In Arkansas and Georgia, an Obamacare Tale of Two Clinics
For the two clinics, it was the best of times and the worst times. In Mena, Arkansas, the 9th Street Ministries free clinic is closing its doors after 16 years, its services no longer needed by the poor residents who have now obtained health insurance thanks to the Affordable Care Act. But in Glenwood, Georgia, the Lower Oconee Community Hospital has closed, largely because the low income denizens of Wheeler County did not. And with 94,000 Arkansans covered by the expansion of Medicaid spearheaded by Democratic Governor Mike Beebe while Republican Governor Nathan Deal left over 600,000 Georgians without, the tale of two clinics is bound to be repeated in the months ahead.
Arkansas is one of the few red states which chose to extend federally-funded Medicaid coverage to its residents earning up to 138 percent of the federal poverty level (FPL). Under its unique "private option" agreement with the Obama Department of Health and Human Services (HHS), the state is using those federal dollars to enable lower income Arkansas to purchase private insurance coverage. (Polls show that private option approach is very popular among Arkansans, unless they are first informed that it is part of Obamacare.) And as fierce Obamacare foe and Arkansas State Rep. Nate Bell learned, the program is working exactly as planned in his hometown of Mena:
"Because people are qualifying for insurance coverage through the Affordable Care Act, also known as Obamacare, our free medical clinic will not be needed anymore," Stacey Bowser RN, 9th Street Ministries Clinic Director, stated. "We've gone from seeing around 300 people a month on a regular basis, but as people were enrolling in Obamacare, the numbers we were seeing have dropped. We were down to 80 people that came through the medical clinic in February, all the way down to three people at the medical clinic in March. Our services won't be needed anymore, and this will conclude our mission."
But in Georgia, the situation for the uninsured and the hospitals that care for them is getting worse. As ThinkProgress reported in February, 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. Which is exactly why Arkansas chose to accept Uncle Sam's dollars for Medicaid expansion. As Arkansas Business explained:
Beebe has said rejecting the $915 million in federal funds for the private option would jeopardize other state services. Beebe's proposed $5 billion budget relies on $89 million in savings he says the private option will create by cutting down on hospitals' uncompensated care costs.
Ezra Klein and Evan Soltas summed up an analysis by the RAND Corporation of 14 Medicaid rejecting states last 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.
For Georgia Governor Nathan Deal, make that an awful lot of self-inflicted pain. In response to the prospect of 613,000 needlessly uninsured Georgians--up to 1,175 of whom will needlessly die each year--Deal only doubled down on his Medicaid rejection. As the Atlanta Business Chronicle detailed in March:
Gov. Nathan Deal unveiled a plan Wednesday to help keep rural hospitals in Georgia open by scaling back their operations.
The governor announced changes to state regulations governing hospital licensing that will let rural hospitals offer fewer services if they are in danger of closing.
And if he could, Governor Deal would end the federal requirement that hospitals must provide emergency treatment for the uninsured:
The Emergency Medical Treatment and Labor Act is a 1986 law that requires hospitals to provide emergency health care treatment to anyone who needs it, regardless of citizenship or their ability to pay. And it's provided life-saving care to countless people, but it's also strained hospital resources and turned emergency rooms into the first stop, instead of a last resort, for some.
"If they really want to get serious about lowering the cost of health care in this country, they would revisit another federal statute that has been there for a long time," Deal told a crowd of dozens at a University of Georgia political science alumni gathering. "It came as a result of bad facts, and we have a saying that bad facts make bad law."
In the case of Lower Oconee Community Hospital and other clinic and medical centers in Georgia, Nathan Deal's bad law in rejecting the Medicaid expansion is producing some very bad facts on the ground. Meanwhile in Mena, Arkansas, the soon-to-close 9th Street Ministries clinic is celebrating the best of times.