Hospitals say a ‘no’ to Medicaid expansion would hurt financially

The governors of Pennsylvania, New Jersey and Delaware have yet to decide whether they will expand Medicaid eligibility under the Affordable Care Act, an expansion that became optional with the recent Supreme Court decision.

Hospitals in the area are pushing for them to opt in.

The reason rests largely on the bottom line: The federal government gives hospitals that serve the poor Medicaid Disproportionate Share Payments.

The money goes to reimburse hospitals for uncompensated care. Pennsylvania got more than $500 million last year.

The federal health law slashes payments nationwide by $14 billion over 10 years.

“The hospitals agreed to accept some reductions over the next 10 years, but with the understanding that more individuals would be insured,” said Curt Schroder, regional executive of the Delaware Valley Healthcare Council, which represents hospitals in Southeast Pennsylvania.

More insurance means less uncompensated care, and an offsetting of the cuts. If governors do not opt to expand Medicaid, a huge chunk of the people who were supposed to gain insurance will not.

“We feel that the understanding that went into this agreement, we feel very strongly that that needs to be adhered to,” Schroder said.

If the uninsured continue to need charity care but hospitals have a smaller budget to provide it, that could hurt the bottom lines of health systems.

“That’s certainly bad for Philadelphia and for some of the other cities that have a large number of individuals who … are uninsured,” said Sharon Ward of the Pennsylvania Budget and Policy Center.

An editorial published in the Archives of Internal Medicine this week warned that the cuts could trigger the closure of safety net hospitals which care for many of the nation’s uninsured.

About half of Pennsylvania’s uninsured would qualify for the insurance program for the poor under the expanded eligibility criteria.