JEFFERSON CITY, Mo. (AP) The CEO of a rural Missouri hospital system warned Monday that it could face financial peril unless state lawmakers back a Democratic plan to expand the Medicaid health care program to hundreds of thousands of additional low-income adults.
Pemiscot Memorial Hospital CEO Kerry Noble joined Democratic state House members at the Capitol as they announced the filing of legislation to expand Medicaid eligibility. Because of provisions in President Barack Obama’s health care law, hospitals have a large financial stake riding on the additional federal Medicaid money they would receive for treating patients.
“We will no longer be in existence if the passage of this expansion does not occur,” Noble told reporters while flanked by about 20 Democratic lawmakers.
The hospital CEO later softened that assertion, explaining that Pemiscot Memorial Hospital would not have to immediately shut its doors if Missouri does not expand Medicaid but rather could face financial hardship that could jeopardize its operation in the long run.
At issue is a provision in Obama’s 2010 Affordable Care Act encouraging states to expand Medicaid eligibility for adults earning up to 138 percent of the federal poverty level, which is $15,856 for an individual or $32,499 for a family of four. The federal government would pay the full cost of the expansion from 2014-2016, with states paying a 5 percent share in 2017 that gradually grows to 10 percent by 2020.
The Medicaid expansion is backed by Democratic Gov. Jay Nixon and various health care and business groups, among others. But Republican legislators generally oppose it, citing concerns about the long-term costs while raising doubts about the federal government’s ability to make good on its promises.
The federal government would pay an estimated $900 million for a Missouri Medicaid expansion in 2014, with that doubling in future years.
House Speaker Tim Jones said he plans to refer the Democrats’ plan to a House committee for a hearing and vote, but he expects it will fail.
“Pumping 300,000 to 400,000 able-bodied Missourians onto the Medicaid rolls at a federal cost of $2 billion that seems to be complete economic irresponsibility to me,” said Jones, R-Eureka.
House Republicans have been working on an alternative Medicaid plan, which Jones said would “provide more health care serves to those who are truly in need of it the disabled, seniors and children.”
Hospitals have a financial stake in the proposed Medicaid expansion. The federal health care law cuts payments to hospitals for treating uninsured patients on the assumption that many of those patients instead will be covered by an expanded Medicaid program.
If Medicaid is not expanded, Noble said his hospital system would lose around $1 million annually because of the reduced federal payments for the uninsured. Although that’s a small portion of what Noble said is a roughly $50 million annual operating budget, he said the reduced federal payments could affect the services provided at the hospital and its affiliated nursing homes and primary care clinics in southeast Missouri.
“We would have to ratchet back our capabilities initially in response to that and limit our capacity to provide health care,” Noble said. “Eventually, it would erode our ability to the point where, in the end, I very much think that we would be financially at risk (and) we would ultimately probably lose our hospital.”
Jones dismissed hospital assertions of financial insecurity as “scare tactics” that are “partially of their own doing” for agreeing to accept lower federal Medicare and uninsured payments in exchange for the promise that more patients would be covered through Medicaid and private insurance.
House Democrats touted figures from a report released last November by the Missouri Hospital Association estimating that the influx of federal money under a Medicaid expansion could create 24,000 jobs in Missouri. The Democrats described that Monday as “the biggest economic boost in a generation.” They also pointed to the report’s conclusion that a Medicaid expansion could reduce private insurance premiums by $1 billion over seven years by reducing the amount of uncompensated care costs that medical providers shift to insurers.
House Minority Leader Jake Hummel, D-St. Louis, said he hopes that his proposed Medicaid expansion will be allowed to get out of a committee.
“This is too important of an issue to sweep under the rug,” Hummel said. “Missourians deserve a vote they deserve to have this bill debated on the House floor.”
© Copyright 2013 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.