In the wake of President Obama’s re-election, Georgia advocates plan to renew a push to bring to the state a key piece of his health care overhaul: Medicaid expansion to cover more of the uninsured.
Gov, Nathan Deal opposes it as too expensive, and a spokesman said the program already faces a $700 million deficit in coming years. Some Augusta hospital leaders say the election has done little to alter their planning for a future that includes less money one way or the other.
Deal has yet to give formal notice that the state will not implement its own health insurance exchange, though spokesman Brian Robinson said it became a moot point when the federal government severely limited what Georgia could do to craft its own plan, leaving it to accept a federally created exchange as a default.
“We were going to get a federal exchange no matter what,” he said.
Advocates are still hopeful Deal will reconsider his opposition to Medicaid expansion, a key part of trying to get coverage to the uninsured, said Cindy Zeldin, the executive director of Georgians for a Healthy Future.
The Affordable Care Act was designed to expand Medicaid up to 133 percent of the federal poverty level and to offer subsidies in the form of tax credits to higher-income patients to purchase private insurance through the exchanges. The problem is, if Medicaid is not expanded in Georgia, those who would have been picked up are not eligible for the subsidies, Zeldin said.
“We’re going to have a big inequity issue within the state if we don’t expand Medicaid because we will have people who will really have nowhere to go,” she said. “They could go to the exchange, but without any tax credit, with incomes that low there isn’t going to be anything affordable. And with incomes that low they are probably not being offered coverage at work.”
That is particularly a big problem for Georgia, Zeldin said.
“We have one of the highest uninsured rates in the nation,” she said. “We have one of the highest number of uninsured in the nation. And many of them are low to moderate income. The Medicaid piece is really what is going to make a dent in the uninsured in a big way.”
The Medicaid expansion could cover 600,000 to 900,000 more people in Georgia and be a big help for hospitals, said Kevin Bloye, a spokesman for the Georgia Hospital Association. It was part of the deal that hospitals struck with the Obama administration to make up for $155 billion in Medicare cuts over 10 years to help pay for the health care overhaul, he said.
“We basically got the cuts and not the coverage, which is a worst-case scenario for hospitals,” Bloye said. In Georgia’s case, that is $3.5 billion in cuts over 10 years.
The Centers for Medicare and Medicaid Services have told states that the first three years of expansion would be fully funded beginning in 2014, with the rate dropping to 90 percent by 2020. Robinson said that Georgia’s share, however, would be $4.5 billion over the next 10 years and that the state doesn’t have the money, nor does the federal government have the other $40 billion it would spend on expanding Georgia Medicaid.
“So at some point in time the rubber is going to hit the road and we are going to have all of these people on Medicaid and no money coming in to pay for it all,” he said. “It’s a train wreck.”
Besides that, Robinson said, the program is already facing a $700 million deficit over the next two years.
“It’s not a matter of us not wanting people to have insurance,” he said. “It is a simple matter of affordability.”
Should any state refuse the Medicaid expansion money, it would likely just go to another state’s program, said Dr. Cyril Chang, a professor of economics and the director of the Methodist Le Bonheur Center for Healthcare Economics at the University of Memphis.
“The recipient of your money will not even say thank you to you,” he said.
Georgia hospitals have a good relationship with Deal and hope to continue a “dialogue” with him about Medicaid expansion, Bloye said. Zeldin’s group will be among a broad coalition working for it in the next legislative session.
University Hospital CEO Jim Davis said the election left him with the status quo, as he expected.
“I think we were always, deep down inside, planning on Obamacare rolling out in its entirety regardless of the outcome of the election,” he said. “To actually overthrow Obamacare would have taken a huge change. I did not see that coming.”
The health care overhaul is going to cost University about $27 million and will force as much cost-cutting as possible. Hospitals are likely to get creative and look at things such as “pseudo-mergers” taking place in other areas of the country, in which health systems combine some office operations to save overhead, Davis said.
Of more immediate concern is the $1.2 trillion in automatic cuts at the federal level, half to defense and half to domestic programs, that are set to take effect next year, said David Hefner, the executive vice president for clinical affairs at Georgia Health Sciences University. He estimated they would cost GHSU $20 million a year.
Democrats and Republicans have talked about creating a deal that would avoid the cuts. Regardless, something has to change, Hefner said.
“All of it is concerning because health care as an industry, the way we have it configured, is fairly unsustainable,” he said. “We are talking about how do we finance that which is inherently unsustainable. And everybody wants it better, faster, less expensive.”