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Small-hospital aid bills fire up Medicaid debate

HOLLAND

Steve Holland

By Bobby Harrison

JACKSON – Bills advancing in the Mississippi Legislature are re-ignitingdebate on whether the state should expand Medicaid as allowed under federal law.

Thus far the Republican leadership in the Legislature and Gov. Phil Bryant have blocked the Medicaid expansion that is part of the Affordable Care Act. The expansion would provide health care coverage primarily to the working poor.

Yet this session the Mississippi House has passed legislation to create a $10 million pool of state funds designed to help struggling, rural hospitals and OK’d the Attala County Board of Supervisors issuing $5 million in bonds “for relief from debts and financial obligations” for the struggling Montfort Jones Memorial Hospital in Kosciusko. The bonds will be the responsibility of the taxpayers of Attala County.

Many legislative Democrats contend it would be better to spend those funds to draw down more than $1 billion in federal funds to expand Medicaid to cover those earning up to 138 percent of the federal poverty level, or about $15,000 for an individual, as is allowed under the Affordable Care Act.

Rep. Steve Holland, D-Plantersville, said the legislation is nothing more than “putting a Band-Aid” on the problem facing many hospitals across the state, both small-town medical centers and larger ones.

Medicaid expansion, on the other hand, Holland argues would pump millions of dollars into the hospitals because they would be treating far fewer people with no health insurance and no way of paying for their medical treatment.

Holland said one study, by the Mississippi University Research Center, estimated that the expansion would cost the state $18 million for the upcoming year, but it would generate nearly $1 billion in funds from the federal government.

“Mississippi’s decision to refuse Medicaid expansion is one that is causing unnecessary fiscal harm to the hospital and local economy of Attala County,” said Jarvis Dortch, with the Mississippi Health Advocacy Program, a pro-expansion group.

“All of this is happening while hospitals in expansion states are seeing dramatic drops in charity care … In states that expand Medicaid, there are more paying customers and greater revenue for hospitals, providers, and doctors. In states like Mississippi, the working poor are forced to seek emergency room care and the hospitals are left with the bill.”

It is likely the economic struggles for Mississippi hospitals only will become more difficult. Under the ACA, federal funds earmarked to compensate them for treating patients with no health insurance and no ability to pay are supposed to be dramatically reduced.

The reduction already has begun, and in 2017 those funds are slated to be cut $24.8 million. Between 2017 and 2024, the cumulative cuts to Mississippi hospitals are expected to be $483.4 million, according to the Mississippi Hospital Association.

The theory in the ACA is that the loss of those funds would be offset by more people having health care coverage. But if Medicaid is not expanded, a large segment of the working poor would remain uninsured.

Republican leadership remains steadfastly opposed to Medicaid expansion. Gov. Phil Bryant and the legislative leadership have long maintained the state could not afford Medicaid expansion.

“I think expanding Medicaid is the wrong approach,” said House Public Health Chair Sam Mims, R-McComb. “We passed legislation that takes $10 million out of the general fund to improve the health of small, rural hospitals. That is the right approach.”

The legislation would make 46 hospitals across the state with 50 beds or less eligible for grants of up to $500,000 “to reinvent themselves” in a manner that could make them more viable. Mims said that could include a new program or building renovations, for instance.

In Northeast Mississippi, hospitals in Pontotoc and Iuka operated by Tupelo-based North Mississippi Health Services; Calhoun Health Services in Calhoun City; Tippah County Hospital in Ripley; Pioneer Community Hospital in Aberdeen and the Alliance Healthcare System in Holly Springs would be eligible for the grants.

Mims’ legislation providing help to rural hospitals is now pending in the Senate. If it passes, and all seven Northeast Mississippi hospitals received the maximum $500,000 grants, that would mean an additional $3.5 million for health care and the economy of the 16-county Northeast Mississippi region. The University of Alabama-Birmingham study concluded that in the three-county area of Pontotoc, Union and Lee, the Medicaid expansion would create about 700 jobs and provide health care coverage to more than 7,900 while pulling down $45 million in federal funds for the upcoming year and $308 million in federal funds by 2020.

The study said that statewide from 2014-2020, expansion would net a cumulative $848 million in state and local taxes instead of costing the state money. From 2020 on when the federal government is paying 90 percent of the costs instead of a larger amount, the net gain in local and state tax revenue would be about $34 million annually.

In 2020, for instance, the study says Mississippi will pay $167 million to draw down $1.22 billion in federal funds, But the infusion of money would have a direct economic impact on the medical community of $1.22 billion and an indirect impact of $764 million in new businesses created. The result, Becker said, would be the state receiving more in tax revenue than it paid to match the federal Medicaid funds.

The estimate is that the expansion would cover between 200,000 and 350,000 Mississippians.

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About Ross Reily

Ross Reily is editor of the Mississippi Business Journal. He is a husband to an amazing wife, dad to 3 crazy kids and 2 dogs. He is also a fan of the Delta State Fighting Okra and the Boston Red Sox.

2 comments

  1. If you ever wanted to see the results of Mississippi’s low standing in education, you need look no farther than its governor and legislature. Sad.

  2. One more example that shows that Republicans don’t care about the poor or even the economy for everyone else either. Prosperity for the state as a whole isn’t worth it to them if it means even implicitly acknowledging that Barack Obama has done something right. The demographic revolution that will bury Republicanism as we know it today can’t come soon enough.

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