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Republicans proposed mini-bailouts for Ga. hospitals

By Ray Henry and Christina A. Cassidy AP Staff | 2/14/2014, 10:03 a.m.
In this Friday, Jan. 24, 2014 photo, a worker wheels beds through the emergency department at Grady Memorial Hospital, in Atlanta. In two years, federal payments to hospitals treating a large share of the nation’s poor will begin to evaporate under the premise that more people than ever will have some form of insurance under the federal health care law. The problem is that many states have refused to expand Medicaid, leaving public safety net hospitals there in a potentially precarious financial situation and elected officials facing growing pressure to find a fiscal fix. And in an election year, Democrats are using the decision by Republican governors not to expand Medicaid as a major campaign issue and arguing the hospital situation could have been avoided. Photo by David Goldman/AP.

He also raised the concern - which has been echoed by other Republican governors - that states could be left with the tab if the federal government isn’t able to keep its promises on funding the expansion.

"I mean, here we would be saying to 300,000 Mississippians, 'We’re going to provide Medicaid coverage to you,’ and then the federal government through Congress or through the Senate, would do away with or alter the Affordable Care Act, and then we have no way to pay that. We have no way to continue the coverage.’’

South Carolina has taken a different approach. The state government raised the Medicaid reimbursements it pays rural, often financially struggling hospitals - from 60 percent of an uninsured patient’s bill to 100 percent. The change was part of a larger, $90 million effort - $48 million of it paid with state taxes - approved in this year’s budget. Gov. Nikki Haley’s administration called it a way to find and improve the health of South Carolina’s most vulnerable residents, focusing on rural areas. As a political benefit, it eased pressure on the same hospitals that would have the most to gain from a Medicaid expansion.

There is also a lack of consensus about how much expanding Medicaid would cost each state.

In Georgia, Deal’s budget officials estimate that expanding Georgia’s Medicaid system over a decade would cost the state government $2.8 billion. The first full year of an expansion would run about $48 million, or less than 1 percent of Georgia’s proposed state budget. Those costs would rise to nearly $498 million by 2023.

The estimates do not include the cost of covering people expected to enroll in Medicaid as they learn they are already eligible. They also exclude the cost of changes that will happen regardless of whether Georgia expands its Medicaid program or not.

However, the Georgia Budget and Policy Institute, which supports an expansion, estimates the costs of enlarging Medicaid may average around $35 million annually after taking into account new taxes that offset costs.

"What makes the Medicaid expansion so hard to compete with from an alternative standpoint is that it’s so much money,’’ said Tim Sweeney, the institute’s director of health policy.

AP reporters Emily Wagster Pettus in Jackson, Miss., and Seanna Adcox in Columbia, S.C. contributed to this report.