The U.S. Supreme Court has upheld the health care overhaul, but Georgia’s emergency rooms and free clinics may still be jammed with the uninsured years after that landmark ruling.
The court on Thursday gave states the authority to opt out of the massive expansion of the Medicaid program that is a key component of the law. In 2014, that expansion would extend Medicaid to about 650,000 poor and low-income Georgians who do not qualify for the program today.
Without the Medicaid expansion, however, Georgia will not come close to extending insurance to most of the 1.9 million residents who do not have it now.
“The truth is that millions will continue not to be covered,” said Georgia Attorney General Sam Olens, who led the state’s fight against the law. “You have a huge tax increase without necessarily helping many of the folks you intended to help.”
How close Georgia comes to universal coverage, however, is largely up to the state itself, and Georgia’s elected officials now have a profoundly important decision to make: Will they expand Medicaid by hundreds of thousands of people, jacking up the cost of an already costly program, or will they undermine the health care overhaul by removing one of its pillars?
The law calls for the federal government to cover 100 percent of the costs of the Medicaid expansion for the first three years and at least 90 percent of the costs thereafter. Over ten years the Medicaid expansion would bring tens of billions of federal dollars to Georgia.
“That’s a whole lot of dollars that the Georgia hospitals will never see,” said William Custer, a health care expert at Georgia State University.
Most of the Georgians covered by Medicaid today are poor children, pregnant women and elderly people. Under the law, however, anyone with an income up to 133 percent of the federal poverty level — $31,000 for a family of four — would be eligible for Medicaid starting in 2014.
Gov. Nathan Deal said Thursday he had not yet reached a decision on Medicaid and noted that the November elections may change the landscape yet again. The governor and other elected officials have repeatedly expressed concerns about what the expansion could mean for the state budget. The state estimated last week that it would have to pay an additional $4.5 billion over 10 years if the Medicaid expansion goes through.
“We can’t afford the patients we have on Medicaid already,” said state Sen. Renee Unterman, R-Buford, who heads the senate’s Health and Human Services Committee. Georgia is facing a $300 million Medicaid shortfall this fiscal year. “There’s no way we can accept more patients.”
‘It would be horrible’
Mark Ritter is one of the nearly 2 million Georgians without insurance.
The 50-year-old diabetic works part time at a retail shop in Peachtree City for minimum wage. A diabetic, Ritter has searched without success in the past for full-time work that would provide insurance.
With an expensive condition and limited income, buying a costly individual plan is simply not feasible today.
“If I had a car wreck and I had to go to the hospital, it would be what it is,” he said. “It would be horrible.”
At least he has a job. Ritter – who is also a volunteer coach for diabetics at a local free clinic – has talked to many people like himself who don’t.
He said he has learned to manage his diabetes with the help of doctors at the Fayette CARE Clinic and assistance programs at pharmaceutical companies. Without help, the insulin, glucose testing strips, syringes and other medications would cost him thousands of dollars each year.
“There’s no way I could afford the things that I need for my diabetes just on my own,” Ritter said.
Without the clinic, he would be forced to go to a hospital emergency room, where costs would be out of sight.
Many Georgians who do not get health insurance at work are likely to obtain coverage as of 2014. That’s when state-based health insurance exchanges would open for business,es and many Georgians would be able to qualify for income-based subsidies that would help to pay for insurance plans they buy plans purchased on the exchange. For people with low incomes, the subsidies would cover most of the cost.
The law would also block insurers from turning people down for coverage because they have pre-existing conditions. That provision, along with the subsidies, is expected to attract thousands of Georgians to shop on the exchange.
If Georgia opts out of the Medicaid expansion, it may be possible for some poor Georgians who would otherwise have gained coverage on Medicaid to turn to the exchange and earn a generous subsidy. But the details of how — or whether — that would work were unclear immediately following the decision.
“The people most likely to sign up for the exchange who were otherwise eligible for Medicaid would be the sicker folks in that group,” said Custer, the expert at Georgia State. He said that could lead to higher insurance costs on the exchange.
‘Over the cliff’
Safety net hospitals were already worried about taking care of an estimated 600,000 Georgians who are expected to remain uninsured even if the law is fully implemented. The possibility of the law going forward without the Medicaid expansion raised that concern to a new level last week.
Georgia hospitals lose an estimated $1.5 billion every year caring for the poor and uninsured.
Some people head to the ER – the most expensive setting for care – for simple colds and sore throats. Others end up there for serious, and costly, complications from diabetes and other chronic diseases that could have been managed with medications and regular checkups.
In the past year alone, about eight in 10 uninsured Americans and 55 percent of those with coverage put off care because of the cost, according to a recent poll by the nonprofit Kaiser Family Foundation.
At Grady Memorial Hospital, not a week goes by that someone isn’t rushed to the ER after suffering a stroke caused by uncontrolled hypertension or diabetes, said CEO John Haupert.
The massive safety net hospital in downtown Atlanta spent roughly $200 million caring for the poor and uninsured last year, logging 284,000 visits from uninsured patients. Whether they are illegal immigrants or people who decide to go without insurance, hospitals will still be treating thousands of Georgians without coverage.
“We have to have some source of funding to make that happen,” Haupert said.
American hospitals agreed before the health law was put in place to accept a $155 billion in cuts to Medicare and Medicaid payments, said Kevin Bloye, a spokesman for the Georgia Hospital Association. But the expectation was that there would be 32 million newly insured Americans to make up for the decreased reimbursements, Bloye said.
If that doesn’t happen, some hospitals could end up worse off than they are now, he said, adding that one in three Georgia hospitals lost money in 2010.
“Some hospitals are hanging by a financial thread,” he said. “It could send them over the cliff.”
High costs either way
People who do have insurance coverage also end up bearing the burden – whether they realize it or not – with hospitals raising prices to make up what they lose on caring for the uninsured, experts say
Insured Georgians pay an estimated $1,000 extra on their premiums each year to cover the uninsured, said state Rep. Pat Gardner, D-Atlanta. who focuses on health care issues.
The state also stands to lose out on billions of dollars in new federal Medicaid money — more than $35 billion over 10 years — that would flow to hospitals, doctors, pharmacies and other providers, said Tim Sweeney, a health care analyst with the nonpartisan Georgia Budget and Policy Institute.
If Georgia chooses not to expand the program, other states will, said Gardner, who is urging Gov. Deal to consider the option.
“Our tax dollars will go to New York or California or another state where they have more expansive coverage than Georgia,” she said.
Still, an expansion is going to be a huge drain on Georgia’s economy, said Dr. Sandra Reed, president of the Medical Association of Georgia.
She worries the state would end up further cutting Medicaid reimbursements to doctors at a time when there is already a shortage of physicians, especially in rural Georgia.
Doctors could also face the addition of more Medicaid patients without enough money to expand staff to handle the demand, she said.
“You can’t keep your doors open, if you can’t afford to pay your employees,” she said.
Custer said turning down the Medicaid expansion would have a range of implications for insurers, employers and health care providers, all of whom will press policy makers to carefully weigh this decision.
“I do not know what is going to happen,” he said. “But I think there is going to be a much larger and longer debate on the merits of accepting or declining the Medicaid expansion.”
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