Feds make financial pitch for Medicaid expansion

The Obama administration rolled out new statistics this week to buttress the argument that Georgia should expand its Medicaid program.


The report from the White House Council of Economic Advisers said that if Georgia expanded Medicaid, as outlined by the Affordable Care Act:

** An additional 389,000 Georgians would have insurance coverage in 2016.

** 52,000 additional Georgians would report being in good (or better) health and 36,000 fewer individuals would experience symptoms of depression.

** 55,300 fewer people would have trouble paying other bills due to the burden of medical costs.

The report also estimates that by not expanding Medicaid, Georgia will miss out on $2.85 billion in federal funding in 2016.

The White House report included similar estimates for other states that have not expanded Medicaid. While expansion is called for by the ACA, the U.S. Supreme Court ruled in 2012 that the decision is up to the individual states.

Medicaid expansion is off the table in Georgia, at least for the time being. Gov. Nathan Deal and state legislative leaders have stood firmly against expansion, saying it would be too costly for the state. Few Georgia politicians have pushed for it, and in fact a state law passed in 2014 increased the roadblocks to potential Medicaid expansion.

Photo of the Georgia Capitol Building

Brian Robinson, a spokesman for the governor, said Thursday in an email to GHN, “Medicaid expansion adds another expensive layer of entitlement spending at a time when current entitlements are already crowding out essential spending projects. As it is currently constructed, Medicaid expansion is too expensive for Georgia, and recent reports have shown that it has not been the windfall for hospitals that Obama officials promised.”

Two recent reports gave conflicting pictures of how expansion and the ACA have affected Kentucky hospitals, one of two Southern states that have expanded Medicaid.

A report from Deloitte Consulting and the University of Louisville’s Urban Studies Institute said Kentucky hospitals received $506 million more in Medicaid reimbursement since January 2014 because of the expansion, and that the expansion generated more than 12,000 new jobs in health care and related fields, USA Today reported.

The Kentucky Hospital Association, though, said the ACA overall has left them facing billions of dollars in cuts and forced them to lay off staff and shut down services. The report went beyond Medicaid expansion costs to include cuts from other parts of the law, such as the loss of charity care funds and the penalties on hospitals for high patient readmission rates.

Tim Sweeney, deputy director of policy for the Georgia Budget and Policy Institute, which supports the ACA and Medicaid expansion, said Friday that the “benefits of expansion for hospitals are real”  — as are the health benefits to Georgians, he added.

Another hospital at risk

The hospital environment in Georgia, meanwhile, remains turbulent.

The Georgia Hospital Association says its members are facing the most difficult financial conditions they’ve ever seen. The state’s rate of uninsured people remains among the highest in the nation. And since 2013, five hospitals in Georgia have closed.

Kim Ryan
Kim Ryan

One more hospital appears to be teetering on the edge of collapse. Clayton County in metro Atlanta has allocated no money for the 331-bed Southern Regional Medical Center in Riverdale for the county’s 2016 fiscal year.

“The hospital cannot survive as it does currently unless we receive external financial support,’’ Kim Ryan, the Southern Regional CEO, told the AJC this week.

The Clayton Board of Commissioners approved a plan to hire a consulting firm to evaluate all viable strategic options, including identifying potential strategic financial partners for the hospital.

Meanwhile, uncompensated care charges have increased at the hospital. In 2014, Southern Regional’s cost of uncompensated care was $21 million.

The White House report this week said uncompensated care costs would be $410 million lower in 2016 if Medicaid expansion were fully in effect in Georgia.

A Southern Regional spokesman would not respond to a question on whether expansion would help the hospital’s finances. Tal Wright, the spokesman, pointed instead to a proposed Medicaid waiver to insure more Georgians. That plan was developed by Grady Health System in Atlanta.

“We support Grady’s initiative to tailor a program for Georgia through the 1115 waiver, and we hope that those discussions continue to develop a waiver that serves Georgians,” said Wright.

To date, 28 states have expanded Medicaid. The issue has prompted a long, fierce debate in Florida.

The state Senate in the Sunshine State passed an expansion bill this week. But despite several changes made in recent days to assuage the concerns of the Republican majority, the Florida House remains poised to defeat the plan.