Print options

December 16, 2013

Hospitals at Risk in States that Opt Out of Key Obamacare Provision

by Brian Padden

Nearly half of all U.S. states are rejecting a key component of the new U.S. health care reform law popularly known as "Obamacare." These states - almost all with strong Republican majorities - are citing unsustainable costs as the reason for opting out.  But, by not participating, states like South Carolina could lose billions of dollars in federal funds.

At the Anderson Free Clinic in South Carolina, people line up early in the morning to see a doctor.  The clinic treats more than 2,000 people a year.  Most of the patients - like Ronnie Green, who is 60-years-old and living on a small pension - are either unable to work or have limited incomes.  

“My nerves are real bad. I cry all the time. I shake. Can’t hold nothing. My nerves [are] just gone," said Green.

Under the Affordable Care Act, also known as "Obamacare," almost all of these patients would have their costs covered by Medicaid - the government-funded health care program for the poor.
 
But because South Carolina has chosen not to expand Medicaid, free clinics remain are the only option for many people.
 
Barb Baptista, the clinic's director, says there are not enough exam rooms to handle the growing number of patients.

“The exam rooms are only a piece of it. Having the providers who are willing to volunteer at the free clinic and having the financial means to support our budget are a huge concern," said Baptista.

The clinic sends seriously ill patients to the AnMed hospital emergency room - often by taxi rather than ambulance to save money.

Hospitals that accept federal funds are required by law to provide emergency care regardless of an individual’s ability to pay.
 
But Obamacare will phase out the federal program that reimburses hospitals for some of these bills - replacing it by covering more people under Medicaid.

Bill Manson, who heads AnMed Health, says South Carolina’s decision not to expand Medicaid imposes on hospitals all of the law's cuts but none of the benefits.

“By not participating in the expansion, we kind of have almost a perfect storm of all the reductions that were built into the law without the resulting increase in coverage of the uninsured," said Manson.

Under Obamacare, federal funds will pay 100 percent of added Medicaid costs - gradually reducing that to 90 percent by 2020.  But Conservatives like Ashley Landess with the South Carolina Policy Council say the costs are adding to a budget deficit that is unsustainable.

“The fix is not to continue the cycle of dependency on dollars that are really coming from debt for the most part but rather to cut that dependency and put control of health care back into the hands of providers and the patients," said Landess.

Unless some compromise is reached in states like South Carolina, the number of poor without health care will continue to grow and hospitals will face increasing financial risk.