Hospitals: Failure to expand Medicaid may cost facilities and jobs

Hank Hayes • Mar 24, 2013 at 12:42 PM

Northeast Tennessee lawmakers, for the most part, indicate they aren’t sold on expanding Medicaid coverage for more low income Tennesseans.

Both Wellmont Health System and Mountain States Health Alliance (MSHA), the region’s two major hospital groups, have been lobbying for the expansion.

The two groups warn that without it, thousands of health care jobs could be lost and hospitals might close or be forced to cut services.

Medicaid expansion has been endorsed statewide by more than a half dozen chambers of commerce, including Kingsport’s and Johnson City’s.

Estimates put together by Gov. Bill Haslam’s administration indicate that TennCare, the state’s $8 billion Medicaid program for more than 1 million Tennesseans, could take on another 100,000 to 200,000 enrollees under an expansion.

The federal government, under the 2010 Affordable Care Act (ACA), has promised to pay for the expansion’s full cost for the first three years.

After the third year, the federal share would decline to 93 percent. TennCare currently gets about 65 percent of its annual funding from the federal government, with state taxpayers picking up the remainder.

Haslam, a Republican, will make his decision on the expansion by the end of March, administration spokesman Dave Smith said in an email. State lawmakers, meanwhile, have the option to take legislative action for or against the expansion.

Lt. Gov. Ron Ramsey said he is trying to give Haslam every chance to make the best decision.

“I’m obviously leaning toward ‘no,’ but at the same time we’re looking at what Arkansas has done to allow people to buy private health insurance with Medicaid money,” said Ramsey, R-Blountville. “The governor hopefully will be making his decision this week. I’ve talked to him a lot about this ... (but) realistically, the federal government doesn’t have a good track record of keeping their promise of sending states money. ... They are borrowing four out of 10 dollars. That’s unsustainable.”

State Rep. Jon Lundberg, R-Bristol, opposes Medicaid expansion.

“Seven or eight years ago, we dropped 200,000 people or so off the rolls of TennCare,” Lundberg recalled. “At that time, Wellmont and Mountain States said ‘Frankly, it’s the right thing to do. We understand.’ There wasn’t any concern. Now we’re talking about roughly the same amount of folks being put back on those rolls and Mountain States, Wellmont and everyone else is saying, ‘If you don’t do this, we are going to lose jobs and hospitals are going to close.’ “What’s the difference between now and what happened eight years ago? I have no doubt the hospitals are going to come back in three years and go ‘You’re going to have to match that money, don’t cut the program.’”

State Rep. Tony Shipley, R-Kingsport, also opposes expansion.

“I’ve been asked if the governor’s position will change mine, and it’s likely not to change mine,” Shipley responded. “It’s fundamentally inappropriate health care policy the way it’s been pushed at us. There’s significant momentum against it in the legislature.”

Still, Shipley added, there could be “middle ground” on the issue.

For instance, the state could opt out of the expansion if federal funding drops below a certain percentage, he explained. “We’re not going to swallow another federal program on the taxpayers of Tennessee,” Shipley insisted.

State Rep. Timothy Hill, R-Blountville, said he’s inclined to not support expansion.

“But there’s realities associated with it,” Hill said of the move. “We’ve got to see what the governor is going to do first. I have to take a second look at it. I have a critical access hospital in Johnson County that could possibly be affected.”

A Haslam administration policy document points out one negative associated with turning down the expansion is that employers face “potential increased exposure” to tax penalties under ACA.

The Tennessee Hospital Association also stresses its members agreed to accept cuts under ACA in exchange for expanded health insurance coverage to reduce bad debt created by uncompensated care.

State Sen. Rusty Crowe, a MSHA employee and chair of the Senate Health and Welfare Committee, said he’s keeping an open mind.

“The difficulty is we’re all trying to separate the political reality from the economic and health care services reality,” said Crowe, R-Johnson City. “We’re told if we don’t do something ... then we’re looking at some 90,000 (lost) jobs statewide. There will be some potential (hospital) closings in the rural areas. ... Our health care system as we know it in Northeast Tennessee would be very much in jeopardy. ... I hope there’s a way to make this work.”

State Rep. Mike Harrison, R-Rogersville, indicated he’s in a wait-and-see mode. “I want to see what the governor comes up with. ... I’ll make a decision after that,” Harrison said.

State Reps. Matthew Hill, Kent Williams and James “Micah” Van Huss were contacted but not available to comment for this story.

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