States that have not expanded Medicaid are finding that rural hospitals struggle because they must still treat uninsured patients who show up for care, but they get less help from the federal government than in the past.
Now that Louisiana has become the 31st state to expand Medicaid to the working poor, other holdout states in the Deep South are looking for ways to extend health coverage to this group while keeping costs in check.
One of those states is Georgia, where an estimated 500,000 residents fall into the “coverage gap," between 100% and 138% of the federal poverty level. This group makes too much to qualify for traditional Medicaid, but not enough to meet the requirements to get subsidies on the exchanges—which means that when they get sick, this group still lands in the emergency room or goes without care.
The dynamic has upended finances at rural hospitals across the South, because the Affordable Care Act (ACA) assumed that all states would expand Medicaid, and thus, redirect payments that had gone to cover costs for the uninsured. In Georgia alone, 5 rural hospitals have closed in 2013, according to Georgia Health News. More cuts in these “disproportionate share” funds are planned.
However, as states from Arkansas to Kentucky see many more working poor sign up for Medicaid expansion than they projected, Georgia lawmakers are looking past traditional Medicaid to different models for expansion. Instead, legislation introduced this week would use federal funds for “premium assistance”—something closer to the Arkansas “private option” model, which calls for allowing those in the expansion pool to use Medicaid dollars to seek coverage on the health insurance exchange.
Premium assistance models may call for greater cost-sharing obligations from enrollees than in traditional Medicaid. CMS has not been keen on additional costs for Medicaid beneficiaries if it means some would lose coverage; however, it is not clear how CMS would react to a premium assistance plan for a group that has never had coverage at all.
According to news reports, although the bill did not receive a vote at this week’s hearing, there is momentum to revisit the issue.
In Louisiana, more than 305,000 people have signed up for Medicaid expansion since officials opened enrollment on June 1, 2016, for coverage that took effect on July 1; officials projected enrolling 375,000 through expansion. The Associated Press reported this week that state governments in many poorer states are finding that, while expansion is very popular, it is also turning out to be costly, because there are more enrollees with greater medical needs than anticipated.
Although the federal government paid the full cost of expansion through this year, states pick up 5% of the cost starting next year and that share rises to 10% in 2020.
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