Subject: Medicaid expansion.
“In a nutshell, the impact on our two hospitals, Mountain States Health Alliance and Wellmont Health System, both members of the Johnson City-Jonesborough-Washington County Chamber of Commerce and other regional/tri-state chambers of commerce, is astronomical,” Gary Mabrey, Chamber president and CEO, wrote in a recent letter to state leaders.
Mabrey sent the letter to Gov. Bill Haslam, Lt. Gov. Ron Ramsey and Speaker of the House Beth Harwell in hopes the governor and the General Assembly will embrace the Affordable Health Care Act’s Medicaid expansion, which “makes sense/cents for Tennessee.”
Medicaid is the nation’s health insurance program for low-income individuals and families. New federal legislation calls for a nationwide expansion of eligibility, set to begin in 2014. Nearly all U.S. citizens under 65 with family incomes up to 133 percent of the federal poverty level ($30,675 for a family of four in 2012) will now qualify for Medicaid.
The Supreme Court’s ruling on the Affordable Care Act allows states to opt out of the law’s Medicaid expansion, leaving each state’s decision to participate in the hands of the nation’s governors and state leaders.
So far, 24 governors have said they support the Affordable Care Act; 14 have said they will not participate. Tennessee is one of six states that remain in the “undecided” category. Others are either leaning one way or the other or want to use a state-run or partnership exchange instead.
Mountain States Health Alliance Chief Financial Officer Marvin Eichorn has in the past two weeks stated his case for opting into the Medicaid expansion. He has gone before the Johnson City Commission and the Washington County Commission and its Budget Committee in an effort to better educate local leaders about what might happen should the governor decide not to accept federal money for the expansion.
Wellmont Health System Chief Financial Officer Alice Pope also has been hitting the trail with Eichorn talking about how the Tennessee Health Association and the hospital systems in the region are supportive of the Affordable Care Act.
“Over the next 10 years, the cumulative fallout for the two systems is nearly $750 million; MSHA (nearly $380 million) and Wellmont (nearly $299 million),” Mabrey said in the letter. “Keep in mind these two systems are regional and macro-regional economic and community development drivers, with MSHA the largest employer in the macro-region.
“One is safe to point to the reason that businesses locate and expand here is attributable to the health-care delivery system, via these two systems, the ETSU Academic Health Science Center (Quillen College of Medicine, Gatton College of Pharmacy, Public Health), and the VA.”
Mabrey said the Chamber does see some other sides of the debate, from the potential increase in size and liability of government entitlements through the new law to a potential increase in state expenditures on Medicaid after 2016.
“Yes, we can see reasons for skepticism and mistrust of our friends in the federal government, but we are the same state with three leaders who have kept the conversation between Tennessee and Washington at an optimum level,” he said.
Medicaid expansion would benefit the state’s overall economy, Mabrey added.
A study conducted by the Nashville Chamber of Commerce shows nearly 21,000 new jobs will be created by the expansion between 2012 and 2019. These job holders would spend nearly $200 million with an indirect economic impact of nearly $6 billion.
“An equal and opposite effect occurs for Tennessee with statewide reimbursement cuts totaling $7.4 billion, which our friends at the Tennessee Hospital Association estimate will result in a loss of 90,000 jobs, with a recessionary impact of $13.3 billion,” he said.
He also said Tennessee’s overall health ranking makes it more likely to be more adversely affected than most other parts of the country, and that the recently enacted hospital assessment allows the state to draw down nearly $1 billion in matching federal funds.
“Our General Assembly reauthorizes this assessment annually, which our hospitals saw as a win-win for all when first enacted,” he said. “Further destabilization of some hospitals could result in additional hits to the state budget.”