Rejecting free money is expensive

Forbes Magazine is using little words to explain to its readers that hospitals in states that are rejecting Medicaid Expansion are hurting:

financial issues are emerging for medical care providers in the two dozen states that didn’t go along with the expansion under the Affordable Care Act.

Reports out in the last week indicate the gap between those with health care coverage is widening between states that agreed to go along with the health law’s Medicaid expansion and those generally led by Republican legislatures and GOP governors that are balking at the expansion….

“We expect providers in states that have chosen not to participate in expanded Medicaid eligibility to face increasing financial challenges in 2014 and beyond,” Fitch said in its July 16 report. “Nonprofit hospitals and healthcare systems in states that have expanded their Medicaid coverage under the Patient Protection and Affordable Care Act have begun to realize the benefit from increased insurance coverage.”

As I explained in my post on rural hospitals and Disproportionate Share Hospital payment reductions, this is a logical consequence of Chief Justice Roberts and his associated sociopaths making Medicaid expansion optional.

The hospital most likely relied on Disprorpotionate Share Hospital payments.  These payments are Medicaid reimbursement bonuses to hospitals that serve underinsured and overly poor areas.  The goal of the DSH payments was to make up for some of the fixed costs that normally would be covered by private insurance’s higher reimbursement rates.  PPACA reduced the pool of money committed to DSH payments.  The policy logic behind the reduction was that the Medicaid expansion and Exchange subsidies should significantly reduce the number of people who are uninsured and receive care that is not directly paid for, therefore the need for DSH payments would decrease. 

That logic is sound, and it works as long as there was the assumption that the Medicaid program and expansion was a single program that every state in the nation would take as the deal was too damn good to pass up. It is working in the Expansion states.

Thanks to the assholes on the Supreme Court and the sadists and sociopaths in the Republican Party, half the states have not taken up free federal money to cover their poor uninsured population via Medicaid Expansion… the compensating factors for the DSH payment cuts aren’t compensating as intended in Republican governed states.

In a rational world, blame would be placed squarely on the Republican governors and Teabagging legislatures for refusing free money.  In a slightly less rational world, blame would be split between the Supreme Court and the Teabaggers who say Nee.  In our world, at least 27% of the country will blame Obamacare for closing the rural hospitals in non-Expansion states.

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49 replies
  1. 1
    Chris says:

    Florida is one that rejected the Medicaid expansion. It wasn’t until I was shopping around for insurance around the same time that I discovered Florida doesn’t offer Medicaid to you even if your income is an absolute zero – you need a more extreme situation, like “my income is zero or close to it AND I have a kid to feed.”

    That would’ve changed if the expansion was accepted, so the ACA workers told me, but nope, the state government doesn’t want it. Free. Fucking. Money. They denied money that wouldn’t have cost them a dime, because fucking people over is just that prodigiously important to them.

    Yeah, like I’ve said multiple times in the last few years, it’s amazing how much my sympathy and understanding for the French Revolutionaries has grown just in the last five years.

  2. 2
    soonergrunt says:

    In a rational world, blame would be placed squarely on the Republican governors and Teabagging legislatures for refusing free money. In a slightly less rational world, blame would be split between the Supreme Court and the Teabaggers who say Nee. In our world, at least 27% of the country will blame Obamacare for closing the rural hospitals in non-Expansion states.

    Welcome to Oklahoma.

  3. 3
    Bobby Thomson says:

    Optimist.

  4. 4
    PaulW says:

    Technically, it’s not really “free” in the long run: the Medicaid is mostly paid for by federal taxes in the first year, but then after that a portion of the program has to be paid by the state(s) that sign on. While the federal gov’t still foots most of the bill, there’s a point where the states have to pay in. That means in most cases those states would have to raise taxes in some way to pay for it (as most states have a balanced budget requirement and a lot of them can’t make any more spending cuts to justify their insane corporate tax cuts).

    I think that’s one of the major reasons – the other is sheer spite against Obama and the hippie-tree-hugger-socialists – some of the states reject the expansion. Which is still a massive effort to cut off their own citizenry’s collective noses to spite Obama.

  5. 5
    Mike in NC says:

    Welcome to 21st Century America, where our lives are controlled by assholes, sadists, and sociopaths. All that we’re missing is President Mitt Rmoney, but the GOP will do their best to make up for that.

  6. 6
    greennotGreen says:

    The university medical center where I work is in a state that didn’t accept free, free, free Medicaid expansion (probably, IMHO, because there’s an n-clang! in the White House.) The medical center has laid off people right and left. I’m near retirement, so I’m stress-free, but people in their fifties with years of very specific technical experience are losing their jobs, and it’s going to be very difficult to get another one so late in ones working life. Morale is lower than I’ve ever seen it.

    On the plus side, it’s a lot easier to find a parking place.

  7. 7
    greennotGreen says:

    @PaulW: You have a good point about the taxes, but I’d be interested to know if other states that rejected medicaid expansion also have as inefficient and regressive tax structure as mine has.

  8. 8
    blueskies says:

    And yet we see almost NOTHING in red state local papers and TV news explaining a very simple cause-and-effect story.

    Almost makes you wonder about that liberal media…

  9. 9
    MattF says:

    I’m a bit surprised that Forbes is covering this, considering that their executive editor Pooh-Bah-In-Chief is none other than Mr. Forbes. Maybe this:

    http://www.forbes.com/sites/fo.....al-growth/

    has something to do with it.

  10. 10
    Another Holocene Human (now with new computer) says:

    @Chris: At least we can still vote out Pink Slip Rick.

    If you’re in Florida, think about donating to some of the State House and Senate candidates who are challenging GOP extremists. (Not all of the GOP are extremists: Latvala, for example, has blocked a lot of bad stuff and is pro-Florida. Gaetz, OTOH, is a POS.)

    Jon Uman is trying to turf failed roofing contractor and all around idiot Keith Perry, who is bought and paid for by the Florida Retail Federation and Florida Restaurant Association (Publix and Darden).

    We nearly got rid of Perry in the last election but had precious resources yanked at the last minute by the feckless Florida Democratic Party, but Uman has done a great deal of his own fundraising. You need it because Perry gets airlifted cash by the GOP and big business to stay in power. The district is competitive but spread out.

    I’m sure someone from Central Florida could chime in about their races. We are taking the fight to them and Medicaid is going to be a big issue this cycle.

  11. 11
    Another Holocene Human (now with new computer) says:

    @PaulW: Not really because that 10% or more was already being paid by state governments in a patchwork of programs for critically ill cancer patients, sick kids, mentally ill folks, etcet. And I mean direct medical stuff, not knock-on societal costs (law enforcement, etc). At least that is true in Florida. There is patchwork fund after patchwork fund. But with those indigent care funds being yoinked by Washington we are really, really screwed.

    Even with the state co-pay Florida would actually be saving money. That’s before you consider probable economic stimulus effects of the change.

  12. 12
    Chris says:

    @Another Holocene Human (now with new computer):

    Relatively recent arrival to Florida, and actually overseas for now, but, yes. It’s my permanent address.

    I do know one person who’s into the Nan Rich campaign for governor and asked if I was interested in getting involved (which I probably would be, if I’m back in FL before the elections) – any particular opinions, for or against her?

  13. 13
    gene108 says:

    @Chris:

    Betty would be worth contacting, wrt to FL politics and who to support and why.

  14. 14
    aimai says:

    @PaulW: But the amount of money that the state has to pay is derisory–10 percent. The amount that it costs the state and business in the state to waive payments from the chronically indigent, to pay for ER services, Police Services, and other things is far, far, higher than that 10 percent would be. Its like people who refuse to pay for kids education but happilly pay for prison expansion. This is never a rational, “about the money” decision–some kinds of social programs are always considered too expensive, others are always considered essentially free because they are necessary. In this country weapons and prisons are “free” and health care and education are expensive.

  15. 15
    Villago Delenda Est says:

    I so want to live in that rational world.

    Do you suppose if I grow a goatee this might come to pass?

  16. 16
    Villago Delenda Est says:

    @Chris:

    Yeah, like I’ve said multiple times in the last few years, it’s amazing how much my sympathy and understanding for the French Revolutionaries has grown just in the last five years.

    Desperate people take desperate measures.

    We’re seeing that right now along the southern border of the US with the refugee situation.

    Freedom’s just another word for nothing left to lose. When you’ve run out of ways to effect necessary peaceful change, you turn to other ways to effect the change that must come.

    This time, no half measures like in the 30’s.

  17. 17
    Richard Mayhew says:

    @PaulW: From a regional economic modeling point of view, a 9:1 Fed:State split is still free money as the 9 federal dollars will create more than enough new net jobs to pay for the 1 state dollar. It is as close to free money from a state point of view as possible.

  18. 18
    Another Holocene Human (now with new computer) says:

    @Chris: Labor is backing Crist.

    A) Crist, at great political cost, vetoed a bill that would have hurt teachers and students during his last year as governor

    B) He can win

    Nan Rich supporters are very, very passionate. But as a relative newcomer to the state, I watched the decisions Crist made as governor and I know where his heart is. Do you know his first act as governor was to ditch the racist state inaugural song and replace it with a song that was actually written by a Floridian and didn’t glorify slavery? And his last was an executive order to allow felons to get their civil rights back in an orderly fashion? (Rick Scott, after killing high speed rail, reversed Crist’s order on felon civil rights restoration, putting a lot of people I know in horrible limbo–and it was a big issue for activists and the Dem party in Tallahassee this year.)

    Crist can beat and will beat Rick Scott. I, for one, have no love lost for the Florida Dem Party. Look at all the money they sunk on Alex Sink six months ago to prove some sort of point. Well, the voters were having none of it and did not vote for her. They could have won with a local Dem candidate that they muscled out of the race. Stupid.

    We can be stuck on stupid, or we can take the baton that Barack Obama passed to us and win back this state!! But the days of Florida Jews from NY/NJ plus Dixiecrats are over. Kiss them goodbye. It’s done!!

    Crist is being supported by John Morgan in Central Florida, which is a very swingy area going progressive Dem due to Puerto Rican (Newyorikan) transplants settling in that region and out organizing and out voting the lily white super religious right good old boys that used to dominate the place (think Sanford).

    Crist is pushing these justice issues that really, really matter to African-American voters in the Northern (Southron) part of Florida, not just felon rights restoration and getting back early voting, but also marijuana legalization. Pot charges are like an economic death sentence in Florida, it’s a really fucking big issue.

    Look, I appreciate that Nan Rich never wavered and is gung ho on women’s rights (not that Crist is against it) and blah blah but her supporters are just really missing why big pieces of the D coalition are so strongly behind Crist, aside from the money wanting to follow someone who can win, and Rich just doesn’t have the statewide name recognition that a former governor does.

    I’m sorry, the D’s can only rule as a coalition. You can’t take your piece of it and wave it around and say it’s the only one that matters. This is life and death up here in the Northern part of Florida, these are whole families’ fortunes and you want to run a purity pout because you know you can’t win and you won’t get donor money. Fuck that shit.

  19. 19
    catclub says:

    @PaulW:

    That means in most cases those states would have to raise taxes in some way to pay for it ….
    I think that’s one of the major reasons

    That is made clearer when you note that this values any improvement to the state economy with the increased healthcare spending at zero, and you also value any improvement to the health of the citizens of your state at zero. Both of which the GOP is doing.

  20. 20
    catclub says:

    @aimai:

    In this country weapons and prisons are “free”

    That prisons are free bias is slowly ( or perhaps not so slowly) changing. If Louisiana is considering changes to mandatory minimum prison sentences, that is a sign of spring. The reporting I heard was some coalition that included business leaders wanted the changes to cut prison costs. [The reporting was not quite so progressive as to note the benefits to certain people of prison slave labor.]

  21. 21
    Ruckus says:

    Thanks to the assholes on the Supreme Court and the sadists and sociopaths in the Republican Party, half the states have not taken up free federal money to cover their poor uninsured population via Medicaid Expansion… the compensating factors for the DSH payment cuts aren’t compensating as intended in Republican governed states.

    This is pretty significant, this direct attack, having been printed in Forbes. Is this a shift away from the disaster that is conservative politics for Forbes or just a one time “error” in judgement? Let’s hope for a chink in the armor, rather than a one time thing.

  22. 22
    Richard Mayhew says:

    @Ruckus: Those are my words — a foul mouthed blogger at a disreputable publication– not the words of an esteemed Forbes columnist.

  23. 23
    RaflW says:

    As I see it, the market is indeed working. States that took the expansion are benefitting, and states with shit-assed management (aka elected Republicans) are seeing their hospital revenues decline. Exactly as Adam Smith might predict.
    What should happen is that voters fire their current GOP sadists and replace them with folks who would take the subsidy. Mr. Smith’s supply-demand curves don’t seem to apply there, though.

  24. 24
    JustRuss says:

    Has anyone penciled out the economic advantages of having more well-paid health professionals providing care to those Medicaid customers? Combined with a healthier population (fewer sick days) and fewer ER visits, seems like a pretty big win for states that didn’t fight the ACA.

  25. 25
    rikyrah says:

    There is that Mayor in North Carolina that is going the protest walk from NC to DC because of the GOPers refusing the money, his local hospital closed.

    My problem isn’t with him.. it’s with all the other Mayors seeing their hospitals closing and not fighting for them because it’s too important to knock down the Black Man in the White House than help their constituents.

  26. 26
    RaflW says:

    @greennotGreen: If at all possible, these laid-off medical people should look for work in Minnesota and move ASAP if they can.

    Our D/D/D state (Gov/House/Senate) has very low unemployment, Medicaid expansion, one of the best uninsured uptake rates, etc.

    One of the consequences of the GOP dickishness needs to be – though I know job-hunting and relocation sucks hobbit toes – that people migrate to the blue states that are working, functional places that citizens enjoy living in.

    Free market? Yes – move to where life is valued. Not in some b.s. anti-abortion fetish way, but in the sense of not having 42 pupils per teacher, of actual healthcare options, investments in job training and infrastructure, etc.

    Let Kansas have its self-inflicted GOP budget crisis. The assholes will learn nothing.

    But maybe, over time, the blatant differences in quality of life in Blue states will sink in for voters (and business leaders – who fund the current GOP nihilism brigade).

  27. 27
    Villago Delenda Est says:

    @rikyrah:

    because it’s too important to knock down the Black Man in the White House than help their constituents.

    The needs of the racist tribe outweigh all other possible needs. Always.

  28. 28
    Villago Delenda Est says:

    @Richard Mayhew: They are ACCURATE words, though. It’s really too bad that Forbes didn’t print them. The truth can be very painful at times, can’t it?

  29. 29
    rikyrah says:

    Thanks to the assholes on the Supreme Court and the sadists and sociopaths in the Republican Party, half the states have not taken up free federal money to cover their poor uninsured population via Medicaid Expansion…

    tell the truth, why don’t you…

  30. 30
    texasdem says:

    @blueskies: This actually is showing up in Texas newspapers, I think prompted by the Forbes article. There was an editorial in the Houston Chronicle this weekend urging our next governor (Abbott? Fat chance!) to expand Medicaid. What is so stupid is that we are paying twice for the uninsured–once because of higher prices at hospitals to cover unreimbursed care, and again with the increased federal taxes to help pay for “Obamacare”.

  31. 31
    RaflW says:

    Took a quick look at the comments on the Forbes article, and it’s comical. The gist is: these statistics cannot be true and/or medicaid is just taking money out of my pocket, has to be a (future) failure.

    There is precious little point in saying anything analytical or factual to these morons. They’ve been brainwashed very deeply.

    The main question is, are the business elite reading this at Forbes? Some of them of course are just as deeply brainwashed. But I have to hope that some of the C-suite brass in corporate America are noticing that the GOP formula is not working.

    But I think things have to get worse in the Red states first…

  32. 32
    WereBear says:

    @RaflW: It was exactly these issues that led to me fleeing the South when I was 19. Even then, on the cusp of the 80’s, it was obvious to me that Florida had nothing but contempt for its own citizens, who cost money.

    But I was young and unattached and had somewhere to land while I got my independence together.

    Lots of people are too poor to move, or are caring for a sick or elderly person, or couldn’t stay afloat without their support network. The middle class has the luxury of being Red State Refugees.

  33. 33
    RaflW says:

    @WereBear: I am well aware of the damage to those who are not able to move. I have several friends in Austin, TX who are more-or-less locked in. I left in 1995 when GWB was testing out his bullshit ‘leadership’ on that state.

    Those who’ve stayed have now suffered Rick Perry and the ongoing disaster known as the TX lege, and it ain’t pretty.

  34. 34
    James E. Powell says:

    In our world, at least 27% of the country will blame Obamacare for closing the rural hospitals in non-Expansion states.

    So much of this kind of thing could be taken care of with well-placed 30 second TV ads. It’s not like it’s hard to explain. And the more fiery the presentation, the more likely the ads get news coverage and generate discussion.

  35. 35
    James E. Powell says:

    @PaulW:

    I think that’s one of the major reasons – the other is sheer spite against Obama and the hippie-tree-hugger-socialists – some of the states reject the expansion.

    The sheer spite is the only reason. Just look at who is and who isn’t doing it. They depend on their base voters and their base voters demand that they stand up to that [insert racist epithet] consistently and vocally.

  36. 36
    Villago Delenda Est says:

    @James E. Powell: Cleek’s Law is possibly even more ironclad that Poe’s Law.

  37. 37
    Mike G says:

    @PaulW:

    Medicaid is mostly paid for by federal taxes in the first year, but then after that a portion of the program has to be paid by the state(s) that sign on. While the federal gov’t still foots most of the bill, there’s a point where the states have to pay in. That means in most cases those states would have to raise taxes in some way to pay for it

    They could just cut taxes. Under the magic of Laffer Curve Reaganomics, tax cuts INCREASE revenues.

    What? You’re looking for an actual solution, not a propaganda tale to justify tax cuts? Never mind.

  38. 38
    Villago Delenda Est says:

    @Mike G: I understand that tax cuts will cure the common cold and clear up a rainy day.

  39. 39
    Mnemosyne says:

    Without going into details we don’t know yet, my oldest stepbrother (51 years old) was admitted to the hospital in Florida over the weekend with what may be cancer. I’m already thinking that if he loses his job, he needs to move back home to Illinois STAT, where he’ll actually have a chance of getting Medicaid, unlike Florida, which would be happy to let him die if he ends up unemployed.

  40. 40
    RSR says:

    the injury is wider than just healthcare, too. In PA, we ‘don’t’ have ‘enough’ money for schools, but we refuse to take free money for the healthcare system, or levy taxes on mineral rights (fracking). The money left on the table could close the school funding gap. It’s almost as if they want the public school system to fail. Oh, wait.

  41. 41
    Mnemosyne says:

    @RSR:

    I still don’t understand the rationale for not levying taxes on fracking. What are the gas companies going to do, move their fracking operations overseas? You kinda have to be on the site to do the work. You can’t drill for gas in Pennsylvania from an outside location.

  42. 42
    Ruckus says:

    @Richard Mayhew:
    So you are far smarter than Forbes, you understand cause and effect. Got it.

  43. 43
    Ruckus says:

    @Ruckus:
    Richard,
    That seemed a little snotty on seeing it published and was not meant to be that in any way.
    My original comment was mistaken about the author so I was trying to acknowledge that and why.

  44. 44
    Ruckus says:

    @Mnemosyne:
    You have a rational thought process. It allows you to see the issues and cause and effect and long term gains and losses. Conservatives just believe stuff. Doesn’t have to be real stuff and in fact almost never is. But they know it to be true because they would never question beliefs. A belief has got to be true otherwise some one would be able to show it as false but that would mean you’d have to listen to someone who doesn’t believe and there goes your whole belief system. Joesph Heller had nothing on conservatives.

  45. 45
    catclub says:

    @Mnemosyne:

    You can’t drill for gas in Pennsylvania from an outside location.

    But you can drill for oil in Iraq from Kuwait! Pissed off Saddam enough to invade.

  46. 46
    richard mayhew says:

    @Ruckus: no problem

  47. 47
    richard mayhew says:

    @Ruckus: no problem

  48. 48
    richard mayhew says:

    @Ruckus: no problem

  49. 49
    Ruckus says:

    @richard mayhew:
    Thanks!
    When you say no problem you really mean no problem.

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