Colorado hospitals want Medicaid expansion

By Katie Kerwin McCrimmon

Burdened with providing $1.5 billion in care for the uninsured a year, Colorado hospitals support an expansion of Medicaid to help reduce health care costs.

As of now, the Medicaid expansion is the best solution we know of to get health insurance for the people who need it most, said Julian Kesner, spokesman for the Colorado Hospital Association.

Kesner said the associations financial analysts are calculating how much a failure to expand Medicaid would cost hospitals, but he doesnt have an estimate yet. Hospitals cannot turn away uninsured people who show up sick in emergency rooms. Hospitals absorb some of these costs while taxpayers and individuals and businesses who foot the bill for ever-more expensive private health insurance premiums are paying the rest of the tab for the uninsured.

The Supreme Court ruling on the Affordable Care Act, which allows states to opt out of covering more poor people, has triggered vitriolic battles across the country about whether states will expand Medicaid.

While the justices upheld the health law overall, a majority voted that the federal government cant force states to cover a greater share of people under Medicaid, the health insurance program for the poor. Republicans in some states are using the battle against Medicaid expansion as a way to express their anger over the entire health law.

In Colorado, Gov. John Hickenlooper, a Democrat, and his aides have made no commitments on whether theyll support adding more people to Colorados already expanding Medicaid rolls. The economic downturn caused a spike in the states Medicaid rolls. Already more than 600,000 people are on Medicaid and the expansion could add another 200,000. Even with the federal government picking up all of the tab in the first two years and 90 percent in successive years, Hickenlooper has been cautious about adding more people to public health insurance. He says his primary goal is to cut soaring health care costs overall and hes analyzing the best way to do that.

For now, the governor says hes studying alternatives. Meanwhile Colorado Attorney General John Suthers warned last week that Colorados share of the Medicaid expansion could cost a billion dollars over several years.

In states such as Florida, Texas and Nebraska, governors have said they will refuse to expand Medicaid. But, now the entities that foot the bills for the uninsured are fighting back. The Florida Hospital Associations president told the New York Times last week that its a bad deal for the people in Florida if the state walks away from federal funds that could help provide health coverage for more poor people.

Here in Colorado, emails are flying and health leaders are meeting behind the scenes to dissect the ACA ruling and analyze how best to cover the uninsured.

Both the Colorado Hospital Association and the American Hospital Association supported the Affordable Care Act.

At the end of the day, we want increased access and increased coverage for everyone in Colorado and we dont want hospitals to have to deal with the cost of uncompensated care for the uninsured, Kesner said.

In 2010, the most recent year for which data are available, uncompensated care at hospitals across Colorado cost $1.5 billion. That was down slightly from $1.7 billion the year before, Kesner said.

Costs may have declined in part because in 2009, Colorado lawmakers passed provider fee legislation known as the Colorado Health Care Affordability Act. The law imposes a fee on the states hospitals. These funds then allow Colorado to draw matching federal funds, which are used to expand Medicaid coverage to more people, including single adult men, who previously have not been eligible for Medicaid.

Analysts are trying to figure out if the Medicaid expansions, which were mandated in the Affordable Care Act, can mesh with Colorados provider fee program. In addition, state Medicaid managers are confronting a raft of other questions.

In most states, the Medicaid battle has emerged as an either/or issue. Either the states will expand their coverage for the poor and get billions in federal funds, or they will refuse to expand Medicaid and will surrender much-needed cash.

Other possibilities are beginning to emerge, however. Its clear that Medicaid managers in some states are trying to figure out whether they can get a waiver and use federal Medicaid funds to give the poor subsidies so they can buy their own insurance through state online health exchanges.

State Medicaid experts also are trying to figure out thorny financial questions including whether they would have to return cash if theyve already spent it to plan for the expansion and then decide to opt out. Some are wondering if they can accept federal cash in the first two years when the federal government covers 100 percent of the cost, then stop covering the additional poor people in 2016.

In Colorado, theres a history of business groups, the hospital association and consumer health advocates cooperating to map out policies that reduce the number of uninsured people. Time will tell whether Colorado goes for the Medicaid expansion or tries to come up with some sort of hybrid solution.