Will Ga. hospital group go to bat for expansion?

Unlike its counterparts in other states, the Georgia Hospital Association has not been seen as actively advocating for Medicaid expansion.

A number of states have expanded their Medicaid programs, making more low-income people eligible for benefits and thus helping hospitals financially by reducing their numbers of uninsured patients.

Hospital Outpatient Entrance Sign

But expansion has gone nowhere in Georgia. Gov. Nathan Deal and his fellow Republicans who dominate the General Assembly have made a point of blocking such a move, saying it would cost the state too much money.

Just last week, Georgia House Speaker David Ralston slammed the door on the idea once again. “I haven’t heard any widespread regret in Georgia on our decision not to expand Medicaid,” said Ralston, as reported by Tom Crawford in his Georgia Report.

But in recent days, Georgia’s biggest hospital association has crafted a proposal to the state that would include Medicaid expansion, and the group says the plan would be both beneficial and fiscally wise.

The GHA proposal, obtained by Georgia Health News,  calls for the state to take advantage of the federal government’s commitment to absorb 100 percent of the costs of expanding the program until 2017.

The plan urges the state to use $6.1 billion in federal funds to extend coverage for uninsured Georgians, with services delivered through the existing Medicaid managed care companies for two state fiscal years.  

The proposed plan would have a sunset provision for 2017. The GHA proposal says that provision “addresses concerns about the long-term state budgetary impact of traditional Medicaid expansion. In fact, it ensures the net budgetary impact of this proposal to the state is positive.”

The proposal also recommends the creation of a commission that would study the financial effects of expansion on the state and local governments, and develop a comprehensive health care strategy for Georgia.

How official is the plan?

Adopting Medicaid expansion would extend coverage to an estimated 500,000 low-income Georgians. And it would turn many non-paying patients into insured patients for hospitals to collect reimbursement for services.

Healthcare Cost

The GHA documents say expansion would create tens of thousands of new jobs and would generate “far more in new state tax revenues than is needed to cover the state’s costs.” It would also create state savings from current costs of providing behavioral health care, along with the cost of health care for prisoners, the proposal says.

It’s not known how widely the hospital association proposal has been circulated in the industry, or among political leaders. And a GHA official told Georgia Health News via email last week that the organization would not discuss the plan publicly.

“We have discussed many proposals on this issue and to date, our membership has not adopted a position of support on any them,’’ said Kevin Bloye, a GHA vice president. “At this time, it is premature for us to publicly discuss any of the potential solutions that we continue to explore.”

Hospital crisis

This year’s General Assembly convenes Monday, and experts say Medicaid expansion won’t be a major topic. Outspoken opponents of expansion won re-election in November, so they are unlikely to face political pressure on the issue.

At the same time, though, many Georgia hospitals are facing financial peril.

Tennessee Gov. Bill Haslam
Tennessee Gov. Bill Haslam

GHA has said this is the most difficult time ever for the state’s hospitals. “There’s no question that the financial challenges that so many hospitals throughout the state are currently facing are unprecedented,’’ Bloye told GHN recently.

Since 2013, five Georgia hospitals have closed. Many others, especially those in rural areas, are in financial distress.

If Georgia were to expand Medicaid, it would join about half the states in doing so, including some run by Republican governors.

Three nearby Republican-dominated states – Florida, Alabama and South Carolina – have not expanded their Medicaid programs, though the hospital associations in those states have shown their support for such a move.

But with the help of its hospital association, Tennessee appears to be moving forward on expansion. Gov. Bill Haslam, a Republican, has developed an alternative to conventional Medicaid expansion.  The hospital association has struck a deal with Haslam to help pay for the state contribution to expansion, according to an NPR story.

Besides the GHA, another Georgia hospital organization, the Georgia Alliance of Community Hospitals, has backed Medicaid expansion. A third group, HomeTown Health, an association of rural hospitals, has said that Medicaid expansion would help, but that “it’s not a silver bullet’’ for financial problems these facilities face.

Some individual hospital CEOs have gone public in their support of expansion.

The GHA has been criticized for not taking an active stand.

Bloye of the GHA, while not discussing its expansion proposal, said the organization has discussed with state leadership how the cuts from the Affordable Care Act “will hit Georgia hospitals to the tune of $727 million in reductions.”  (The federal health law anticipated that Medicaid expansion would compensate for these cuts to hospitals, but the U.S. Supreme Court ruled in 2012 that the states had the right not to pursue expansion.)

Last year, Gov. Deal, recognizing the financial crisis facing rural hospitals, proposed a regulatory change allowing them to convert to standalone emergency departments. But no hospital has sought to do so, state officials said recently.

And Deal formed a Rural Hospital Stabilization Committee, which has discussed standalone ERs and other ideas, but has not engaged in a discussion about Medicaid expansion. Recently the panel heard comments from several organizations urging Medicaid expansion.

‘There’s money flowing’

Kentucky is one of two Southern states to enact expansion. The state has seen its percentage of uninsured citizens drop from 20.4 percent in 2013 to 11.9 percent in mid-2014.


Besides previously uninsured people getting needed medical care, “there’s money flowing to hospitals and other providers,’’ said  Jason Bailey of the Kentucky Center for Economic Policy, speaking to a Georgia Budget and Policy Institute conference last week.

Adam Searing of the Georgetown Center for Children and Families added that in the states that have expanded Medicaid, “there’s an increasingly strong body of evidence of the substantial and immediate benefits to hospitals.”

The GHA proposal says expansion “provides the state an unparalleled return on investment.”

“The state pays 20 percent of the costs of transportation while federal revenues pay 80 percent,” the GHA documents say.

“This proposal is a much better return on investment because it requires the state to pay nothing for the first year and a half and only 5 percent for the last six months of the 2017 fiscal year.”