States May Tap Hospitals To Help Pay For Medicaid Expansion In 2017

Author | Shield HealthCare
07/22/15  11:26 PM PST
Texas hospital alliance

Policymakers in Medicaid expansion states likely will try to wring some cash from hospitals starting in 2017 when the federal government no longer pays the full tab for the coverage expansion, experts say.

Higher-than-expected enrollment means expansion states will be on the hook for hundreds of millions more than they anticipated when they took advantage of the Affordable Care Act’s Medicaid expansion to adults earning up to 138% of the federal poverty level. For instance, in Oregon, 386,000 people enrolled Medicaid in 2014, up from a pre-expansion estimate of 222,700.

Under the ACA, the federal government picks up the full cost for newly eligible adults through 2016. After that, the match gradually drops to 90% by 2020. In 2013, Oregon estimated its tab for Medicaid expansion would be $262 million between 2017 and 2019. It now expects the cost will be $369 million during that period, said Stephanie Tripp, a spokeswoman for the Oregon Health Authority, the state’s Medicaid agency.

Earlier this month, the CMS issued a report noting that the ACA’s Medicaid expansion pushed enrollment higher than expected and that the projected costs for that coverage had gone up as well. But experts have noted that the Medicaid expansion reduces state costs in other ways, and also boosts jobs and states’ economies.

“What you’re seeing now is that state budget people are saying we’re ending up with more people in the system than we initially thought, and we have to think about how we’re going to finance this,” said Joy Wilson, health policy director for the National Conference of State Legislatures.

Any arrangement to have a state’s hospitals pay assessments to pay for the Medicaid expansion would have to be approved by each state’s legislature.

One option is to have hospitals contribute through the system of assessment fees already being collected by many states. Since the 1980s, provider assessments have generated billions of dollars to help states boost the matching funds they receive from the federal government. In 2015, 38 states had such levies in place, according to the Kaiser Family Foundation.


Original article published by Virgil Dickson of Modern Healthcare on July 21, 2015. Read the Full Article here.

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