Mo. House Democrats file Medicaid expansion bill

JEFFERSON CITY, Mo. -- The CEO of a rural Missouri hospital system warned Monday that it could face financial peril unless state lawmakers back a Democratic plan to expand the Medicaid health-care program to hundreds of thousands of additional low-income adults.

Pemiscot Memorial Hospital CEO Kerry Noble joined Democratic state House members at the Capitol as they announced the filing of legislation to expand Medicaid eligibility. Because of provisions in President Barack Obama's health-care law, hospitals have a large financial stake riding on the additional federal Medicaid money they would receive for treating patients.

"We will no longer be in existence if the passage of this expansion does not occur," Noble told reporters while flanked by about 20 Democratic lawmakers.

The hospital CEO later softened that assertion, explaining that Pemiscot Memorial Hospital would not have to immediately shut its doors if Missouri does not expand Medicaid but rather could face financial hardship that could jeopardize its operation in the long run.

Southeast Hospital president and CEO Wayne Smith released a statement in response to a request from the Southeast Missourian in which he warned of negative consequences of not expanding Medicaid in the state when combined with Medicaid and Medicare payment cuts from the Affordable Care Act.

"If our state opts out of the Medicaid expansion program, hospitals will have to make difficult decisions to absorb these losses while still providing the care that communities expect and deserve and treating the uninsured. Missouri's hospitals provided $1.1 billion in uncompensated care in 2011, a new and not enviable, state record. In 2011, Southeast Hospital provided just over $16 million in uncompensated care at cost," Smith said by email Monday.

Steven C. Bjelich, president and chief executive officer of Saint Francis Healthcare System in Cape Girardeau, wrote in a Feb. 10 opinion article that the expansion would be beneficial for the local economy, not just for hospitals.

"Medicaid expansion in the Southeast Missouri Workforce Investment Area would generate an estimated 24,000 jobs in 2014, with a potential cost shift savings of $1 billion to private insurance through 2020 because of fewer uninsured patients," Bjelich said.

Rejecting the expansion also would mean forfeiting federal funds, a portion of which are paid for by Missourians, Bjelich said.

At issue is a provision in Obama's 2010 Affordable Care Act encouraging states to expand Medicaid eligibility for adults earning up to 138 percent of the federal poverty level, which is $15,856 for an individual or $32,499 for a family of four. The federal government would pay the full cost of the expansion from 2014 to 2016, with states paying a 5 percent share in 2017 that gradually grows to 10 percent by 2020.

The Medicaid expansion is backed by Democratic Gov. Jay Nixon and various health-care and business groups, among others. Republican legislators generally oppose it, citing concerns about the long-term costs while raising doubts about the federal government's ability to make good on its promises.

The federal government would pay an estimated $900 million for a Missouri Medicaid expansion in 2014, with that doubling in future years.

House Speaker Tim Jones said he plans to refer the Democrats' plan to a House committee for a hearing and vote, but he expects it will fail.

"Pumping 300,000 to 400,000 able-bodied Missourians onto the Medicaid rolls at a federal cost of $2 billion -- that seems to be complete economic irresponsibility to me," said Jones, R-Eureka.

House Republicans have been working on an alternative Medicaid plan, which Jones said would "provide more health-care services to those who are truly in need of it -- the disabled, seniors and children."

Hospitals have a financial stake in the proposed Medicaid expansion. The federal health-care law cuts payments to hospitals for treating uninsured patients on the assumption that many of those patients instead will be covered by an expanded Medicaid program.

If Medicaid is not expanded, Noble said his hospital system would lose around $1 million annually because of the reduced federal payments for the uninsured. Although that's a small portion of what Noble said is a roughly $50 million annual operating budget, he said the reduced federal payments could affect the services provided at the hospital and its affiliated nursing homes and primary care clinics in Southeast Missouri.

"We would have to ratchet back our capabilities initially in response to that and limit our capacity to provide health care," Noble said. "Eventually, it would erode our ability to the point where, in the end, I very much think that we would be financially at risk [and] we would ultimately probably lose our hospital."

Jones dismissed hospital assertions of financial insecurity as "scare tactics" that are "partially of their own doing" for agreeing to accept lower federal Medicare and uninsured payments in exchange for the promise that more patients would be covered through Medicaid and private insurance.

House Democrats touted figures from a report released in November by the Missouri Hospital Association estimating that the influx of federal money under a Medicaid expansion could create 24,000 jobs in Missouri. The Democrats described that Monday as "the biggest economic boost in a generation." They also pointed to the report's conclusion that a Medicaid expansion could reduce private insurance premiums by $1 billion over seven years by reducing the amount of uncompensated care costs that medical providers shift to insurers.

House Minority Leader Jake Hummel, D-St. Louis, said he hopes that his proposed Medicaid expansion will be allowed to come out of a committee.

"This is too important of an issue to sweep under the rug," Hummel said. "Missourians deserve a vote -- they deserve to have this bill debated on the House floor."

Staff writer Shay Alderman contributed to this report.

------

Medicaid bill is HB627.

Online:

House: http://www.house.mo.gov

------

Follow David A. Lieb at: http://www.twitter.com/DavidALieb