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Medicaid Ruling Creates Major Budgeting Problem

Karen Minich-Pourshadi, for HealthLeaders Media, July 2, 2012

Freed's concern is shared by Healthcare Financial Management Association President and CEO Joe Fifer, who says the ruling created "more uncertainty for CFOs than if it had been shot down altogether."

"Many of us are wondering what the implications of this will be on Medicaid—it's a big question mark," Fifer says. "We can't be sure how many uninsured people it will impact until each state decides what to do. The only thing we can presume is that there will be more activity toward establishing [insurance] exchanges in each state."

That poses another challenge for CFOs, as many states delayed establishing exchanges. To date 14 states and the District of Columbia have authorized creation of these exchanges, 33 states have taken initial steps or none at all, and three states have announced they won't participate in exchanges period. In the case of those states that refuse to participate or cannot find a way to do so, the law requires the federal government to run that state's exchange.

Some state officials argue that declining to participate in the Medicaid expansion will save money in the long term, even though it would likely carry repercussions from providers and advocates for the poor. Moreover, the Centers for Medicare & Medicaid Services has other ways besides legislative mandate to influence dissenting states to participate, such as the granting of special permissions.

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2 comments on "Medicaid Ruling Creates Major Budgeting Problem"


David Andrews (7/3/2012 at 9:32 AM)
This article makes a good point. Michigan is faced with covering another 1 million people under expanded Medicaid. I suppose this could be done if the prisons are closed and school funding is cut. Hospitals are covering these people now as a write-off very expensively with no preventive health. Will hospitals start paying the Medicaid premiums to offset the write-offs?

S Harbaugh (7/2/2012 at 3:07 PM)
I am completely amazed that we have so many healthcare "leaders" looking at the issue of Obamacare from a completely myopic, selfish viewpoint of how their individual organizations will benefit or not benefit from the law! What about the concept of Constitutional limitations on federal power? What about the loss of individual liberty? At the end of the day, hospitals are going to saddled with even more federal regulations, reporting requirements, and mandates. No state that is governed by competent leaders is going to willingly sign-up for an expansion of Medicaid when they cannot accurately forecast the increased cost, in addition to having to pay 90% of these costs after 3 years. Rather than being homers for the current administration and not wanting to rock the boat, the AMA and HFMA might want to re-focus their energies on standing up for what is right, rather than for what is expedient.