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Problem Set 3: Spring 2014: Econ 2: UC Berkeley

Medicaid Non-Expansion Watch: Georgia Republicans are Killing Hospitals--and People: Live from St. Louis Airport Starbucks LXXXXXVII: February 28, 2014

Jon Perr: Georgia Republicans are Killing Hospitals--and People: "By now, millions of Americans--most of them in red states-- are growing familiar with the 'coverage gap'.

Thanks to their rejection of the Affordable Care Act's expansion of Medicaid in states they control, GOP leaders are leaving at least five million people in an insurance "dead zone," earning too much to qualify for Medicaid but too little to obtain federal subsidies to purchase coverage... with as many as 17,000 people forecast to needlessly die each year for lack of health insurance. But GOP obstruction won't just kill people in places like Texas, Mississippi and many more. As the case of Georgia shows--where over 600,000 residents will fall into the coverage gap and as many as 1,175 will die this year--Republican policy is killing hospitals, too.... A fourth rural hospital in Georgia is shutting its doors due to a lack of patients who can pay for their medical expenses:

The Lower Oconee Community Hospital, a so-called "critical access" hospital in southeastern Georgia with 25 beds, will close down and possibly re-open as an urgent care center that provides services that aren't quite serious enough to necessitate an emergency room visit. Patients in the Wheeler County region who need more extensive medical care after the hospital closes will need to travel upwards of thirty miles in order to receive it. "We just did not have sufficient volume to support the expenses," said CEO Karen O'Neal in an interview with local CBS affiliate WMAZ. "It's a terrible situation, and it's tragic, the loss of jobs and the economic impact."

It's tragic all right. And as with many facilities in rejectionist red states, it doesn't have to be this way. Because it's not just millions of their constituents who are falling into the Republican coverage gap. As Bloomberg and CNN recently documented, many of the hospitals, clinics and emergency centers that serve them are at risk, too.... Memorial Hospital in Savannah, Georgia "is now facing the loss of nearly half of its roughly $100 million in annual subsidies known as disproportionate share hospital payments."...

By 2022, Texas could lose $9.2 billion by not expanding Medicaid as allowed under the Affordable Care Act, while Florida could lose $5 billion over that period, the study conducted by The Commonwealth Fund shows...Also during that period, the study showed, Georgia could lose $2.9 billion, while Virginia could lose $2.8 billion. "There are no states where the taxpayers would actually gain by not expanding Medicaid," said Sherry Glied, lead author on the study. "Nobody wins."... As Ezra Klein and Evan Soltas summed up an analysis by the RAND Corporation of 14 Medicaid rejecting states earlier this year....

They get $8.4 billion less in federal funding, have to spend an extra $1 billion in uncompensated care, and end up with about 3.6 million fewer insured residents....

In Ohio, Governor John Kasich's decision to take Washington's money will actually produce a $400 million surplus for the Buckeye State (one which Republican legislators want to give away in the form of more tax cuts). The simple math-and simpler consideration in insuring millions of indigent patients as the DSH funding is reduced over time is precisely why hospital associations in Texas, Kentucky, Georgia, Mississippi, North Carolina and every other state pleaded with Republican governors and legislatures to take Obamacare's money for Medicaid expansion. In October, the Fitch ratings agency released a special report titled, "Adverse Expansion: Hospitals, States and Medicaid," which warned that:

"Hospitals operating in states not expanding Medicaid, which usually have higher uninsured and poverty rates, will have to absorb the full impact of the ACA reimbursement cuts without the full benefit of increased insured volumes," said Adam Kates, Director in Fitch's Public Finance group. Texas, Florida, Georgia, Louisiana, Mississippi, and South Carolina are not expanding Medicaid and have among the highest uninsured and poverty rates, and some of the most stringent Medicaid eligibility requirements. Fitch believes hospitals in these states, particularly those with weak payer mixes, will be particularly vulnerable.

It's no wonder Arizona Governor Jan Brewer, certainly no friend of Barack Obama, explained her decision to extend Medicaid coverage to 300,000 more people in her state this way:

It's pro-life, it's saving lives, it is creating jobs, it is saving hospitals.

But not in Georgia. And not in Rick Perry's Texas, Rick Scott's Florida, Phil Bentley's Mississippi, Scott Walker's Wisconsin or any other state where supposedly pro-life Republicans have essentially sentenced thousands of people to death.

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