Expanded coverage important for hospitals and our communities
Sunday, January 13, 2013
The most important issue facing the next Missouri Legislature is whether to expand health care coverage.
The federal Affordable Care Act (ACA) allows states to expand their medical coverage to 138 percent of the federal poverty level. The federal government will pay 100 percent of the cost through 2016. That percentage will phase down to 90 percent in 2020.
About 161,000 additional Missourians would receive medical coverage under the expansion. Absent expansion, those Missourians will continue to live without health insurance. When they experience health problems, they show up at hospitals and are treated -- but the cost of that care is not completely compensated. We all pay the cost of their treatment. It is redistributed through increases in our health care premiums or absorbed by the hospitals as uncompensated care.
There is a provision in law whereby hospitals receive money to offset the cost of uncompensated care [called DSH or Disproportionate Share Hospital allotments]. The DSH provision will be substantially reduced. It has been replaced by the option for states to expand coverage. That means Missouri hospitals will lose DSH payments and, if there is no expansion of Medicaid coverage, they also will absorb the cost of treating people with no insurance -- a huge financial burden.
Statewide, the cost of decreased DSH payments will be roughly a half-billion dollars. Losses to hospitals resulting from other changes in law will be about $2.6 billion. On the other hand, if Missouri expands coverage, the state will receive an additional $8.2 billion from the federal government in the years between 2014 and 2020. The state will be required to pay about $333 million, all occurring after 2017. Tax revenue to the state would increase by more than $850 million. The tax revenue from the increased jobs and economic activity will generate more than double the cost of expansion.
Southeast Missouri has 15 hospitals. Because of various changes in federal law, some of which are deficit reduction initiatives and some of which are part of the Affordable Care Act, the hospitals in the region will lose about $300 million.
If the state expands health care, the region will experience a total increase of approximately $600 million, a net difference of about $300 million. Much of this economic expansion would occur in Cape Girardeau County.
The hospitals in Cape Girardeau are larger and stronger than some other rural hospitals. As one looks south toward the Bootheel, the situation becomes more troubling. The hospitals are smaller and their patient populations are poorer. If Missouri does not expand coverage, Missouri could lose more than a dozen rural hospitals -- perhaps as many as 25 -- a tragedy for rural Missouri.
In 2007, a devastating tornado destroyed the entire town of Greensburg, Kan. The people had to decide whether to rebuild. Many said, if the hospital rebuilds, we will too. Rural hospitals are often the economic nuclei of their communities. Their loss would in some cases mean that their communities would lose the critical mass necessary to stay economically viable.
There is only one rational conclusion: Missouri will gain far more than it loses from the expansion of health care coverage.
Opponents of expansion say, "We cannot afford it." These claims are an expression of opposition to the concept of Obamacare without analysis of the actual economic costs and benefits. Whether one supports or opposes the underlying philosophy of Obamacare, it is the law of the land. Missouri should not undermine the solvency of its own hospitals and decimate the economic lifeblood of many rural communities just for the sake of demonstrating political purity. The legislature has an obligation to examine what is economically best for the state of Missouri. We should work together to find a solution we can all live with.
Chris Kelly, D-Columbia, is the state representative for Missouri's 45th District.