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Hospitals could lose $500M in federal funds

MIAMI — Hospitals nationwide could lose half a billion dollars in federal funding for uninsured patients next year under the national health overhaul — a loss that will hit especially hard in states like Florida that decided against expanding Medicaid coverage.

Hospitals that treat a large number of uninsured residents have relied on federal funding in the past to offset the cost. But the Affordable Care Act assumes that more residents will have Medicaid or private health insurance, meaning hospitals would see fewer uninsured patients and need less assistance.

But hospitals in states that declined to expand Medicaid stand to lose the federal funding without a corresponding increase of Medicaid-covered patients to offset it. The decision not to expand means potentially millions of residents in those states who would have been eligible for the expanded Medicaid coverage will continue going to the emergency room when they are sick — and hospitals will be stuck with the bill.

Florida hospitals could stand to lose more than $10 million, according to rough estimates from the Department of Health and Human Services.

"You have continuing high levels of uncompensated care but the funding you had designated to address it is shrinking so the amount of unmet costs will grow," said Bruce Rueben, president of the Florida Hospital Association.

Health experts are divided in their opinions of what will happen next.

Judy Solomon, vice president of health policy for the Center on Budget and Policy Priorities, a liberal think tank, said the new regulations could mean that states that don't expand Medicaid will get a break and face smaller cuts compared to states that are expanding Medicaid.

But Rueben said he doesn't think the feds will take pity on states that choose not to take them up on their generous offer to pay for Medicaid expansion. Under the federal health law, the federal government is offering to pay 100 percent of the coverage for newly eligible Medicaid recipients for the first three years and at least 90 percent after that.

"For those states that willfully deny their own citizens coverage when it was so substantially paid for … (the feds) will not protect those states from their own bad decision," he said. "How does that make good policy sense?

Hospitals could lose $500M in federal funds 05/13/13 [Last modified: Monday, May 13, 2013 11:27pm]

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