the conclusion that we must take this critical actions for the people of Missouri.”

From a local perspective, the executive promises continued quality care no matter the outcome of the expansion decision.  “Regardless of what happens with the federal accountable care act,”said Tindle,” we need the residents of Carroll County and all of those who utilize our facilty to know that we have never, and will never under my leadership, consider a financial decision before we treat someone who is sick or injured.”

While the political distraction continues, the leadership at Carroll County Memorial plans to adhere to their patient-focused care.  “It’s a business, yes,” said Tindle,” And we have to operate at a profitable nature to keep our doors open, but we certainly don’t use that as a guideline.  We will work with anyone who seeks healthcare regardless of their ability to pay and ultimately that’s what’s it’s all about.  We just need to keep people healthy.”

Press Release from Missouri Hospital Association:

Not expanding Medicaid could cost Missouri more than 9,000 jobs, $1.9 billion in reduced capital investment of $1.1 billion in cost shift to the insured, according to a new analysis from the Missouri Hospital Association.  The gloomy forecase is based on cuts included in the Affordable Care Act and Budget Control Act of 2011, which the combined, reduce hospital reimbursement by $4 billion between 2013 and 2019.

“The Affordable Care Act included cuts to hospital payments but offest some of those cuts through increased coverage,” said Herb B. Kuhn, MHA president and CEO.  “Without the new revenue from expanded coverage, the numbers don’t add up.  That’s bad enws for the currently insured and bad news for Missouri’s economy.”

A recent study from the University of Missouri found that Medicaid expansion would create more than 22,000 sustainable jobs.  However, not expanding Medicaid would leave the ACA’s cuts in place and require hospitals to make costly decisions about staff, services, and infrastructure.

To illustrate the consequences of $4 billion in cuts, the analysis projected the effect of reductions in both workforce and capital investments between 2012 and 2021.  The analysis found that cuts of this magnitude would reduce hospital employment by 5, 011 through 2021.  In addition, between hospital jobs support additional jobs in communities throughout the state, the analysis projected a total job loss during standard economic multipliers.  The total job loss, accounting for the ripple effect of hospital community job cuts, would equal 9,019 jobs statewide.

Missouri’s hospitals incest approximately $1 billion annually in their physical plants and properties.  Without the offsetting revenue provided by Medicaid expansion, a $4 billion cuit to hospital payments could reduce capital expenditures by $1.9 billion through 2021.

“In 2011, Missouri hospitals provided more than $1.1 billion in uncompensated care statewide – a record level,” Kuhn said.  “Without expansion and in light of the cuts, this level of care is unsustainable.  The cuts significantly impair hospitals’ ability to invest in the staff, services and facilities necessary to deliver the level of care Missourians expect.”

In addition to the cost to Missouri’s economy through losses in jobs and capital investment, Missouri businesses could bear an increased share of the cost of the uninsured.  The cost shift, also known as the “hidden health care tax,” would likely increase in the absence of Medicaid expansion.  These costs are borne by businesses and individuals and the $4 billion in cuts could increase the costs by $1.1 billion through 2021.

“This new analysis paints a stark contrast to the earlier work by the University of Missouri on the economic benefits of Medicaid expansion,”Kuhn Said.  “It paints a picture of a Missouri that pays more in federal taxes and gets less.  And, that’s not a direction we can afford to go as a state.”

The Missouri Hospital Association is a not-for-profit association in Jefferson City that represents 154 Missouri hospitals.  In addition to representation and advocacy on behalf of its membership, the assocation offers continuing education programs on current health care topics and seeks to educatte the public about health care issues.

Press Release from Governor Jay Nixon:

Gov. Jay Nixon today visited Three Rivers College in Poplar Bluff to discuss his plans to provide health care coverage for an additional estimated 300,000 Missourians. The Governor said the step would yield significant benefits not only for uninsured working families and the economy, but also for Missouri taxpayers because the federal government will cover 100 percent of the costs for the first three years.

“Right now, we have a unique opportunity to provide health coverage to nearly 300,000 Missourians who can’t afford health insurance, while growing our economy and standing up for taxpayers,” Gov. Nixon said. “This is the smart thing to do, and the right thing to do, for the people of Missouri.”

“Beyond our borders, Democrats and Republicans alike are stepping forward to make sure their states take advantage of this opportunity,” Gov. Nixon said. “If Missouri turns down these dollars – dollars that come from taxes paid by Missourians – that money will go to some other state. They’ll get the benefit, and we’ll get the bill.”

Currently, federal law allows for an expansion of Medicaid to cover low-income Americans who can’t afford health insurance by raising the eligibility level to 138 percent of the Federal Poverty Level. A family of four living at 138 percent of the Federal Poverty Level in 2012 makes $31,809 a year.

Because federal funding will cover 100 percent of the costs for calendar years 2014, 2015 and 2016, expanding health care coverage to those 300,000 uninsured Missourians would involve no state tax dollars for those years. Beginning in 2017, the state share would be just five percent of the cost, and then increase to six percent for 2018 and seven percent for 2019. Beginning in 2020, the state would pay only 10 percent of the cost.

Missouri hospitals are already required by law to treat people who have no health insurance. This results in the high cost of caring for the uninsured being passed along to employers and individuals who must pay higher premiums for their health insurance. If this coverage is not compensated for through an expansion of Medicaid to cover the cost of that care, hospitals will have to bear those costs or pass them onto patients with health insurance.

A recent report by the Missouri Hospital Association found that in 2011, Missouri hospitals provided $1.1 billion in uncompensated care to Missourians – a record level.

Last fall, a report by the University of Missouri demonstrated the clear economic benefit to Missouri of providing expanded health care coverage, using the available federal funds. The University of Missouri report showed that the additional funding for health care will create 24,000 new jobs in Missouri in 2014 alone.

“I believe that as folks consider the benefits of making health care more accessible to working families and bringing billions of dollars to our state, they will come to the conclusion that we must take this critical action for the people of Missouri,” Gov. Nixon said.

 

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