Even with the underfunding of Medicaid payments surpassing $800 million two years ago, the trade association for Michigan hospitals offers strong support for expanding the federal health program.
The annual community benefits report from the Michigan Health & Hospital Association says Medicaid payments to the state’s hospitals fell short by $804.2 million in the 2011 fiscal year, a 26.9 percent or $170.8 million increase from FY 2010. The shortfall grew as the Medicaid rolls expanded by more than 200,000 people during the recession.
Yet even with the continued growth in losses on Medicaid, the association supports the expansion, as proposed by Gov. Rick Snyder, “so even more residents could get the care they need.”Medicaid expansion, an option allowed to states under last June’s U.S. Supreme Court decision in the federal Affordable Care Act, would make an additional 450,000 residents eligible for coverage.
“Expanding health care coverage can result in more patients receiving needed care and becoming healthier,”states the MHA’s 2012 community benefits report.
The issue comes down to doing “the right thing,”said Dave Finkbeiner, senior vice president for advocacy at the MHA. More than 1 million Michigan residents now lack health coverage and some of them wind up in a high-cost emergency room when they have a medical problem.
Through Medicaid expansion, people who qualify and enroll in the coverage can better afford to see a doctor when they are ill or to manage an ongoing medical condition, avoiding higher costs by preventing their condition from becoming acute and requiring emergency care or hospitalization, Finkbeiner said.
“For a majority of hospitals and physicians, it is a belief that it is the right thing to do,”he said. “It is not good for the state and it is not good for these folks to not have access to health care.”
That view comes even though hospitals lose money on every Medicaid patient they treat. The MHA’s thinking is that the amount Medicaid pays is better than no payment from someone who is uninsured and can’t pay.
“The levels of uncompensated care are unsustainable and some funding, albeit not enough, to cover the cost is better than no funding,”Finkbeiner said. “It’s something our industry thinks makes a lot of sense.”
Gov. Snyder’s proposal to expand Medicaid, which the federal government would fully fund for three years and then fund at 90 percent in subsequent years, was included in his budget proposal for the 2014 fiscal year that starts Oct. 1. The recommendation is now undergoing legislative review as part of the appropriations process in Lansing, where expectations are that it will face stiff opposition from Republicans.
Other data in the 2012 community benefits report show that the shortfall in Medicare payments to hospitals declined from 2010 to 2011, from $83.4 million to $64.5 million, as did bad debt. As the state’s economy began to rebound in 2011, bad debt for the fiscal year declined to $515.9 million from $609.7 million in FY 2010.