Wednesday, August 13, 2014

Study: Georgia's refusal to expand Medicaid will leave $33.7 billion in federal cash on the table

Posted By on Wed, Aug 13, 2014 at 10:00 AM

Gov. Nathan's Deal decision to reject Medicaid expansion, a key provision of the Affordable Care Act, has already started to affect Georgia residents. The Kaiser Family Foundation estimates that more than 400,000 residents living on low incomes will be denied access to health-care treatment. Some rural hospitals have already shuttered their doors. Now we learn that, according to a new study, the governor's steadfast opposition to Medicaid expansion come with a price tag: $33.7 billion.

A new report from the Urban Institute, a nonpartisan think tank in Washington D.C., has analyzed the costs that states incur when its leaders decide against expanding their Medicaid programs. In June 2012, the U.S. Supreme Court tossed out a key component of the Affordable Care Act requiring states to expand their Medicaid programs. That decision left the choice in the hands of individual governors.

The Urban Institute's estimate that Georgia will potentially lose $33.7 billion isn't a new figure. But the report puts Deal's decision into greater context by comparing to nearly two-dozen other states making the same choice.

Between 2013 and 2022, the 24 states that have rejected Medicaid expansion are projected to pass up $423.6 billion in federal dollars, the report says. Medicaid expansion in Georgia would have cost the state somewhere around $2.5 billion over a 10-year period. But in the process, Georgia would have received an estimated $33.7 billion in federal funds. That's the fifth-highest amount of funding of any U.S. state that the governor and Georgia lawmakers are passing on thanks to their decision.

"The only question within state policymakers' control is whether to counter the adverse economic effects of those mechanisms by bringing in federal dollars to buy additional health care," the report says. "Adding these federal dollars to a state's economy while leaving the ACA's funding sources unchanged can generate economic growth and employment."

The U.S. Supreme Court's 2012 ruling also had an unintended consequence that negatively affects hospitals (especially for safety-net institutions such as Grady Memorial Hospital). Whenever an uninsured patient receives treatment, hospitals get partially reimbursed with Disproportionate Share Hospital - or "DSH" - payments from the feds to cover part of their costs. But "DSH" payments will be slashed since Medicaid expansion would've provided more people with health insurance, making the reimbursements less necessary.

Because of that policy gap, hospitals in those two-dozen states are expected to lose a combined $167.8 billion in Medicaid and Medicare reimbursements. Georgia hospitals are likely to lose approximately $12.8 billion in reimbursements - provided that Deal, his successor, and state lawmakers continue to reject Medicaid expansion. Florida and Texas are the only states facing bigger loses in hospital reimbursements without expanding their Medicaid programs.

You can see the full Medicaid expansion report after the jump:

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