Medicaid won’t cover health care costs, officials say

Like the Rolling Stones song says, you can’t always get what you want. Well, it turns out hospitals might not get what they want from the new health care law.

In an e-mail statement, Bloomington Hospital CEO and President Mark Moore said the hospital strongly supports the concept of accessible health care for all citizens and insurance reform, to a point.

“We are, however, disappointed that the legislation does not adequately address the systemic problem of how providers are reimbursed,” Moore said.

One reason is the fact that neither Medicaid nor Medicare pays the complete costs for provided care, said Neil Pickett, director of Health Policy Research and Analysis for Clarian Health.

Medicaid is government insurance for low-income adults with children or the disabled.

Compared to other forms of health insurance, Medicaid is considered a very poor care from a health care provider’s point of view, Pickett said. 

“It doesn’t pay as much as Medicare or private insurance, and it doesn’t pay what it costs to provide care,” he said.

In addition to the uninsured population, former beneficiaries of the Healthy Indiana Plan, an Indiana program that provides affordable insurance for the working poor, will be moving to Medicaid because the program is ending in result of the new law, HIP spokesman Marcus Barlow said.

Hospitals would prefer HIP to continue because it pays the same rate as Medicare, which is more than Medicaid, Pickett said.

“A significant amount of people who come for treatment with that kind of insurance is an issue,” Pickett said about Medicaid.

Another cause for concern is the limited number of hospitals that provide the care for those without insurance, Pickett said.

The new health care law reduces the amount of federal government funding for the Disproportionate Share Hospitals program, which includes Wishard Memorial Hospital in Indianapolis. DSH will lose about $36 billion over 10 years, Pickett said.
 
The federal government said more people are going to be insured so DSH does not need as much funding as it did in the past, Pickett said.

“This is true, but the problem is that there will still be a significant number of uninsured,” he said.

Pickett said the best case scenario is 23 million uninsured after the health care law goes into full effect. Coverage will not include illegal immigrants, people who still cannot afford insurance and those who won’t buy insurance despite the imposed penalties.

“You have an increase in Medicaid patients, but you have a pretty significant cut to the program that helps hospitals absorb the lack of payment from Medicaid,” Pickett said. “That’s kind of a concern.”

Another problem is the predicted influx of new patients along with a concurrent shortage of nurses and a predicted shortage of doctors.

Pickett said if there is a shortage of nurses and doctors and an increase in the demand for medical care in the future, hospitals will have to compete to hire more medical personnel by raising salaries.

This means that hospitals will have to charge more to get back money they spent to compete for doctors and nurses, Pickett said.

“The point is there is going to be an upward pressure on costs that are even more significant than today, and there is going to be a backlash or a reaction to that,” he said. “But it’s not clear how that reaction will come.”