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RESOURCE CENTER AND ARCHIVES

Not expanding Medicaid hurts everyone, Mitchell sayscomment (0)

August 28, 2014

By Ross Mitchell


Not expanding Medicaid hurts everyone, Mitchell says

Alabama’s continuing refusal to expand Medicaid under the Affordable Care Act (ACA) not only leaves some 200,000 struggling workers without a health safety net, it also threatens our hospitals’ mission to provide medical care when and where it is needed.

Additionally it hinders faith-based hospitals from carrying out the Creator’s mandate to care for the “least of these.” Both the Old Testament and the New Testament point out a Christian’s obligation to provide opportunities for health and wholeness to all regardless of their economic or social standing.

Luke 8 records the story of a woman who had spent all her resources on her health and still suffered. In faith she reasoned that if she could just touch the hem of Jesus’ garment she could be healed. She was correct because Jesus never refused to heal anyone who came to Him. Faith-based hospitals are the means of connecting the physically hurting and medically impoverished to the healing touch of the Savior. Faith-based hospitals will continue to offer medical care to anyone who needs it, but at some point the resources will reach a critically low point that will force our compassionate caregivers to turn them away instead of welcoming them with open arms.  

As written, the ACA would have been a break-even scenario for hospitals. ACA funding cuts and other factors would have been offset by revenue created when more people were insured through both the federally subsidized insurance exchanges and the expansion of Medicaid for adults earning less than 138 percent of the federal poverty level.

But the U.S. Supreme Court allowed states to opt out. Alabama, with nearly 700,000 uninsured adults in 2013, is among 24 states that have not expanded Medicaid.

The decision puts a multi-billion-dollar dent in Alabama hospitals, already battered by the recent Great Recession. 

The ACA’s funding cuts will cost Alabama hospitals some $4 billion through 2022. Again these losses could have been offset by approximately $7 billion in reimbursements under expanded Medicaid, a new study by the Urban Institute shows.

Many Alabama hospitals already are in a dangerous downward spiral, with rural facilities at greatest risk. Eight rural hospitals have closed in Alabama since January 2012. Without the economic boost from expanded Medicaid, many others face serious service reductions or even closure.

The effects of hospital closures are devastating and widespread. Traveling farther for medical help can be a life-or-death matter for someone having a stroke or heart attack, or for a mom ready to deliver a newborn with possible complications.

The economic impact ripples across the county and surrounding areas. Hospitals often are among the top employers and pay top wages. In some rural areas, hospital workers earn $250–$350 a week above the county’s average wage. Alabama’s health care industry employs 80,000; their wages indirectly support another 79,000 jobs.

Hospital employees and visitors also bring in business and sales taxes. Hospitals are, in sum, a community’s lifeblood.

Alabama is parsimonious on eligibility for standard Medicaid. A family of three must make less than $3,600 a year ($68 weekly) for adults to qualify.

Nearly 342,000 uninsured adults in Alabama would qualify for expanded Medicaid under the ACA Medicaid eligibility guidelines, almost totally funded by tax dollars generated in Alabama but held by the federal government.

Working adults

The majority — 185,000 adults — are working. They are cooks, servers, cashiers, office clerks, barbers, child care workers, mechanics and janitors, a new study by Families USA shows. Another 82,000 do not participate in the workforce, including at-home spouses, the disabled and college-age students.

Only 22 percent of those who would qualify for an expanded program are unemployed, the Families USA study said. Considering the vast number of laid-off professionals still unable to find equivalent jobs, it would be unreasonable to dismiss Medicaid expansion as a handout for those who don’t want to work.

ACA-subsidized insurance is available only to adults above the federal poverty level, less than $20,000 a year ($381 weekly) for a family of three. Among those who would have qualified for expanded Medicaid, 74 percent do not earn enough money for subsidized insurance.

Because elected state leaders opted out of expanding Medicaid, some 254,000 Alabamians fall into an “insurance gap,” with no options for affordable coverage.

Hospitals have suffered in recent years as recession job losses left tens of thousands without insurance. And the cost of providing care to these individuals has soared by more than 150 percent at some hospitals from 2008 to 2012.

Financial benefit

So why add Medicaid patients?

Under the ACA, federal tax dollars will cover 100 percent of costs for expanded-Medicaid patients through 2016. Reimbursements will taper to 90 percent by 2020 and stay at that level. The entire health care industry, not just hospitals, will benefit financially.

Critics say state government cannot absorb the additional costs after 2016. But a University of Alabama study shows the economic benefit to taxpayers from expansion would exceed costs by $935 million through 2020.

The trade-off for expanding Medicaid is $13.41 in federal money for every $1 state taxpayers spend to expand coverage for the poor, the Urban Institute calculates. Refusing Medicaid expansion could cost Alabama taxpayers $14.4 billion in extra federal funding through 2022, the Urban Institute says.

Credible studies say expansion could result in 32,000 additional jobs paying $1.3 billion, providing a $20 billion overall benefit to Alabama through 2020.

We will pay the same federal taxes regardless. But by refusing to expand Medicaid, Alabama now subsidizes the states that did. Alabamians already pay more in federal taxes than we get back in funding.  

The state needs the jobs and economic boost. Hospitals deserve a fighting chance from a balanced ACA. Employers seek a healthier, more productive workforce. Cities and counties are measured by their hospitals and staff. 

People’s lives and well-being depend on a robust health care industry.

Editor’s Note — Ross Mitchell is vice president of external and governmental affairs for Baptist Health System in Birmingham.

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