Advocacy groups urge Medicaid expansion for Georgia

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Georgia’s financially distressed rural hospitals might have a better chance of surviving if the state would expand Medicaid coverage and accept the federal funding that comes with that expansion, says a coalition of healthcare and consumer advocacy groups.

The organizations are asking the Rural Hospital Stabilization Committee, a panel appointed by Gov. Nathan Deal to find possible solutions to the hospital crisis, to consider Medicaid expansion as one of their recommendations to the governor.

“By expanding Medicaid eligibility, and thus providing more than 400,000 Georgians with health insurance, rural hospitals would be able to collect compensation for the care that they are currently providing to their patients at no cost,” the groups said in a letter to Rep. Terry England (R-Auburn) and Sen. David Lucas (D-Macon), the cochairmen of Deal’s study committee.

“The additional income would boost hospital revenues, thus strengthening the financial situations of rural hospitals and Georgia’s health care system as a whole,” the letter said.

The advocacy groups – which include Georgians for a Healthy Future, Georgia Watch, the Georgia Budget & Policy Institute, and Families First – have sent a report outlining the financial impact of Medicaid expansion on the state’s hospitals to the members of the rural hospital committee, whose next meeting is Thursday.

Medicaid expansion is a key component of the Affordable Care Act, but states have the option of not participating in it. Deal and the Republican leadership in the General Assembly have been opposed to expanding Medicaid, saying that the state cannot afford to pay its share of the cost.

Shortly after he was reelected to another term, Deal told reporters he remained opposed to the expansion of Medicaid.

“I think you will find what we have done [refuse to expand coverage] to be the best answer,” Deal said.

Under the ACA, the federal government would have paid 100 percent of the costs of Medicaid expansion for a three-year period beginning in 2014 – that would have brought an estimated $3 billion a year in federal funds into the state. After that three-year period, the federal government would pay 90 percent of the expansion costs, with the states picking up the other 10 percent.

Deal has cited the estimated $2.1 billion that Georgia would pay as its share of the costs over a 10-year period as a major reason for opposing expansion.

The report prepared for the study committee says Georgia hospitals that treat a large percentage of uninsured and Medicaid patients are seeing reductions in the Disproportionate Share (DSH) payments they receive from the federal government.

“In FY 2014, Georgia received $287 million in federal DSH funds, 19.2 percent of which (over $55.1 million) went to rural hospitals throughout the State,” the report said. “By the time federal cuts are phased-in in 2018, Georgia’s hospitals will realize $143 million in fewer federal DSH funds.”

The additional federal funding from Medicaid expansion could make up for the reductions in DSH payments, the report said.

“If Georgia accepts the federal funds and expands eligibility for Medicaid, almost 600,000 Georgians, many of whom live in rural areas, could be newly covered by health insurance,” the report said.

“The increase in insured patients would alleviate the burden of uncompensated care on hospitals’ finances,” the report said. “Rural hospitals would be able to collect significantly more revenue from insurers, thus strengthening their financial positions.”

© 2014 by The Georgia Report

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Tags: ACA , David Lucas , Georgia Budget & Policy Institute , Georgia Watch , Georgians for a Healthy Future , Medicaid expansion , Nathan Deal , rural hospitals , Terry England