Forbes: FL & TX governors could cost hospitals billions
Thu November 1, 2012 12:27 am

The headline of the Forbes story was: RICK PERRY AND RICK SCOTT COULD COST HOSPITALS BILLIONS

From Forbes:

The nation’s state and local public hospitals may face an increase of more than $50 billion in the costs of uncompensated care by 2019 if states decide against participating in an expansion of the Medicaid health insurance program for the poor.

The giant price tag to safety net hospitals for patients who are unable to pay their medical bills comes from a new analysis from the National Association of Public Hospitals and Health Systems. The association said the study puts “a dollar figure” on the additional cost of uncompensated care following the U.S. Supreme Court ruling in June on the constitutionality of the Affordable Care Act.

More from Forbes:

It’s unclear exactly how many states will forego the Medicaid expansion, but Republican Governors like Florida’s Rick Scott and Texas’ Rick Perry have publicly said they won’t participate in the Medicaid expansion partly because of eventual costs to their states for increasing coverage. The Perry and Scott moves have been endorsed by Mitt Romney, next Tuesday’s GOP standard-bearer in the election for the presidency, who has said he wants to see the health law repealed.

Despite the rhetoric of Perry and Scott, most states are expected to go along with the Medicaid expansion given a cash infusion of more than $900 billion in federal dollars from 2014 to 2022. The Washington Post last week reported just six states are opting out and another five are “leaning against” participating in the expansion.

This funding is unlike past efforts to expand Medicaid in that the federal government will pick up the full tab for the first three years. The state gradually has to pick up some costs in 2017 but by 2020 the federal government is still picking up 90 percent or more of the Medicaid tab.

It’s a much better funding proposition than the existing Medicaid program that essentially shares the cost between the states and the federal government. The federal government traditionally picks up a little more than half of the cost of Medicaid.

The funding stream is so good that several health insurance companies have already placed huge bets on jumping deeper into the Medicaid business.

Already, this year Wellpoint Inc. (WLP) agreed to buy Amerigroup Corp. (AGP) for nearly $5 billion to expand its Medicaid business while Aetna Inc. (AET) agreed to pay $5.6 billion to buy Coventry Health Care Inc. (CVH) to increase its share of government health insurance business.

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