The Affordable Care Act is headed for another showdown and this time, it's local. In several states where governors are declining Medicaid expansion, safety-net providers have discussed pursuing Medicaid expansion on a regional level.
In Texas, safety-net hospitals have discussed the possibility of seeking Medicaid expansion on their own. Most metro regions in Texas have a hospital district and safety-net hospital that serves the uninsured, many of whom would be eligible for coverage under health reform's Medicaid expansion.
Now New Orleans officials have begun similar talk. A Medicaid waiver in New Orleans allows preventive coverage to the low-income uninsured on a sliding scale. It expires in 2014, just as Medicaid expansion would go into effect. Hospital districts and other health organizations are eyeing those first three years of 100 percent federal funding as relief for charity care they've provided for decades in some instances.
Several Texas safety-net hospitals offer taxpayer-funded programs for the uninsured, such as Carelink. Offered by the University Health System in Bexar County, Carelink provides preventive care for people earning up to 300 percent of the federal poverty level. By moving people on the lower end of that spectrum into Medicaid, University Health would save millions of dollars. The same goes for programs for the uninsured in El Paso, Houston and New Orleans.
CMS might balk at approving Medicaid expansion for a single region of a state; it is unprecedented. However, the waivers CMS issues for state Medicaid plans tell a different story. Perhaps the eligibility expansion could follow the template for managed care rollouts. Texas didn't simply move its members to managed Medicaid in one fell swoop. It used its largest metro regions as testing grounds for different populations in managed care, including dual eligibles. In 2012, Texas Medicaid finally extended managed care to most rural members.
But CMS might not be the biggest hurdle. State Medicaid programs have the final say on Medicaid expansions. In the politically charged climate of healthcare reform, anything less than statewide might be impossible.
Plus, the caveats are myriad for expanding in a smaller geographic area. The rush of newly eligible members could overload providers. People earning 138 percent of the federal poverty level or less might relocate to counties allowed to expand Medicaid, furthering straining the safety net. Although 100 percent of costs will fall to the federal government for three years, providing the administrative infrastructure and picking up 10 percent of medical costs beginning in 2017 could be prohibitive.
The interest in local Medicaid expansions won't stop in Texas or Louisiana. Florida's largest counties may express similar interest. It's hard to see Miami-Dade County staying quiet. Those counties treat the bulk of their state's Medicaid members and a high volume of uninsured residents, so the idea of regional Medicaid expansion is likely appealing.
All of this might just be posturing to nudge states toward accepting expansion. But the metro regions have long borne the brunt of the uninsured, and this is a signal they won't go along quietly when a state rejects expansion.
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