Wednesday, March 20, 2013

Why Private Employers Should Support Medicaid Expansion. Information Bulletin #375 (3/2013) Medicaid expansion is obviously critical for people whose incomes are less than 138% of the federal poverty level. However, the failure of States to expand their Medicaid program on January 1, 2014 will have disastrous impact on the private employers in your State. The Missouri Hospital Association recently released a report entitled “The Hidden Health Care Tax – How NOT Reforming Medicaid Could Lead to Cost Shifting.”…/Cost-Shift_Report.pdf This report presents data and arguments regarding how private employers will be negatively impacted if a State does not expand Medicaid and presents cogent arguments for advocates to use in urging Governors and State Legislatures to agree to Medicaid expansion. As you know from previous Information Bulletins, when Congress enacted the Affordable Care Act it significantly reduced the reimbursements that hospitals previously received uncompensated care the hospitals had been providing to low-income people. This reduction was because Congress had simultaneously mandated Medicaid expansion to all people who had been receiving this uncompensated care. With such expansion, the hospitals would receive regular Medicaid reimbursement for the newly Medicaid eligible people. Unfortunately, the Supreme Court invalidated the mandatory expansion, leaving States, hospitals and insurance companies with significant reductions in uncompensated care and no increase in Medicaid eligible persons. It has been reported that the growth of “uncompensated care is alarming,” from 2002 to 2011. Every State that does not expand its Medicaid program will suffer because the hospitals will continue to have high level of uncompensated care and no Medicaid dollars with which to pay for that care. Uninsured and uncompensated care account for a significant amount of costs hospitals must make up through other means. How will hospitals make up the lost Medicaid costs? Private commercial insurance payers will eventually (sooner than later) have to subsidize the cost of the loss in Medicaid reimbursements. The costs will be shifted from the loss of Medicaid patients to the private businesses that currently provide health insurance to their workers. This will happen regardless of their employees’ incomes. The above “The Hidden Health Care Tax” report presents the data quite starkly. The shifting of costs from uninsured/nonMedicaid low-income patients to employers of low-income workers are “hidden health care taxes” on commercial premiums and will increase what private employers will pay for the private health insurance of their employees. Otherwise, the hospitals will not be able to financially survive. Advocates: Has your State Hospital Association estimated the increase in costs to private employers’ health insurance premiums if your State does not expand Medicaid? Has your State Hospital Association publicly stated this increase? Has your Chamber of Commerce estimated this cost and the impact it will have on private employers’ insurance premiums? Are your Governors and legislatures aware of this ramification and increased costs if they refuse to accept 100% of federally reimbursed Medicaid expansion funds? Are your newspapers aware of these increased costs? Steve Gold, The Disability Odyssey continues Back issues of other Information Bulletins are available online at with a searchable Archive at this site divided into different subjects. Information Bulletins will also be posted on my blog located at To contact Steve Gold directly, write to stevegoldada1@gmail.comor call 215-627-7100. Ext 227.

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