Last week, Paul Ryan accepted the nomination for Vice President. In his acceptance speech, he cited “Obamacare” as the greatest threat to Medicare, but many hospitals view the expansion of coverage for low-income individuals positively. More and more community hospitals are urging their state governments to accept payments for expanded Medicaid programs under the Affordable Care Act (ACA) because they are concerned about the financial impact of rejecting the expansion.
Last month, the Supreme Court ruled that the ACA’s expansion of Medicaid would not be mandatory for states. Some states may decline the federal money to expand Medicaid because Republican lawmakers do not believe their states can afford it. With already tight state budgets, many Republicans say expanding Medicaid comes with a costly price tag. “Some might argue that the federal government will pick up the tab, so states won’t have to worry. But the truth is, they’re promising to pay for only the first couple of years before they begin shifting the burden to the states,” Gov. Rick Scott of Florida said in a written statement.
Missouri hospitals are urging their lawmakers to accept Federal funding to expand Medicaid, and they are not alone. Hospitals in a number of states, including hospitals in Texas, Iowa, South Carolina, and Florida, are concerned about hospital bottom lines if the Federal money is rejected.
The St. Louis Post-Dispatch reported that Missouri hospitals stand to lose a projected $400 million from cuts to federal Disproportionate Share Hospital (DSH) payments. The federal government makes DSH payments to hospitals that serve a disproportionate share of low-income individuals. The ACA cut DSH payments because an expanded Medicaid program would result in fewer low-income patients. The Post-Dispatch article quotes Missouri Hospital Association spokesperson Dave Dillon as saying:
If you don’t expand Medicaid and you eliminate the DSH funding, you have the ability to significantly impact hospitals’ financials. It’s extremely problematic.
While states are rightfully concerned about the cost of a potential expansion, community hospitals may be caught in the middle and forced to address the double whammy of losing DSH funding without the benefits of an expanded Medicaid program.