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The Lake News Online
  • Medicaid expansion: A tough pill to swallow?

  • The debate over Medicaid expansion in Missouri began in earnest in the summer of 2012. Hospitals, chambers of commerce and others lined up to urge the General Assembly to accept expansion while Republican legislators made it clear Missouri would join other states in turning the program aside.
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    • What is Medicaid?
      Medicaid is a federal-state partnership to provide health care coverage for low income individuals. Nationally, Medicaid currently provides public health insurance coverage to approxima...
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      What is Medicaid?
      Medicaid is a federal-state partnership to provide health care coverage for low income individuals. Nationally, Medicaid currently provides public health insurance coverage to approximately 60 million low-income Americans. Nearly 900,000 Missourians are enrolled in the state’s Medicaid program across a broad range of eligibility categories. Among these eligibility categories, differing thresholds based on individual or family income determine program eligibility.
      Each state administers its own Medicaid program. In Missouri, the Medicaid program, known as MO HealthNet, is administered primarily by the Department of Social Services MO HealthNet Division, with assistance from other state divisions and departments.
      State participation in Medicaid is voluntary, and all states have participated since 1982. Although the program is an entitlement to eligible individuals, enrollment is not mandatory.
      The federal government offers matching funds to states to support the financing of Medicaid.
  • The debate over Medicaid expansion in Missouri began in earnest in the summer of 2012. Hospitals, chambers of commerce and others lined up to urge the General Assembly to accept expansion while Republican legislators made it clear Missouri would join other states in turning the program aside. Medicaid expansion became a political football putting the future healthcare of more than 300,000 Missourians who would have qualified for help at risk.
    The Affordable Care Act — widely referred to as Obamacare — uses federal tax dollars to fund Medicaid expansion to cover adult Medicaid eligibility to 138 percent of the poverty level. That means that individuals earning $15,850 a year and families of four with an annual income of $32,500 would be covered by the program.
    Missouri joins at least 20 other states in pushing the issue past the federal-funding deadline.
    In the meantime, the Missouri Hospital Association and local health care providers said the failure of general assembly to approve the expansion will have a significant impact on hospitals, especially those in rural communities and will ultimately cost the state much-nneded jobs.
    Currently parents with children are eligible for Medicaid if their income levels qualify. Adults with no children are not eligible. Expansion would provide health care coverage to more than 300,000 currently uninsured Missourians, including some adults with no children.
    The federal program fully funds the cost of expansion through 2016. States would pick up 5 percent of those costs on 2017 and 10 percent by 2020.
    An important part of the funding package includes disproportionate share hospital payments. The DSH payments have long been critical to hospitals, compensating for care provided low-income patients who cannot pay and are not covered by insurance or other programs.
    The U.S. Supreme Court has ruled that states are not required to accept Medicaid expansion but made no exception protecting states from new funding mechanisms. Two of those are reduced payments to Medicare in the state and a reduction in DSH payments. Thus hundreds of millions of dollars worth of unpaid for care will not be reimbursed to Missouri hospitals, putting them at risk of drowning in red ink.
    Despite the urging of organizations across Missouri and Governor Jay Nixon to expand Medicaid and keep funding mechanisms in place, the General Assembly did not include expansion in the 2013 budget. Instead, a committee of legislators was formed to tour the state this summer and allow Missourians to have input on the matter.
    Medicaid expansion will not be considered by the legislature until the 2014 legislative session. With federal funding of expansion scheduled to begin on January 1, 2014, the state will lose money no matter how quickly the legislature acts.
    The Missouri Hospital Association will move quickly in the new year to support legislative acceptance of expansion. An association poll taken in the spring of 2013 indicates that 56 percent of Missourians favor expansion.
    Page 2 of 3 - According to the association, the high rate of the uninsured, and expanded use of hospital services by the uninsured, has led to a significant increase in hospital uncompensated care costs.
    In 2011, hospitals provided $1.3 billion in uncompensated care statewide.
    Without additional coverage, hospital uncompensated care is expected to increase to $3.5 billion annually by the end of the decade, according to the association.
    Hospitals receive some funding through Medicaid and Medicare to offset the costs of providing uncompensated care, but much of the remaining cost of caring for the uninsured is shifted to commercial insurance carriers increasing the cost of premiums paid by employers and/or individuals.
    Lake Regional Health System recently published “Currents: A Report to the Community.” The annual report covers fiscal year 2013, which began May 2012 and ended April 2013.
    According Lake Regional Health System's annual report, Lake Regional contributed more than $31.1 million to the community, including uncompensated care, free medical services and health professionals’ education. The total also includes $16.2 million for the unpaid cost of treating Medicare patients.
    Lake Regional Health Systems spokesperson Jennifer Bethurem, said another downside is those who could have been included in the Medicaid expansion would have been able to take part in a managed health plan with an emphasis on preventive care. Without that, many of those uninsured will continue to use emergency room care instead of developing a health care routine.
    "That's the most expensive care there is," she said.
    Although State Representative Diane Franklin served on the Interim Committee on Citizens and Legislators Working Group on Medicaid Eligibility and Reform, she did not respond when asked for comments on the Medicaid Expansion issue.
    A spokesperson at Franklin's office recommended checking back in 45 to 60 days for a comment.
    According to Rep. Noel Torpey, the Independence Republican who chairs the Citizens and Legislators Working Group on Medicaid Eligibility and Reform, it appears that "many if not most Missourians want Medicaid expanded."
    Those who attended six scheduled public hearings throughout the state came down on both sides of the issue but supporters seemed to hold the field.
    Torpey said his Working Group will file a report with House Speaker Tim Jones with recommendations on how Missouri lawmakers should handle the expansion during the 2014 session.
     
    Numbers to know
    •$1.3 billion in uncompensated care provided by hospitals in Missouri in 2011 hospitals provided
    •$3.5 billion is the estimate for uncompensated care by the end of the decade without additional coverage.
    •893,976 Missourians are enrolled in the state’s Medicaid program
    •540,824 of 893,976 — are children
    Page 3 of 3 - •$185.9 million was spent in 2012 by The MO HealthNet for Pregnant Women program covering nearly 50 percent of all births in the state in 2012
    •877,000 uninsured in Missouri
    •300,000 estimated number of eligible Missourians under the expansion
     
    * Missouri Foundation for Health, Missouri Hospital Association, Lake Regional Health Systems
     
    At a Glance
    Job Creation and Labor Income
    •Increased Jobs: Expansion of Medicaid in Missouri was projected to generate an additional 24,008 jobs in Missouri in 2014. In one year, this is more than the employment of Missouri’s 10 Fortune 500 companies in the state. It also is 12.8% of the total unemployment number in Missouri in 2011.
    •Increased Payroll: Labor income in the state was projected to increase by nearly $7 billion during the period 2014 to 2020.
    •Increased GSP: In 2011, the Missouri gross state product (GSP) was $249.5 billion. If Missouri participated in the Medicaid expansion, it had the potential of adding another $9.6 billion in value-added output to the economy from 2014-2020 (an approximate 0.53% increase to the total GSP).
    •Total Impact: The total effects (direct, indirect and induced) of the original $8.6 billion Medicaid expansion is an additional $9.6  billion of value-added output to the state.
    •Increased Tax Revenue: The Medicaid expansion would generate $856 million in additional state and local taxes from 2014 to 2020 and $1.4 billion in federal taxes due to the increase in jobs and economic activity, for a total tax collected of $2.3 billion.
     
    *Data collected from the University of Missouri School of Medicine study commissioned by the Missouri Hospital Association.
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