Medicaid Expansion MIA in Georgia

Georgia Governor Nathan Deal says his state cannot afford to expand its Medicaid rolls. Strong evidence suggests it can't afford not to.

Four rural hospitals have closed in Georgia in the past two years.

On Monday, the state's new Rural Hospital Stabilization Committee sat for nearly three hours at its inaugural meeting to discuss ways to keep more rural hospitals from shuttering.

The 15-member committee was created in March by Republican Gov. Nathan Deal. It's comprised of politicians, hospital administrators, rural health advocates, physicians, and other healthcare experts and concerned citizens. Leading the agenda on Monday was Deal's three-point plan which includes allowing financially strapped rural hospitals to transform into freestanding emergency departments.

Palpably absent, however, was any discussion of expanding the Medicaid rolls in Georgia and tapping the billions of dollars in federal money that come with it.

The people appointed to the committee appear to be honest and conscientious and to truly care about the perilous state of rural hospitals in their state. They seem to want to find a solution, but they are severely constrained, and they know better than to carp about a Medicaid expansion that is not going to happen.

Unfortunately, when the single most important, immediate, and glaringly obvious component of any effort to help rural providers is taken off the table, it becomes hard not to dismiss this project as an election year stunt to provide political cover for Deal, who has been heavily criticized for his decision to forego the federal money.

Neal has said Georgia cannot afford to expand its Medicaid rolls, which he says would cost the state about $4.5 billion over the next decade. He has also suggested that the federal government might at some point change the terms of the deal, and force states to shoulder more of the cost.

Other studies suggest that the state cannot afford to reject the expansion money. By some estimates, the state's healthcare providers contend with about $2.8 billion a year in uncompensated care. A Kaiser Family Foundation report estimated that accepting Medicaid expansion money would cost Georgia about $2.5 billion over the next decade.

That state money, however, would bring down about $33 billion in federal matching funds, and it would reduce the uncompensated care bill in the state by $700 million.

The governor's refusal to expand Medicaid also undermines his efforts to loosen state licensure restrictions and allow some hospitals to strip down and become freestanding emergency departments, which is actually an intriguing idea.

Like everything else in healthcare, the devil will be in the details. But providing triage in remote areas that otherwise cannot support even a critical access hospital makes sense and it is worth considering. However, it's not clear how much that transition would cost, or who would pay for it now that Medicaid expansion money is off the table.

Bill Custer, a professor at the Institute for Health Administration at Georgia State University, says the panel's task must be placed in context. "Given the constraints that they are not going to expand Medicaid, then trying to organize the care delivery system in rural areas to be more sufficient makes a lot of sense," he says.

"Where we are seeing a lot of irony is that the resources to help these rural areas would be more readily available if the state expanded Medicaid. The investment by the state to bring more healthcare dollars to rural areas would have been small relative to the benefit to those areas."

Rural providers aren't the only people harmed by the governor's refusal to expand Medicaid. The cost of uncompensated care that would have been reduced will instead be picked up through cost shifting.

"Healthcare is an integrated system and financing goes across the system," Custer says. "Without these resources people buying private coverage are paying more than they would if they expanded Medicaid. People are having to travel farther to get care, regardless of how they are paying for that care. So it's not just affecting the lower incomes, it's affecting all Georgians."

If Deal placed the welfare of rural hospitals and the people they serve above partisan politics, his efforts to stabilize providers would include pressing his party to accept the Medicaid expansion money.

That money by itself will not solve every problem. Without additional funding, however, rural hospitals will close or restrict services, access to healthcare will worsen, and people will die.