The Washington Chamber of Commerce board of directors has given a letter of support to urge legislators in Jefferson City to approve Medicaid expansion under the Health Care Reform Act.
The 2010 health care law signed by President Barack Obama calls for a Medicaid expansion, but a Supreme Court ruling last year made it optional for states.
On Tuesday, the Missouri House rejected the Democratic effort for Medicaid expansion.
Mike Peters, Mercy Health Systems’ vice president of advocacy, appeared before the chamber board Thursday morning to ask it to sign a resolution supporting Medicaid expansion, which is vital to Mercy Hospital Washington’s financial operations because of huge spending cuts in the Medicare sector due to sequestration.
“Whether we agree with the health care reform bill or not, it was passed into law and the Supreme Court upheld it,” he said. “The way the law was designed there was to be cuts on one side to support the other.”
Loss of Revenue
Looming payment cuts from Medicare and Medicaid from 2013 to 2019 threaten health care’s future stability, Peters said.
Within the sequestration Medicare will be cut by 2 percent, which adds up to a loss of more than $2.8 million for Mercy Hospital Washington. Under the Affordable Healthcare Act (ACA), another $11.4 million cut is to be expected.
Mercy is a disproportionate share hospital (DSH), which means it receives money through the Medicaid DSH program to offset costs of patients who can’t pay for services. Under the ACA, that program at Mercy Hospital Washington is expected to see nearly $9.8 million in cuts.
“Cuts on Medicare and DSH are taking place whether or not Missouri expands Medicaid,” Peters said.
Mercy won’t be closing any of its facilities, but some small hospitals in the state will go away, leaving the larger hospitals to absorb those patients.
Expansion Good for Business
Mercy Hospital Washington is the largest area employer with 1,300 on staff so from a business perspective, supporting Medicaid expansion makes sense, Peters said.
“When cuts take place, either the hospital cuts back services, or costs are shifted onto business people. The companies that supply insurance for their workers see increases in premiums because cost for insurance goes up,” he said.
Peters said expanding Medicaid would bring more revenue and jobs to Missouri.
“During the first 10 years, an addition of $8 billion on the low end, to $12 billion new federal dollars would come into the state,” he said, “and an estimated 24,000 jobs would be created within the health care industry in 2014 to take care of the new folks that would be accessing health care under the expansion. Those dollars go elsewhere if we don’t take advantage of that.”
Sending the tax dollars to other states would be detrimental to Missouri’s economy and the health care industry, Peters said. About 9,000 jobs could potentially be cut, insurance premiums are estimated to increase by about $1.1 billion and $4 billion could be cut from health providers.
According to the Kaiser Family Foundation, non-partisan source of facts and analysis for policy-makers, Missouri’s poor make up more than half of the state’s uninsured residents, and about one-quarter of those are not offered insurance through an employer or commercial policy.
Under the ACA, the qualifications for Medicaid eligibility will rise from 100 percent of the poverty level to 138 percent.
That means a family of four making $32,000 or less would qualify for Medicaid, and it is estimated that by 2018, more than 300,000 Missouri residents will qualify for coverage.