How States Rejecting the Medicaid Expansion Sabotaged Their Biggest Cities
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Grady Memorial Hospital in downtown Atlanta is a formidable institution, a bulwark for the low-income and uninsured that grew from a hundred beds in 1892 to one of the largest public hospitals in the country. It has the primary Level I trauma center in the metro region. It has one of just two burn centers in the state. Each year, nearly every one of Georgia's 158 counties sends patients to the hospital for its specialized units or its open doors.
Private insurance covers little of this care: A majority of all these people who come to Grady are either on Medicaid or have no insurance at all.
Next year, the hospital's perpetually strained resources will begin to grow even tighter. The federal Affordable Care Act contains a sweeping expansion of Medicaid, the piece of the law aimed precisely at the low-income Georgians that Grady has long made a point of serving. Only half of the states have opted to take the expansion, paid for in its entirety by the federal government for the first three years. Georgia is not one of them.
That Grady Memorial must live with Georgia's decision illustrates two perverse subplots as the Affordable Care Act rolls out very differently across the 50 states. The political dynamic of somewhat more left-leaning major cities located in red states means that governors and state legislatures have rejected health care resources that many local officials in urban areas desperately wanted.
And because big cities are also magnets for the uninsured, with their more extensive health infrastructure, the burden of caring for a state’s uninsured disproportionately rests on its urban hospitals and taxpayers.
The state politicians who have made these decisions, in short, are not the ones who will bear the cost of them.
The people who pay for Grady are taxpayers in DeKalb and Fulton counties, the two largest counties in Georgia, which bisect Atlanta and its immediate suburbs. Grady draws resources from charitable contributions, Medicare and Medicaid payments, private insurance reimbursements, and property tax assessments in these two counties. That tax money goes to general funds, not a "Grady" line item, meaning local money that’s spent on everyone’s health care is money not spent on other local priorities.
“Only two counties pay for [Grady] out of more than 150 counties,” says DeKalb County Commissioner Larry Johnson. “But most of those counties use that service.”
The state of Georgia has also repeatedly declined to help fund Grady, even as Atlanta sits as the seat of the state capital and the epicenter through which its highways, tourists, events and business flow.
"The economic argument is completely overwhelming for the big cities."
A similar tension has long existed between urban hospital districts (and the taxpayers who fund them), and suburban and rural counties that sit within driving distance of that care without helping to subsidize it. Texas's largest urban areas, spanning San Antonio, Austin, Houston, Dallas, Fort Worth and El Paso, all currently have large local taxing districts to help support health care for the indigent.
“The economic argument is completely overwhelming for the big cities,” says Anne Dunkelberg with the Center for Public Policy Priorities in Texas, which has advocated (unsuccessfully) for Medicaid expansion there. “They’re paying 100 percent local tax dollars instead of getting 100 percent federal funding.”
Part of the issue here lies in a fundamental disparity between local governing and statewide politics. Governors and state legislatures have made many of these decisions to reject the Medicaid expansion on philosophical grounds rather than poverty rates or hospital budgets (often despite receiving detailed analyses on those fronts). County and municipal officials, on the other hand, can seldom afford ideology.
“Oh man, I was just talking to a Head Start group this morning,” says Johnson, ticking off all the ways his job as a county commissioner forces him to face actual constituents more often than abstract debate. He hears from struggling residents when he leaves his house, when he walks through his neighborhood, when he goes to the grocery store, when steps into the local Big Lots. “We see them every day, and we get to see a lot of issues and ills that they go through that are based on decisions that the federal government and governors make.”
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Central to the Affordable Care Act was a plan to expand the federal insurance program for the poor to cover adults with incomes at or below 138 percent of the federal poverty line (that’s $15,856 for an individual this year). The expansion is set to begin Jan. 1 of next year. It was originally estimated to bring about 13.1 million new people onto Medicaid by 2016.
Lately, most of the public attention on the Affordable Care Act has focused on the malfunctioning online insurance marketplaces, where moderate and middle-income Americans are supposed to be able to shop for private insurance, many of them receiving federal subsidies to buy it. The Medicaid expansion, however, was aimed at a different group: those families and adults who likely wouldn’t be able to afford even subsidized private insurance, but who made barely too much to currently qualify in most states for Medicaid.
Then, last year, despite ruling that the Affordable Care Act’s individual insurance mandate was constitutional, the Supreme Court decided that states could choose for themselves whether they would expand Medicaid.
“It threw a lot of curve balls at people,” says Keith Fontenot, a former budget expert on health care in the Obama Administration who’s now a visiting scholar at the Brookings Institution's Engelberg Center for Health Care Reform. “I don’t know anybody that foresaw the Supreme Court going down that road. All the focus was on the individual mandate. So now you have this really kind of unusual patchwork quilt – only it’s missing some of the pieces.”
Twenty-five Republican-controlled states have since announced that they will not broaden Medicaid at this time. Under the law, the federal government pays for the full expansion for the first three years. States then gradually pick up a share of the cost, but never more than 10 percent of it. Governors who have rejected the bill have said that even that 90 percent federal match rate would leave their states with unsustainable costs down the road.
That assessment, though, ignores the economic windfall of billions of new federal dollars in health care spending across these states (as local hospital associations and chambers of commerce have pointed out). And it defies the fact that the public in many cases already pays for safety-net care for the uninsured, in forms like those property taxes that help support Grady Memorial.
In San Antonio’s Bexar County, the Medicaid expansion was estimated to cover an additional 200,000 people, accounting for about half of the county’s uninsured. The county hospital there currently runs a program called CareLink, which offers the poor substantially reduced fees on individual health care services (rather than an insurance plan to cover them). The program serves about 60,000 people, at an annual cost of $54 million. County tax dollars pay for that.
“That’s the irony of the Medicaid expansion that didn’t happen here,” says Thomas Schlenker, the director of public health for San Antonio and Bexar County. “Many if not all of those people who are currently enrolled in CareLink would have gotten Medicaid insurance, which would have meant that the federal government would be paying for their care, as opposed to the county.”
San Antonio, Schlenker adds, attracts people looking for low-wage work in its construction, hospitality and landscaping industries, the kind of jobs that seldom come with employer-provided health insurance. The county is also a magnet for the sick, he says, precisely because of programs like CareLike and the medical care provided by the University Health System.
Most of the 200,000 people in Bexar County who would have benefited from the Medicaid expansion, he says, will have no recourse for now. And the county will have to continue providing for them as best as it can.
“This is not how the Affordable Care Act was supposed to work,” Schlenker says. “And it’s really sad for those people.”