Hospitals Lobby Hard for Medicaid Expansion

By: - April 17, 2013 12:00 am

Demonstrators support Medicaid expansion at a recent rally in Columbus, Ohio. In several states, hospitals are lobbying reluctant legislators to approve Medicaid expansion because it will provide more money to care for low-income people. (AP)

With billions of dollars at stake, hospitals are lobbyinghard for Medicaid expansion in Columbus, Tallahassee and other state capitalswhere state legislators oppose the extension of the program to some 17 millionAmericans.

Hospital associations have paid for television andnewspaper ads, organized rallies, and choreographed legislative testimony insupport of the Medicaid expansion, which is part of the Affordable Care Act.They also have united disparate groups which are used to being on oppositesides of legislative debates. In Columbus, for example, Ohio Right to Life andPlanned Parenthood Advocates of Ohio are working side-by-side to persuade statelawmakers to approve the expansion. Both groups say they want to make healthinsurance available to the poor.

In making their case, the hospitals tout the economic benefitsthat an influx of federal money will bring to the states. The federalgovernment will cover 100 percent of the cost of the expansion for the firstthree years, gradually tapering off to 90 percent in 2020. And they point to thepublic health dividends that will come from providing health care to people whocan’t afford it now.

But the hospitals also acknowledge that the expansion isvital for their own financial health. “For many hospitals it’s existential;it’s really talking about the future viability of their institutions,” said ShawnGremminger of the National Public Hospital Association.

Democratic Sen. Christopher Smith, the minority leaderin the Florida Senate, believes the precarious condition of hospitals has thebest chance of winning over resistant Republicans. “It’s the plight of thehospitals that is bringing everyone to the table,” he said. “Do they want to beresponsible for the shutting of Jackson Memorial? Or closings in the SouthBroward Hospital District?”

It is a fight that only 10 months ago, the hospitalindustry had hoped to avoid.

The ACA is expected to cost hospitals more than billion over 10 years by reducing fee-for-service Medicare reimbursement and cuttingfederal payments that compensate hospitals for providing free care to the poor.In Ohio, for example, those federal changes would cost hospitals about .4billion over the next 10 years.

Nevertheless, hospital associations agreed to back thelaw. That’s because by expanding Medicaid to some of the uninsured andrequiring the rest to purchase insurance from health exchanges, the ACApromised to increase the number of people able to pay for hospital services byabout 48 million. The Medicaid expansion envisioned under the ACA would coverall adults younger than 65 earning less than 138 percent of the federal povertylevel.

The U.S. Supreme Court poked a stick in the spokes byupholding the ACA but making the Medicaid expansion optional for the states. Nowhospitals in states that opt out of expansion will have to contend with the ACAcuts without the influx of new Medicaid patients they had expected.

“The pain part is guaranteed but the gain part dependson the choice each state makes,” said Stan Dorn, a senior fellow on healthpolicy with the Urban Institute.

Most Republican governors initially said they would declineto participate in the expansion. Some have since changed their minds—including Arizona’sJan Brewer, Ohio’s John Kasich, and Florida’s Rick Scott—but they must win overRepublican-dominated legislatures which remain staunchly opposed. Other stateswith Republican governors, including Maine and Tennessee, still haven’t decidedwhether to expand their Medicaid programs. Neither has Arkansas, which has aDemocratic governor and a Republican majority in the legislature.

Hospitals are not strangers in state capitals. Accordingto the National Institute on Money in State Politics, the health industry spent million on state legislative races in 2012, roughly the same amount spentby the finance, insurance and real estate industries combined. Rarely, though,do hospitals get involved in a battle with such high visibility.

“Hospitals are pretty active every year, but they’vedefinitely stepped it up this year,” said Smith, the Florida state senator.“I’ve seen more hospital administrators and board members walking the hallsthan ever. And they’re not just talking to health committee members but toeveryone.”

But hospital lobbyists are finding that many Republicanlegislators who oppose Medicaid expansion—and the health care law as a whole—onideological grounds aren’t convinced by economic and public health arguments.

“They are very passionate about why they were elected,”said Jonathan Archey of the Ohio Hospital Association. “They have anideological frustration or opposition to Medicaid in general and with thepresident’s health plan in particular. That makes them mistrustful. They don’texpect Congress will maintain that high level of funding. They doubt Congresswill allow the states to continue to pay 10 percent and they think 10 percentis too high already.”

Even if the logic of the expansion made sense to them,Dorn said, many of those conservative Republican legislators worry that a “yes”vote would make them vulnerable to a primary challenge from the right when theyrun for re-election.

Their allies give the hospitals credit for theirleadership role in the state campaigns. But Cathy Levine, with Universal HealthCare Action Network of Ohio, warns that the hospitals will have to do even moreif they are going to succeed, at least in Ohio.

“As much as the hospitalassociation has done in reaching out to members, if this is going to happen inOhio, given the political dysfunction in the face of overwhelming public supportfor Medicaid expansion in the state, the hospital association is going to haveto step up even more,” Levine said. “The ones that get listened to the most inthis state are the ones with the deeper pockets. And the hospitals have verydeep pockets.”

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Michael Ollove

Michael Ollove covers health care for Stateline. Ollove worked for many years at The Baltimore Sun, as an enterprise reporter and an editor.