Georgia Gov. Nathan Deal greets lawmakers as he leaves the House Chambers on the last day of the Georgia General Assembly on Thursday, March 29, 2012, in Atlanta. (AP Photo/John Bazemore)
ATLANTA — Gov. Nathan Deal's decision to reject the expansion of Medicaid prescribed by the Affordable Care Act would leave thousands of the poorest Georgians uninsured and threaten the bottom lines of hospitals that were counting on new income from the changes.
Deal's spokesman noted Wednesday that the governor might agree to expand Medicaid if the federal government gave Georgia a "block grant" of money and the freedom to tailor the program as it saw fit — none of which is currently in the health care law. Without that flexibility, Deal believes the state could not afford the expansion.
"The fix for an unsustainable program is not to make it even more unsustainable," said the spokesman, Brian Robinson.
Word of Deal's decision set off a wave of anxiety among hospital officials and patient advocates in the state, with one saying that the governor is "certainly putting hospitals at risk," and another calling the decision a mistake.
"I have diabetics who lose legs because they do not get wound care or get to see a podiatrist," said Carole Maddux, CEO of Good Samaritan Health & Wellness Center in Pickens County. "These are people who will be applying for disability and going on Social Security.. They were perfectly healthy, contributing members of society before that. It's very short-sighted."
Maddux's clinic cares for people who do not have insurance. She said about 85 or 90 percent of the clinic's patients would have qualified for Medicaid in 2014 if the state expanded the program as called for under the law.
The federal health care law calls for anyone under 65 with an income up to 133 percent of the federal poverty line to be eligible for Medicaid, starting in 2014. Under the law, the feds would pay between 90 and 100 percent of the cost of the Medicaid expansion, which would add 650,000 Georgians to the program's rolls. But Georgia projects its share of the expansion would reach $4 billion over 10 years.
Failing to expand Medicaid will be a costly decision for many hospitals around the state — especially those that care for uninsured Georgians when they are sick or injured. About 1 in 5 Georgians is uninsured.
Here's why hospitals are worried: when the health law was passed, hospitals agreed to accept cuts in Medicare payments and in payments from a program that helps cover the cost of providing care to people without insurance. In a world where almost everybody had insurance, as envisioned by the law, hospitals could afford to take those cuts.
Without the expansion, however, hospitals will still be stuck providing care to lots of poor patients without insurance. They will have to do that on an even tighter budget than in the past.
"The decision by the governor yesterday certainly puts us in a spot where we have the cuts but we still don't have the coverage," said Kevin Bloye, spokesman for the Georgia Hospital Association.
Bloye said the governor understand that "hospitals are sort of in a conundrum" without the expansion and said the hospitals plan to work with Deal to find a way to keep health care strong statewide.
Bloye said the state's hospitals now provide about $1 billion in uncompensated care.
Robinson, Deal's spokesman, said the governor wants to improve health care in Georgia — and he is hoping the November elections might eventually lead to alternatives to the Affordable Care Act.
"We're still hopeful that the American people will demand change in this upcoming election and Congress can deliver change," Robinson said.
Under the fine print of the health law, some of those who would have been covered by an expanded Medicaid program might be able to shop for a heavily subsided health plan on the new state-based insurance exchanges that are also a cornerstone of the law. But only those with incomes at or above 100 percent of the poverty line are eligible for the subsidies under a quirk of the law. The poorest of the poor can't get the subsidies, under the law.
The state's safety-net hospitals and its rural hospitals are the most vulnerable going into a future without an expanded Medicaid program.
Grady Memorial Hospital relies heavily on the "disproportionate share" payments (DSH) that many hospitals receive for caring for patients without insurance. The payments are based on the amount of uncompensated care provided by each hospital.
While it's unclear exactly how much those payments would go down for hospitals in Georgia, experts said the health law calls for specific reductions in the disproportionate share payments nationwide, and cuts will be coming.
The way the health law was written was a balancing act, says Shawn Gremminger, who heads legislative affairs at the National Association of Public Hospitals and Health Systems.
"The idea was, on the plus side we were going to get a whole lot of new covered patients," Gremminger said. "To help offset that for the federal government, we took cuts in Medicare reimbursements and DSH."
Eliminating the Medicaid expansion throws everything out of balance, he said.
"I think Gov. Deal is certainly putting hospitals at risk," Gremminger said.
Shaky hospital finances aren't just a problem for people without insurance. It can also hurt patients with the best coverage. That's because hospitals may have to shift even more of their costs onto their paying patients, if they are getting less from the government to cover uncompensated care. Staffing may be reduced, or some services might be eliminated, some experts said.
Gerard Anderson, director of Center for Hospital Finance and Management at Johns Hopkins University Bloomberg School of Public Health, said hospitals will have to charge more to paying patients along with making painful cuts.
"They're already lean and mean — it's not like they have a lot of fat in the system," Anderson said.