Beyond the signature: The Democratic Party takes punitive measures to influence the persistent state of Medicaid expansion
Alex Katchik: Hello, and welcome to Beyond the Byline at Modern Healthcare, where we provide a behind-the-scenes investigation of our report. I’m Alex Kacik, a senior operations reporter. Political reporter Jessie Hellmann will join me today to discuss the latest attempts by House Democrats to get states to expand Medicaid. Thank you for joining me, Jesse.
Jesse Herman: Thank you for your hospitality.
Alex Katchik: So Jessie, you recently wrote about the latest push by policymakers for states that have been insisting on expanding Medicaid programs. You know, first, they suspended additional COVID-19 relief funds in non-expanded states. Now they have taken a more punitive approach by sharing hospital funds disproportionately. Can you tell us about the DSH fund and what is the motivation to push more states to expand Medicaid?
Jesse Herman: DSH aims to help hospitals offset the lower payment rate of Medicaid and help them pay for unpaid care. Therefore, the latest proposal by House Democrats is included in the latest version of the $1.75 trillion domestic policy plan they are developing, which will basically reduce DSH payments in states that have not yet expanded the Medicaid program. So, there are now about 12 states, including Texas and Florida, and hospitals are very dissatisfied with this.
Alex Katchik: You know, the “Affordable Care Act” expands the coverage to approximately 20 million people, many of whom have joined the Medicaid program. Although hospitals have benefited, they claim that the gap between the government’s medical expenses and the medical expenses is growing. . Medicaid beneficiaries dilute these gains. Therefore, supplementary payments like DSH funds are designed to make up for the shortfall in Medicaid and help pay the remaining uninsured persons. So, you know, in addition to these cuts, if I am wrong, please correct me, but in addition to this proposal, the regulations in the ACA have been cut, what is it, the $44 billion in DSH funds in 2024, after them How many delays?
Jesse Herman: Yes, exactly. Therefore, these plans will take effect for a few more years, but they have been postponed for a few years. I think there are still some differences on how to proceed.
Alex Katchik: So Jessie, there are some studies that show the economic benefits of this program. What do those show?
Jesse Herman: Yes, a study by the Brookings Institution shows that under this package, the financial outlook of hospitals will improve, especially in non-expanding states, because it will shrink the 2.2 million by providing them with ACA subsidies The human coverage gap is several years. Therefore, the author of this study believes that this dynamic will offset the reduction in DSH. I know that the hospital has refuted this, pointing out that the subsidy is only temporary and it will take a while for people to register for health insurance, but this is just something to keep in mind. .
Alex Katchik: Understood, I know it is difficult to really rely on some of these regulations, stay in the bill, and take into account some resistance. I want to know, considering some objections from some legislators from their respective states, is it possible that these will be deleted?
Jesse Herman: Therefore, it is not only Republican lawmakers who are worried about DSH cuts. Many Democratic lawmakers from non-expanded states are disturbed by the content contained in the latest version of the settlement bill. They said no, especially this regulation, which was not discussed at the hearing. They were caught off guard, and they are pushing to remove these regulations from the final version. In particular, Senators Warnock and Osoff from Georgia have been pushing Congress to narrow the expansion gap. They hope to see the DSH cuts cancelled and point out that this will have an impact on safety net hospitals that serve low-income patients. Therefore, the terms are entirely possible to change. We do not yet know when the House of Representatives will vote on the bill, and the Senate has not even introduced a legislative text.So I think this fight is far from over
Alex Katchik: Studies have shown that in non-expanded states, it is more difficult for rural hospitals to survive. You know, it’s better to pay than not to pay, which is the basic theory. So, you know, this means that when uninsured people get medical services, most of their bells will turn into bad debts and charity care, and then the profit margins of rural hospitals in expanded states are much better than those in non-expanded states. Therefore, especially reserved states like Alabama have been very resolute in refusing to extend to the Medicaid program. What do the experts think about the latest proposal that affects them?
Jesse Herman: So the people I talked to, especially those hospitals that have been pushing these states to expand Medicaid since the beginning, don’t really believe that this is enough to motivate states like Texas and Florida to pay for Medicaid. Expanding political opposition. They do not believe that this will actually prompt them to do so. As you mentioned, the COVID Relief Act passed earlier this year provided more FMAP funding to non-expanding states, and if they continued to expand, this did not really attract the 12 insisting states to do so. So, now they are trying to take more punitive methods, threatening to cut funding, but the people I have talked to think this will really hurt hospitals, especially safety net hospitals, which are not enough to take care of many low-income people. To motivate these states to change their minds.
Alex Katchik: You know, what is the political mentality of these governors who refuse to make concessions on this matter? Because I know that, as we discussed, many proposals try to get them to change the way they expand on Medicaid. Why is there such strong opposition?
Jesse Herman: Therefore, the estimated amount of funds provided by the states to expand the Medicaid program, experts believe that considering the amount of funds spent by the states on unpaid medical care and poor health outcomes, these funds are actually not large, and these funds will cause people to get into trouble. Coverage gap, no health insurance. Therefore, at this point, people think that the resistance to the expansion of Medicaid is mainly political. The expansion of Medicaid is part of the Affordable Care Act, which is still opposed by many Republican politicians, mainly because it increases the role of the federal government in health care.
Alex Katchik: Well, this is interesting because, for example, the Alabama Hospital Association has been trying to lobby their governor to change shifts for a while, because especially in rural health, I mean that many of their hospitals are rural, but they say it will It is a lifeline. This is, you know, together with some configuration methods of the medical insurance salary index, this is one of the biggest problems in my opinion that 84% of their hospitals lose money. So yes, it’s interesting to see that, at least in some states, the dichotomy between planned governors and their respective hospitals and providers, to see if their views are consistent.
Therefore, there is also a proposal aimed at narrowing the gap in the expansion of Medicaid. As you said, as you reported, the Democrats plan to bypass governors who have not expanded Medicaid. What does that look like?
Jesse Herman: Yes. Therefore, in the House version of the domestic policy package, 2.2 million people in non-expanded states will be eligible for ACA subsidies within a few years. It is not permanent. These non-expanding state hospitals and Democratic lawmakers hope that this repair will be permanent, but I think the leadership just decided that there is no money. There are many competing priorities in the bill. But those in the coverage gap will get some help to buy health insurance for at least a few years. I think the Democrats hope they can control the House of Representatives and the Senate when these subsidies expire. But some excerpts and political observers I have interviewed think this is a rather bold adventure. They worry that if the Republicans control Congress, they will only let the subsidies expire by then, and the people and the coverage gap will happen to return to these subsidies to take effect. The previous level.
Alex Katchik: OK. Let’s talk about some of the consequences of not expanding the Medicaid program. Based on data from the Rural Health Charter Center, you report that the states with the most rural hospital closures have not expanded their Medicaid programs, including Georgia, Tennessee, and Texas. So, if there is no coverage, what does this mean for rural hospitals, the elderly, people living below the poverty line, children and mothers? What are some of the inevitable influences here?
Jesse Herman: Yes, many of these people just don’t have any other way to get medical care. This will be their only option, they cannot use it. Many studies over the years have shown that expanding Medicaid has many benefits, including better health outcomes, especially for people of color who fall disproportionately into the coverage gap. This is also a good thing for rural hospitals. Rural hospitals and states without expanded Medicaid programs are actually more likely to close.
Alex Katchik: So, if the latest incentives do not allow more governors in more than a dozen non-expanding states to make concessions, do you hope there will be more attempts?
Jesse Herman: I think this may be one of their last chances to close the coverage gap in these states in a period of time. I don’t think Republicans in Congress have shown any interest in dealing with this issue. Although Joe Biden will still be president, I think there is a limit to what the government can do in dealing with this issue. Therefore, I think this domestic policy package is regarded by the Democratic Party as one of the last opportunities to resolve it.
Alex Katchik: Glad to know. Well, Jessie, thank you so much for breaking it down for us.
Jesse Herman: Thank you for your hospitality.
Alex Katchik: Okay, thank you everyone for listening. If you want to subscribe and support our work, there is a link in the program description. You can subscribe to Beyond the Byline on Spotify or wherever you listen to podcasts. You can follow Jessie and me of Modern Healthcare on Twitter and LinkedIn to keep in touch with our work. We thank you for your support.