Medicaid status could affect state finances

March 19, 2013 10:24:22 AM

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JACKSON -- Mississippi House Democrats said Monday that the state could hurt its own financial standing if it rejects Medicaid expansion, but Republican Gov. Phil Bryant said he's not convinced that would happen and he still opposes putting more people on the government health program. 

 

Democrats pointed to a statement made last week by Moody's Investors Service, which is one of the financial firms that ranks the creditworthiness of Mississippi and other states. 

 

The New York firm said Thursday that states will face "political and budgetary pressure" to cover hospitals' loss of federal money for treating uninsured patients. The money is known as "disproportionate share hospital" payments. Lawmakers often shorten that to DSH, which they pronounce "dish." 

 

"States that opt out of Medicaid expansion will have to choose whether to compensate for the shortfalls with their own funds or leave hospitals to absorb the costs, which will increase rating pressure on the hospitals," Nicole Johnson, a Moody's senior vice president, said in the statement. "States that choose to fund uncompensated care costs themselves could face budgetary strain." 

 

Moody's estimated that hospitals' losses nationwide will be $17 billion a year by 2019. The firm said states that choose not to expand Medicaid may face large uninsured populations while federal payments to hospitals are declining. 

 

"Based on what we now know, it is clear that the failure to expand Medicaid will have a devastating impact not only on the healthcare of working Mississippians but also on our state's financial viability," the House Democratic leader, Rep. Bobby Moak of Bogue Chitto, said in a news release Monday. 

 

Under the federal health care law that President Barack Obama signed in 2010, states have the option of expanding Medicaid to people making up to 138 percent of the federal poverty level, or about $15,000 for one person. In Mississippi now, the income cutoff to enroll in Medicaid is about $5,500 for one person, and the state program does not cover many able-bodied adults, regardless of income. 

 

Bryant has said for months that Mississippi can't afford to put an estimated 300,000 more people on a Medicaid program that already covers more than 640,000. The state has about 3 million residents and is one of the poorest in the nation. 

 

Responding to questions Monday at the Governor's Mansion, Bryant said, as he has before, that Mississippi might sue the federal government to try to block a reduction in disproportionate share payments to hospitals. 

 

"We think we have a very good legal position with Health and Human Services, saying we're going to pursue all our legal possibilities, including a lawsuit. I've talked to other governors that might be interested in that," Bryant said. "So, I think we've got many options ahead of us. The thing I do not believe, I do not believe the federal government has the revenue to fully fund Medicaid across the United States of America. I am not going to fall into this trap and leave the taxpayers of the state of Mississippi holding the bill." 

 

The 2010 law says the federal government would pay 100 percent of medical expenses for the newly qualified enrollees from 2014 to 2017. The federal share would be reduced to 90 percent by 2020, with each state paying the balance. 

 

A study conducted by the Urban Institute for the nonpartisan Kaiser Commission on Medicaid and the Uninsured estimated about 288,000 newly eligible people could be expected to enroll in Medicaid if Mississippi does an expansion. The study said another 57,000 who are eligible for Medicaid under current standards could be expected to sign up. 

 

The study estimated that with expansion, Mississippi would pay about $1.2 billion more for Medicaid, stretched over 10 years, and would collect more than $15 billion in federal money. 

 

Bryant relies on research from the Milliman firm, which shows larger potential enrollment and substantially larger state expenses. 

 

Bryant, Bobby Jindal of Louisiana, and Rick Perry of Texas are among the Republican governors opposing Medicaid expansion. 

 

Republican Govs. Chris Christie of New Jersey and John Kasich of Ohio say they favor expansion in their states. Republican Gov. Rick Scott of Florida says he wants to expand Medicaid for three years, while the federal government is paying the entire tab. A Florida House committee rejected expansion and is developing another proposal.