Medicaid expansion rejection could cost state billions, may hurt hospitals

Medicaid expansion rejection could cost state billions, may hurt hospitals

Gov. Bobby Jindal's decision to reject the Affordable Care Act provision that calls for expanding Medicaid may end up hurting Louisiana hospitals that treat uninsured patients. John Matessino, president of the Louisiana Hospital Association, says beginning in 2014, the federal government plans to cut the Disproportionate Share Hospital program, which is an important revenue stream for hospitals that treat large numbers of uninsured patients.

The thinking at the time was that many of those patients would be covered by an expansion of Medicaid. But if Louisiana refuses to expand Medicaid, hospitals may suffer the DSH cut without the extra Medicaid help.

"I think [the Centers for Medicare & Medicaid Services], and the federal government, and perhaps the courts, will ultimately have to decide that," Matessino says. "I'm not saying the governor's wrong. What I'm saying is there are a lot of questions that need to be answered."

When asked whether expanding Medicaid is a good thing or a bad thing for hospitals, Matessino says, "Anytime you can get more coverage for people that don't have health insurance, that's a good thing."

The Medicaid expansion would be covered 100% by the federal government starting in 2014, although states would eventually have to pay as much as 10%.

"That's a good deal," says David Hood, a health care policy analyst with PAR.

A 2010 Kaiser Family Foundation report about Medicaid expansion estimates Louisiana would spend an additional $536 million from 2014 through 2019 to draw an $8.94 billion federal match. Bruce Greenstein, Louisiana's top health care official, says the state can't afford to expand Medicaid. Officials already are dealing with an $859 million cut approved by Congress last week. Spokespeople for Greenstein's Department of Health & Hospitals did not respond to emails seeking comment for this story.

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