Health care officials: Lack of Medicaid expansion will put Va. jobs, hospitals at risk

Hank Hayes • Aug 7, 2013 at 11:02 PM

ABINGDON — Southwest Virginia health care jobs and rural hospitals will be at risk unless state lawmakers agree to a Medicaid expansion, Wellmont Health System and Mountain States Health Alliance officials warned a room full of business leaders, insurers and government officials Wednesday.

If “done right,” the Virginia Hospital and Healthcare Association (VHHA) says the commonwealth can get another 30,000 jobs and net $2 billion out of Medicaid expansion and the Affordable Care Act, also known as Obamacare, through 2018.

Without the Medicaid expansion, VHAA projected a net loss of $7.8 billion.

“The impact is very clear: Failing to reform and expand Medicaid will turn the net economic benefit from effective reform implementation into a significant negative impact on jobs and the economy,” said a VHHA document distributed at what was billed as a “community leadership forum” at the Southwest Virginia Higher Education Center.

Most of the people covered under a Medicaid expansion are working but currently don’t make enough money to cover health insurance costs.

Family incomes at or below 133 percent of federal poverty guidelines — $14,484 for an individual and $29,726 for a family of four — would be covered in a Medicaid expansion.

VHHA says an additional 250,000 Virginia enrollees could gain health care access under a Medicaid expansion, but the Urban Institute research organization suggests there would be 400,000 new enrollees as the result of Obamacare.

“The recession had a major impact on the (Virginia) Medicaid program because of increased enrollment and declining revenues,” says the National Conference of State Legislatures. “The state largely addressed the budget problems through provider rate cuts; this has affected both hospitals and physicians, as well as managed care plans and has implications for the expansion of coverage.”

More than 1 million Virginians are currently uninsured, according to VHHA.

MSHA President and CEO Dennis Vonderfecht said his hospital system has a $275 million annual economic impact on Southwest Virginia.

“We are already facing significant cuts in our reimbursement,” Vonderfecht told people in the room. “One of the deals that was done in doing the Affordable Care Act was the American Hospital Association, as part of funding, we gave up $155 billion dollars of reimbursement over the next 10 years as an industry. ... What we were supposed to get in return was an expanded Medicaid program ... for our Southwest Virginia hospitals it was a cut of $120 million dollars. That’s a lot we will try to offset.”

Vonderfecht noted MSHA has reduced more than 300 positions since last March and is looking at cutting 200 more.

Last June, Wellmont announced a cut of about 50 positions from three Southwest Virginia hospitals and cited the lack of Medicaid expansion in the commonwealth as one of the reasons for the move. Affected hospitals included Mountain View Regional Medical Center in Norton, Lee Regional Medical Center in Pennington Gap and Lonesome Pine Hospital in Big Stone Gap.

Wellmont Chief Financial Officer Alice Pope said 10 percent of the system’s patients don’t pay a health care bill.

“People like to say they don’t pay us, but they can’t pay us. They don’t have the money to pay us,” Pope noted. “It’s the difference between feeding their family or paying their hospital or physician bill. ... We employ physicians at a loss. We think it’s very important in these rural communities in Southwest Virginia to have physicians in the primary care network so people aren’t seeking care in a high-cost setting such as an emergency room.”

Earlier this year, the Virginia General Assembly appointed a 10-member commission to study health care reform and Medicaid.

“If there is significant evidence that reform is there and it’s real reform, then it has a chance,” said Virginia State Sen. Phillip Puckett, D-Tazewell.

In Tennessee, Gov. Bill Haslam announced last March he will not expand TennCare, the state’s Medicaid program, under Obamacare but instead would work to leverage available federal dollars to purchase private health insurance for Tennesseans who would not otherwise have access to coverage.

Haslam, a Republican, said his “Tennessee Plan” could cover an additional 175,000 Tennesseans.

“The governor and administration continue to have discussions with (the federal government) about the Tennessee Plan,” Haslam spokesman Dave Smith said in an email.

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