Medicaid reductions could be ‘profound’

By: 
Liz Kearney

Livingston HealthCare Chief Executive Officer Bren Lowe says the title of the Senate’s version of health insurance reform legislation — the “Better Care Reconciliation Act” — is ironic. 

The bill, which is still in draft form and subject to nearly daily updates, proposes to drastically reduce Medicaid — public health insurance for the poor — payments to states. The Congressional Budget Office’s nonpartisan calculations  earlier this week predict that by 2026, 22 million people would have lost their health insurance. 

The projected $880 billion cuts to Medicaid would mean a nearly $5 billion cut to Montana, Lowe said. 

Under Medicaid expansion last year, nearly 80,000 Montanans got health insurance, Lowe said, and 95 percent of those new enrollees would lose their coverage by 2024, including more than 1,000 Park County residents. 

The proposed Medicaid cuts could have profound effects on hospitals and clinics, patients, employees and communities, both Lowe and Community Health Partners’ CEO Lander Cooney said recently. 

“I expected something better,” Lowe said, “something with innovation and cost-cutting,” adding, “Cutting health insurance doesn’t reduce health care costs. It can do the opposite” by passing costs on to hospitals and patients with health insurance. 

 

Financials

LHC’s bad debt and charity care annual costs have held steady the past few years at about $4.5 to $5 million, despite the fact that revenue is up 20 percent. 

“It has stayed constant because of Medicaid expansion,” Lowe said. “If Medicaid expansion is repealed, bad debt would double.” 

LHC operates on a budget that leaves a margin of about $400,000 a year after expenses. Cuts to Medicaid could mean a loss of millions per year or more than LHC’s margin, Lowe said. That margin is reinvested in equipment and other needs, but it’s not enough to fully fund annual, needed upgrades, which run about $1 million a year. For the difference, the facility depends heavily on its partner, Livingston HealthCare Foundation. 

CHP is stable financially and budgeting conservatively pending the health care bill outcome, Cooney said. 

As a federally funded community health center, CHP receives funding from the Public Health Service Act, created during the War on Poverty in the 1960s, Cooney explained. The funding is always tenuous, so the clinic is used to dealing with uncertainty. 

With Medicaid expansion last year, more of CHP’s patients were able to pay for more services, which freed up funds for infrastructure improvements and a major computer software upgrade, she said. 

But CHP has been reluctant to add new providers or more services, out of concern the new staff or services would have to be cut due to funding reductions in the future. 

 

Patients

And “health outcomes” of patients will undoubtedly be harmed by Medicaid expansion, Lowe and Cooney said in separate interviews. 

People who don’t have health insurance don’t see doctors until something is seriously wrong, they both said. 

“You wait until it’s very bad, and you go in when it’s very expensive,” Cooney said, “which hurts patients and the providers. We’re going to provide a cardiac catheterization for free rather than blood pressure medication.” 

CHP sees patients with and without health insurance. Those who do often have a high-deductible, so even with insurance, many qualify for the health center’s sliding scale fee structure. Close to 70 percent of the patients CHP sees live with an income at twice the poverty level, Cooney said, which is $24,120 for a single person. 

 

Bottom line

Neither health care facility expects to close or lay off staff, both CEOs said. 

“We’re here. We’re not going anywhere,” Cooney said. “In some ways, we’ll only become more important as more and more people are without health insurance.”

The bill, with potential amendments, along with the vote delayed until after the July Fourth holiday, and votes from enough Republican senators in doubt creates uncertainty for providers and patients, Cooney said. 

“Without knowing, we can’t plan,” she said. 

Sen. Jon Tester announced he is opposed to the bill, while staff for Sen. Steve Daines said Daines will not take a position until the final bill is presented. 

Cooney and Lowe said now is the time for voters to let elected officials know what they think about the bill. 

The Better Care Reconciliation Act is a misnomer, Lowe said. 

“No way does it represent the title of the bill,” he said.

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Liz Kearney may be reached at lkearney@livent.net.