ATLANTA (AP) — A recent U.S. Supreme Court decision that upheld President Barack Obama's health care overhaul could put Georgia's hospitals in an economic bind.
The ruling sustained a requirement that nearly all Americans must get health insurance or pay a penalty. But the top court ruled that states can decide whether to expand their Medicaid programs, a government-funded health program that covers mostly poor children, pregnant women, the elderly and the disabled. Under the original law, states that refused to expand their Medicaid programs could have lost federal funding.
Georgia Gov. Nathan Deal, a Republican, said he intends to wait until after the November presidential elections to make key decisions on how the state will proceed. Georgia is one of at least 10 states that may reject the Medicaid expansion, according to a report by the Brookings Institution.
The Atlanta Journal-Constitution reports that (http://bit.ly/RHhGLJ) not expanding the Medicaid program would pose a problem for Georgia hospitals, which lost an estimated $1.5 billion caring for people without insurance last year. The hospital industry agreed to absorb $155 billion in Medicare and Medicaid cuts over a decade to help pay for the new health care overhaul. But the hospitals thought they would lose less money giving free care because more people would be enrolled in Medicaid and other health insurance plans.
"If we get the cuts and not the coverage, that's a game changer for us," said Kevin Bloye, a spokesman for the Georgia Hospital Association.
Already, hospitals face lower payments from insurers and pressures to consolidate. One in three Georgia hospitals loses money. All hospitals are preparing for new standards under the law that could mean millions of dollars in penalties if they are not met.
"Everyone's been looking at ways to reduce overall costs," said Kelvin Baggett, chief medical officer for Tenet Healthcare Corp., which runs several hospitals in Georgia.
Deal's administration estimates that expanding the state's Medicaid program would add 650,000 people to a program that now covers about 1.7 million Georgians. Georgia and the federal government share the cost of the Medicaid program for existing users. The federal government would cover all the costs of the newly eligible recipients for three years. Afterward, the U.S. government would pay for 90 percent of those costs.
Deal has questioned whether Georgia could pay its share of the $4.5 billion cost of expanding the Medicaid program over a decade. Such an expansion would secure $35 billion in federal funding. Georgia is facing a $300 million Medicaid shortfall this fiscal year.
"To pay for the expansion without tax increases would require the state to cut nearly a quarter of its annual budget," said Brian Robinson, a Deal spokesman. "And that's after we've shaved off billions in state spending since the beginning of the Great Recession."