By now, millions of Americans--most of them in red states-- are growing familiar with the "coverage gap." Thanks to their rejection of the Affordable Care Act's expansion of Medicaid in states they control, GOP leaders are leaving at least five million people in an insurance "dead zone," earning too much to qualify for Medicaid but too little to obtain federal subsidies to purchase coverage on their own. As a recent Harvard study suggests, that Republican dead zone will a very real body count, with as many as 17,000 people forecast to needlessly die each year for lack of health insurance.
But GOP obstruction won't just kill people in places like Texas, Mississippi and many more. As the case of Georgia shows--where over 600,000 residents will fall into the coverage gap and as many as 1,175 will die this year--Republican policy is killing hospitals, too.
As ThinkProgress reported, a fourth rural hospital in Georgia is shutting its doors due to a lack of patients who can pay for their medical expenses:
The Lower Oconee Community Hospital, a so-called "critical access" hospital in southeastern Georgia with 25 beds, will close down and possibly re-open as an urgent care center that provides services that aren't quite serious enough to necessitate an emergency room visit. Patients in the Wheeler County region who need more extensive medical care after the hospital closes will need to travel upwards of thirty miles in order to receive it.
"We just did not have sufficient volume to support the expenses," said CEO Karen O'Neal in an interview with local CBS affiliate WMAZ. "It's a terrible situation, and it's tragic, the loss of jobs and the economic impact."
It's tragic all right. And as with many facilities in rejectionist red states, it doesn't have to be this way. Because it's not just millions of their constituents who are falling into the Republican coverage gap. As Bloomberg and CNN recently documented, many of the hospitals, clinics and emergency centers that serve them are at risk, too.
In GOP Governor Nathan Deal's Georgia, it's not just Lower Oconee Community Hospital facing a possible death sentence. As the New York Times reported in November, Memorial Hospital in Savannah, Georgia "is now facing the loss of nearly half of its roughly $100 million in annual subsidies known as disproportionate share hospital payments." The Times explained how the Republican temper tantrum after the Supreme Court made Medicaid expansion optional for the states is putting red state hospitals at risk:
Now, in a perverse twist, many of the poor people who rely on safety-net hospitals like Memorial will be doubly unlucky. A government subsidy, little known outside health policy circles but critical to the hospitals' survival, is being sharply reduced under the new health law.
The subsidy, which for years has helped defray the cost of uncompensated and undercompensated care, was cut substantially on the assumption that the hospitals would replace much of the lost income with payments for patients newly covered by Medicaid or private insurance. But now the hospitals in states like Georgia will get neither the new Medicaid patients nor most of the old subsidies, which many say are crucial to the mission of care for the poor.
Savannah Memorial has plenty of company in Georgia, where Governor Deal said no to $33 billion in new federal Medicaid funding over the next decade. But as the federal government significantly reduces funding on Disproportionate Share Hospital (DSH) payments for the care of the uninsured, states like Georgia which turned down Obamacare's Medicaid dollars will be on the hook to make up the difference. For Grady Memorial Hospital, the largest in the metro Atlanta area, what could have been an annual boon of $60 million and coverage for 27,000 uninsured patients instead will be a $45 million loss. Georgia taxpayers will have to pay more even as hospitals likely cut services. Meanwhile, three cash-strapped rural hospitals have already closed their doors. Another 15 may follow suit in 2014. All because a Republican Governor said "no" to free money from Washington, DC.
And the funding is virtually free to the states. The federal government will pay for 100 percent of the cost of the Medicaid expansion until 2017 and 90 percent after that. The loss to rejectionist red state coffers, the Commonwealth Fund found, is staggering. As USA Today summed it up:
By 2022, Texas could lose $9.2 billion by not expanding Medicaid as allowed under the Affordable Care Act, while Florida could lose $5 billion over that period, the study conducted by The Commonwealth Fund shows...Also during that period, the study showed, Georgia could lose $2.9 billion, while Virginia could lose $2.8 billion.
"There are no states where the taxpayers would actually gain by not expanding Medicaid," said Sherry Glied, lead author on the study. "Nobody wins."
But the billions the "opt-out" states will have to come up with in future years will be more than offset by their extra costs to compensate hospitals and other providers for the care of the uninsured. As Ezra Klein and Evan Soltas summed up an analysis by the RAND Corporation of 14 Medicaid rejecting states earlier this year
It finds that the result will be they get $8.4 billion less in federal funding, have to spend an extra $1 billion in uncompensated care, and end up with about 3.6 million fewer insured residents.
So then, the math works out like this: States rejecting the expansion will spend much more, get much, much less, and leave millions of their residents uninsured. That's a lot of self-inflicted pain to make a political point.
Which is just one of the reasons why an increasing number of red state governors are accepting the dollars from DC. GOP governors in Michigan, Pennsylvania and Ohio ran the numbers. In Ohio, Governor John Kasich's decision to take Washington's money will actually produce a $400 million surplus for the Buckeye State (one which Republican legislators want to give away in the form of more tax cuts). The simple math-and simpler consideration in insuring millions of indigent patients as the DSH funding is reduced over time is precisely why hospital associations in Texas, Kentucky, Georgia, Mississippi, North Carolina and every other state pleaded with Republican governors and legislatures to take Obamacare's money for Medicaid expansion. In October, the Fitch ratings agency released a special report titled, "Adverse Expansion: Hospitals, States and Medicaid," which warned that:
"Hospitals operating in states not expanding Medicaid, which usually have higher uninsured and poverty rates, will have to absorb the full impact of the ACA reimbursement cuts without the full benefit of increased insured volumes," said Adam Kates, Director in Fitch's Public Finance group. Texas, Florida, Georgia, Louisiana, Mississippi, and South Carolina are not expanding Medicaid and have among the highest uninsured and poverty rates, and some of the most stringent Medicaid eligibility requirements. Fitch believes hospitals in these states, particularly those with weak payer mixes, will be particularly vulnerable.
It's no wonder Arizona Governor Jan Brewer, certainly no friend of Barack Obama, explained her decision to extend Medicaid coverage to 300,000 more people in her state this way:
"It's pro-life, it's saving lives, it is creating jobs, it is saving hospitals."
But not in Georgia. And not in Rick Perry's Texas, Rick Scott's Florida, Phil Bentley's Mississippi, Scott Walker's Wisconsin or any other state where supposedly pro-life Republicans have essentially sentenced thousands of people to death.