Close Georgia’s Coverage Gap to Stabilize State’s Hospitals

TimStates that expanded Medicaid eligibility to close their state’s coverage gap experienced substantial and nearly immediate reductions in charity care cases due to greater Medicaid payments. Those are the findings of a new report by the Colorado Hospital Association, adding new support for the case to increase health coverage for Georgia’s working poor through income eligibility expansion. Colorado is among 27 states implementing Medicaid expansion.

Hospitals in expansion states across the country saw a 30 percent decline in charity care, while hospitals in non-expansion states experienced no decline, the report says.

The financial struggles of hospitals throughout Georgia drew a great deal of attention over the past year. The plight of rural hospitals attracts the most attention and is even the focus of a special committee appointed by Gov. Nathan Deal, but safety net and hospitals in more populated areas face significant financial pressures as well.

Many Georgia hospitals are in dire financial straits because they treat a large number of patients who lack health coverage and cannot afford the high out-of-pocket cost of care. Medicaid expansion is one important step that could give more people access to health coverage while easing the financial burden on hospitals. Yet the stand state policymakers are taking against expansion means that more than 400,000 Georgians will remain uninsured. They fall into a coverage gap, with income too high to qualify for Georgia’s stringent eligibility standards but too low to qualify for federal tax credits to purchase private insurance.

Closing this coverage gap could be done simply by taking advantage of federal funds already set aside to help states increase Medicaid eligibility. That would guarantee health coverage for working-poor Georgians likely to go uninsured otherwise. Increasing health coverage among low-income citizens is proving to dramatically shrink the amount of uncompensated care delivered by hospitals throughout the country, as shown in the Colorado study.

The findings in the new report should be welcome news for state policymakers and other Georgians concerned about the financial stability of the state’s hospitals. The state recently changed rules governing hospitals to give some rural facilities permission to convert to standalone emergency rooms, but policymakers can take a more sensible step to stabilize hospitals by expanding Medicaid eligibility.

This could dramatically increase health coverage for working poor Georgians. And evidence continues to grow that it is the best way to pump needed revenues into Georgia’s hospitals burdened by uncompensated care costs.

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