February 7, 2013
Governor Makes Local Announcement of Plan to Add 300,000 to Medicaid
SCH CEO Marcia Dial looks on as Missouri Governor Jay Nixon makes an announcement regarding Medicaid at an event in Kirksville on January 31st.
With changes looming in the healthcare industry as the result of the federal Affordable Care Act, Missouri Governor Jay Nixon, on January 31st, announced plans to provide health care coverage for an additional estimated 300,000 Missourians.
During a media event held at Kirksville Regional Economic Development Inc., Nixon and a panel of area experts discussed his plans that the governor said would yield significant benefits not only for uninsured working families and the economy, but also for Missouri taxpayers because the federal government will cover 100 percent of the costs for the first three years.
"Providing health care for an estimated 300,000 more Missourians - men, women and children - who currently have no health insurance is the smart thing to do, and it's the right thing to do," Gov. Nixon said. "If we take a pass on billions of health care dollars - dollars that come out of Missourians' paychecks - that money will go to some other state. I want to see those dollars go to work and help create jobs here in Missouri - and I'm glad that the business leaders here at Kirksville REDI agree."
Scotland County Hospital CEO Marcia Dial was among the area representatives invited by the governor to attend the event.
"Our involvement was two-fold," said Dial. "Obviously we are impacted by the healthcare ramifications of this proposal. But equally important is the financial survival of this hospital as the economic engine in the area."
Dial was referring to the fact that SCH employees more than 200 area residents in a broad range of fields that draw trained and highly-skilled workers back to this community.
Governor Nixon had highlighted that fact in his State of the State Address to open his new term.
"Quite frankly, the biggest economic decision facing our state right now is how to move forward on health care," he said. "This isn't the time to re-open the debate or reargue the merits of the President's health care plan. I had some problems with it, and I know many of you did as well. But Congress passed it - the President signed it - and the Supreme Court upheld it. It's the law of the land. And it's not within our power to rewrite federal laws, even if we wanted to. It is within our power - it's our responsibility - to now do what's right for Missouri."
In addition to the Kirksville Regional Economic Development Inc., business and economic development organizations across Missouri have endorsed the Medicaid expansion, including The Missouri Chamber of Commerce, the chambers of commerce in Kansas City, Independence, Springfield, Lee's Summit and St. Louis, and the Civic Council of Greater Kansas City and the Associated Industries of Missouri.
"As a non-partisan organization committed to growing the economy, we know that bringing billions of dollars back to the Show-Me State is a smart business decision that will help create jobs and support rural Missouri," said Carolyn Chrisman, CEO of Kirksville REDI. "Likewise, ensuring that the doors of rural hospitals and clinics stay open and their staffs stay employed is critical to protecting the quality of life here in Kirksville - and in smaller communities throughout Missouri."
The governor stated that because federal funding will cover 100 percent of the costs for calendar years 2014, 2015 and 2016, expanding health care coverage to those 300,000 uninsured Missourians would involve no state tax dollars for those years.
He added that some of these federal dollars will pay for coverage that is currently being paid for with state dollars. As a result, expanding Medicaid would generate savings in the state budget moving forward. In addition, the economic benefit of this health coverage will generate additional state revenue. These savings and revenue are conservatively estimated to have a positive impact of $46.6 million in 2014, $125 million in 2015, and $139.6 million in 2016. Even as the federal funding match rate slightly declines to 90 percent, savings and revenue for the state budget will continue from $112.9 million 2017 to $4.3 million in 2021.
Dial noted that SCH received $114,244 in Federal Reimbursement Allowances (FRA) which are federally matched funds distributed to hospitals for Medicaid and uninsured coverage cases.
That number dropped to $89,532 last year but is expected to rebound to $138,331 in 2013.
That is just a drop in the bucket when considering that SCH has provided $1.3 million of uncompensated care in the first six months of the current fiscal year.
"That is a 79% increase from a year ago, so it's very alarming," Dial stated.
The hospital CEO noted that not only are the uninsured an issue in that figure, but a growing concern is the number of under-insured patients. She added that with the ever-increasing costs of health insurance, more patients are forced to take high-deductible policies, which can leave the hospital uncompensated for those higher amounts.
"There's also a human element to this that can't be ignored," said Governor Nixon. "A stronger Medicaid system will make health care available to 300,000 of our friends and neighbors - working Missourians who work day and night, but simply can't afford health coverage. For these Missourians who are in the workforce but are still without insurance, expanding access to health care is the right thing to do."
Under the proposed expansion, low-income Missourians who can't afford health insurance and earn less than 138 percent of the Federal Poverty Level would be eligible for coverage. A family of four living at 138 percent of the Federal Poverty Level in 2012 makes $31,809 a year.
Currently 11.54 of the population base served by SCH is Medicaid eligible. Dial stated that figure traditionally had been consistently around five percent, but had crept higher and higher in recent years.
Missouri hospitals are already required by law to treat people who have no health insurance. This results in the high cost of caring for the uninsured being passed along to employers and individuals who must pay higher premiums for their health insurance. If this coverage is not compensated for through an expansion of Medicaid to cover the cost of that care, hospitals will have to bear those costs or pass them onto patients with health insurance.
A recent report by the Missouri Hospital Association found that in 2011, Missouri hospitals provided $1.1 billion in uncompensated care to Missourians - a record level.
Last fall, a report by the University of Missouri demonstrated the clear economic benefit to Missouri of providing expanded health care coverage, using the available federal funds. The University of Missouri report showed that the additional funding for health care will create 24,000 new jobs in Missouri in 2014 alone.
"Across the country, we're seeing Governors and state legislators put politics aside to do what's undeniably best for their states, and we should do the same here in Missouri," Governor Nixon said. "Republican Governors in places like Arizona, North Dakota, New Mexico and Nevada are using federal funds to strengthen their Medicaid systems because it's the smart thing to do. Missouri should not fall behind other states in bringing new investments, new jobs and new opportunities back home to our communities."