Georgia Misses Big Opportunity to Help Struggling Rural Hospitals

Tim SweeneyFirst published in the SW Georgia Health Beat on page 23.

The good news is Georgia lawmakers understand something must be done to help the state’s struggling rural hospitals. Calhoun Memorial Hospital closed in Arlington in recent years, as did Flint River Hospital in Macon County and too many others serving Georgia’s rural communities.

The not so good news is the plan hatched during this year’s just-ended General Assembly in Atlanta falls far short of better alternatives to help financially struggling hospitals in and around the southwest Georgia region. First, let’s take a look at the strategy lawmakers produced this year.

Georgia’s leaders advanced a tax credit for corporations and individuals who donate to rural hospitals. Assuming the governor signs the bill, the tax credit allows donors to claim $180 million in tax credits over the next three years in exchange for donations to rural hospitals. While this could be helpful for some cash-strapped hospitals, the tax credit plan could better target donation incentives to hospitals most in need of help. And potential benefits to patients pale in comparison to what would come from expanding insurance coverage through the federal health care law.

The tax break plan is designed to spread the benefits widely among rural hospitals instead of concentrating them for a few donor-savvy institutions. That’s an improvement over the original version of the plan. However, the new tax credit will do very little for primary care and other non-hospital providers in rural communities, or for the uninsured patients who cannot access these services. Legislators need to find ways to take advantage of new federal resources available to extend health coverage to more Georgians. Because if the fundamental problem of access to health coverage is not fixed, patients, hospitals and communities throughout Georgia will continue feel the pinch of an underfunded health system.

Adults in Georgia lack health insurance coverage at the third highest rate of any state in the country, according to a recent Gallup survey. About one in six adults went without health coverage in 2015, or nearly 1.2 million people. Believe it or not, this is a big improvement from just a few years ago. That’s in large part thanks to relatively new federal tax credits that help people buy private health insurance. Still, more than 300,000 Georgians fall in a health insurance coverage gap and remain uninsured because they make too little to qualify for this federal help. These Georgians are instead intended to be covered by Medicaid. But they’re not because since 2014 state leaders refused billions of dollars in federal money that would help pay for coverage.

States can extend existing Medicaid programs to provide health coverage to uninsured people with yearly income below 138 percent of the federal poverty level, or $29,200 for a family of three. Federal money continues to be available to pay all the costs of covering these Georgians in the short term and no less than 90 percent in the long run.

At least $3 billion annually would flow directly to health care providers throughout the state and create a substantial economic impact in both rural communities and big cities. New federal funding would ripple throughout Georgia and generate 56,000 new jobs and $6.5 billion in new economic activity in the state every year, according to research from a health economist at Georgia State University. At least 12,000 of these jobs and $1.3 billion in new activity would flow to Georgia’s rural communities.

It’s possible that Georgia’s rural communities with struggling hospitals could get something of a financial lifeline from the tax credit plan passed by the 2016 Legislature. That still falls far short of the golden opportunity lawmakers bypassed once again this year that could infuse billions into the state’s health care system while closing the coverage gap for hundreds of thousands of Georgians.

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